Implications for EU and candidate countries: Agriculture

Agriculture has been playing an important role in the European Union occupying approximately half of the total budget of the European Union. Therefore, it is not surprising that agriculture is a major aspect of the enlargement process. Research on the effects of the enlargement on the European Union and the candidate countries is extensive. Budgetary aspects within the Common Agricultural Policy (CAP) including the subsidies and direct payments are important research issues. Other issues include the effects on production, price and income levels. 

In this section an overview is given of several papers and articles which touch upon the effects of enlargement on the agricultural sector in the EU-15 and/or the candidate countries.

Relevant publications

EU Agricultural expenditure for various accession scenarios, H.J. Silvis, C.W.J. van Rijswick, A.J. de Kleijn, 2001, Agricultural Economics Research Institute (LEI), The Hague

In this publication a number of scenarios are calculated regarding the consequences of the EU enlargement for the budget of the EU. In particular, the authors focus on direct payments. The study concludes that supplying the direct payments to the candidate countries will have tremendous effects for the EU budget. The authors advocate a gradual reduction of the direct payments.

For the document click here.

Economic Impacts of the Enlargement of the European Union – Analysing the importance of direct payments, S.E. Frandsen, H.G. Jensen, 2000, SJFI Working paper No. 15, Danish Institute of Agricultural and Fisheries Economics (SJFI), Copenhagen

The paper addresses the effects of the Eastern enlargement on the direct payments under the Common Agricultural Policy (CAP). Three scenarios are discussed. In the first scenario no direct subsidies are given to the new member countries. In the second scenario candidate member states receive the same level of direct payments, whereas in the third scenario two third of the pre-accession levels of direct subsidies are given to both new and old members of the European Union. It is shown that farmers in the candidate countries will increase their supply following the incentives of the direct payments. The article warns for the possible effects since there are no restrictions on the allocation of land. The paper also shows that maintenance of the existing CAP is an expensive option.

For the paper click here.

European Integration and the Common Agricultural Policy, C.F. Bach, S.E. Frandsen, 1998, SJFI Working paper No. 1/1998, Danish Institute of Agricultural and Fisheries Economics (SJFI), Copenhagen

This study assesses the effects of enlargement within a global general equilibrium model with special focus on the Common Agricultural Policy (CAP). The authors anticipate the potential of major increases in production and in exports for the Central European Countries. This will lead to a significant increase of welfare in the candidate countries. The EU budget will increase however, although the macroeconomic costs for the EU-15 will rise only slightly.

For the document click here.

Searching for Common Ground – EU Enlargement and Agricultural Policy, K. Hathaway, D. Hathaway, 1997, FAO, Rome

This publication deals with the implications of enlargement for the agricultural policy. It analyses the effects for three countries in Central Europe: Hungary, Poland and the Czech Republic. The study claims that the agricultural policies might become a source of conflict since within the EU as well as between the EU and the three countries there are different opinions concerning agricultural policies. The different opinions partly stem from the East-West division during the Cold War Era.

For the document click here.