Farming in Europe Under Pressure: Rising Costs Undermine Profitability

FOOD & AGRICULTUREFarming in Europe Under Pressure: Rising Costs Undermine Profitability

Running a farm is becoming an increasingly serious economic challenge. As representatives of agricultural producers emphasise, the problem is no longer limited to fluctuations in purchase prices. It also concerns a lasting imbalance between production costs and revenues. As a result, for many farms, the main stabilising factor is no longer the sale of products, but subsidies and public support instruments.

“Farm profitability is now severely disrupted. This is particularly visible in the calculations prepared by the Wielkopolska Chamber of Agriculture, which show that for several seasons now we have not been making money on the production of cereals such as winter wheat or maize,” Mateusz Stankiewicz, an expert at the Federation of Sectoral Associations of Agricultural Producers, tells Newseria. “Of course, there are crops that generate surpluses in these summaries, such as winter rapeseed and sugar beet, but today it is primarily the issue of scale, which makes it possible to reduce costs, that determines the financial surplus a farm is able to generate.”

He adds that instruments under the Common Agricultural Policy play a certain stabilising role, but work is needed to create mechanisms that will restore profitability to the sector. At present, agriculture is not sustained by production itself, but largely by European and national support instruments.

Hard data confirms that cost pressure is strong. The latest calculations by the Wielkopolska Chamber of Agriculture for April 2026 show that the financial result from one hectare of winter wheat is more than PLN 1,000 in the red, while one hectare of grain maize generates a loss of more than PLN 4,000. At the same time, the same calculations show a positive result for rapeseed, at PLN 710.79 per hectare. The chamber itself emphasises that its calculations include most of the costs incurred by a farm, including depreciation, which shows the real scale of the economic burden of production.

“Negative profitability is primarily linked to the production costs we incur,” explains Mateusz Stankiewicz. “As farmers, we have no influence over global markets, which today determine the prices of cereals or rapeseed, but we can work on costs. We see several possible solutions. One answer is certainly scale, meaning greater cooperation among farmers themselves. There is also a need for all participants in the agri-food sector to take care that the weakest link today — farmers — does not bring down the entire system.”

As he points out, the issue concerns above all margins, which farmers believe are distributed unfairly. For example, they sell potatoes for several dozen groszy per kilogram, while the same kilogram later costs PLN 2–2.50 in a shop.

The problem is not limited to Poland. According to Eurostat, real income from agricultural activity per full-time worker across the EU increased in 2024 by only 0.6 percent compared with 2023, while in Poland it fell by 1.3 percent. Declines were also recorded in countries including France, Romania, Germany and the Netherlands, showing that income pressure in agriculture is broader than a purely national issue.

For several years, the European Commission has been trying to strengthen farmers’ position in the food supply chain. An EU directive bans 16 unfair trading practices, and a Commission report shows that in 2023 around 1,500 proceedings were initiated in Member States, of which approximately 17 percent ended with a finding of infringement and a sanction. The highest number of detected unfair practices occurred at retail level. In Poland, unfair use of contractual advantage may result in a fine of up to 3 percent of turnover from the year preceding the imposition of the penalty.

“We are observing low farm profitability on a European scale. This does not concern only cereal producers in Poland. Of course, individual markets function differently. Italy is a good example, with large food production but also a very strong domestic market and consumption driven by tourism,” says the expert from the Federation of Sectoral Associations of Agricultural Producers. “There, small-scale processing, for which Italian farms are well known, works well in such conditions. In Poland, the market structure is different, and that is why we need to find a way to maintain balance between farmers and retail chains.”

In the debate on the future of the sector, the question increasingly returns not only to the level of subsidies, but also to a lasting model for distributing value across the entire “farm to fork” chain. The European Commission has already launched the EU Agri-Food Chain Observatory, known as AFCO, whose aim is to improve transparency around prices, costs, margins and the distribution of added value. At the same time, discussions are underway on the Common Agricultural Policy after 2027. The Commission has proposed that in the new post-2027 framework, at least EUR 300 billion should be allocated to income support and crisis support for farmers, showing that public instruments are still expected to remain one of the pillars of stability for the sector.

“When it comes to universal access to food, we must cooperate with grocery chains. In this specific triangle — farmers, the purchasing sector and the state — regulatory support is needed to normalise relations between farmers, intermediaries and retailers. Today, practically everyone who compares prices paid to farmers with prices in shops asks where such a large difference comes from,” Mateusz Stankiewicz points out.

Poland already has solutions that allow farmers to shorten the supply chain, including agricultural retail trade, under which it is possible to process and sell food from one’s own production directly to end consumers, under the supervision of the relevant sanitary and veterinary authorities. From the producers’ point of view, however, this is still more of a supplement to the business model than an answer to the systemic problem of price relations across the sector.

“Prices that are much more favourable than those on shop shelves can often be found directly on farms, which is why I encourage consumers to use direct sales offered by farmers,” the expert emphasises. “There are many possible solutions. We have proposals concerning local shelves or greater use of locally produced goods, but this requires the consent and involvement of all parties. Our recommendations must be aligned with what the national administration is able to propose, but also with what retail chains are ready to accept. Without joint action, it will not be possible to permanently improve the income situation of farms,” he concludes.

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