POLISH AGRICULTURE: POLICY AND PROSPECTS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83-00857R000100120002-7
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 15
• Document Creation Date: December 21, 2016
• Document Release Date: July 7, 2008
• Sequence Number: 2
• Publication Date: September 1, 1982
• Content Type: REPORT

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Directorate of Confidential
Intelligence
Polish Agriculture:
Policy and Prospects
ON FILE DEPARTMENT
OF AGRICULTURE
RELEASE INSTRUCTIONS
APPLY
State Dept. review
completed
Confidential
EUR 82-10087
September 1982
copy 0 0 2
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Directorate of
Intelligence
Polish Agriculture:
Policy and Prospects
European Division, EURA
are welcome and may be directed to the Chief East
Office of European Analysis. Comments and queries
The author of this paper is
Confidential
EUR 82-10087
September 1982
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Polish Agriculture:
Policy and Prospects
Key Judgments The Jaruzelski regime is making little progress in resolving Poland's
Information available agricultural problems, which have resulted from more than three decades
as of 27 August 1982 of neglect and mismanagement by successive Communist regimes. Even if
was used in this report.
Poland has an average grain harvest of 20 million tons this year, it faces a
shortfall of more than 3 million tons. The government has raised food
prices to reduce excess demand, but it has not taken adequate steps to
increase supply. The present regime is in a particular bind since it cannot
import large quantities of grain or other food products from the West
because of its financial problems and Western credit sanctions.
The regime has not provided incentives that would induce private farmers,
who account for about 75 percent of agricultural output, to produce more.
For years, the state has not allocated sufficient investment to the agricul-
tural sector and has not ensured the profitability of private farms. The
present government has threatened a return to compulsory deliveries, but it
is reluctant to make good on the threat out of fear that the private farmers
will cut production in response.
The regime's tougher approach to private farmers under martial law has
yielded ambiguous results during the first seven months. Partially because
of fodder shortages, farmers have increased livestock sales enough to
satisfy rationing requirements, but they have not filled state grain needs.
The shortfall has forced the government to buy additional grain in the
West, using proceeds from the sale of high-quality meat. The regime could
face serious supply shortages again later this year if the harvest turns out to
be worse than is now indicated or if farmers decide for other reasons not to
sell sufficient quantities to the state. Should Warsaw reimpose compulsory
deliveries of grain, and perhaps other farm products as well, the regime
could be dragged into a confrontation that might become a major turning
point in the Polish crisis.
iii Confidential
EUR 82-10087
September 1982
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Polish Agriculture:
Policy and Prospects
Agricultural Problems in Perspective
In the years since World War II, Warsaw's agricul-
tural policy has had two conflicting goals. One goal-
increased farm production-requires increases in
agricultural investment and in financial returns to
farmers, which would be facilitated by high procure-
ment prices. The other-low food prices for urban
workers-militates against high state procurement
prices and has led to huge consumer subsidies. The
general problem is not unique, but its resolution is
more difficult in Poland than in other Communist
countries because most farmland remains in private
hands and workers have reacted violently against
he attempts by t overnment to raise retail food prices.
Poland has been a net importer of grain since the
beginning of the Communist period. It became a net
agricultural importer in the 1970s, when Polish farm-
ers failed to keep pace with increasing consumer
demand for foodstuffs and the regime decided to boost
imports rather than ignore or curb that demand. In
1970, agricultural raw materials and food imports
constituted 25 percent of total imports from the West;
by 1981, these imports had jumped to 45 percent of
total hard currency purchases. Agricultural exports,
meanwhile, declined from one-fourth of Poland's ex-
ports to the West in 1971-75 to only 10 percent in
1981 (table 1).
including investment in agriculture, sharply. These
levels of investment meant that farmers did not
receive modern machinery and high-quality seeds,
and the rural infrastructure (for example, roads,
storage facilities, and irrigation projects) was not
upgraded. To some extent, weather damage to
crops-a primary cause of poor harvests in the late
1970s-could have been reduced had the state invest-
ed more in flood control and land improvement
projects and in the construction of transport and
storage facilities. Even in a good harvest, the inade-
quate rural infrastructure contributes to losses aver-
aging around 15 to 20 percent of the crop. The
situation is aggravated further by inadequate invest-
ment by private farmers. Many are reluctant to invest
in land which they feel may be taken eventually by
the state, either by force or after their retirement. As
a result, inadequate storage facilities, outdated farm
implements, and poor soil management are common
problems which lower production.
