Commission: Candidates will benefit from the CAP

A study, released by the Commission on 18 March,
concludes that farmers in the candidate countries will be
significantly better off even without direct
aid.

The study, “Analysis of the Impact on Agricultural Markets
and Incomes of EU Enlargement to the CEECs”, examines four
possible policy scenarios:

  • no enlargement,
  • introduction of the CAP without direct payments,
  • introduction of the CAP with direct payments,
  • accepting candidate country negotiating
    positions.

The simulation shows that even under the
most pessimistic restructuring scenarios, EU accession will
have positive effects on the income of farmers in the
candidate countries. In seven of the eight Central European
candidates that might join the EU in 2004, the income of
the farmers in the new Member States would increase even
without direct payments, by 30 percent on the average. The
expected increase per country is:

  • Czech Republic: 60 percent,
  • Latvia: 59 percent,
  • Estonia: 55 percent,
  • Slovakia: 45 percent,
  • Poland: 35 percent,
  • Hungary: 16 percent,
  • Lithuania: 5 percent.

Only in Slovenia would the income of
farmers decrease by 4 percent under this scenario.

The Commission underlines that
“immediately paying 100 percent of direct payments would
create significant social distortions and inequalities and
would hamper the necessary restructuring, given that
farmers’ income in the candidate countries could more than
double”. The application of 100 percent direct payments
would triple the income of Central European farmers (89
percent increase), whilst accepting the candidate countries
negotiating positions would quadruple it (123 percent
increase).

 

The Commission proposed on 30 January to spend
approximately 40 billion euro on the first wave of
enlargement, between 2004 and 2006. The Common Agricultural
(CAP) and Regional Policies, which account for nearly 80
per cent of the EU's annual budget, will represent the
biggest cost of enlargement.

The current Member States are expected
to adopt a common strategy for negotiations on these
issues, and their impact on the future EU budget, in the
first half of 2002. In their first debate on the financial
framework, on 9 February in C¥res, EU Foreign
Ministers said the Commission's proposal was too generous,
and sought to reduce it by eight billion euro.

Negotiations are scheduled to be
concluded by the end of 2002, and as many as 10 candidate
countries could join the EU in 2004. The European Council
of Laeken in December 2001 postponed Bulgaria's and
Romania's accession.

 

The agriculture ministers of the Member States and the
candidate countries will discuss the introduction of the
CAP in the future Member States at the Agriculture Council
in Brussels on 19 March.

The Commission is expected to present a
draft common negotiating position for agriculture by the
end of March.

 

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