| Author (Person) | Bower, Helen |
|---|---|
| Publisher | ProQuest Information and Learning |
| Series Title | In Focus |
| Series Details | 20.6.02 |
| Publication Date | 20/06/2002 |
| Content Type | News, Overview, Topic Guide | In Focus |
|
World agricultural markets will emerge from a prolonged downturn over the next seven years according to a report published by the European Commission on 19 June 2002. The report, which provides a picture of the likely developments of agricultural markets up to 2009, based on a certain number of assumptions and on the statistical information available in April 2002, foresees an upturn in the sale of most agricultural products in the European Union in the medium term. EU cereal exports are expected to rise as a result of a continued increase in consumption and beef production is due to return to 'more normal' levels after both the BSE and the foot and mouth crises. Prospects do not look so good for the rice market which is set to suffer from the progressive reduction in tariffs for rice imports from less developed countries adopted in the Everything But Arms Initiative. By the end of the decade, EU domestic demand for rice is expected to be almost entirely satisfied by more competitive imports from these countries. The rye market is also set to deteriorate due to its relatively high market prices and lack of market outlets. The report also looks at the prospects for agriculture in the candidate countries from Central and Eastern Europe. It suggests that that the key challenge for these countries in the coming years is a rapid restructuring of the agricultural sector, especially of the labour-intensive part, in order to maintain competitiveness. The main report does not take account of the potential impact of the US farm bill on international and EU markets, however a separate qualitative assessment is included. The US farm bill, which was signed by President Bush on 13 May 2002, will help boost US cotton and grain farmers' income at a time of record-low prices for commodities by providing subsidies and price guarantees but it is set to depress commodity prices elsewhere in the world. According to the EU report, Europe's cereal sector is set to be the hardest hit because the US farm bill is expected to increase the competitiveness of US products and entail higher production levels. However, US oilseed production may drop which would help to relieve the pressure on EU market prices. Overall, the largest impact of the US farm bill is expected in the wheat sector, followed by coarse grains and meat production. The publication of the report comes on the same day as it became clear that a blueprint on EU agricultural reform, which is currently being reviewed by the European Commission, should be made public on 10 July 2002. The report provides a mid-term review of the so-called Agenda 2000, which was agreed in Berlin in 1999, and covers the EU Agricultural Policy until 2006. It is likely to propose some radical changes to agricultural subsidies, separating them from what farmers produce and linking payments more closely to environmental, animal welfare and food quality criteria. According to the Financial Times, direct payments to farmers - except the smallest - would also be gradually reduced by 20% over 6 to 7 years, with the money saved being redirected towards broader rural development spending. With enlargement set for 2004, it is widely accepted that the Common Agricultural Policy needs to be thoroughly overhauled but such radical proposals are likely to be met with stiff opposition from some Member States. Links: European Commission:
European Sources Online: Financial Times: United States Department of Agriculture: European Sources Online:
Helen Bower |
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| Subject Categories | Business and Industry |
