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Article

Foreign Trade as a Channel of Pandemic Transmission to the Agricultural Sector in Poland

by
Jacek Maśniak
* and
Andrzej Jędruchniewicz
Department of Economics and Economic Policy, Institute of Economics and Finance, Warsaw University of Life Sciences—SGGW, Nowoursynowska Str. 166, 02-776 Warsaw, Poland
*
Author to whom correspondence should be addressed.
Sustainability 2024, 16(16), 7072; https://doi.org/10.3390/su16167072
Submission received: 30 July 2024 / Revised: 16 August 2024 / Accepted: 17 August 2024 / Published: 18 August 2024
(This article belongs to the Special Issue Economic and Social Consequences of the COVID-19 Pandemic)
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Abstract

:
The resilience of economic and social systems to shocks is one of the fundamental goals of sustainable development. One such event that seriously disrupted the global economy was the COVID-19 pandemic. It posed a direct threat to people’s health and lives and also caused an economic crisis. One of the effects of the crisis was the loss of stability in agricultural production with the resulting threat to food security. The foreign trade channel played a vital role in the mechanism of pandemic transmission to the agricultural sector in the world and Poland. This article aims to assess the significance of changes in international trade in agri-food commodities conducted by Polish entities during the COVID-19 pandemic. The research period covers the years 2017–2021, focusing on the years 2020–2021, the period of the COVID-19 pandemic. Such a research period allows comparative analyses during the pandemic and pre-pandemic periods. The following research methods are used in this study: a critical analysis of the literature, the descriptive approach, the comparative method, and verbal logic and descriptive statistical methods. The data used in this article come from the Central Statistical Office (CSO) and cover Poland’s foreign trade turnover according to the International Standard Trade Classification (SITC) used by the United Nations Statistics Department. The COVID-19 pandemic period did not cause a drastic collapse in Polish foreign trade. Short-lived blockages in the flow of goods, which appeared in Q2 2020, resulted in a 14% drop in the value of Polish exports. Already in Q3 2020, foreign trade turnover returned to pre-pandemic levels. In Q2 2020, the value of the exports of agri-food goods decreased by only 3%. For other commodity groups, the export values were 7–40% lower. Agri-food trade proved more resilient to pandemic shocks than trade in non-agricultural sectors. The foreign trade crisis affected the imports of goods more than exports.

1. Introduction

The COVID-19 virus was discovered in China in December 2019, and the World Health Organization (WHO) declared a global pandemic in March 2020 [1,2]. The pandemic was a great surprise and became a significant societal challenge. It made everyone realise that there was not just a medical problem but a multidimensional one, affecting various aspects of people’s lives and the activities of economic actors. In addition to the negative consequences for human health and well-being, the pandemic had a significant impact on global and national economies, and its impact also affected agriculture. The stability of agricultural production and food security are essential elements of sustainable development. Therefore, research on the stability of economic systems and their resistance to external shocks is a significant and ongoing problem.
The pandemic’s impact on agricultural producers’ activities was multifaceted and came through various channels. The process involved many areas where changes can be long-term. The pandemic affected agriculture directly and indirectly, negatively impacting the agricultural sector’s demand and supply. It affected domestic food demand and agri-food exports, as well as the availability of workers, mainly in labour-intensive industries. Identifying the channels of transmission of the pandemic to agriculture is essential from the point of view of expanding and enriching the theoretical scientific knowledge of the phenomenon. It is also of practical relevance, as a good knowledge of these channels enables the preparation of more effective and efficient policies to limit the adverse effects of the pandemic on the agricultural sector. It also makes it possible to deepen the analysis of agricultural systems in the context of their resilience to adverse external shocks.
The foreign trade channel was vital in transmitting the pandemic to agriculture globally and in Poland. The linkage of the agri-food sector and, by extension, agriculture itself with foreign markets demonstrates the vulnerability of this sector to various types of global shocks. This article aims to assess the significance of changes in international trade in agri-food commodities conducted by Polish entities during the COVID-19 pandemic.