Discrimination Against the Private Farmer. Unlike
its neighbors, Poland decided not to socialize farming
forcibly in the 1950s because the regime feared that
resistance by the farmers would disrupt food supplies
for years. Warsaw instead tried to pressure farmers
into joining collectives. It assigned compulsory deliv-
ery quotas of products that private farmers had to sell
to the state, at the same time depriving them of many
farm inputs, especially key items such as tractors and
fertilizers. Because of the lack of proper inputs, yields
Emphasis on the Industrial Sector. Successive Com-
munist regimes in Poland-like regimes in other
Soviet Bloc countries-have considered improvement
of the agricultural sector to be less important than
industrial development. Only 11 to 15 percent of the
Polish state investment budget was apportioned to
agriculture in the 1950s and 1960s.' Even when food
supply problems were widespread in the 1970s, state
investment in the sector averaged just 15 percent of
total state investment. In 1980, balance-of-payments
problems caused Warsaw to cut total investment,
per unit of land have been less for most crops on
private farms than on state farms.
By the mid-1970s, only one private farmer in 13
owned a tractor; most of the others depended on
horses to farm their land. In 1975, the supply of
fertilizer provided private farms per unit of land was
only half that allotted to state farms. Relative to land
area and livestock numbers, the state farms received
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Table 1
Polish Agricultural Trade
Of which: Western
0.26
0.28
1.04
1.73
1.95
1.69
2.47
Grain (million tons)
2.68
2.46
4.03
7.37
7.34
7.67
7.04 a
Wheat (million tons)
1.38
1.10
1.48
2.31
2.93
3.47
3.44
Corn (million tons)
0.78
0.23
0.63
1.81
2.09
2.52
2.43
Barley (million tons)
0.49
1.09
1.38
2.41
1.50
1.13
0.88
Meat (thousand tons)
38
45
16
33
2
174
175
Total (billion $)
2.23
3.55
10.51
14.49
16.86
17.25
13.40
Of which: Western
0.82
1.26
4.12
5.48
6.35
7.51
5.49
Food and agriculture (billion $)
0.44
0.45
1.41
1.27
1.41
1.30
0.78
Of which: Western
0:35
0.41
0.68
0.96
1.05
1.03
0.65
Grain (million tons)
0.09
0.20
0.10
0.01
0.07
0.0
0.0
Meat (thousand tons)
197
148
209
153
167
150
73
a Estimated.
b Polish Statistical Office, Rocznik Statystyczny Handlu Zag ranicz-
nego, 1966, 1971, 1976-81.
more machinery and equipment and had greater
access to services of veterinarians and soil scientists.
Many private holdings, however, were too small or too
divided for mechanized techniques to be economical.
Despite the pressures, most farmland remains in
private hands. In 1980, private farms accounted for
76.9 percent of gross farm production; state farms,
17.8 percent; collectives, 4.3 percent; and associations,
1.0 percent of output.. Associations provide services
such as plowing and harvesting to private farmers and
demonstrate new farming techniques.
Private farms are small because of direct and indirect
constraints imposed by the government and because
many farms were split into small noncontiguous par-
cels as a result of the now-forbidden tradition of
dividing a father's land among his surviving sons.
About 2 percent of Poland's farmland was lying
fallow in 1981 because many noncontiguous plots
were too small to be used profitably. In the early
1950s, private farmers were not permitted to hold
more than 15 hectares (1 hectare equals 2.47 acres).
This subsequently was increased, and by the late
1970s farmers were allowed to own 50 hectares of
land. This year, apparently recognizing the key role of
private farming (and perhaps economies of scale), the
regime doubled the amount. Local officials often have
been a stumbling block: they have been slow to
approve land sales to prosperous farmers and have
used their controls over credit and their other powers
to hinder farm expansion'. Moreover, chronic short-
ages of machinery have made farmers reluctant to
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Confidential
acquire more land. As a result of these factors, the
great majority of farms have been much smaller than
the allowable maximum; in 1980 only 5 percent of
farms were over 15 hectares.
