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Abstract

In the early 1990s the Polish economy was opened up to global forces, increasing competitive pressure, raising standards, and inducing an inflow of foreign products and investment. This paper studies the impact on the dairy sector in Poland. We combine statistical data with evidence from interviews with company managers and household survey results to identify the impact of these forces, both on processing companies and on their suppliers. Our analysis shows that the globalisation process, through a complex interaction of public and private incentives, has contributed to important increases in company investment and product quality, and in enhanced access to credit and technology for local suppliers. The associated restructuring process caused a shift towards somewhat larger suppliers and significant cuts in employment. However, the increase in size is modest and the vast majority of suppliers are still relatively small family farms.

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