Brussels, 25/03/2003 (Agence Europe) - As we announced (EUROPE of 25 March 2003,p.13), the European Commission published two new studies on Tuesday analysing the economic consequences of proposed legislative changes to the Common Agricultural Policy (CAP). If these proposals were adopted, farmers' incomes in the EU of Fifteen would rise by 8.4% in 2009 compared with 2001, which would represent a small reduction compared to the scenario whereby the current policy under Agenda 2000 is renewed (in this case, incomes would increase by 8.5%). In the EU of twenty-five, enlargement and reform of CAP would bring about a 1.5% increase in incomes compared to the situation in 2002. These studies confirm that farmers in the ten Member States acceding to the EU in 2004 will draw great benefit not by reform of CAP per se (which would have a limited effect on their income), but more so from enlargement. According to the Commission, farm incomes in these ten countries would rise by 17% in 2009, by drawing profit from the market, even up to 45%, taking account of the gradual introduction of direct aid and rural development measures.
For the current Member States of the EU, proposed reforms should have variable effects according to the products: 1) reduction by around 2% in total cereal production (rye and durum wheat would be the most affected, as the area used to grow them could fall by 10%); 2) for the beef sector, the strategy to sever ties between protection and subsidies ("decoupling") would ensure a better income for producers and would allow development of extensive production, the Commission believes, stating that beef production would fall by 2.7% in the medium term, which would lead to a 7% rise in prices for the farmers by 2009. This drop in production would bring about a slight drop pin exports (around 5%). An increase in prices of beef and sheep meat would strengthen the competitiveness of the pork and poultry sectors, which could register a slight increase in terms of production and consumption; 3) the additional increase in quotas could cause an equivalent increase (2%) in milk production in the Fifteen current Member States by 2009. On the other hand, butter production could fall in the medium term (with the projected drop in the support prices). A less interesting butter market would lead to greater production of cheese and fresh dairy products. In the scenario projected in the context of CAP reform, the price of milk should fall 10% in 2009 in the Community of Twenty-five, compared to the policies under Agenda 2000, whereas the drop would be 23% in the Community of Fifteen.