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Impact of the European Enlargement and Common Agricultural Policy Reforms on Agricultural Markets: Much Ado about Nothing? The

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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.

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  • Jacinto F. Fabiosa & John C. Beghin & Fengxia Dong & Amani Elobeid & Frank H. Fuller & Holger Matthey & Simla Tokgoz & Eric Wailes, 2005. "Impact of the European Enlargement and Common Agricultural Policy Reforms on Agricultural Markets: Much Ado about Nothing? The," Food and Agricultural Policy Research Institute (FAPRI) Publications 05-wp382, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University.
  • Handle: RePEc:ias:fpaper:05-wp382
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    Cited by:

    1. Ovidiu Stoica & Monica Damian, 2013. "Evaluation of the Common Agricultural Policy’s Impact upon Inflation Rate in Central, Eastern and Southern Europe Countries," International Journal of Economics and Financial Issues, Econjournals, vol. 3(1), pages 229-236.
    2. Simla Tokgoz, 2005. "EU Enlargement and Technology Transfer to New Member States," Center for Agricultural and Rural Development (CARD) Publications 05-wp414, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    3. Yu, Tun-Hsiang (Edward) & Tokgoz, Simla & Wailes, Eric J. & Chavez, Eddie C., 2009. "A Quantitative Analysis of Trade Policy Responses to High Agricultural Commodity Prices," 2009 Conference, August 16-22, 2009, Beijing, China 51805, International Association of Agricultural Economists.
    4. Fabiosa, Jacinto F. & Beghin, John C. & Dong, Fengxia & Elobeid, Amani E. & Fuller, Frank H. & Matthey, Holger & Tokgoz, Simla & Wailes, Eric J., 2006. "The Impact of The European Enlargement and CAP Reforms on Agricultural Markets. Much Ado about Nothing?," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25618, International Association of Agricultural Economists.
    5. Alexandre Gohin, 2006. "Assessing CAP Reform: Sensitivity of Modelling Decoupled Policies," Journal of Agricultural Economics, Wiley Blackwell, vol. 57(3), pages 415-440.
    6. Gohin, Alexandre, 2006. "Assessing the 2003 CAP Reform: Sensitivity to the Decoupling of Agenda 2000 Direct Payments," Working Papers 18868, TRADEAG - Agricultural Trade Agreements.
    7. Ahmed, Wasim & Hussain, Safdar & Jafar, Rana Muhammad Sohail & Guang-Ju, Wang & Rabnawaz, Ambar & Saqib, Zulkaif Ahmed & JianZhou, Yang, 2016. "Impacts of Trade Liberalization on Dairy Industry in China," MPRA Paper 70385, University Library of Munich, Germany.
    8. Margherita Scoppola, 2005. "Agricultural Policies of the EU in the New Member States: Development or Re-Distribution?," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 1, March.

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