European Commission Directorate General for Agriculture Analysis of the Impact on Agricultural Markets and Incomes of EU Enlargement to the CEECs

FOREWORD This report has been prepared by the Directorate General for Agriculture of the European Commission in the framework of the analyses carried out in preparation for the approaching EU enlargement. It is aimed at providing a clear picture of the possible impact of different enlargement scenarios on agricultural markets and on farm incomes in the Central and Eastern European Countries (CEECs) as well as in the EU-15. The report examines three different accession scenarios: (1) accession without direct payments, (2) accession with full direct payments and (3) accession according to the negotiating position of the Candidate Countries. In the first two scenarios reference quantities are based on a recent reference period. In the third scenario, reference quantities are those requested by Candidate Countries. The proposals presented by the Commission in its Issues Paper " Enlargement and Agriculture: Successfully Integrating the new Member States into the CAP " (SEC (2002) 95 final, of January 30, 2002) represent, in a certain fashion, an intermediate choice between these different scenarios. Although the impact of these specific proposals is not examined in the report, it nevertheless provides a lot of useful information in this respect since it includes the results of quite a wide range of assumptions as far as the conditions for accession are concerned. The results of the simulations are also compared with those obtained under the assumption of unchanged policies and non-accession. As is the case for all similar impact analyses, the results of the simulations carried for this report are not intended to constitute a forecast of what the future will be, but rather provide an indication of what may happen under certain circumstances, which at the time of the projections were judged as the most plausible. Specific characteristics prevailing in the CEECs, such as the duality of farm structures, and an assessment of production potential, have been explicitly included. Moreover, enlargement effects on the EU-15 and the EU-25 have also been included, which allows for assessing the likely competitiveness of the current and the new member countries.