Brussels, 19/03/2002 (Agence Europe) - Before the informal meeting between European Agriculture Ministers and their counterparts from the countries candidate to EU membership (see other article), the European Commission presented Monday's Agriculture Council with a forward looking study. The study confirms its point of view whereby the immediate and integral payment of direct aid would have the effect of doubling the income of farmers in candidate countries. The Commission stresses the major distortion and social inequalities that would arise from this, including the risk of delaying the process of restructuring of farms in these countries. The study, which takes four different hypothetical scenarios ("no enlargement", "integration in Common Agricultural Policy without direct payments", "integration with direct payments" and "negotiating position of candidate country), reveals that even in the most pessimistic case, EU accession would "have a positive impact on the income of farmers in candidate countries (…) through the restructuring needed with a view to aligning Community production standards".
The Commission considers that integration of candidate countries in CAP (market measures) without the payment of direct aid, would, in 2007, cause a 30% increase in agricultural income in eight candidate countries of Central and Eastern Europe (all CEECs except Bulgaria and Romania). The increases would be particularly important in the Czech Republic (+60%), in Latvia (+59%), Estonia (+55%), Slovakia (+45%) and in Poland (+35%). The payment of 100% direct aid (calculated on the basis of recent reference periods) would result in a 89% increase in farm income. Thus, the average Hungarian or Czech farmer would from one day to the next receive more than double the average national salary. The acceptance of these negotiating positions proposed by the candidate countries would lead to even greater increases in farm incomes (+123%).
According to the study, without accession in 2007, production in the eight CEECs would slightly increase in the sector of plant production and would continue to fall in the livestock field. In the crop sector, the most significant growth would be registered in Slovakia (+6%), while plant production would decline 3% in Lithuania. As far as stock farming is concerned, all countries (except for Slovenia and to a lesser extent the Czech Republic) and above all the Baltic States and Hungary, would record a fall in production. The revenue of these countries would fall 4% on average compared to 2002. The only countries that would come out better would be Slovenia and the Czech Republic. "This study supports the Commission's strategy", commented Commissioner Franz Fischler when the study was published. He added that "our direct payment proposals (25%, 30%, 35% between 2004 and 2006) will allow farmers of all the candidate countries to enjoy a more favourable situation than if they remained outside the Union". According to Mr Fischler, this analysis "shows that a certain level of direct payments is needed for stabilising incomes but it does not need to be very high for guaranteeing that all CEECs benefit from the positive impact of enlargement with regards incomes".
Furthermore, the study concludes that enlargement will not entail major imbalance on the markets. In the arable crop sector, the Commission does not expect great increases in corn surpluses and considers that stocks of maize from CEECs could be fully absorbed by the current EU members. It could be difficult, however, to find outlets on the global markets for rye and oats. The beef markets in an enlarged Union should remain relatively balanced unless there are major changes in consumer habits, states the survey, which does not predict any serious upheaval on the Community dairy markets, either, if quotas are calculated on the basis of recent reference periods.
(The study may be consulted and/or downloaded at the DG Agriculture internet site at the following address: http://www.europa.eu.int/comm/agriculture/publi/reports/ceecimpact/index_en.htm )