Following a historical agreement on the EU enlargement, 10 new member states (NMS) acceded to the European Union on May 1, 2004. Although the European Union has expanded its membership in the past, this enlargement is unique in terms of its scope and diversity of the countries, area, and population involved. Thus, the effects of the EU enlargement on current and future member countries and on world commodity markets require careful consideration as the European Union is a major player in these markets. We analyze the effects of the Common Agricultural Policy (CAP) reform and enlargement on the EU-15, the NMS, and world agricultural markets. We compare three 10-year comprehensive agricultural outlook scenarios. In a "pre-enlargement" scenario, all pre-enlargement policies of the EU-15 are held in place and the 10 NMS maintain their independent economic policies and older technologies as if nothing happens. The second scenario considers the CAP reform in the EU-15. The third scenario is the 2004 Food and Agricultural Policy Research Institute (FAPRI) baseline projection, which incorporates both the CAP reforms and accession of the 10 NMS with the associated domestic and trade policy reforms and some convergence in technology within the EU-25. With prices in most commodities in the acceding countries historically below EU-15 prices, accession leads to a moderate decrease in the EU-15 prices, whereas for the 10 NMS, domestic prices of many commodities increase substantially. Holding income levels constant, consumption levels of agricultural products in these countries decrease in most instances because of higher food prices, while production levels rise. The impact of the two reforms on world markets is moderate to negligible. The CAP reform has a moderate impact on the EU-15.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
file. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number
12729.
Length: Date of creation: 23 Feb 2007 Date of revision: Handle: RePEc:isu:genres:12729
Contact details of provider: Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070 Phone: +1 515.294.6741 Fax: +1 515.294.0221 Email: Web page: http://www.econ.iastate.edu More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: (Stephanie Bridges).
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)