2. Review of the Literature

The COVID-19 pandemic posed a global challenge that required researchers, policymakers, and governments to address many aspects that went far beyond the health and welfare implications of the pandemic [3]. The outbreak of coronavirus disease in early 2020 had a significant impact on economies around the world [4,5], and its consequences were subject to ongoing uncertainty [6].
The COVID-19 pandemic is widely regarded, not only among economists, as a significant black swan phenomenon [7,8,9,10,11]. The magnitude of this adverse phenomenon has often been compared to the global financial crisis of 2008–2009 [12,13] or the Great Depression of 1929–1933 [14].
An essential area of pandemic research is to assess its impact on agriculture. This is crucial because agriculture is a vital sector of any economy. Agriculture plays a central role in ensuring food security, is linked to the overall economy, is an essential provider of public goods, and influences food prices [15,16,17]. Furthermore, it is a critical factor in rural development [18] in both national and international contexts [19,20]. Nevertheless, the role of agriculture in contributing to national economic growth needs to be more recognised [21].
The COVID-19 pandemic also impacted the agricultural sector around the world. Adverse developments occurred in the demand and supply side of agricultural activity [22]. In the agriculture and food sector, the demand and supply shocks associated with COVID-19 evolved into three critical effects, i.e., impacts on agricultural production, changes in consumer demand, and disruptions in the food supply chain [23]. The key impacts of the COVID-19 pandemic on agriculture from a global perspective are (1) the disruption of food supply chains; (2) reduced agricultural productivity; (3) the increased risk of food shortages; (4) changes in consumer behaviour; (5) increased interest in sustainable agriculture and digital farming; and (6) new opportunities for innovation.
The mechanism of transmission of the pandemic to agriculture can be defined as the behaviour of public institutions and economic actors creating pathways (channels) through which the pandemic influences the decisions of agricultural producers, ultimately resulting in changes in the prices and volumes of the production of agricultural products and the income received by agricultural sector actors. In other words, the question of the mechanism of transmission of the pandemic to agriculture is a question of the structure of the agricultural sector, i.e., the relationships between the economic variables, reflecting the behaviour of agricultural actors, underlying the flow of impulses created by the pandemic [24]. This makes it possible to identify the extent of its impact and the induced effects [25].
The COVID-19 pandemic affected the entire agri-food system through multiple channels [26]. These transmission channels include multiple macroeconomic processes, affecting all components of the agri-food system (primary production, processing, trade, logistics systems, and food demand), as well as factor markets and intermediate inputs [24]. Demand and supply channels can be distinguished among the main transmission channels of the COVID-19 pandemic to the agricultural sector. Demand channels are concerned with domestic and foreign demand for agricultural products. They consist of the household food demand channel, the food industry demand channel for agricultural products, and the agri-food export channel. Supply channels, in turn, affect the availability and prices of inputs, the ability to finance them, and the volume and structure of available agricultural products. Supply channels include the input industry, agricultural services, the labour market, credit, and agri-food import channels.
Demand-side disruptions, due to pandemics, in the agricultural sector include the household demand for food. The primary reason for the decline in demand is the prolonged economic downturn, which reduces consumer purchasing power due to increased unemployment and uncertainty, among other factors. Food expenditure is generally considered inelastic to income [27]. However, there are significant differences between countries with different levels of economic development and within countries between groups of consumers with different purchasing power [28]. Low incomes result in a more robust food expenditure response, and food demand may decrease when incomes fall. There are also significant differences in the income elasticity of demand for individual food products. In turn, the need to stay local and the proliferation of remote working and learning may contribute to an increase in the share of food expenditure in total household consumption [29]. On the other hand, consumer concern about the continuity of the food supply may result in rapid changes in food demand that are difficult to predict [30,31].
During the COVID-19 pandemic in Poland and other countries, the system created a demand channel for the food industry that significantly affected the outcomes for agricultural production [32]. In turn, the increase in household food expenditure and the price and quality competitiveness of Polish foodstuffs contributed to increased exports [27]. The purchase volume of agricultural products increased, and, in addition, the purchase structure shifted towards crop production, which can be associated with a change in consumer preferences resulting from sanitary risks and the need to comply with regulatory rigour [33]. In turn, foreign trade restrictions meant that export-oriented industries (e.g., the beef sector) experienced problems selling their products. Production was diverted to the domestic market.
The demand channels of the pandemic’s impact on agriculture include agri-food exports. The fight against the COVID-19 pandemic, especially in its first phase, resulted in restrictive international trade restrictions, barriers to accessing foreign markets, and numerous logistical difficulties. The agricultural producers in countries that were net exporters of agri-food products were most vulnerable to the adverse effects of the collapse of the global food market. Such countries include Poland [34]. In these countries, farmers’ incomes are heavily dependent on exports. Therefore, the collapse in the demand for food on world markets may have significantly worsened the situation of domestic agricultural producers due to the decline in demand and the fall in the prices of agricultural products. At the same time, it should be emphasised that foreign trade, as a demand factor, does not directly affect the volume of agricultural production. This is due to the nature of agricultural production, which is based on biological processes and is characterised by a long production cycle.