Unfavorable Pricing Policies. State procurement
prices for farm products have rarely been high enough
to provide much stimulus to production. Regimes have
raised procurement prices substantially only in re-
sponse to pressure from workers to increase food
supplies-and then many times have raised input
prices, eroding farmers' real gains. After crisis periods
in 1956, 1970, 1976, and 1980, the government
increased procurement prices of most livestock and
grains. In the first three instances, farmers responded
by selling more livestock to the state. In the case of
hogs, for example, a procurement price increase of 21
percent in 1957 led to a hike in hog sales to the state
of 26 percent the following year; the 1971 price
increase of 26 percent led to a 38 percent rise in
procurements in 1972; and the 17 percent purchase
price rise in 1977 increased sales to the state by 16
percent the following year. The same trend is evident
in the procurement of milk and cattle, although there
is a lag of two years before cattle sales increase
because of the time required to raise animals for
market.'
The costs of many inputs such as fertilizers, pesti-
cides, and farm machines were doubled in the late
1950s, and some were increased by 20 to 30 percent
again in the late 1960s. In the early 1970s, Gierek
temporarily increased real farm income by raising
procurement prices much more than input costs. In
1974, however, input prices were increased by 10
percent while purchase prices rose only 7 percent. For
Simple regression analysis shows a strong positive relationship
between the numbers of hogs and cattle or the amount of milk sold
to the state and the procurement prices of these items. But not all
grains show the same positive correlation between amounts sold to
the state and procurement prices. Although wheat and barley
deliveries are responsive to purchase price changes, rye-which is
the biggest part of the grain crop-is much less so. In any case, this
approach does not take into account variations in the weather or
offsetting changes in costs. Sales of agricultural products to the
state actually fell in 1980 and 1981 despite substantial increases in
procurement prices because mediocre crops and a jump in non-
agricultural wages led to much bigger increases in black-market
example, the state passed on the higher costs of
imported feed grains to farmers but failed to take into
account these higher costs when setting procurement
prices. To avoid worker discontent, the government 25X1
refused to raise retail prices (which did not cover
prevailing procurement costs) and, because it wanted
to avoid a greater subsidy burden in the state budget,
refused to raise procurement prices. In real terms,
private farm income declined 6.6 percent in 1974 and
6.2 percent in 1975, discouraging farmers from in-
creasing production and helping to bring on the crisis
of 1976.
Deterioration in Agricultural Labor. Low farm in-
comes have forced many farmers to take second jobs
to make ends meet. A survey in the mid-1970s showed
that nearly 60 percent of Poland's private farm
families depended to some extent on nonagricultural
income. Because second jobs divert these, people from
farm work, yields reportedly are 20 to 30 percent
lower on their farms than on others of similar size or
soil fertility
As in other countries, the attraction of higher incomes
and improved lifestyles has drawn many young farm-
workers to the cities in the last three decades. Indeed,
the number of private farmworkers declined 30 per- 25X1
cent from 1970 to 1980. The quality of labor on
private farms also has fallen; presently over one-third
of the private farmers are over 60 years of age. Some
older farmers are being enticed off the land, however,
by liberalized retirement benefits-granted in 1980-
which allow farmers to retire at age 65 for men and
60 for women if they surrender their land to the State
Land Fund or to younger relatives.
Recent Agricultural Performance
Despite all the problems, Poland had an agricultural
boom in the early 1970s that was unprecedented in its
postwar development. Between 1970 and 1974, grain
production increased an average of 9.0 percent a year,
cattle numbers by 4.7 percent, and hog numbers by
12.5 percent. Other farm products such as milk,
vegetables, and fodder crops increased significantly
(table 2).
