Changes in the Price of Food and Agricultural Raw Materials in Poland in the Context of the European Union Accession

Shaping of prices of agricultural raw materials results from the impact of a wide range of factors that influence prices in different links in the marketing chain. Political changes, especially sudden ones, which abruptly changed farming conditions, were one of the reasons for the asymmetry in price transmission. The main purpose of the paper was to estimate the trends in changes in agricultural raw materials prices in comparison to the trends in food prices in Poland in two time frames, differing in political and economic conditions: before (1999-2004) and after Poland's accession (2005-2019) to the European Union. It was found that the accession to the EU improved the situation of farmers in agricultural markets. There was a reversal of downward price trends in agricultural raw materials and their stabilization. In the years 1995-2005, for most of the prices of agricultural raw materials and food under the analysis, the differences between the trends were not statistically significant. This situation was consistent with the model of market operating under perfect competition. The trends in the prices of wheat, rolls, and bread, as well as the prices of livestock for slaughter-pigs and roast beef were the only exceptions. In turn, in the years 2005-2019 statistically significant differences between the trends in the prices of agricultural raw materials and food were recorded for wheat, bread, and flour; milk, butter, and cottage cheese; eggs and egg retail prices; as well as livestock for slaughter, cattle, and sausages. No statistically significant differences were found for the remaining relationships of the analyzed prices of agricultural raw materials and food. These data indicate a different level of price transmission depending on the product group.

Automated summary

This paper examines the trends in agricultural raw materials prices compared to food prices in Poland before and after its accession to the European Union. The study finds that joining the EU improved the situation for farmers in the agricultural markets, with a reversal of downward price trends in agricultural raw materials and their stabilization. The level of price transmission varies depending on the product group.