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Abstract
This study discusses the issue of the stability of the food sector in Poland during the period 2001-2030 in the context of economic sanctions imposed by Russia in 2013. Food exports from Poland to Russia have fluctuated prior to the introduction of sanctions and Polish food exporters have dealt with numerous regulations. Some of the recently observed trends, including deflation, might have been exacerbated, but not because of sanctions. The GDP growth rate may have declined by 0.3-0.5% in 2014 and the food sector lost about $340 mln as a result of sanctions. Paradoxically, the Russian trade embargo will accelerate the modernization of Poland's food sector and enhance competitiveness.
Keywords: economic expansion, trade embargo, administrative intervention, market mechanism, effectiveness
JEL: E65, F13
Introduction
This study discusses the issue of the stability of the food sector in Poland during the period 2001-2030. Production volume may incidentally and locally rise, but over a longer period of time, growth remains insignificant. Countries at the upper middle and high levels of development face a problem in this sector of inefficiency, potential production surplus, and the need for acceleration of structural changes.
Structural and market weaknesses of the primary sector, including mainly its agricultural and raw materials, lower the long-term dynamic of the entire national economy. Therefore the problem is of a strategic nature and its solution is both an economic and political necessity, and in this case, the market mechanism may be used only on a limited scale (see section 2).
In the short term, counteracting perturbations in the market resulting from the trade embargo mutually imposed by the European Union (EU) and Russia (see section 3) requires diversification of ready markets and improvement in the organization of the food trade. At the same time, it is believed that a prerequisite for the increased stability of the food sector in Poland is not significant growth in production volume, but better competitiveness: improved quality of products and a significant decrease in production costs. Such changes lower the sensitivity of the food economy to market perturbations, such as trade embargos, and maintain high export growth.
Furthermore, large portions the potential of the primary sector will be released and transferred to sectors that are economically more efficient. Such deep...