The question of the resilience of agriculture and the national economy to various external shocks, as the COVID-19 pandemic undoubtedly was, is also linked to a country’s monetary system and exchange rate policy. A worsening of the economic growth outlook usually creates downward pressure on the exchange rates of the currencies of less economically developed countries against the US dollar and the euro [35]. While weakened national currencies raise the prices of raw materials and non-food commodities, such as metals and oil, they also improve the competitiveness of food exports. Hence, in global crises, one’s currency with a floating exchange rate plays the role of an economic stabilizer and makes it possible, to some extent, to limit the adverse economic effects of external shocks.
Foreign trade as a mechanism for transmitting pandemics to agriculture can also impact the supply side. In the global economy, each sector supplies factors of production or raw materials for their production to foreign markets. Polish agriculture is also linked to the global economy from this side. Therefore, the disruption of international trade during the pandemic meant that the input supply chains were disrupted, resulting in supply problems worsening and manufacturing costs ultimately increasing [36]. Moreover, in developing countries, including Poland, global crises usually weaken these countries’ currencies against the leading global currencies such as the US dollar and the euro. As a result of this, imported goods become relatively more expensive. This translates into an additional increase in imported inputs, including energy.
In response to the pandemic, restrictions at the international level have drastically reduced the ability to export and import agri-food products [37]. Such restrictions led to a decline in foreign demand for the products produced by domestic agriculture. At the same time, import restrictions reduced competition in the domestic agricultural market. Changes in foreign trade led to lower prices for agricultural products and reduced farm incomes [38]. These effects are particularly exacerbated in the short term. In contrast, the impact on agricultural production is more long-term. In poorer countries, food security is also affected.
The agricultural input and service industry is another important channel for transmitting pandemics to agriculture [24]. This is due to its place and importance in the entire food economy complex [39]. It is a factor in the development of agriculture and in improving the working and living conditions of those working in the sector [40]. Modern and specialised machinery and equipment replace farmers’ work, making it less physically demanding. Increasingly better inputs and more efficient service solutions are critical factors in increasing agricultural productivity and efficiency. Studies indicate that in Poland, as in the world, different segments of the agricultural input industry showed different resilience in the supply chain during the COVID-19 pandemic [41,42].
Credit is used by farms in their current and investment activities. Research allows us to conclude that the COVID-19 pandemic significantly impacted agriculture through the credit channel [26]. At the beginning of the pandemic, the National Bank of Poland significantly eased monetary policy, decreasing interest rates during the first two years of the pandemic. The level of new borrowing fell significantly, resulting in a steady decline in individual farmer debt, which at the end of 2022 was almost 20% lower than its level at the end of 2019. The term structure of debt was dominated by long-term debt, and its importance increased further during the pandemic. There was a several-fold decrease in the absolute value of short-term debt, reflecting farmers’ attempts to adapt to the increased uncertainty of farming conditions. Although the share of investment loan debt in total debt increased, its value decreased. This indicates some reduction in agricultural investments, especially in machinery and transport equipment in 2020 or at least a refraining from financing them with loans. The significant decrease in short-term borrowing and, to a lesser extent, investment borrowing indicated a wait-and-see attitude on the part of farmers and some fear for the future, which, however, gradually diminished throughout the pandemic.
The pandemic also impacted the agricultural labour supply [43]. Health conditions, quarantine, and isolation restricted the farmer, family members, and wage earners from working. At the same time, it is worth remembering that the number and density of people working on most farms are not as high as in industrial production, so the illness of one worker resulted in quarantine or illness for a small number of people compared to enterprises of a different nature. In addition, some of the work in agriculture is done outdoors, which reduces the risk of infection compared to other industries [44]. Restrictions due to border closures and changes in the number of public transport passengers affected the possibility of immigrant labour arriving during the first few months of the pandemic (as seen in the number of seasonal work permits issued). They were less significant in the following months. The impact of this restriction on agriculture depended on the type of activity, its labour intensity, and seasonality.
An essential aspect of considering the impact of the COVID-19 pandemic on foreign trade in agri-food products is the relation of the sensitivity of foreign trade with respect to GDP in this period to its sensitivity during the global financial crisis [45]. This study indicates that foreign trade was more volatile during the subprime crisis than during the recent pandemic. Many conditions influenced such a difference in the changes in foreign trade. The causes of these crises and the resulting consequences were crucial factors. The financial crisis resulted from long-term mistakes in the monetary and credit sphere in the USA. It concerned financial institutions. The consequences of the problems of these institutions were a reduction in the financing of demand, including foreign demand. A decrease in financing the production of goods intended for export could also be a problem. The recovery process of these institutions took quite a long time, so the reconstruction of foreign trade was relatively slow.
On the other hand, the pandemic crisis resulted from arbitrary decisions by the authorities that restricted the freedom of action of consumers and entrepreneurs. The consequences were a decrease in demand and sales, including foreign sales. The production capacity of the economy suffered to a limited extent. The reduction in restrictions enabled the revival of foreign trade. On an annual basis, it changed little, as the restrictive restrictions lasted for a very short time.
Central bank policy was essential in both crises [46,47]. It was generally quite similar. In general, it was characterised by monetary expansion. However, during the pandemic crisis, the expansion of central banks was more substantial than during the financial crisis. Banks also used non-standard instruments on an even larger scale. They mainly used quantitative easing. Such a solid monetary expansion allowed for a significant increase in demand after the rapid lifting of restrictions. Polish exports were additionally supported by the weakening of the Polish zloty, which resulted from the expansive policy of the Polish central bank.

