Last week, Agriculture Minister Stefan Krajewski sent a letter to the Office of Competition and Consumer Protection (UOKiK) over suspicions of unfair market practices and price collusion on the pork market. The matter concerns purchase prices for live pigs, which the ministry believes are being artificially lowered, harming the interests of farmers. The ministry is also planning further measures to support pig producers.
“In recent weeks, we have observed significant declines in live pig prices that are not justified by the market situation, production costs or what is happening around us,” Adam Nowak, Deputy Minister of Agriculture and Rural Development, told Newseria.
According to data from an information bulletin prepared on the basis of the Integrated Agricultural Market Information System, purchase prices for live pigs on 17 May stood at PLN 5.13 per kg of live weight, and PLN 6.66 per kg in post-slaughter class E. This means they were 11–13% lower than a month earlier, when they stood at PLN 5.76 and PLN 7.68 respectively, and 27–28% lower than a year earlier, when they amounted to PLN 7.01 and PLN 9.27.
In his letter to UOKiK, the minister stressed that, given high costs of feed, energy, veterinary care and strict biosecurity requirements related to ASF, current price levels are at or below the profitability threshold for many Polish farms.
“We want the Office of Competition and Consumer Protection to verify this situation. We are concerned that farmers, who are dependent on processors and have a much weaker position in relation to them, may in this case be victims of collusion,” Nowak emphasised.
In the letter to the president of UOKiK, the Minister of Agriculture and Rural Development also pointed to a dangerous asymmetry of market power. As he noted, several large meat plants have a significant advantage over dispersed and economically weaker breeders.
“Given the very serious challenges and problems faced by the pig farming sector, such a situation cannot be allowed to occur,” the deputy agriculture minister said. “This applies both to those who produce in a closed cycle and have contract fattening, as well as to those operating in an open cycle, who buy piglets from outside their farms, are highly exposed to piglet and weaner prices, and then sell at a price that generates losses for their farms.”
Ministry expects a thorough investigation
The Ministry of Agriculture and Rural Development expects UOKiK to thoroughly examine relations between producers and processors of live pigs. It also declares full readiness to cooperate.
“Regulations concerning contractual advantages are subject to significant limitations on the part of the European Union. However, through the actions carried out by the Ministry of Agriculture — including monitoring, reporting cases to the Office of Competition and Consumer Protection and providing greater support to producers — we are trying to influence the direction of market changes,” the deputy minister said.
Contractual advantage occurs when there is a significant imbalance in economic potential between the supplier and buyer of agricultural or food products. This area is regulated by the 2021 Act on Counteracting the Unfair Use of Contractual Advantage in Trade in Agricultural and Food Products, which implemented the EU directive on unfair trading practices in business-to-business relations in the agricultural and food supply chain.
“The market position of farmers in relation to processors and purchasing entities, especially in times of overproduction, remains exceptionally weak. This applies not only to pig producers, but also to other branches of agriculture. However, we can see that the roles reverse when there are deficits and shortages on the market — then farmers have a stronger position,” Nowak said. “As part of dialogue with the farming community and organisations representing individual businesses, we are trying to resolve this situation.”
Support programme for pig producers
According to the deputy minister, the ministry is expected to present a support programme for Polish pig producers in the near future. For now, a draft version has been prepared and is being consulted with industry representatives.
“We are preparing appropriate regulations that would support domestic pig producers. Such support would be directed primarily to breeders who keep sows, but also to producers of domestic piglets. This is where we see the greatest needs,” Nowak noted.
He added that such a programme is needed, especially in the context of the difficult market situation caused by low live pig prices. According to the ministry, this discourages farmers from continuing production and represents the greatest threat to maintaining food security in this area.
