Conditions for the development and experiences in the
implementation of entrepreneurship support instruments
in rural areas in Poland
Dr Iwona Nurzyńska
Institute of Rural and Agricultural Development
Polish Academy of Sciences (IRWiR PAN)
Structure of the presentation:
1. Rural and agricultural economy - need for off-farm jobs
2. Rural entrepreneurial ecosystem - strengths and
weaknesses of rural areas as place to run a business
3. Barriers for the rural entrepreneurship development in
Poland
4. Institutional system of the EU CAP implementation in
Poland
5. EU support programs for job creation in rural areas
6. Lessons learnt
Rural and agricultural
economy in Poland
Why do we need non-farm jobs in Poland?
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Decreasing role of agriculture in the national economy – a 3,3% contribution to Poland’s
GDP
Agriculture as „a reservoir” of the labor force - still12,8% (2,0 million people in 2011) of the
employed work in agriculture but the agricultural productivity accounts only for 30% of
the EU27 average productivity (hidden unemployment
Decreasing number of farms but only some 100-150 thou. competitive farms (> 30 ha and
16 ESU)
Rural households income disparity – disposal income per capita in urban areas over 41%
higher than in rural areas (2009)
Unemployment among non-farming populationon in rural areas 12,9%
Deagrarization - some 60% of rural population has no links with farming land and only 1/3
of rural population lives on agriculture
Entrepreneurship index lower than in urban areas (only 25% of the registered enterprises in
RAs)
Depopulation of rural areas (migration of the young) and land abandonment
Source: RDR 2012, FDPA, Nurzynska & Wilkin (editors)
Farm structural change in
Poland over 2002-2010
Years
AUA
[in thou. ha]
Average
[in ha]
2002
Agricultural
holdings
[in thou.]
2 933
16 899
5,76
2010
2 278
15 534
6,82
2010:2002
[in %]
77,6
91,9
118,4
Source: National agricultural census. 2010, GUS, Warszawa 2011
Number of farms in 19902010 by size (in ’000 ha)
1800
1600
1400
1200
1990
1996
2002
2010
1000
800
600
400
200
0
up
1ha
1-5
5-10 >10 10-20 20-30 30-50 >50
Socio-economic groups in
rural areas
%
Employees of public sector
Employees of private sector
Farmers
Retired and pensioners
Private business
Unemployed
Non economically active (others than the
unemployed)
Students and pupils
No data
7,1
15,5
7,9
22,5
2,3
4,6
16,5
21,6
2,1
Source: Halamska M. (2011), IRWiR PAN, based on Diagnoza społeczna 2009
Klasy oceny
wg Jenks' Natural Breaks
(udział klasy w zbiorze)
korzystna (46%)
przeciętna (25%)
niekorzystna (29%)
poglądowa granica rozbiorowa
obszar miejski
© Monika Stanny
Weaknesses of rural
entrepreneurial ecosystem
1. Low level of development of the local market: insufficient local
demand resulting from lower rural households’ income (income disparity
= ~40% );
2. Difficult access to the final customer and users of services and
products – lower population density; peripheral location
3. Lower qualifications and education level of rural people which limits
the access to the qualified specialists (lower willingness to commute to
rural areas for jobs);
4. Underdeveloped technical infrastructure compared to urban areas
(roads, water supply and sewage system, energy and
telecommunication networks - Internet), which implies higher costs for
potential investors;
5. Hindered access to financial infrastructure in rural areas – difficulties to
acquire capital for start ups
Weaknesses of rural
entrepreneurial ecosystem
6. Hindered access to training and advise for rural
entrepreneurship development (often inadequacy
of entrepreneurship support)
7. Underdeveloped entrepreneurship culture
(attitudes, perception, roles);
8. Low level of social capital (trust, cooperation).
9. Lack of more targeted policies differentiated
between potential entrepreneurs and existing
enterprises.
Strengths of RAs
1. Natural resources for the development of on-farm food
processing (local, regional and traditional food)
2. Lower labor costs - access to relatively low-paid
employees (key for start-ups)
3. Potentially easier access to investment areas
4. Informal human relations;
5. Individual and friendly approach of local public
authorities
6. Dedicated EU-funded aid programs for rural areas
Source: Institutional barriers for rural entrepreneurship
development (2011), Nurzynska and others, EFRWP
Rural entrepreneurship
development barriers in Poland
• Complicated, costly and
implementation procedures;
time-consuming
regulations
and
• Inadequate regulations to the small and micro-enterprise scale of
operation (Think Small First, KE);
• Insufficient number of advise and training organizations (access)
• „Overregulation” – not proportional to the problem addressed
• Administrative barriers „red tape” (elimination
regulations: one in – one out; sunset clauses)
•
of
redundant
Need for better educational system promoting „entrepreneurship”
attitude and economic education
Institutional framework of EU CAP
support implementation in Poland
The institutional structure of the institutions involved in the accreditation process of the Polish
system of management and implementation of EU support
MINISTRY OF FINANCE
COMPETENT
AUTHORITY
CERTIFICATION UNIT
MARD
COORDINATION
BODY
Supervision
over the
operation
EXTERNAL AUDITOR
Examination of accreditation
criteria for
ARMA (PA)
Source: Ex-post Evaluation of RDP. Final Report. MARD, Warsaw 2009.