3. Materials and Methods

The research period covers 2017–2021, focusing on 2020–2021, the COVID-19 pandemic period. This research period allows for comparative analyses across the pandemic and pre-pandemic periods. The year 2022 was specific. Firstly, the restrictions imposed on the economy in connection with the pandemic had already been lifted. Secondly, in this year, there was the event of Russia’s invasion of Ukraine. This event caused numerous political and economic consequences, including high inflation. Therefore, the research period ends in 2021 to avoid this disruptive factor. This study used various research methods, including a critical literature analysis, the descriptive approach, the comparative method, and verbal logic and descriptive statistical methods. The time series indicator analysis constituted the leading research tool.
The data source from which information on the value of Polish exports and imports was drawn was the Statistical Bulletin [48]. The value of exports and imports was expressed according to the nomenclature used by the United Nations, the Standard International Trade Classification (SITC). This study used the standard categories with some modifications. The “agri-food products” section included “food and live animals” and “beverages and tobacco”. The “raw materials except fuels” section included the “crude materials, inedible, except fuels” and “animal and vegetable oils, fats and waxes” sections. The “manufactured products” section included “manufactured goods classified chiefly by material”, “miscellaneous manufactured articles”, and “commodities and transactions not classified in the SITC”. Other sections, such as “mineral fuels, lubricants and related materials”, “chemicals and related products”, and “machinery and transport equipment”, had the same names as the SITC sections.
The value of trade turnover was expressed in transaction prices in PLN. The prevailing exchange rate was used to convert the prices expressed in foreign currencies. The prices of imported goods were included based on the terms of the Franco–Polish border or the Polish CIF port. The prices of exported goods were determined based on the terms of the Franco–Polish border or the Polish FOB port.

