The Agricultural Social Insurance Fund (KRUS) is facing changes as the government seeks to lower state funding of the insurance system and limit enrollment to low income farmers. To this end, the Chancellery of the Prime Minister has assembled a special team to draw up reforms by March.

The plan has sparked tension within the ruling coalition, with smaller partner the Polish Peasants’ Party (PSL) opposing the reform. Concerned about its rural electorate, PSL offered to raise the cost of participation in KRUS to farmers who own more than 50 ha.

KRUS, a social insurance system offered to people who are registered as farmers (as well as their families), involves lower fees than Poland’s standard social insurance organization, ZUS. For example, the quarterly KRUS contribution is a flat zł.191 for all participants regardless of income, while the minimum ZUS contribution paid by entrepreneurs last year was zł.751.47 per month.

Almost 1.6 million people were insured by KRUS in 2007, according to the fund’s own data.
The KRUS system violates constitutional norms and discriminates against those entrepreneurs who are not officially registered as farmers, according to the Business Centre Club (BCC). Moreover, the organization claims that KRUS cost the state budget zł.16 billion last year.

In November 2008, the BCC proposed that farmers be included in the social insurance and tax systems.

PSL MP Jarosław Kalinowski told radio station RMF in January that farmers’ tax burden, apart from KRUS, is much higher than for other entrepreneurs.

The KRUS system has lost its raison d’etre and is unjust for other entrepreneurs, according to Łukasz Hardt, an expert with the Sobieski Institute. “The situation in our countryside has changed considerably in recent years,” he said, noting that many agricultural firms are thriving enterprises but have lighter tax burdens than other businesses.