Auswirkungen der Erweiterung und Aussichten für den Agrarsektor

Mit dem Beitritt der 10 neuen Mitgliedstaaten ist die nutzbare
Landwirtschaftsfläche um 29 Prozent, die ländliche Bevölkerung um
52 Prozent und das landwirtschaftliche BIP um nur 7 Prozent
angestiegen. Hieraus ergeben sich nach der neuesten Sonderausgabe
der Revue Elargissement von MINEFI-DREE drei Probleme:
niedrige Produktivitätsniveaus, möglicherweise erhebliche
finanzielle Kosten für die Union und eine stark ausgeprägte
soziopolitische Anfälligkeit.

1 – Inventory and typology of the CEEC’s agricultural
sectors 

The weight of agriculture, yields, land structure and trade
indicators for agricultural products enable a typology to be drawn
up within the CEEC. 

In 3 countries, Bulgaria, Poland and Romania, the agricultural
sector still accounts for a significant share of GDP and/or
employment. 

In 2003, employment in the agricultural sector (agriculture,
hunting, forestry and fishing) accounted for 34.5% of the total
employment in Romania, 26% in Bulgaria and 18.5% in Poland, whereas
in Slovenia (4.4%), the Czech Republic (4.5%), Hungary (5.8%) and
Estonia (6.1%) it is currently close to the French (4.1%) and the
former EU 15 (4%) levels. Since 1995, employment has dropped in
this sector in all these countries, except in Bulgaria.

In the CEEC, the weight of the agricultural sector within GDP
ranges from 2.6% in Poland to 11.7% in Romania, whereas on average,
in the former EU15, the sector contributes 1.9% of GDP (2.4% in
France). This share has dropped everywhere in the region since
1995: it has dropped drastically in Poland (-55%), in the Baltic
States and in Hungary (-45%) and to a slightly lesser extent (less
than the 30% drop in the 15) in the other countries.

Yields are very unequal from one economy to another, but also
between regions within a country and from one farm to another.

As regards the major vegetable crops generally, they clearly lie
below Western-European levels. Nevertheless, oilseed rape yields
are particularly high in the region and in 2001 were even greater
in Slovenia (+9%) and the Czech Republic (+7%) than in France for
example. At the other end of the scale are potatoes, whose yields
per hectare do not reach half the former EU-15 level. For milk,
yields grew quickly during the last years and almost reach the
French level in the Czech R., Slovenia, Slovakia and Estonia and
exceed them in Hungary. Conversely they are low and stagnating in
Bulgaria and Romania.

Regions such as those of Lodz, Kielce and the North of Poland,
and also that of Plzen in the Czech Republic, combine large farming
populations and low yields, because of infertile soil.

Farms’ land holdings are a determining factor for investment and
the achievement of potential economies of scale. The more the land
is split up, the weaker the owners’ investment capacity. Three
groups of countries can be distinguished: 

The first group includes Estonia and Hungary; in Hungary, only
6% of the farms comprise more than 10 hectares but they account for
80% of the area; in Estonia, 20% of the farms have more than 10 ha
and also account for 80% of the area under cultivation.

Latvia is in an intermediate situation (70% of the farms
comprise more than 5 ha and account for 95% of the agricultural
area), with a strong concentration of farms whose area ranges
between 5 and 20 hectares;

The Czech Republic, Slovenia, Lithuania, Poland and Romania form
the third group, characterised by many small farms (< 3 ha or
< 5 ha), which cover a considerable portion of the area under
cultivation (45%, 33%, 30%, 20% and 90% respectively). 

Some countries have developed specialisations which have enabled
them to integrate more easily into European trade, or even achieve
a trade surplus like Hungary, Bulgaria and the Baltic States.

“Meat and meat products” are Hungary’s primary specialisation.
The production and export of duck and foie gras, and also pig meat,
contribute greatly to this. The whole of this sub sector accounted
for 48% of the total agricultural production in value (in 2002) and
a little more than 25% of the country’s total exports in 2003. “The
grain industry and animal feeds” also accounted for 25% of
Hungary’s sales abroad in 2003, a country whose topography is
favourable to vegetable crops. “Fruit and vegetables”, of which 50%
is processed locally (70% canned and 30% deep frozen), is Hungary’s
3rd most competitive sector (using the RCA criterion).

The RCA of Poland in “fruit and vegetables” is coherent with the
importance of production, estimated at 3 M tons (including 70% of
apples) and with nearly 5.1 M tons of vegetables in 2003. In
comparison, the Hungarian production amounted to 1.2 M tons and 1 M
tons respectively (in 2001). But these exports, used to calculate
the RCA, also include potatoes, of which Poland produced 13 M Tons
in 2003 (19 M tons in 2001 and 45 M tons for the EU15). In this sub
sector, Poland sold USD 1.3 bn abroad in 2003, among which nearly
20% went to the CEEC and 10% to Russia, achieving a trade surplus
of approximately 450 M. Pork production, 2.8 M tons in 2003,
represents the essence of the dynamism of the “meat and meat
preparations“ sub sector in Poland. The number of pigs was
estimated at 18.5 M units in 2003, compared with 5.1 M in both
Hungary and Romania and 15 M in France.

Conversely, compared to the preceding countries, the Czech
Republic (like Slovakia and Slovenia) historically suffers from a
comparative disadvantage in agriculture and the food industry. In
2003 it was particularly marked in the “fruit and vegetables”
sector, the other sub sectors deviating little from the overall
trade imbalance. 