4. Results and Discussion

4.1. Export of Agri-Food Products

Between 2017 and 2021, the value of Polish exports showed an increasing trend. The value of exports increased from PLN 221.7 billion in 2017 to PLN 363.5 billion at the end of 2021 (Figure 1). In the pre-pandemic period covering 2017–2019, the value of exports grew steadily at a moderate rate. Compared to the same period of the previous year, the value of Polish exports rose at a rate of 2–14%. The pandemic years (2020–2021) ended this stable trend, and Polish foreign trade faced a new reality.
The most significant changes in foreign trade occurred in the first wave of the pandemic. From 14 to 20 March 2020, a state of epidemic emergency was in force in Poland, during which, from 15 March 2020, restrictions were also introduced on international traffic at Poland’s borders. The introduction of the epidemic state in Poland on 20 March 2020 was associated with numerous further restrictions on social and economic life. As shown in Figure 1, the value of Polish exports expressed in PLN decreased significantly in the second quarter of 2020 due to these restrictions. Compared to the previous quarter, the value of exports fell by 14%.
The negative impact on global merchandise trade during this time was mainly due to perturbations in maritime transport, particularly in 2020 and the early months of 2021. Coronavirus infections and social distancing paralysed port operations. Given that around 80% of international trade is carried out by sea, this disruption led to severe congestion on significant trade routes and a more than threefold increase in the price of shipping. Countries’ protectionist activities compounded this. According to the Global Trade Alert (GTA), there was a sharp increase in export restrictions on trade in goods in 2020. A total of 290 new restrictions were introduced globally. In comparison, only 28 such measures were found in 2019 [49].
However, global trade started to catch up in the second half of 2020. The factors that accelerated the growth of trade certainly include the mobilisation of state aid by many governments to survive the crisis and maintain employment, the effective containment of COVID-19, the rapid return to economic activity in China and other Asian countries, shifts in household consumption patterns from restricted goods and services to durable goods (including hardware), improved public sentiment as a result of the vaccination campaigns launched, improvements in business inventories, the successive easing of maritime transport congestion, and improved port capacity [49].
In Poland, from April onwards, anti-COVID-19 policies started to foster the recovery. On the one hand, from April to June 2020, the government lifted further restrictions related to sanitary isolation (the possibility of movement for recreational purposes and the loosening of restrictions on trade and services). On the other hand, the implementation of state aid for entrepreneurs under the anti-COVID-19 shield began [3]. As a result of the unblocking of the economy and the adjustment measures taken on the part of enterprises, the value of exports increased significantly in the third quarter. Compared to the previous quarter, exports increased by 20% (Figure 1). In the fourth quarter, the export dynamics remained high at 13%, with a stabilisation of turnover from the beginning of 2021. From the fourth quarter of 2021 onwards, the value of trade turnover started to increase again.
The data published in the Statistical Bulletin [48] also allow a more profound analysis of sectoral diversification. During the most significant economic restrictions period, the agri-food industry was characterised by relative stability. In the second quarter of 2020, agri-food exports decreased by only 2.8% compared to the first quarter of that year (Table 1). In contrast, the slump in foreign trade was most pronounced in mineral fuels, lubricants, and related materials. The value of the exports of these goods fell by more than 40%. The second most vulnerable sector to the trade blockade was the machinery and transport equipment manufacturing industry, with exports falling by more than 21%. In the case of industries producing raw materials (except fuels), manufactured products, and chemicals and related products, the effects of the pandemic were slightly weaker. They amounted to a decline in exports by 7–11%.
From the third quarter of 2020, the exports of all groups of goods started to increase. The growth rate of total exports compared to the previous quarter was 20%. The dynamics were highest in the goods groups, including manufactured products, machinery, and transport equipment. The value of exports increased by 19–31%. Agri-food products showed the smallest export growth, by just under 6%. Moderate growth rates (10–12%) were recorded for raw materials; mineral fuels, lubricants, and related materials; and chemicals and related products. The high rate of export growth continued into the third quarter of 2020. The overall increase in export value was almost 13%.
During the most extraordinary restrictions, Polish agri-food exports did not suffer a significant slump. This is important because foreign trade is counted as one of the demand channels for the impact of the pandemic on agriculture [24]. The transmission of the pandemic to agriculture through demand channels consists primarily of the decreasing demand for agricultural products in domestic and foreign markets, which affects the income of agricultural producers and shapes their income. It should be noted that this kind of demand shock occurred due to restrictions imposed on the economy, such as the closure of the restaurant and hotel industry and export barriers. In Poland, as in the rest of the world, this occurred in the first half of 2020. [16,25,36,50,51,52]. One of the results of the demand shock that affected agriculture was a drop in agricultural commodity prices. The most significant price declines were in pork livestock and poultry [53]. The changing prices of agricultural products did not have a significant impact on the income of Polish farmers. More important was the increase in input prices, which occurred in the second half of 2020 and was caused by a sharp rise in energy and raw material prices on world markets [54].
The sustained good sales of agri-food products in the domestic and foreign markets resulted from food being a primary product characterised by a relatively low-income elasticity of demand [34]. In the case of Poland, there was an additional tendency to strengthen its position as a net food exporter. This phenomenon was caused by growing demand on world grain markets and the weakening of the zloty exchange rate, which benefited Polish exporters [55]. Another factor allowing Polish exporters to maintain their competitive advantage was lower production costs than other developed countries [27].

