dertaken within the scope of PPPs should "bring together the efficiency, flexibility, and com-
petence of the private sector with the accountability, long-term perspective, and social inter-
ests of the public sector" (Spielman and Grebmer 2004, p. 10). Furthermore, PPPs should
not only pursue goals of the private sector but also of the local or more global society in terms
of providing e.g. (local) public goods (Schaeffer and Loveridge 2001; Spielman and
Grebmer 2004, p. 10).
The following section will present the public-private partnership “Chmielnik Zdroj” (Well of
Chmielnik), which is working as a commercial entity based on a bottom-up initiative of local
authorities, local leaders and local businesses. We attempt to demonstrate why it was success-
ful despite the previously mentioned obstacles of local collective action as well as how it
combines private sector objectives with the provision of certain public goods for the region.
5 “Chmielnik Zdroj” - a public-private partnership in South-Eastern Poland
5.1 Objectives and impact
“Chmielnik Zdroj” is a limited liability entity located in Chmielnik, one of the four com-
munes of Dolina Strugu. The most important associates are the four communes of Dolina
Strugu and the members of a local non-profit organization also called “Dolina Strugu”, which
was the main initiator of the public-private partnership. Farmers’ relation to the partnership is
market-based, they are usually not members and do not pay any fees. When “Chmielnik
Zdroj” started in 1994, its main objectives were to create new jobs for people from the Dolina
Strugu region, to give farmers the opportunity to sell their products, to provide people from
the region with local, traditionally-made products, and to keep the environment and fields in a
good and environmentally friendly condition. In 2005 the partnership employed 400 people
and bought products from more than 500 small farms of Dolina Strugu. In the region around
the cities of Krakow, Rzeszow, Tarnow and Lublin, they provide, with 170 vehicles, 70,000
households with processed products (vegetables, fruits, honey, bread, soups and pasta). Cus-
tomers order their purchase by phone or internet and are delivered at home. Farmers have
short or medium-term contracts with the partnership, which enables them to sell their products
without the need to deliver them to a distant wholesale company. It provides them with a ba-
sic source of income and certainty about next year’s market situation. Furthermore, the part-
nership processes farmers’ products and sells them directly to its customers. In addition, it
supports farmers in applying for ecological certification. In the future, farmers will also re-
ceive assistance in production planning. Local farmers receive information about EU pro-
grammes and assistance in applying for direct payments or other funds for free from an office
which is mainly financed by the local non-profit organisation “Dolina Strugu”.
“Chmielnik Zdroj” has had a widely perceived impact on broader rural development goals. It
provides non-farm jobs, contributes to the local infrastructure development thereby improves
the economic situation of rural households and counteracts out-migration of young people. In
addition, consumers’ demand for regional and environmentally beneficial products is met.
An indirect impact is the increased number of businesses in Dolina Strugu compared to other
rural communes in the region. In the four communes of Dolina Strugu, the number of busi-
nesses per 100 inhabitants increased between 1995 and 2001 from 2.2 to 5.1, whereas in other
rural communes near Rzeszow this number increased only slightly from 2.2 to 2.3 per 100
inhabitants in the same period (UNDP 2003).
5.2 Steps on the way to “Chmielnik Zdroj”
The roots of this initiative go back to a telephone cooperative that was founded by five repre-
sentatives of the local government together with twenty local business administrators in 1991.
In 1991 these four communes had only access to 800 telephone subscribers and the state-