25X1
I
25X1
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Table 2
Poland Agricultural Production
Agricultural production
(Index, 1970=100)
a
100.0
108.1
113.6
118.7 '
120.8
105.3
107.0
107.5
116.7
109.9
95.7
98.5
Crops b
Grain (million tons)
(1970=100)
16.3
100.0
19.9
122.1
20.4
125.2
21.9
134.4
23.0
141.1
19.6
120.2
20.9
128.2
19.4
119.0
21.5
131.9
17.3
106.1
18.3
112.3
19.7
120.9
Potatoes (million to
(1970=100)
ns)
50.3
100.0
39.8
79.1
48.7
96.8
51.9
103.2
48.5
96.4
46.4
92.2
50.0
99.4
41.1
81.7
46.6
92.6
49.6
98.6
26.4
52.5
42.6
84.7
Sugar beets (million
(1970=100)
tons)
12.7
100.0
12.6
99.2
14.3
11.2.6
13.7
107.9
13.0
102.4
15.7
123.6
15.1
118.9
15.6
122.8
15.7
123.6
14.2
111.8
10.1
79.5
15.9
125.2
Livestock (June census)
Cattle (million)
10.8
11.1
11.5
12.2
13.0
13.3
12.9
13.0
13.1
13.0
12.6
11.8
ii non-inm
1000
I--
1028
- ..u
106
-.1
1130
^ i .v
20
INN
123.1
119.4
120.4
121.2
120.4
116.7
109.3
Hogs (million)
13.4
15.2
17.3
19.8
21.5
21.3
18.8
20.0
21.7
21.2
21.3
18.5
(1970= 100)
100.0
113.4
129.1
147.8
160.4
159.0
140.3
149.3
161.9
158.2
159.0
138.1
a Source: L. W. International Finance Research, Inc., Economic
Growth in Eastern Europe, OP-48, OP-54, 1975; OP-65, 1981.
b Polish Statistical Office, Rocznik Statystyczny , 1971-81.
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Table 3
Poland: Per Capita Consumption of Selected Food Products a
Meat (kilograms)
53.0
56.1
59.3
62.1
65.6
70.3
70.0
69.1
70.6
73.0
74.0
Milk (liter)
262
266
263
263
261
264
258
263
264
264
262
Eggs (units)
186
193
196
202
205
209
214
214
219
221
222
Sugar (kilograms)
39.2
39.6
40.9
42.4
43.9
43.2
43.9
41.5
42.7
43.9
41.4
Fish (kilograms)
6.3
6.4
6.8
7.2
7.3
7.2
7.7
7.6
7.3
7.6
8.0
Cereals (kilograms)
131.0
128.0
127.0
125.0
123.0
120.0
119.0
121.0
120.0
120.0
124.0
Potatoes (kilograms)
190.0
189.0
187.0
183.0
177.0
173.0
171.0
168.0
166.0
163.0
158.0
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As a result of increased production, Polish diets
improved considerably in this period. Per capita con-
sumption of meat increased 5.5 percent annually, eggs
2.5 percent, fats 2 percent, and sugar 2.6 percent. At
the same time, supplies of less-desirable foods such as
potatoes and grains decreased 1.6 percent annually
(table 3)
The improvement in farm output was due to a
coincidence of favorable weather and Gierek's efforts
to give greater support to private farmers. During
these years, the government increased purchase prices
of grain and livestock, reduced land taxes, abolished
compulsory deliveries, and granted national health
insurance and retirement benefits
The farming boom faltered in the middle of the
decade. Between 1975 and 1980, production of many
farm products stagnated or fell. Grain production
stayed at 1975 levels; only in 1976 and 1978 did it
surpass 20 million tons. The potato and sugar beet
harvests fell to record lows in 1980 after four years of
stagnation at the 1975 level. Cattle and hog produc-
tion were at 1973 levels in 1980. Livestock numbers
stagnated or fell every year after 1978.
Although imports were increased, shortfalls in output
slowed the growth of consumption of quality food-
stuffs. Consumption of meat rose only 5 percent in the
last half of the decade and consumption of eggs rose
6 percent. Consumption of milk stagnated, while
consumption of sugar fell by 4 percent. At the lower
end of the quality scale, cereal consumption rose only
3 percent, and potato consumption fell 9 percent.
These downward trends can be blamed partly on the
weather, but they also reflect a shift by the Gierek
regime to policies that weakened incentives for private
farmers. For example, the regime raised farmers'
input costs more than procurement prices in order to
reduce farm subsidies while maintaining low retail
prices. At the same time, it kept down investment in
agriculture for budgetary reasons and to keep re-
sources flowing into industry
By 1977, the decline in farm production and an
eruption of worker unrest prompted Gierek to shift his
agricultural policies once again in favor of private
farmers. The regime expanded farmers' pension
rights, raised procurement prices, promised to allow
larger private farm holdings, and pledged to keep
farmers' price-cost ratios favorable. This time
Gierek's plan did not work. Private farmers did not
increase production, apparently because they were
uncertain about the regime's real intentions. Their
doubts seem to have been justified, since the state
failed to make good on many of these promises. Poor
weather in 1977-80 also tended to keep production
below the high levels of 1974.