Accreditation issues
Supervision over public
spendings.
Certification of accounts to the
EC
OTHER ENTITIES
(DELEGATED BODIES)
EU CAP budget transfers
over 2004-2011
Transfers
2004
2005
2006
2007
2008
2009
2010
2011*
2004-2011
Market measure 10,7
166,7
181, 8
56,7
134,6
409,0
66,3
136, 6
1 162 ,7
RDP
662, 1
1 149,5
1 550, 8
846, 5
1 043,8
1 571, 9
1 385
8 496,5
Direct payment 0
702 ,6
811,5
545,3
1 037,6
1 446 ,1
1 827,7
2 392,4
8 763,6
Other transfers
10,6
11,1
400,3
12,4
14,86
12,5
2,9
286, 6
0
464,8
SAPARD
118 ,2
339
0,012
0
34,7
0
0
0
Total transfer
415,7
1 881,1
2 154, 1
2 553,3
2 065,9
2 913 ,9
3 478,6
3 917
492,1
19 379,8
Source: own calculations based on the data of Ministry of Finance
EU Cohesion Policy and the CAP in Poland
in 2007-2013 in MEUR
70,000.0
60,000.0
50,000.0
40,000.0
30,000.0
20,000.0
10,000.0
0.0
BE BG CZ DK DE EE
IE
EL ES FR
IT CY LV LT LU HU MT NL AT PL PT RO SI
EPS alokacje krajowe w mln euro w latach 2007-2013
SK
FI
ROW alokacje krajowe w latach 2007-2013 w mln euro
SE UK
EU-funded aid for rural
job creation
Program
Measure
Diversification of economic
activities in rural areas
Number of
projects
Payments/allocation*
Share in the program budget
in %
4 071
342,3 mln zł
6,75%
4015
282 mln zł
6%
21530
1380 mln zl*
2,00%
28670
4 092 mln zł*
5,90%
n/a
450 mln euro (plan)
4,03%
n/a
?
?
SAPARD
SOP Agriculture
2004-2006
RDP 2007-2013
RDP 2007-2013
RDP 2014-2020
(planning)
PROW 2014-2020
(planning)
Diversification of agriculural
activities in rural areas
Diversification towards nonfarm activities
Creation and development of
microenterprises
Non-agricultural activieties in rural
areas
Support for existing SMEs (under
LEADER budget – 5% of RDP)
Polish RDP 2007-2013
(Share of Axes in %)
RDP 2007-2013 Axis 3
Objective – improvement of quality of life and job
creation in rural areas via:
• Access to capital for start-ups and development of
rural SMEs ;
• Access to training and advise services;
• Improvement of rural technical infrastructure;
• Village renewal
• Creation of support network for enterprises and
local development (LEADER approach)
Some business ideas under the measure „Establishment and
development of micro-enterprises” of RDP 2007-2013:
-
-
Hospital for horses, Wielkopolska region, 2 jobs
Hotel modernization and equipment purchase „Dwór Korona Karkonoszy”,
Dolnośląskie region, 2 jobs
Polish-English artistic kindergarten, Małopolska region, 1 job
Purchase of modern equipment (3D laser scanner with software),
Świętokrzyskie region, 2 jobs
Cosmetic and SPA services – expansion of existing business , Lubelskie region,
2 jobs
Textile business expansion (purchase of machinery and transportation means),
Pomorskie 2 jobs
Rural sport and recreation center (Factory Fitness Club ) under LEADER, 1 job
RDP 2007-2013
Job creation measures
Measures
Axies 3
Limit
in MPLN
Value of Relation of
contracts
contract Payments Payments
Projects Contracts concluded
value to
done
as % of
submitted concluded in MPLN limit value MPLN the limit
311
1 428,5
28 999
15 045
1 329
91,47%
1 011,3
91,47%
312
4 232,5
45 450
11 738
1 624
29,60%
1 078,8
24,62%
Total
5 661,0
74 449
22 698
2 953
52,10%
2 090,1
36,90%
Source: own caculations based o the Ministry of agriculture weekly reports as of July 2013
Rural Development Program
Off-farm jobs
2007-2013
Objective: off-farm jobs
(start-ups, micro-firms
creation and
development, LEADER)
Target groups: farmers
and farmer family
members, SMEs,
Share in RDP budget: 7,9%
2014-2020
Objective: off-farm jobs
(start-ups, existing SMEs
support under LEADER)
Target groups: farmers
and farmer family
members, existing SMEs (2
years), LAGs
Share in RDP budget:
8,06%
Conclusions:
1. More integrated approach towards programming of
the EU funds (CSF 2014-2020) for job creation at regional
level
2. Less money under RDP 2014-2020 for job creation
3. Need for domestic policy more targeted at job creation
in rural areas.
4. Need for the complex entrepreneurial ecosystem –
„tailored” composition of information sources, training
and advice institutions supporting nascent
entrepreneurs, suppliers of goods and services, local
demand, technologies, financial support, access to
external capital etc.
5. Role of NRDN (KSOW) in 2014-2020
Thank you for your attention