Trends and determinants of post-integration agricultural transformation in Poland and Bulgaria

Agricultural transformation in Poland and Bulgaria, both characterized by unique farm structures compared to the old EU, has been a policy challenge for the Common Agricultural Policy (CAP) even before integration. Eurostat and Comtrade data over 2000 to 2016/2017 have been used to analyse agricultural restructuring at farm level, relating it to growth trends in agro-processing units and eventually to competitiveness in agricultural exports and trade specialization. CAP payment instruments, especially DPs have influenced farm restructuring, farming practices and income in both Poland and Bulgaria. Distinctive farm structures have evolved that have caused polarization and influenced productivity. Large farms are the main beneficiaries of farm aids and this polarization continues in the agro-industry sector as well. Multinational agro-firms, though insignificant in number are found to monopolise agro-based production in almost all the food processing sub-sectors in both the member countries. In terms of trade competitiveness indices, export specialization of agri-commodities has reduced in both members over 2000-2017, shares of processed commodities in exports with specialization have increased for Poland while Bulgaria has gained in medium-processing capabilities. For policy implications, small farms need to form producer groups and coordinate with small producers to increase both farm and firm level productivity. The subsidiarity principle of new CAP can be utilized by member states to facilitate this.