The Food Platform

The Food Platform. A new stimulus for the Polish agricultural and food sector

A horizontal board with a green inscription in capital letters: Sellfood Food Platform. Light green background with graphically represented ears of grain.

Project title

The Food Platform.

Name of Beneficiary/Beneficiaries

Consortium:

National Support Centre for Agriculture (KOWR) – Consortium Leader
Institute of Agricultural and Food Economics, National Research Institute
Wacław Dąbrowski Institute of Agriculture and Food Biotechnology

Name of programme

GOSPOSTRATEG – Strategic Research and Development Programme

Competition

"Social and Economic Development of Poland on the Globalised Market" – GOSPOSTRATEG

Project value

PLN 10,052,564.21

Funding value

PLN 10,052,564.21

Project delivery period

1 June 2018 – 31 August 2020

Meet our team

In the photo (from the left): Michał Milewski – Acting Manager of the Projects Division, Innovations Department, KOWR, Mateusz Balcerowicz – Director of the Innovations Department (Project Manager to NCBR), Bożena Tybora – Lead Specialist in the Projects Division, Innovations Department, Elżbieta Jagłowska-Zawadka – Lead Specialist in the Projects Division, Innovations Department, Wojciech Kędzia – Deputy General Director, KOWR.

What problem is addressed by the project?

Our Food Platform is a pioneering solution, developed in response to the requests from, and consultations with, the representatives of the agricultural and food sector. We have recognised legitimate demand for introducing to the Polish market spot contracts as instruments for concentrating supply and managing price and trade risks to secure transactions and stabilise the market and revenues.

Until now, Poland has not had an organised spot market for agricultural goods. Since there have been no standardised contracts of this type supervised by a trade moderator, and any disputes solved through independent arbitration, it has been, to a large extent, difficult for Polish businesses to join the global economy. Therefore, it became necessary to provide advanced tools to stabilise and/or improve the revenues of the businesses operating in the Polish agricultural and food sector and facing some barriers to their operations.

Major problems in the agricultural sectors include the lack of a widely available and reliable source of reference prices for Polish agricultural and food products, uncertainty as to whether the contractual terms and conditions of trade transactions will actually be complied with, possible difficulties with regularly obtaining large and consistent batches of products with specific minimum quality parameters, and poor exposure to foreign consumers who are interested in large, consistent product batches.

The launching of the Food Platform, as an organised and regulated spot contract market for agricultural and food products, marked the beginning of a new era in Polish exchange trading and created new trade opportunities for agricultural market players. With the Food Platform, these players can now reach their full potential by offering their agricultural products on international markets. As a result, this will create new growth stimuli for the agricultural and food sector as a whole, and improve its competitive position on the global market.

Who uses the project results?

At stage one of its operation, the Food Platform will benefit the businesses that are now making trade transactions on the cereal market. The supply side is generally represented by agricultural producers, meaning large farms, producer groups, and minor farms that sell part of their produce, while the demand side involves companies that trade in cereal (whether domestically or internationally), and primary cereal processing companies (cereal grinding, animal feed production).

Other project stakeholders include warehouses which store the cereal that is traded on the Platform and other warehouses, the exchange manager, the clearing house, brokerage houses, the body responsible for the authorisation inspection of the warehouses included in the authorised warehouse system, and reference laboratories.

As this tool develops, future beneficiaries can include businesses operating on markets related to major agricultural and food products, such as rape, sugar, fruits and vegetables, milk and dairy, red meat and poultry.

The result of the project is the establishment of an exchange market for selected agricultural and food products that meet specific standards. This tool has been tested during a six-month pilot trial, during which we tested its functionality and operation. During the pilot trial market players could make real transactions within two parallel systems, i.e. cash price/standard quotation and auction.

What was the greatest challenge during project implementation?

Introducing innovative solutions involves a high risk related to achieving the expected results, and is very difficult to implement.

The greatest challenge while implementing our Food Platform was how innovative and complex it was. This project is a pioneering solution on the Polish market, which means that we were unable to use any similar solutions already available on the market. The project as a whole was difficult to implement and involved many risks, which we tried to mitigate by taking action on many levels.

These difficulties were associated, for instance, with identifying the best solutions for this project, correctly and accurately preparing documents for tendering procedures for key project tasks, selecting the economic operator who would deliver the project according to our requirements and schedule, and adopting the right management structure for the project as a whole.

Our advice for other applicants

In order to successfully and effectively implement the Food Platform in a way that would meet our stakeholders' expectations it was crucial for us to take many actions both before project launch and during its implementation.

Major actions included consultations with the primary project stakeholders, i.e. cereal market players. During these consultations we learned about their needs and problems.

Another action we took was a technical dialogue to identify the latest and most suitable solutions, including technical, legal, and executive, related to project implementation. This technical dialogue helped us correctly prepare our tendering documentation to effectively complete public procurement procedures for key project tasks.

Moreover, we went on study visits to the Euronext exchange in Paris, and to electronic platforms for exchange-based trade in agricultural products in the Netherlands. The purpose of those visits was to see how organised markets function, and learn about participation rules, types of goods available for buying/selling, quality requirements and standards adopted for the agricultural goods traded on the exchange, and ways of managing compliance. These insights allowed us to successfully prepare and implement our project to meet the needs of its major stakeholders.