Agriculture and EU enlargement

Many of the toughest questions posed by enlargement relate to agriculture. This is due to the continuing importance of agriculture both in the economies of the applicant countries and in the EU budget. At the same time food and agricultural measures account for roughly half the acquis communautaire, so the applicant countries have the daunting task of adapting to EU policies and standards. Land and labour costs tend to be lower in the CEECs (Central and East European countries), so farmers in the EU(15) have expressed concern about the increased competitive pressures in an enlarged EU, though the impact seems likely to be less than initially feared. The preparation of their agriculture to join the EU is rendered more complex for the candidate countries by the fact that the CAP is a moving target. Substantial changes in the CAP were introduced by the MacSharry Reform of 1992 and the 1999 Berlin Agreement. The CAP is subject to a mid-term review in 2002, and the issue of reform will be back on the table when the financial perspective for the years after 2006 comes up for discussion. The question is further complicated because the issues of CAP reform, enlargement and GATT/WTO obligations are all interlinked. Given the importance of agriculture for enlargement, the aim of the article is to provide a brief survey of the issues. After providing data illustrating the weight of agriculture in the CEEC economies, the CAP budget and the acquis, agricultural transition in the CEECs is discussed. The prospects for agricultural production and consumption in an enlarged EU are then assessed. It is then shown how the CAP is a moving target. The difficulties of applying direct payments, quotas, set-aside and rural development policies to the CEECs is then analysed. The budgetary implications of enlargement is then illustrated before showing how the issues of CAP reform, enlargement and WTO negotiations are interconnected.