4.2. Import of Agri-Food Products

The trends of changes in Polish imports were similar to changes in exports. Between 1917 and 2021, a general upward trend was observed. During this period, imports increased from PLN 218.6 billion in 2017 to PLN 379.6 billion in 2021. The slump in international trade that emerged in the second quarter of 2020 also caused a temporary collapse in Polish imports. As a result of these shocks, in Q2 2020, the value of Polish imports expressed in PLN decreased by 19% compared to the previous quarter (Figure 2). Thus, this decline is slightly more significant than that for exports (down 14%). As in the case of exports, imports have already clearly increased in the following quarter, with a 22% increase in imports compared to the previous quarter. Compared to the corresponding quarter of 2019, the value of imports was already 2% higher. The import growth rate was still high (12% in the previous quarter) in the fourth quarter of 2020, and, from the beginning of 2021, the import growth rate weakened significantly. At the end of 2021, an increase in the value of imported goods could again be observed.
The structure of imports, like exports, shows that the collapse of imports in the initial phase of the pandemic did not affect every industry similarly. The value of agri-food imports during the second quarter of 2020 decreased by more than 6.1% compared to the previous quarter (Table 2). Although this is a noticeably more significant decline than for exports (2.8%), the agri-food sector was still the least affected by the restrictions caused by the pandemic. The biggest slump in imports was in mineral fuels, lubricants, and related materials. Here, the value of imports fell by as much as 47% compared to the previous quarter. The second most sensitive industry to the trade blockade was machinery and transport equipment, with imports falling by nearly 24%. In the remaining industries, i.e., those producing raw materials (except fuels), manufactured products, and chemicals and related products, import declines ranged from 8% to 17%.
The third and fourth quarters of 2020 were a period of continuously dynamic import growth. Total imports increased by 23% and 13%, respectively, compared to the previous quarter. The strong growth in imports occurred even in the final phase of the pandemic—in the fourth quarter of 2021, the growth rate in the value of imports increased by 14.5%. On the industry structure side, agri-food commodities were stable in imports in the second year of the pandemic. Only in the last quarter of 2021 did the value of imported goods increase rapidly (18.7%). The market for mineral fuels and lubricants was characterised by high dynamics and, simultaneously, a wide variety of turnover. The dynamics of the imports of these goods ranged from −2% to 35%.

4.3. Merchandise Trade Balance

The period in which restrictions on international trade became most apparent was the second quarter of 2020. When analysing trade declines during this pandemic, it is also worth noting that for all industries, including food, import declines significantly exceeded export declines [48]. This was most pronounced in agri-food and raw materials, where declines in imports relative to the previous quarter were twice as significant as in exports. In other industries, the differences were minor. Foreign exchange was the most balanced for machinery and transport equipment, with imports down 24% and exports down 21%. Significant differences occurred between the mineral fuels, lubricants, and related materials; chemicals and related products; and manufactured products sectors. Exports and imports increased markedly in the third quarter of this year. However, the recovery in foreign trade was different. Export growth exceeded import growth in industries such as agri-food goods and chemicals. This means that breaking the export blockade caused by the pandemic happened fastest in these markets. Import growth exceeded export growth in the markets for fuels, lubricants, and related materials and raw materials. Moreover, in the case of fuels, lubricants, and related materials, the growth rate of imports was nearly four times that of exports.
The pandemic period resulted in a breakdown of the general trend prevailing in the years preceding the pandemic. From 2017 to 2019, the total goods trade balance was fairly balanced (Figure 3). In Q2 2020, there was a clear advantage of exports over imports of PLN 14.2 billion, which accounted for about 7% of the value of imports at that time. The positive balance persisted until Q2 2021, and the total goods trade balance was negative by the end of the pandemic. This shows that the exports of goods were less affected by the international trade crisis. Furthermore, export barriers were broken down more quickly and effectively. As a result, during the pandemic, except for the last period, the foreign trade balance was positive and continued to increase.
For the agri-food industry, the trend was different. Poland exports far more food goods than it imports (Figure 3). This was evident in the pre-pandemic period when net exports were about 50–60% of the value of imports. During the pandemic, this trend was reinforced, with the trade surplus in agri-food goods rising to 60–70% of the value of imports. The record in this respect was the third quarter of 2021, in which exports exceeded imports by 74%. This is all the more significant given that, in the second half of 2021, Polish total exports were weaker, and the total trade balance was negative at PLN −16 billion at the end of that year. It follows that food exporters fared better than importers in the new pandemic reality. Positive trade balances, both before and during the pandemic, were still recorded by the manufacturing and machinery and the equipment and transport equipment industries. Before the pandemic, the industrial processing industry maintained an export value advantage over imports of 15–19%. Then, during the pandemic period, the export advantage strengthened slightly (17–23%), and, in the second half of 2021, the problems of Polish exporters became apparent, and the export–import surplus dropped to 10–13%. The trade balance in machinery and transport equipment was more volatile. As it turned out, exporters fared much better than importers during the pandemic. As a result, the surplus of exports over imports increased from 1–7% to 6–12%. Only in the last phase of the pandemic, with the general weakening of exports, did this surplus decrease to 3–4%.
International comparisons prove that during the COVID-19 pandemic, exports, imports, and the trade balance of goods turnover in Poland were similar to those in other countries. Food goods are more resistant to the international trade crisis than non-food goods [56]. Poland’s experience also shows great convergence regarding the scale and structure of changes in foreign trade. The food trade decreased by 5–10% during the peak. In the case of non-agricultural sectors, this decline was 2–3 times greater [37]. Interesting regularities were also observed in the structure of the agri-food trade. The most significant decline occurred in the turnover of highly processed food and food of higher value, e.g., meat products and seafood. Essential goods, such as cereals and rice, were more stable, and a relative improvement in the economic situation of this group of agricultural producers was recorded over a long period.

