Assessment of Poland’s Competitive Position in Trade in Fur Skins and Their Products Against a Background of the EU Countries

The presented article attempts to assess the competitiveness of foreign trade in fur skins and their products in Poland against a background of the European Union countries between 2005 and 2016. The data used for the research came from the statistical yearbooks of the Central Statistical Office, and the study was supported by methods of descriptive and comparative analysis. It also used the data of the International Trade Center (ITC) and Faostat database. The results of the research confirmed that Poland has a competitive advantage in foreign trade in fur skins and their products in 2005 as well as in 2008-2011 and 2013-2016. In addition, Poland recorded one of the highest trade coverage ratios between 2010 and 2017 among the EU countries. It was found that, recently, Poland noted one of the fastest rates of competitive advantage in this respect, and the concentration of production in Poland may strengthen its role in the international arena, and has more and more impact on the economic situation of producers operating in the industry.


Introduction
The issue of competitiveness of foreign trade in fur skins and their products not only in Poland but also in many of the European Union countries is extremely difficult, due to the existence of many ethical controversies on breeding minks and other fur animals. On the one hand, we are dealing with the arguments presented by animal defenders, their postulates and campaigns, and on the other, it is necessary to take a rational attitude towards economic benefits of pursuing a widespread business consisting in breeding minks and other animals commonly known as fur animals. When perusing foreign and Polish internet portals devoted to this subject, we can grasp the arguments of both parties, but the priority task is to grasp their rationality. The study attempted to assess the competitiveness, so, as it is provided by the Encyclopedia of Management-conducting activities aimed at achieving the same or similar objectives, which at the same time and in the same environment are sought by other economic entities. Competitiveness can be defined as an ability to plan, create and sell a product more attractive than that of competitors (Encyklopedia Zarządzania, 2019). In analysing the reference of this definition to the current situation in Poland and the European Union, it is necessary to take into account what main arguments are on the side of producers, and in the case of Poland -mainly exporters of fur skins and their products, what are their competitive advantages in relation to producers in other countries, while not necessarily addressing lobbying accents and attempts of other countries to take over our market.
Going to analytical studies, it should be noted that the way in which the various agricultural sectors operate and changes taking place in agriculture in the European Union are reasons for which considering the competitiveness of individual industries gives us valuable knowledge also enabling the development of possessed advantages in this area. The issue of competitiveness of foreign trade of Polish agriculture is the frequently raised subject, which was particularly evident at the time when our country joined the economic structures of the European Union. In Poland, the subject of competitiveness in general terms was addressed by e.g.: Urban (2003), Rytko (2008), Misala (2011), Nosecka, Pawlak and Poczta (2011), Juchniewicz (2014, Wieliczko (2014), Firlej (2017, . Analytical studies with regard to one of the most modern special sectors of agriculture: fur market, where farms are considered as sources of social and economic benefits in the development of the local economy were conducted by the authors such as: , Dacko, Firlej, Łapiński, Niedziółka and Zawadka (2017), Jakubowski (2017).

Objective of the studies
The proposed main objective of the study was to assess the competitiveness of foreign trade in fur skins and their products in Poland against the background of the European Union in 2005-2016. The authors of the study fully agree with the argument of the Polish Association of Breeders and Producers of Fur Animals that the fur industry "gives employment to owners of fur animal farms and their fami-lies, hired workers, producers of farm equipment, producers of medicinal products, farmers producing cereals, owners of meat and fish processing plants and their workers, veterinarians (Fermowe zwierzęta, 2019).
The study conducted has been based on the international trade statistics of the individual European Union countries in the field of raw fur skins, tanned or finished fur skins and clothes, accessories and other fur skin articles. The reference base for calculating comparative advantages was the export value of agricultural products. The data source was the International Trade Centre (ITC) and the FAOSTAT database. The article uses abbreviations of country names according to the ISO 3166 standard (GUS, 2019).

