Farm deal set to complicate accession talks

Date: 01/04/1999

By Simon Taylor

INTEGRATING farmers from eastern Europe into the EU will be more difficult because of the diluted farm reforms agreed at the Berlin summit last week European Commission officials warn that cutting the cereals price by only 15% increases the risk that farmers in central and eastern Europe could add as much as 10 million tonnes to any EU grain surplus.

Even with the 15% cut, grain prices will still be higher in the Union than in the applicant countries, giving farmers an incentive to boost their cereals output. If world grain prices stay low, the extra grain will be more expensive than on the rest of the world market. Given the tightening limits on subsidising EU exports, the cereals would end up in new grain mountains.

But officials point out that the Berlin deal allows for the possibility of changing the grain price if the EU faces new surpluses, and doubt that the problems will be a real barrier to enlargement. "Once the political decision to let in new countries has been taken, no one is likely to keep countries out because of grain prices or a bit of milk quota," said one.

East European farm experts say the strict limit on agricultural spending agreed in Berlin is a bad sign for farming in the five leading applicant countries.

One Polish analyst said the cost-cutting approach would make it more difficult to finance enlargement. "It may not be possible to integrate bigger countries like Poland within the time frame or to treat all farmers equally," he said.

He added that the budget limits would increase the likelihood that the EU would try to withhold vital support payments from farmers in the new member countries - a move which Warsaw would reject.

" Polish farmers would lose market share to the benefit of EU farmers. This would be totally contrary to the requirements of fair competition," he insisted.