EU Enlargement and Agriculture: Risks and Opportunities Martin Konečný Friends of the Earth Europe martin.konecny@foeeurope.org www.foeeurope.org

Risks Opportunities  Delocalisation – more transport Loss of biodiversity Pollution and soil degradation Rural decline New factory farms Opportunities  Limit pollution through EU legislation  Green rural revival through 2nd pillar subsidies: boost organic farming, tourism, renewables, young farmers, maintain grasslands

Delocalisation: More long-distance transport Causes Single Market – elimination of trade barriers Supermarkets and Agri-Food Business – centralised sourcing Consequences More transport Specialisation, concentration, intensification/abandonment

Delocalisation So far… German agricultural exports to NMS up by 29% (jan 05 / jan 04) : meat and meat products + 279%, cheese + 234% Exports of live animals for slaughter soared (e.g. PL, CZ) -> imports of meat & oversupply of cereals Polish food exports to EU-15 up by 37% (jan 05 / jan 04) Milk powder + 42%, cheese + 61% (04 / 03) Hungary: domestic share of food market down from 90% to 85%

Rural decline So far… Farm employment: EU-15: 4% x CEE-10: 21% Farm structures: CZ & SK: extremely concentrated, low farm employment SI, PL, LT, RO: extremely fragmented, many semi-subsistence farmers “To reach only half of the average productivity of the EU-15 would already involve, with constant production, the destruction of 4 million agricultural jobs in the ten CEE countries” So far… Eurostat: Farmers’ incomes up 54% in 2004.

Intensification: More pesticides and fertilisers? How will farmers use the additional money? So far…  Use of fertiliser in Czech Republic up by 25% in 2004

Pesticides use, 1989-2001

N-fertiliser use, 1961-2002 Longer time-scale

Cereal yield, 1961-2003

New factory farms? 1990s: CEE livestock numbers declined to less than a half Intensive pig and poultry farms built with foreign investment (e.g. Danish pig farms, Smithfield)

EU environmental legislation Pesticides Nitrates Water, air, soil Animal welfare Natura 2000 Will it be sufficient to offset the negative trends?

2nd pillar: chances for green rural revival Organic farming Young farmers Semi-subsistence farmers Rural tourism Renewable energy Maintain semi-natural grasslands Local economies (Leader, etc.)

Share of organic farmland, 1993-2002

Share of organic farmland, 2002

RDPs 2004-2006

RDPs 2004-06: +/- Czech Republic Poland  No shift-back to the first pillar  AEPs - well-prepared, 36% of RD expenditure  LFAs - limited to grasslands, to reduce share of arable land  Forestry measures - weak or absent environmental criteria Poland  Weak AEPs, severely delayed  Lack of AE advisors

RDPs 2004-06: +/- Hungary  AEPs very popular among farmers (4 times more applications)  Government shifted funds back to 1st pillar, AEP budget reduced

RDPs for 2007-13: challenges Integration instead of polarization Measures must not undermine each other Environmental goals & criteria for all measures 3 axes not helpful Lack of money (esp. for EU-15): EC budget proposal 2007-2013: € 89 bn (+ € 7 bn modulation) = 2% decline for EU-15 Failed Luxembourg compromise: € 74 bn Extended scope of the regulation