held Skierniewice, Poland, 20th September 2014
PURPOSE OF THE MEETING
- To summarise the present situation for Polish blackcurrants, as seen by both growers and processing plants.
- To consider how to co-operate in coming seasons.
- To develop strategies to solve the current problems and prevent such problems in the future.
MEETING CONTENT
Welcome and introduction of guests
- President of the IBA Dirk Herdieckerhoff
- A representative of the Polish Minister of Agriculture
- Representatives of the processing plants: the meeting invited representatives of the four largest companies in Poland (Doehler, Austria Juice, SFZ, OK) – invitations to the meeting were sent in late August.
- Of the four invited companies only one attended -Austria Juice’s Jaroslaw Dybus.
Season review 2014 by a member of the KSPCP Board
This year’s season for the producers of black currant was one of the worst in history. Very low prices for the fruit offered by the processing plants could lead to bankruptcy for many farms, and in the next few years to the collapse of blackcurrant production in Poland. The real value of 0,40-0,45 zÅ‚ / kg of fruit growers received on average this year, is much lower than the prices that producers received in 2003-2004, which were considered at that stage to be the worst. Prices per fruit in 2003 -2004 allowed growers to small expenditures associated with the subsequent functioning of households, prices in 2014 did not cover the cost of harvesting fruits and deliver them to processing plants.
The mood among manufacturers was very bad, and many people do not even want to talk about blackcurrants. At many farms, berries were not collected at all, and some plantations face liquidation.
Assessment of the situation by the Minister of Agriculture and the envisaged aid and prevention
The Polish Government understands the dramatic situation of fruit this year. The Minister of Agriculture asked the President of the OCCP to take action to investigate whether market behavior by entrepreneurs buying blackcurrants infringed the anti-competitive behaviour regulations.
The Polish Government provides the financial support this year to producers of black currant and cherry in the amount of 30 million zł, ie. 410 zł / ha.
In Poland, work is progressing on a project called the Stabilization Fund, which in the future may pay compensation to farmers in case of a drop in their income by more than 30 percent against the average annual income of their last three years – eg. due to lower prices of agricultural products caused by, amongst others things, by market speculation. According to the National Fund money will come from contributions from farmers and purchasers of agricultural products who will be charged 0.2% of their net value.
Ongoing preliminary work on system procurement contracts comply with the Regulation of the European Parliament and of the Council of Europe 13.08.
Assessment of the situation by representatives of the processing plants (Austria Juice)
The cause of low prices in Poland in 2014 was:
- The large stocks of concentrate and frozen foods.
- Price fluctuations between years due to erroneous and unreliable forecasts of yields of fruit.
- A fall in the consumption of beverages with fruit.
- The overproduction of blackcurrant.
Signing contracts with a fixed price contracting is dangerous, because another supplier may offer concentrate at a lower price from another source. Signing contracts with manufacturers does not solve the problems until the overriding production and oversupply issues are addressed.
Austria Juice expressed willingness to help and take part in further discussions.
Facts
The analysis of the balance of production of black currant in the years 2008-2012 shows that Poland, processed an average of 115, 400 tonnes of fruit, which indicates that the production of fruit in 2013 was 4% higher than the average of the years’ 2008-2012.
According KSPCP, blackcurrant production in Poland in 2014 amounted to 80% of the 2013 year. In the current season, crops from many fruit plantations have not been collected (estimated by KSPCP to be 10-15% of the total crop), which significantly reduces the overall total of the blackcurrant harvest size in Poland.
Confirmation of lower totals are published CSO data: according to the estimates of the GUS experts, the 2014 harvest is estimated at 124,000 tonnes.
It should be noted that the above estimate covers the entire Polish national production, not only commercial orchard crops but also private gardens.
Production estimated by the CSO experts may in fact be even lower if the percentage of “not collected fruit” proves to be greater than estimated in mid-July. The information available looks set to confirm that the 2014 production level was similar to the levels of 2007 and 2011; but prices nearly 10 times smaller.
At the end of this year’s harvest in Poland, there were numerous inquiries regarding the purchase of large quantities of fruit, and the offered prices were 100% higher than those paid in full season. On the one hand processing plants inform that there is a large overproduction of fruit in Poland and large stocks of frozen and concentrated, but on the other hand the same companies invest multimillion-dollar amounts in the development of infrastructure, increased capacity and greatly increased storage capacity.
More than 90% of blackcurrant plantations in Poland have a surface area of 1 – 5 hectares. Poland is characterized by fragmentation of production and a poor response by growers to be part of organized producer groups. With favorable weather conditions in the next year (no spring frost, the optimal quantity rain during flowering), we have overproduction of currants in Poland.
Compensation for embargoed exports to Russia will not be available to producers of fruit blackcurrant because of failure of blackcurrant crops to meet the requirements of the Regulation of the European Commission.
Overall, there is a lack of good relations between growers and processing plants.
There is a high concentration of processing plants in Poland, the strong position of several existing entities strongly affects the potential for new market participants.
Conclusion
There is a lack of good will to create better cooperation between growers and processing plants in Poland (example: of the four invited companies – only one attended). To stabilize the situation growers should seek to have further discussions with the industry on contracts for the supply of fruit and for quality certification for crops. If the price level in 2015 is similar to 2014, many farms will fail and there will be a decline in the production of blackcurrant, not only in Poland but also in other European countries. Low prices for the fruit will be a limiting factor for the level of production. Intensification of activities to promote the health benefits of fruit and juice consumption growth in the domestic and international markets is needed and this has to be the role of the IBA. Help from the government in Poland (surcharge 410zÅ‚ / ha – de minimis aid) is a temporary aid, promising solutions are needed (a Stabilization Fund is a good idea).
Piotr Baryla, Vice President KSPCP, Vice President IBA (September 2014)