2 – Enlargement and the introduction of the
CAP 

For the 10 NMS, accession brings with it two immediate
consequences. Firstly, they must start distributing European
subsidies and set up Common Market Organisations (CMO), charged
with the control of and intervention in market prices. Secondly,
the convergence of farm prices with the former EU15 has almost been
completed for the principal products.

The EU CAP subsidies are divided into 3 categories: direct,
market support and rural development. The total pot will increase
over the years: it will amount to nearly € 4 bn in 2006, which is
33% of the total funds the CEEC receive from the Union’s budget. In
2006 the 15 will receive a little over € 40 bn.

Before 2013 (phasing-in), the NMS will not receive 100% of the
direct subsidies to which they might be entitled, the so called
“reference amount”, which the farmers of the former EU15 receive.
The distortion in incomes that would have arisen between
socio-professional categories in the CEEC (if 100% had been paid)
was the main economic justification for this decision: thus, in
2004, farmers will receive only 25% of the “reference amount” and
75% in 2010. Direct subsidies are calculated per “eligible
hectare”. To determine the “eligible hectare”, the total amount
allocated to each NMS was divided by a “production reference”,
which results from the combination of an “eligible area” and a
“yield reference“ per hectare, calculated from 1995-1999 production
data.

The Common Market Organisations (CMO), which are financed by the
FEOGA Guarantee, are organised by product and mainly enable
domestic market prices to be supported through direct purchases of
the production. The CMO function on the basis of three
institutional prices: the “indicative price”, a price which the
authorities wish to achieve on the markets, the “intervention
price”, which is used as a basis for the calculation of purchases
by the intervention boards and the “threshold price” (higher than
the market and intervention price), the lowest import price at
which imported goods can enter the Union without levies, it being
understood that Community prices are generally higher than world
market prices.

Rural development subsidies, the so called “second pillar” of
the CAP, have been increased. Unlike the subsidies of the “first
pillar” (direct assistance and market price support), they are
ring-fenced to the implementation of projects such as, for example,
bringing a farm up to environmental standards or improving food
quality.

Did enlargement have an impact on farm prices? In general,
prices in the CEEC had already widely converged with those of the
Union before accession took place on May 1st. Like milk prices,
where wide price differentials persisted, convergence quickened by
the middle of 2003, at varying rates according to the country. To
date, price equality henceforth prevails between the NMS and the
countries of the former EU15, also for meat, cereals and dairy
products. Further differences persist because of transport costs
and quality differences. 

3 – What prospects for agriculture in the
CEEC?

Some of the “small countries” of the region have almost
completed the reorganisation of their agricultural sector (Estonia,
Hungary, Czech R. and Slovenia) or are clearly on the way to doing
so (Latvia, Lithuania, and Slovakia).

Bulgaria will join this group in the medium term,: on the one
hand this country can rely on its strong agricultural
specialisations (wines, cereals) as well as on a landscape and
natural environment favourable to “green” or thermal tourism and,
on the other hand, the economy benefits from increasing
attractiveness, with FDI making it possible to absorb all or part
of the labour released from the agricultural sector through
productivity gains.

In this context, the current land structure in Poland seems
about to plunge the country into a depressive circle: its split
land structure reduces investment potential and potential
productivity gains. Agriculture is still very subsistence
orientated, the weak specialisation of Polish farms being another
frequently quoted constraint. But would these productivity
improvements be welcome in an economy where the unemployment rate
remains high and drops very slowly? As in Spain two decades ago,
with the agricultural question it is essentially a matter of
maintaining “social peace”.

National governments and the European Commission encourage
farmers to diversify their incomes.

More than a third of the EU funds devoted to agriculture should,
between 2004 and 2006, go to “rural development” in the CEEC, via
projects designed not to support incomes, but to develop the
creation of jobs and increase the standard of living of the rural
population as a whole. A country’s green and thermal tourism
potential is part of this logic. For example, Mazuria in Poland,
the Tatra mountains on both the Slovak and the Polish side, the
Carpathian mountains north of Romania, the Danube delta, Lake
Balaton in Hungary and the 1,600 Bulgarian mineral water springs
all offer such possibilities.

The prospects offered to agriculture by the biomass also appear
particularly interesting. A European Directive indeed requires
fuels to have a bio content of at least 5.75% by 2010 (this rate is
currently 1.04% in France). In addition, 12% of the energy produced
in the Union in 2010 (7.5% for the NMS) must have a renewable
origin, compared with 6% currently. More generally, one of the
authors of the last OECD report on biomass and agriculture
considers that the biomass will account for approximately 85% of
all the renewable energy used in the EU in the future. The
production of this energy being highly sensitive to the costs of
transporting raw materials, it may thus contribute to the
development of “rural industrialisation”.

The food industries and the demand for food, agriculture’s
traditional outlets, might increase by 33% in the 12 CEEC by the
year 2010, according to a recently published WIIW study, compared
with 9% in the former EU-15. This demand would then rise to € 60 bn
(compared with € 45 bn in 1999), that is approximately 9% of the
enlarged Union’s expected demand (7.4% currently).

This issue of Revue Elargissement Special Agriculture was
written and edited by Elise
REGNIER, Guillaume ROUSSET
and Yann LEPAPE.  To read further analyses from the same source, visit the MINEFI-DREE website.