5. Conclusions

The COVID-19 pandemic period did not cause a drastic collapse in Polish foreign trade. Short-lived blockages in the flow of goods, which appeared in Q2 2020, resulted in a 14% drop in the value of Polish exports. In Q3 2020, foreign trade started to catch up, and export growth was 20% compared to the previous quarter, and, in the fourth quarter, the dynamics reached 13%. A stabilization of trade marked the second year of the pandemic (2021). Only in the fourth quarter of 2021 did the value of Polish exports increase significantly.
The disruptions to trade in agri-food products were much smaller than in the non-agricultural sectors. Thus, the agricultural sector showed remarkable resilience to external shocks. In the second quarter of 2020, the value of agri-food exports decreased slightly by only 3%. For the other sectors, the declines in the value of exports were much more significant at 7–40%.
The foreign trade crisis affected the imports of goods to a greater extent than exports. In Q2 2020, the value of Polish imports decreased by 19% compared to the previous quarter. As for exports, the agri-food sector was more resilient than the other sectors of the national economy. The value of agri-food imports was 6% lower. The imports of other commodities collapsed much more sharply, as declines in the value of imported goods ranged from 8 to 47%.
The pandemic period caused a collapse in the general trend prevailing in the years before the pandemic. From 2017 to 2019, the total goods balance was pretty balanced. From Q2 2020 onwards, there was a clear advantage of exports over imports, and, for the rest of the pandemic period (except the last six months), there was a favourable foreign trade balance. This shows that in the case of the Polish economy, export barriers were broken down faster and more effectively than import barriers.
The pandemic caused various effects in the agricultural sector, including foreign trade in this sector’s products. Therefore, an effective policy to limit these effects is needed. Currently, agricultural policy uses a large number of instruments. However, the authorities should apply new or modified solutions during a pandemic. Proposals for such solutions include the following: a digital platform for matching producers’ offers and the needs of the buyers of food and the means of agricultural production at the international level, e.g., in the European Union; support for the expansion of warehouses and storage systems for agricultural products; and the expansion and improvement of infrastructure within the so-called privileged corridors ensuring the flow of goods and means of production, as well as substantive support for farmers applying a risk management strategy.
The impact of the pandemic on foreign trade in agri-food products is multifaceted. Promising future research directions in this area include conducting comparative analyses of the impact of past pandemics and the COVID-19 pandemic on agricultural foreign trade, the role of digitalisation and sustainable practices in increasing the resilience of agriculture to pandemics, and the effectiveness of state agricultural policy in limiting the negative effects of the pandemic.

Author Contributions

Conceptualization, J.M. and A.J.; methodology, J.M. and A.J.; software, J.M. and A.J.; validation, J.M. and A.J.; formal analysis, J.M. and A.J.; investigation, J.M. and A.J.; resources, J.M. and A.J.; data curation, J.M. and A.J.; writing—original draft preparation, J.M. and A.J.; writing—review and editing, J.M. and A.J.; visualization, J.M. and A.J.; supervision, J.M. and A.J.; project administration, J.M. and A.J.; and funding acquisition, J.M. and A.J. All authors have read and agreed to the published version of the manuscript.