Methodology of studies
The basic indicator that allows to assess the level of competitiveness in foreign trade is the Revealed Comparative Advantage Index (RCA) proposed by Balassa (1965). This index is calculated according to the formula: (1) where: X ij -export of the i th product by a given country j, X iw -export of the i th product by a group of countries w, n -number of types of products.
The main task of the RCA index is to determine the relative share of a product group in the given country's export in relation to the share of the same product group in the export of a comparative area (Szczepaniak, 2014). According to the interpretation, the values of the RCA index below 1 mean that a given country does not have comparative advantages in the reference market. In turn, the values above 1 indicate the existence of revealed comparative advantages in trade in the analysed commodity.
It should be noted that this index has drawbacks as it is unlimited from the top, which means that it can assume any maximum value. Therefore, in order to get rid of the interpretation difficulties, it is reasonable to modify this index in the following way (Dalum, Laursen and Villumsen, 1998;Salamaga, 2013): (2) where: RCA k (a) -revised revealed comparative advantage index, RCA -relative comparative advantage index (Balassa index), a -any positive number (exponent).
The values of the revised RCA index may be within the range of [-1; 1]. The positive values of the indices inform of the existence of a revealed comparative advantage in the export of a given product, the negative values mean no advantage. At the same time, the index indicates the strength of an existing advantage. The values closer to 1 indicate a stronger advantage, the closer they are to -1 the greater is the absence of an advantage. It should be noted that the adopted value of parameter a determines the rate of convergence of the RCA k (a) index with the limit values of the range [-1; 1].
The second index to assess the competitiveness is the Trade Coverage index, which represents the degree of covering import with export. Its objective is to determine the extent to which expenses for the import of a given product are covered by revenues from the export of that product. It determines the export specialisation of a given country in the analysed sector. It is calculated using the formula: ( 3) where: Ex -export value, Im -import value.
According to the adopted interpretation, the index above 1 means a relative advantage over competitors in the analysed area and attests to the export specialisation. The values below 1 indicate, firstly, the weak competitive position in the analysed area, as well as a deficit in international trade.

Results of the studies
Breeding of fur animals in the European Union is concentrated in the northern countries, especially in Denmark, Finland and the Netherlands. Poland is also one of the countries with the largest production of fur skins in the European Union (Table 1). However, in the so-called fur production chain Poland plays a minor role, since this production is characterised only by the production of raw material, which is then exported. As indicated by the report of the West Social and Economic Research Centre, the first link of fur production accounts for, on average, 12.5% of the value of the finished product (Ocena sytuacji..., 2018). In the coming years, the production structure is expected to change because of a ban, introduced in 2012, on breeding fur animals in the Netherlands which comes into effect as from 2024 (Czerwińska, 2019). In the medium and long term, an increase in the share of the Eastern European countries and China in the production structure of fur animals is predicted (PwC..., 2014).

