The lack of investment in ports and railroads is limiting the export potential of agricultural goods and poses a problem for the transit of Ukrainian grain. The construction of agroports is essential. “We are facing a large surplus of grain that needs to be exported as quickly as possible to free up storage space for the next harvest season, and therefore a faster pace of export is needed,” says Stefan Krajewski, Deputy Minister of Agriculture and Rural Development. Some experts, however, question the long-term justification for such investments.
Poland is one of the main grain exporters in Europe. According to the Agricultural Market Agency (KOWR), from July 2022 to April 2023, grain exports from Poland were 41% higher than in the same period of the previous season, totaling 9 million tonnes. In the export structure, wheat accounted for 47%, corn 39%, and rye 4%. Polish exporters primarily sold grain to the EU market (67% of the exported grain). Nearly 3 million tonnes of grain were exported to non-EU countries.
However, inadequate infrastructure does not fully capitalize on Poland’s export potential and also hinders the transit of Ukrainian grain, which has largely been redirected through Poland to Europe since the outbreak of the war and the blockade of Ukrainian ports on the Black Sea. This year alone (data from January to March 10), 600,000 tonnes of Ukrainian grains and rapeseed transited through Poland. Last year, more than 1 million tonnes of grains (mainly corn – 598,000 tonnes and wheat – 347,000 tonnes) were imported from Ukraine to Poland.
“Investments in infrastructure, which should and will be made in Poland, include port investments. The situation with exporting Ukrainian grain has shown that these ports need to be rebuilt and serviced more quickly. Loading and unloading should take less time. And, of course, this needs to be coordinated with railway lines and delivery,” Krajewski explains in an interview with Newseria Biznes.
The necessary investments to increase the export of products from Ukraine are estimated by Poland at 1 billion euros, including the modernization of railway border crossings with Ukraine and the expansion of border crossings for large trucks. It is also necessary to increase the capacity of seaports.
“We are currently facing a large surplus of grain that needs to be exported as quickly as possible to free up storage space for the next harvest season. Therefore, a faster pace of service and export is needed. We also stand by our exports, exporting agricultural and food products, and the fastest way is by sea. However, this will not be possible without well-prepared port infrastructure,” emphasizes the Deputy Minister of Agriculture and Rural Development.
Estimates from the Ministry of Agriculture indicate that Poland’s largest seaports can handle about 1 million tonnes of grain per month. However, the Grain and Feed Chamber estimates the real capacity of Polish ports at about 750,000 tonnes per month. If the Black Sea route remains closed to Ukrainian grain, this will be far too little, especially since, as experts calculated during the Resilience Congress 2024, loading a Panamax-type ship with grain takes up to 10 days, several times longer than in Western European ports. There is also a shortage of port warehouses.
Plans to build agroports are accompanied by a series of questions.
“Agroports should be built by companies that deal with distribution, trade, sales, and purchasing of grain. If private investors come to every port in Poland and say: we want to build such and such a terminal, we need such a quay, such depth, such land, then the ports will definitely give it to them. However, the question is whether they will come, because what is currently happening with grain is a temporary situation. If the war in Ukraine ends, then these huge quantities of grain will pass through Ukrainian ports,” explains Rafał Zahorski, plenipotentiary for development of the Szczecin Świnoujście Seaports Management Board.
As the Deputy Minister of Agriculture and Rural Development emphasizes, more infrastructure investments are needed, as they concern not only agriculture itself but also rural development. This includes the construction and modernization of roads, as well as water supply and broadband infrastructure.
“The funds that have been invested over the years through pre-accession and accession funds, starting from SAPARD, through all the Rural Development Programs and the Strategic Plan, show that there is still much to be done. We need to catch up on the infrastructure prepared for farmers, processors, but also for rural residents,” Krajewski insists. “This is also a matter related to storage, the preparation of cold stores, freezers for those entities that process and prepare final products. These investments are ahead of us, and we are trying to implement them through the actions conducted by the Agency for Restructuring and Modernization of Agriculture.”
As experts from the Institute of Financial Research and Analyses at the University of Information Technology and Management in Rzes
zów explain (“Without changing incentives, there will be no modernization of agriculture and rural areas,” published in “Pomorski Thinkletter: Polish agriculture at the threshold of a great transformation”), despite significant public fund transfers, the condition of Polish agriculture and rural areas is still not optimal. Public financing supports land ownership rather than agricultural activity. Funding is more likely to support consumption rather than modernization and restructuring of the sector. The effectiveness of support for rural development and the transformation of agriculture is also negatively affected by the fact that of the approximately 50 billion złoty allocated annually from national and EU funds, over 90% constituted direct transfers and support for the social insurance system. Assistance is dependent on owning agricultural land, not on the efficiency of producing healthy food and managing a farm in accordance with the principles of sustainable development.
Experts emphasize that for the development of agriculture and the increase of its efficiency and profitability, while simultaneously improving the quality of food, rural areas must develop. Clear disparities between the quality of life in rural areas and in cities will deepen the depopulation of rural areas, which will eventually weaken the agricultural sector. Hence the necessity to link agriculture with rural areas.
