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Support for milk processing in the pre - and after Polish accession to the EU

Support for milk processing in the pre - and after Polish accession to the EU

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Support for milk processing in the pre - and after Polish accession to the EU

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  1. Support for milk processing in the pre - and after Polish accession to the EU Magdalena Nowicka Poland Ministry of Agriculture and Rural Development Department of Rural Development

  2. Republic of Poland - general information • Member of the EU since May 2004 • Population: 38,2 mln • Area: 312 685 km2 • Rural areas cover 93.2% of the country • Number of farms (over 1 ha): 2 mln in 1996, 1,5 mln in 2010, • Agricultural land – 16,9 mln ha (2002), 15,5 mln ha (2010)

  3. The extensive dairy sector in the pre-accession period • Milkproduction = 12.2 bln l(1998) • 1.3 mlnholdings had dairy cows, 19,5 % of them more than 3 cows. Milk production/cow = 3700 l • About 500 000 milk producers, full-time employment for 100 000 people. • About 290 milk processing co-operatives and 130 private firms (with or without foreign capital). • Only 19 plants meeting EU export license standards.

  4. Number of cows and the production of cows’ milk in Poland

  5. Production of cows’ milk per 1 ha of agricultural land

  6. Average annual quantity of milk

  7. Preparation of the SAPARD in Poland [1/2] • April 1999 – The beginning of the preparations for the implementation of SAPARD in Poland • June 1999– Adoption of Council Regulation (EC) No 1268/1999 on Community support for pre-accession measures for agriculture and rural development in the applicant countries of central and eastern Europe in the pre- accession period. • July 1999 – Council of Ministers approves the strategy for rural development and agriculture in Poland. • July 1999– Adoption of Commission Decision 1999/595/EC on the indicative allocation of the annual Community financial contribution to pre-accession measures for agriculture and rural development. • December 1999– Adoption of Commission Regulation (EC) No 2759/1999 laying down rules for the application of Council Regulation (EC) No 1268/1999 on Community support for pre-accession measures for agriculture and rural development in the applicant countries of central and eastern Europe in the preaccession period. • December 1999 – SAPARD programme submitted to the Commission

  8. History of the preparation of the SAPARD in Poland (Special Pre-Accession Programme for Agriculture and Rural Development) [2/2] • June 2000 – Adoption of the Financial Implementing Regulation. • October 2000 – SAPARD programme adopted byCommission Decision. • January 2001– Signature of Multi-Annual Financing Agreement with Poland • 2001 – 2002 SAPARD Agency preparations, audits • August 2002 – Start of the SAPARD programme in Poland

  9. SAPARD budget by measures [EUR]

  10. Changes in the SAPARD programme • Changes made in the program after the start of its execution and implementation procedures were designed to simplify and facilitate access offered under the SAPARD program support to the beneficiaries, as well as broadening the category of beneficiaries eligible for support. • November 3, 2004 the Commission approved the final financial table for the SAPARD programme. The initial and final allocations for each of the program

  11. Support for milk processing – measure description [1/4] Measure 1:Improvement in processing and marketing of foodand fishery products Scheme 1.1. Support for processing of animal origin products Beneficiaries - Milk, meat and fishery sectors Objectives: • to increase the volume of production coming from plants with food safety systems (HACCP) and EUROP grading system; • to improve the milk collection system; • to improve the quality of fish supplied to processing plants or for direct sales; • to increase the number of processing plants with sewage, waste and by-product management facilities; • to introduce new technologies ensuring better adjustment to market needs; • to increase the share of raw material purchased on the basis of long-term contracts between processing plants and agricultural producers, and in particular between processing plants and agricultural producer groups.

  12. Support for milk processing – measure description [2/4] Scope of grants for Scheme 1.1. • construction and modernisation of buildings of processing plants and equipment in accordance with EU veterinary, sanitary and animal welfare standards – in existing enterprises; • modernisation or replacement of production lines and the introduction of technologies which will increase value added and which will conform with the requirements of the acquiscommunautaire in relation to hygiene, quality, packaging and labelling, not later than before the grant is paid out; • investment enabling the reduction of nuisance caused by waste water discharges, gas and dust emissions; • investments related to the reduction of power and water consumption with regard to the technological processes; • investments in waste and by-products management; • implementation of food processing safety system (HACCP); • purchase of equipment to introduce the EUROP grading system; • purchase of milk tanks and coolers.