Funding

This research received no external funding.

Institutional Review Board Statement

Not applicable.

Informed Consent Statement

Not applicable.

Data Availability Statement

The data presented in this study are available on request from the corresponding author.

Conflicts of Interest

The authors declare no conflicts of interest.

References

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Sustainability 16 07072 g001
Figure 1. Polish exports in million PLN (left axis) and structure of exports (right axis) in 2017–2021. Source: own calculations based on [48].
Figure 1. Polish exports in million PLN (left axis) and structure of exports (right axis) in 2017–2021. Source: own calculations based on [48].
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Figure 2. Polish imports in million PLN (left axis) and structure of imports (right axis) in 2017–2021. Source: own calculations based on [48].
Figure 2. Polish imports in million PLN (left axis) and structure of imports (right axis) in 2017–2021. Source: own calculations based on [48].
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Figure 3. Merchandise trade balance by groups of goods, 2017–2021 (PLN million). Source: [48].
Figure 3. Merchandise trade balance by groups of goods, 2017–2021 (PLN million). Source: [48].
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Table 1. Changes in Polish exports by commodity groups, 2019–2021, in % (previous quarter = 100).
Table 1. Changes in Polish exports by commodity groups, 2019–2021, in % (previous quarter = 100).
YearQuarterTotalAgri-Food Products Raw Materials Except Fuels Mineral Fuels, Lubricants, and Related MaterialsChemicals and Related Products Manufactured ProductsMachinery and Transport Equipment
2019q11.5−2.32.7−1.54.91.32.3
q2−0.7−0.96.1−11.50.8−1.80.5
q30.06.5−5.5−5.5−0.11.7−3.0
q44.31.8−1.4−17.72.12.88.7
2020q1−0.64.34.018.17.3−2.0−3.7
q2−14.1−2.8−8.8−40.1−7.2−10.9−21.4
q320.05.910.312.310.419.031.1
q412.85.310.715.65.710.519.4
2021q10.8−1.713.823.44.61.7−1.7
q25.32.812.316.18.96.33.3
q3−0.46.5−3.020.33.13.0−7.5
q412.98.96.541.110.810.216.5
Source: own calculations based on [48].
Table 2. Changes in Polish imports by commodity groups, 2019–2021, in % (previous quarter = 100).
Table 2. Changes in Polish imports by commodity groups, 2019–2021, in % (previous quarter = 100).
YearQuarterTotalAgri-Food Products Raw Materials Except Fuels Mineral Fuels, Lubricants, and Related MaterialsChemicals and Related Products Manufactured ProductsMachinery and Transport Equipment
2019q1−1.8−0.27.3−20.02.3−2.1−0.5
q2−0.2−1.6−5.35.90.7−3.62.6
q3−0.5−1.0−1.21.6−0.76.1−5.6
q43.67.6−4.04.1−1.8−2.710.8
2020q1−0.47.29.7−15.311.82.5−4.9
q2−18.7−6.1−17.3−47.4−8.4−15.2−23.7
q321.80.617.746.84.124.532.0
q411.89.25.2−1.48.59.318.1
2021q13.20.010.024.712.43.5−3.7
q26.11.111.3−1.89.66.65.6
q35.30.415.735.23.19.2−3.1
q414.518.7−1.325.75.07.017.5
Source: own calculations based on [48].
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Maśniak, J.; Jędruchniewicz, A. Foreign Trade as a Channel of Pandemic Transmission to the Agricultural Sector in Poland. Sustainability 2024, 16, 7072. https://doi.org/10.3390/su16167072

AMA Style

Maśniak J, Jędruchniewicz A. Foreign Trade as a Channel of Pandemic Transmission to the Agricultural Sector in Poland. Sustainability. 2024; 16(16):7072. https://doi.org/10.3390/su16167072

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Maśniak, Jacek, and Andrzej Jędruchniewicz. 2024. "Foreign Trade as a Channel of Pandemic Transmission to the Agricultural Sector in Poland" Sustainability 16, no. 16: 7072. https://doi.org/10.3390/su16167072

APA Style

Maśniak, J., & Jędruchniewicz, A. (2024). Foreign Trade as a Channel of Pandemic Transmission to the Agricultural Sector in Poland. Sustainability, 16(16), 7072. https://doi.org/10.3390/su16167072

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