COVID-19-related state aid programs for agriculture in Poland

ABSTRACT

Agriculture is a sector in which economic policy has an exceptionally significant influence. The paper aims to identify, discuss, and assess the actions taken by the Polish state (government) concerning agriculture in connection with the COVID-19 pandemic. We use data on state aid for agriculture in connection with the COVID-19 pandemic from the European Commission, the National Bank of Poland (NBP), and the Agency for Restructuring and Modernization of Agriculture (ARMA). The research period covers 2020-2021. Polish state has taken several measures concerning agriculture to limit the adverse effects of the COVID-19 pandemic. These anti-COVID-19 state measures covered e.g. aid for farms at risk of losing liquidity, intervention purchases of agricultural products, subsidies to interest rates on banking loans, loans, guarantees and loan sureties, subsidies for the costs of employee salaries, allowances for rent or lease, subsidies or repayable assistance, exemption for farmers from paying social security contributions, children care benefits, sick benefits for the quarantine period. Public financial aid for agriculture with the highest value (2/3 of the aid for farmers) came from the RDP 2014-2020 program, i.e., EUR 270 million. Moreover, under state aid, ARMA implemented three programs with approximately a total value. EUR 135 million, i.e., financial aid for agricultural producers facing liquidity losses due to restrictions on the agricultural market, financial aid for the holders of chrysanthemums who have suffered losses due to market restrictions, and financial aid to pig producers. More than 90% of the submitted applications were approved as part of the national state aid. Such a large percentage of accepted applications, both from the RDP 2014-2020 and state programs, resulted from the willingness of the Polish state to help farmers quickly.