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Zagadnienia Ekonomiki Rolnej / Problems of Agricultural Economics Breeding of fur animals covers the whole of Poland and the dominant breeding species are minks and foxes. However, as shown in Figure   Source: own study based on the data of the General Veterinary Inspectorate.
In the European Union, the largest share in the export of fur skins and their products in 2005 and 2016 was that of Denmark, its share between these years increased by 5.65% (Table 2). Other countries with significant shares include: Italy, Finland and Greece. Poland has recorded the largest increase in the share in the export of fur skins and their products in the European Union (to the level of 11.50% in 2016) between these years. In 2005 and between 2008 and 2016 Poland achieved a positive trade balance in trade in fur skins and their products (Fig. 2). Over the years, the values between the export and import differed, on average, by USD 197,856.2 thousand. In 2006-2007, a negative trade balance was observed (in 2006 in the amount of USD 28,896 thousand, and in 2007 in the amount of USD 11,031 thousand). Between 2005 and 2016, there was an increase in the export of fur skins and their products by 192.45%. In the first post-accession years, the main customers of the Polish commodities were the European Union countries. This situation began to change gradually since 2010, when as a result of opening the representation of the Canadian exchange (NAFTA) the export to the North American countries started to gain in importance. Currently, about 90% of the total export is sent only to three countries (International Trade Centre, 2019): Canada, Denmark and Finland (in 2016, the total export value to those countries was: 55.75; 17.54; 14.54%). It should be noted, however, that these are the countries of sale, not of the final destination. Worldwide trade in fur skins and their products is conducted by specialised auction houses which operate mainly in Denmark, Finland, Canada and the USA (Bielański, Wrzecionowska, 2013). This attests to building a competitive position based on the quality of products offered. At the first stage, the RCA index has been calculated, as a quotient of a ratio of the export of fur skins and their products in a given country to the total export of fur skins and their products in the European Union countries and a ratio of the export of agri-food goods of this country to the total export of agri-food goods in the European Union countries. The revised relative comparative advantage index (Table 3) has been applied in the course of further analysis. The calculations adopted the value of parameter a at level 1.

Zagadnienia Ekonomiki Rolnej / Problems of Agricultural Economics
The  Eksport Import in thousand USD Export Import

Revealed comparative advantage (RCA) index of fur skins and their products in the European Union countries in 2005-2016
Country 2005  Considering the rate of changes in comparative advantages in the analysed group (Fig. 3), the upward trend is visible in 9 countries, the largest in the case of Lithuania (an increase in the value of the revised RCA index between 2005 and 2016 by 344.34%), then in Poland, Slovenia and Italy (increase in the revised RCA index between 2005 and 2016, respectively, by 83.34%; 51.77%; 41.11%). In the countries with the highest values of the revised RCA index (Denmark, Finland, Greece), small changes in its value are visible over the years (fluctuating between -13% and 15%). The countries such as Croatia, Romania and Sweden lost in importance to the largest extent.  When observing the changes in the value of the Trade Coverage index between 2005 and 2016 (Fig. 4), it can be concluded that for 11 countries there was an increase in the value of the index. The largest increase in the export specialisation in fur skins and their products took place in the case of Slovenia, Poland and Lithuania (increasing the value of the Trade Coverage index between 2005 and 2016 by, respectively, 672.42%; 306.00%; 214.33%). The countries such as Ireland and Bulgaria lost in importance to the largest extent.

Final conclusions
The studies conducted made it possible to look objectively at the competitiveness of foreign trade in fur skins and their products in Poland against a background of other European Union countries in the years 2005-2016, in which such activities were carried out on a broader scale. The authors tried to highlight the value of the results obtained in terms of continuing breeding fur animals in Poland, while ignoring lobbying aspects and other actions affecting the implementation of particular interests of other countries, including, the hypothetical takeover of modern breeding in our country.
Based on the results of the studies, the following conclusions have been identified: 1. Taking into account the criterion of the location of fur farms, it was found that breeding fur animals in the European Union is concentrated in the Northern European countries, mainly in Denmark, Finland, the Netherlands and Poland. 2. In Poland, contrary to the other European Union countries with the highest level of production, the production is based on producing raw material for export; 3. Poland had a competitive advantage in foreign trade in fur skins and their products in 2005, in 2008-2011 and in 2013-2016. It is one of the countries where the fastest growth rate of the competitive advantage between 2005 and 2016 has been recorded. 4. Poland is a country in which some of the largest Trade Coverage indices among the European Union countries were recorded in 2010-2017. Therefore, increasing the production of fur skins is an opportunity to develop the fur industry in Poland. 5. Taking into account the aspects of competitiveness of foreign trade in fur skins and their products in Poland compared with the European Union countries, it has been concluded that, in connection with the emerging restrictions on breeding fur animals in these countries, the concentration of production in Poland can strengthen its role on the international arena, as well as have an increasing impact on the economic situation of producers operating in the industry.