Poland will allocate Pln3.9 billion (approximately $912.6 million at current exchange rates) to a new subsidy program for fertilizer purchases by the country’s farmers to protect them against higher production costs, according to a Ministry of Agriculture press statement, cited by a Polish Press Agency (PAP) report on March 18.
The subsidies will be paid once the European Commission announces its consent for the program, the ministry said.
Poland will offer Pln500 per hectare in subsidies to up to 50 hectares of arable land, available to all farmers, Poland’s Prime Minister Mateusz Morawiecki told a news briefing, as cited by the PAP report. Additionally, Poland will offer Pln250 per hectare for pastures, also with a 50 hectare limit.
The subsidies will be paid only upon presentation of invoices for purchases of fertilizers issued between Sept. 1, 2021, and May 15, 2022, PAP reported, citing Poland’s Deputy Prime Minister and Agriculture Minister Henryk Kowalczyk.
Shares in Polish fertilizer and chemicals company Grupa Azoty SA, Poland’s biggest fertilizer producer, gained as much as 4.8 percent following the government announcement.
Azoty’s shares in Warsaw on March 18 rose to 38.80 zloty per share, until then their highest since September 2019. The shares were higher still later in the week, closing the day’s trading on March 24 at 44.7 zloty (approximately $10.5 at current exchange rates) per share.
Warsaw-based Trigon Investment Bank analyst Michal Kozak was cited in a Bloomberg report as saying the new aid will boost farmers’ purchasing power, “which should help Azoty sell products at higher prices reflecting the elevated cost of gas and other commodities required in production.”
However, Kozak added that it was too early to estimate the impact from the new government plan precisely.