Solidarity Era. In early 1981, farmers organized
their own Rural Solidarity, after urban workers had
shown the way with the original Solidarity. The
farmers' union, which claimed membership of 2 mil-
lion of Poland's 3.5 million private farmers, won a
number of concessions. The Kania regime promised
legislation guaranteeing the right to own and inherit
land. It also promised to increase investment in
agriculture, sell more land to private farmers, increase
farm credits and subsidies, and maintain a favorable
price-cost ratio. The government moved slowly, how-
ever, to implement these commitments. Bills on inher-
itance and land consolidation were introduced into the
Sejm committees but were not formally approved.
Local officials in many cases continued to hinder the
transfer of land to private farmers. Regime promises
to increase state investment in agriculture also were
broken. While agricultural investment was 18.6 per-
cent of total state investment in 1981, total investment
was reduced by 25 percent in real terms; hence real
investment in agriculture was less last year than in
1975.
the regime's
inability or unwillingness to fulfill its promises of
more favorable treatment of private agriculture in-
creased the farmers' historical mistrust of the govern-
ment at a time when the Kania regime badly needed
their support. The regime had yielded to Solidarity's
demands for huge wage hikes, which sharply in-
creased consumer demand and inflationary pressure.
Supplies of foodstuffs in 1981, however, declined
absolutely because farm output and the amount of
food processed and stockpiled fell in 1979 and 1980.
With prices controlled in the state distribution system,
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a huge gap developed between supply and demand,
resulting in long food lines, hoarding, and increased
black-market activity. The regime increased imports
of food and agricultural goods and reduced exports of
these products, but failed to close the gap
The government hoped to reduce excess demand (and
decrease the state food subsidy) by raising retail
prices, many of which had been frozen for more than
a decade. Solidarity refused to accept the price in-
creases, however, and the government was forced to
impose rationing on an ever-widening scale. Most
workers blamed the regime for the shortages, and
rumors spread that the government was hiding large
food reserves. Polish press reports of discussions at
Solidarity and party meetings indicate that workers
generally considered the farmer as much a victim of
the system as anyone, an attitude that reflected the
populace's deep-seated enmity toward the regime and
belief that it was trying to drive a wedge between
farmers and workers. Few attributed the problem to
the inflationary wage increases that had been won by
Solidarity.
Consumers responded to empty store shelves by in-
creasing their purchases through private channels.
Polish statistics and press commentaries indicate that
farmers increasingly ignored delivery contracts with
the state and sold their products in black markets,
where they could get prices several times higher than
the state's procurement prices-with payment often in
scarce goods rather than money. The leaders of Rural
Solidarity often told the regime that farmers were
reluctant to sell to the state because of the govern-
ment's failure to provide promised inputs to private
farmers. The result was that the state was unable to
procure sufficient amounts of food or meet its ration
commitments even though the country in 1981 had a
grain harvest of 19.7 million tons-equal to the
average for the 1970s and 10 percent above the
previous year-and a potato crop only moderately
below normal. At one point the government estimated
that 30 percent of meat sales were outside the state
system, and by the end of the year state grain
procurements fell to only one-third of the scheduled
monthly amounts. By the time martial law was im-
posed, the state retail system was hamstrung by severe
shortages, and the economy was operating largely on
a barter basis.
In an effort to increase the amount of food moving
through the state distribution system, the regime
gradually raised agricultural procurement prices by
an average of 80 percent, but state prices still lagged
far behind black-market prices. The government also
increased purchases of food in the West, alleviating
some shortages but worsening the foreign trade bal-
ance and preempting imports of goods critically need-
ed by industry. In the second half of 1981, Jaruzelski
increasingly used the military to conduct campaigns
against the black market and to eliminate distribution
bottlenecks, but even the presence of the military did
not convince the farmers to sell their scheduled
amounts to the state.