  13. Support for milk processing – measure description [3/4] Eligibleexpenditure • construction and modernisation of buildings; • purchase and installation of new machinery and equipment including computer softwareand special transport equipment; • general costs, namely costs of architects, engineers and consultants' fees, legal fees, feasibility studies, acquisition of patents and licences, for preparing or implementing a project. Levels of aid • the maximum rate of aid is up to 50% of the total eligible costs • cannotexceed 2 500 000 EUR/per the industrial plant overtheprogramming period • inaddition, a plant mayreceiveintotalup to 275 000 EUR for investmentsinfavour of poducergroups • not lowerthan 30 000 EUR/project

  14. Support for milk processing [4/4] • Theresults of themeasure 1 • 1 778 applicationssubmitted, 1 342 contractssigned, thebudget of themeasurefullyused • Dairysector: 385 applicationssubmitted, 325 contractssigned (value: 101 mln euro), paymentsreachedtheamount 97 mln euro. • Theaveragevalue of theprojectinthedairysector = 297 000 euro. • Most of theexpenditure (about 70%) inthedairy industry was spent on thepurchase and installation of machinery and equipment and to adjustprocessingplants to sanitary and veterinarystandards.

  15. The achievement of the expected results (projects completed)

  16. SOP 2004-2006 budget by measures [EUR]

  17. Measure 1.5. Improving processing and marketing of agricultural products[1/3] Measure objectives • improvement of sanitary-hygienic and veterinary conditions of production; • market orientation of production and utilization of the existing market niches; • creation of new and the rationalization of existing sales outlets; • improvement of production quality; • increase in value added of production; • reduction of adverse environmental impact; • improvement of the logistics structure; • improvement of animal welfare; • introduction of new and modernization of the existing production technologies

  18. Measure 1.5. Improving processing and marketing of agricultural products[2/3] Scope of Aid • construction or modernization of production plants or the agricultural product wholesale infrastructure; • environmental protection investments bringing measurable ecological results.

  19. Measure 1.5. Improving processing and marketing of agricultural products[3/3] Level of Aid • max 50% of total eligible costs • max 5 million euro / beneficiary • no less 25 000 euro per one project Beneficiary Processingplantsin milk, meat, fruits and vegetables, grain and othersectors defined in eligibilitycriteria); agricultural product wholesalemarkets, commercial freezing and storage of agricultural products, egg packaging.

  20. The results of the measure 1.5 1 085 projects completed , total value = 1 bln euro, 243 projects in the dairy industry (22,4% of the total), total value of circa EUR 300 mln.

  21. RDP 2004-2006 budget by measures [EUR] * the original budget of measure was EUR 243 400 000

  22. The results of the measure 6 • 71 385 agricultural holdings received the support of the total value euro 633 mln. • Scheme 2. „Adjustment of milk farms to the EU public health standard” - 5 540 households have received the aid (nearly 4 500 euro/holding). • The value of payments reached 23 mln euro.

  23. The effects of the investment in the dairy sector

  24. RDP 2007-2013 budget by measures [EUR]

  25. Measure 123 Increasing the added value to basic agricultural and forestry production[1/3] Scope of Aid • construction, modernisation or reconstruction of buildings or facilitates constituting infrastructure of processing plants or of agricultural products wholesale, • Purchase and installation of new machinery or equipment (including laboratory equipement and software)

  26. Measure 123 Increasing the added value to basic agricultural and forestry production[2/3] Aid intensity • The financial aid cannot exceed 5 mln euro per beneficiary and : • 40% of the totaleligiblecost of the project implemented by SME; • 25% of the totaleligiblecost of the project implemented by non - SME; • 50% the totaleligiblecost of theproject implemented by a SME, who acquires the raw materials on the basis of the long-term agreements with agricultural producer groups or who implements a project related to the processing of agricultural products for energy purposes.

  27. Measure 123 Increasing the added value to basic agricultural and forestry production[3/3] Beneficiary Enterpreneurs • registered and operating in processing or marketing of agricultural products, • SMEsorenterprises employing less than 750 persons, or an enterprise with turnover not exceeding 200 mln euro • differentsectors of agricultural products processingcovered (includingmilksector)

  28. Current information - measure 123 • 1481 contracts with 879 beneficiaries signed; • 75 % of the budget contracted; • Nearly 900 operations finished; • 42 % of the budget spent.

  29. Support for processing of agricutlural products and number of beneficiaries including the dairy sector – summary

  30. Support for processing of agricutlural products and number of beneficiaries including the dairy sector – summary

  31. What makes a program successful? • Consultations with the social, economic and regional partners – adjustment of the programme to their needs and objective asessment of the situation of the sector. • Communication through the meetings, conferences, trade newspapers and other media. • General and detailed information dissemination through different channels: websites, hotlines, printed materials advisory services, banks, commercial sector, branch organisations etc. • Good practice – neighbor effect • Grant system (refundation of eligible costs) can work if beneficiaries have an access to credits.