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The Financial Times

Polish farmers plough the organic furrow
The country has fertile conditions for developing its wholefoods industry but must first harness the market forces of agriculture and retailing, writes John Reed

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From left to right :
Artur Tymiński, Steve Sperelakis, Tokya E. Dammond

Ask anyone in Poland's small hut passionate environmental movement and they will say their country Is one of Europe's most promising producers of organic food. Polish farming was never collectivised or industrialised widely, so small plots abound. Mechanisation is scarce and farmers are willing to shoulder the hard physical work that most organic production demands.

Native breeds pushed out elsewhere by better-yielding variants - such as the Pulawy pig, source of Poland's tastiest cold cuts - persist.

 

Chemical and fertiliser use is at a fraction of the level in most European Union states: and Germany, one of the world's biggest import markets for organic foods. Is next door.

Pitted against these natural advantages is the seemingly Inexorable march of market forces. Agro-industrial companies are pushing Into Poland, bringing the tools of factory farming ant) genetically modified crops. Foreign retail chains, which have Invested heavily in Poland, are pulling in price-conscious consumers with bulk-packaged chicken breasts and intensively grown vegetables.

When Poland enters the European Union in less than two years, it will begin receiving subsidies from the EU's Common Agricultural Policy, Environmentally minded Poles worry that the new soft money will destroy traditional landscapes and pave their land, which is "greener" by far than most Ell states, with intensive farms, like Denmark and the Netherlands before it.

"We fear seeing our wetlands planted with corn." says Dorota Metera, a project officer with the World Conservation Union's Warsaw office.
Subsistence farmers today work sus-tainably in most of Poland's national parks but the arrival of EU farm subsi dies could alter that, Ms Metera warns.
An abrupt switch to big farming would carry high human costs too, since about 38 per cent of Poles live in

The European Commission, recognising its past mistakes, is promoting organic farming as part of a revamp of the CAP and pressing candidates such as Poland, which passed Us own organic farming law last year, to follow suit.

But to create a market for organic food. Poles realise, they need to bow to market forces and build viable businesses. Two companies' experiences -one negative and one positive - highlight the challenges Ekoland. Poland's first and best-known organic food co-operative, was established in 1389 with support from Germany's Heinrich Boll Foundation, which is concerned with environmental issues. The co-operative includes more than Ś400 farmers from around Poland and recently opened a stand in Bron-isze, the main farmers' market supplying Warsaw.
But Ekoland's fanners have struggled to raise working capital, a perennial pitfall in Poland's tight banking market. Erratic supplies and patchy transport have failed to keep its farm stand in Bronisze stocked with food.

Ekoland has dabbled with branding but failed to forge partnerships with the foreign chains that dominate Polish commerce. Its one shop in Warsaw is dimly lit and poorly located, making it a destination mostly for die-hard enthusiasts.
"We still aren't profitable," sighs Danuta Zarzycka. the shop's somewhat glum proprietor. "And when the turning-point comes, that will mean breaking even "
Symbio Polska, a company comprising growers in south-eastern Poland, tells a happier story. Founded in 1998 with support from Caresbac Polska, a venture-capital fund, the company set its sights on exports rather than Poland's embryonic domestic market. "It was a matter of finding a niche," says Steve Sperelakis, president of the board. Mr Sperelakis is an MBA who coworked for Keebler, the US biscuit pro-Focusing on ingredients for packaged foods. Symbio exports fruit and vegetables for use in processed organic products such as yoghurt, jam and baby food. Its biggest markets are Germany, the UK and the Netherlands and it shipped its first batch of strawberries to the US last weekend.

Leaving little to chance. Symbio locks in supplies via contracts with farmers and provides fertiliser and seeds, training and round-the-clock technical support, It also helps farmers to attain EU and Polish organic certified - shared processing equipment - doing everything, in short, except growing the product.
With 280 farms under management, Symbio now wants to extend its reach, and gain an extra revenue stream, by marketing in Poland. The company plans to begin selling eggs, milk and other products in Polish stores, developing a brand in the process.

"We're hoping to supply the super - and hypermarkets," says Mr Sperelakis, "People say: 'Don't! They're the enemy!' But we want to sell our products where Poles shop."

The chains say they are ready to expand their organic food offerings if reliable supplies are available. France's Geant, with stores in shopping malls around Poland, already stocks soy-based foods, wholewheat pasta and other organic and diet foods. The retailer plans to broaden its assortment next year. It says, Poland's budding wholefoods movement also has friends in high places. President Aleksander Kwasniewski, a promoter of goods made In Poland, hosted an "Eco-Festival" in the gardens of his Belvedere palace last month. "You are what you eat," declared the president, a noted bon vivant. before joining his guests at a buffet that included organic raspberries, sauerkraut, crayfish, apple cider and smoked cheese.

Official incentives backing the Industry include last year's law, which lays out a legal framework for organic farming, including certification. Organic farming is also one of Poland's only agricultural branches to benefit from subsidies, though the level was cut by 50 per cent this year because of the country's fiscal constraints. An EU - funded "twinning" project with fanners in Italy, which is one of Europe's largest producers of organic food, is also under way.
With only about 2.000 organic - farms - less than 1 per cent of farm land, compared with an average of 2-3 per cent in the EU - the industry still has far to go, says Wieslaw Wawiernia, an agriculture ministry official.

But Symbio, which reported its first profit in 2000, believes the glass is half-full. "Polish agriculture is so far behind the west," says Mr Sperelakis, "'that in many ways it's ahead of it.