Martial Law. Immediately after the imposition of
martial law, the new regime made several threats in
an effort to induce farmers to sell more produce to the
state. A drop in some procurements and reports of
farmers killing livestock and hiding food to protest
martial law prompted the regime to raise the prospect
of a return to compulsory deliveries in press commen-
taries and at Party meetings with farmers. Military 25X1
teams were redeployed to the countryside to press
farmers to fulfill their grain contracts. The govern-
ment for the first time in recent years talked about
legal action against farmers who failed to fulfill their
contracts. More immediately, the state refused to sell
key inputs-which were available only in limited
amounts-to farmers who did not make sufficient
The government raised procurement prices 33 percent
for cattle, 15 percent for hogs, and 44 percent for
grain. By February, these increases-along with re-
gime threats and stringent prohibitions on black-
market sales-had increased the amount of food
reaching state stores. Retail price increases averaging
300 to 400 percent helped reduce excess demand.
Although food appeared to be more available, the
Polish press reported that retail sales of food, adjusted
for inflation, were down 17 percent in the first five
months of 1982 compared to the same period last
year. Meat and egg supplies declined around 20
percent in the first quarter of 1982 compared to the
same period in 1981.
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Because of these food supply problems, the regime
reiterated its threats concerning compulsory deliveries
of grain. To keep pressure on the farmers, it again
spelled out in a press report during June some plans
that were under consideration. Under one proposal,
farmers would be compelled to deliver 60 percent of
their total production to the state. Other. proposals
would restrict a farmer's purchases of inputs to half
the value of his total sales to the state or increase the
penalties for failure to meet commitments in procure-
ment contracts. The regime thus far has not imple-
mented any of these proposals.
While stepping up pressure on the farmers, the regime
on balance has offered them little positive inducement
to produce and sell more to the state. Despite pledges
to reduce input costs, the government in January
raised wholesale farm input prices by 36 percent and
the cost of services provided to private farmers by 330
percent. It increased procurement prices by only 21
percent on average and now estimates that farmers'
real income will decrease this year by at least 20
percent. Warsaw did make the increases in livestock
and grain procurement prices retroactive to Novem-
ber 1981. For several months it paid a premium of up
to 20 percent for on-time fulfillment of grain con-
tracts, but the delivery premium was canceled in July.
The regime has extended credit for purchases of
agricultural inputs and has continued subsidies on
some machinery and fertilizer which remain in short
supply. It has offered to pay farmers who deliver grain
above contracted amounts with interest-bearing
"grain bonds" redeemable at higher prices in 1983-
85. The regime attempted to underscore its support of
private farmers by securing parliamentary approval of
several measures that had been introduced before
martial law, including the bills liberalizing farm
inheritance and pensions and increasing the maxi-
mum farm size from 50 to 100 hectares.
Mixed Results. During the first seven months of
martial law, Warsaw's approach yielded mixed re-
sults: farmers did not fulfill their grain procurement
requirements but did increase livestock sales. During
the first four months of the new "grain bond" pro-
gram only 4,000 tons of grain (out of the more than
400,000 tons procured during that time) were sold to
the state in return for bonds. Farmers probably held
back grain because of their concern over unsettled
conditions, their need for grain to feed to livestock,
and their frustration over the lack of availability of
inputs.
In the early days of martial law, the government had
to rely on Soviet meat deliveries to fill a quarter of its
rationing commitment. Over the first quarter of 1982,
however, it was able to procure enough to cover
completely a rationing commitment that had been
reduced 10 percent from the previous quarter. We
believe that the government's ability to increase live-
stock and poultry purchases improved because of
distress slaughtering of chickens due to feed shortages
and the sale of animals held back from slaughter in
late 1981 as farmers waited for higher procurement
prices. Government threats and inducements probably
played only a minor role.
The government met the country's grain needs by
exporting 60,000 tons of high-quality meat to the
West in the second quarter to pay for the import of
400,000 tons of grain. Although grain imports should
meet present consumer demand, the state may face
shortages again later this year-perhaps very soon-
because farmers are not selling sufficient amounts of
grain to the state. By the end of August, with 90
percent of grain harvested, the press reported that
procurements were only 40 percent of the total
amount which the state planned to buy from farmers.
The numbers of cattle and hogs on private farms rose
7.3 percent and 10.3 percent, respectively, between
January 1981 and January 1982, probably because
farmers bred more livestock to sell at last year's high
black-market prices. Now, with that opportunity
closed off to most farmers, they seem to be cutting
their holdings. Farmers face a 30-percent decline in
the availability of feed concentrates supplied by the
state and higher costs. While human needs for grain
apparently have been satisfied with the aid of imports,
the regime was short 360,000 tons of fodder at the end
of June. We believe the shortage of feed led to
increased cattle and hog slaughter and higher meat
procurement in June which, in turn, will mean meat
shortages later this year. What could be most cata-
strophic for the future are a 71-percent increase in
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sales of breeding sows for slaughter and an 18-percent
drop in hog breeding in May 1982 compared to the
same month last year
The increase in private holdings of livestock in the
year to January was offset by declines on state farms
of 14.0 percent in cattle numbers and 18.2 percent in
hog numbers. Livestock holdings on state farms
dropped because these farms continued to find it
unprofitable to raise livestock and because the regime
drew heavily on the state farms last year to fulfill
rationing commitments. The decline in state farm
herds will put additional pressure on the regime to
persuade private farmers to sell more to the state.F-
We believe the regime will do everything possible to
avoid reverting to compulsory deliveries. The history
of Polish private farming in the Communist era shows
that the Polish farmer has responded to inducements
rather than threats; government harassment of private
farmers usually has been accompanied by stagnant or
decreased production. The regime, seeking to channel
more food through the state distribution system, has
stated it needs to procure 5.5 million tons of grain
from private farmers in the 1982-83 marketing
year-over 3 million tons more than the 2.3 million
tons procured in 1981-82. Sufficient inducements,
however, still do not exist to encourage private farm-
ers to sell to the state. Cost-price ratios have become
less favorable, and officials have said that procure-
ment prices for livestock and grain will not be in-
Outlook
In the next year, the regime will have to depend
heavily on domestic production, and especially the
private farmer, to satisfy the food needs of the
population; hard currency shortages will preclude
large imports of meat or grain. Current assessments
point to an average grain harvest of 20 million tons in
1982, which still would be 3 million tons below
estimated need if 2 million tons were imported. Crop
growth is hindered by severe shortages of fertilizers,
pesticides, and other farm inputs, but (as of mid-
August) harvest prospects were normal only because
weather has been favorable.
We estimate that meat production could fall to a level
that would provide as little as 50 kilograms per capita,
compared with 74 kilograms in 1980. To fill its
promise to keep meat consumption at 60 kilograms,
the regime would need to harvest about 25 million
tons of grain, well above expected domestic produc-
tion.
Outside sources of grain are few. Other East Europe-
an countries and the USSR will not be able to provide
any significant amount of grain or other foodstuffs
because those countries themselves have insufficient
supplies. Poland has not received any new grain
creased in the second half of 1982.
Moreover, the farmers have found that Warsaw can-
not provide them with adequate supplies of concen-
trated feed and other inputs. In this situation, the
worker-farmer may turn more attention to his indus-
trial or service job. The US agricultural attache in
Warsaw believes that many farmers will become
subsistence farmers in the next year, producing main-
ly for themselves and their relatives. Other farmers
may change to more profitable crops such as vegeta-
bles or even flowers.
Any number of factors-such as a disappointing
harvest, the ouster of moderate regime leaders, a
decision to cut back food imports even further, or a
heightened worker reaction to the poor food situa-
tion-would increase the chances of a tougher regime
policy. The workers' tempers are already frayed by
political repression and depressed living standards; at
any time they might vent their frustrations in demon-
strations over meat shortages or other specific griev-
ances.
If Polish officials decide they have no choice but to
institute compulsory deliveries of grain and perhaps
other farm products, they could begin quickly because
military teams in the countryside have already inven-
toried stocks. Such a move would dramatically esca-
late the crisis. It would take a large-scale effort by
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security forces to enforce compulsory deliveries; peas-
ants would find ways to hide their produce and some
would resist. In the longer run, farmers would cut
back production and the decreased availability of food
would further anger workers already disgruntled with
high prices. In addition, the Polish Church, whose
mainstay is the peasantry, might well feel compelled
to come to the aid of its members and thus become
more of a participant in the crisis rather than a
calming moderator.
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