Directorate for Food, Agriculture and Fisheries 1 ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT ORGANISATION DE COOPÉRATION ET DE DEVELOPMENT ÉCONOMIQUES OECDOCDE ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT ORGANISATION DE COOPÉRATION ET DE DEVELOPMENT ÉCONOMIQUES AGRICULTURAL SECTOR TRENDS IN CEECs Loek Boonekamp Head of the Trade and Markets Division OECD, Directorate for Agriculture EastAgri conference Rome, 28 February, 2005

Directorate for Food, Agriculture and Fisheries 2 Outline of the Presentation Macro-economic trends The context of agricultural world markets A focus on Ukraine

Directorate for Food, Agriculture and Fisheries 3 Macro-economic Trends Robust GDP growth

Directorate for Food, Agriculture and Fisheries 4 Robust GDP Growth

Directorate for Food, Agriculture and Fisheries 5 Macro Economic Trends

Directorate for Food, Agriculture and Fisheries 6 Inflation slowly under control

Directorate for Food, Agriculture and Fisheries 7 Macro Economic Trends

Directorate for Food, Agriculture and Fisheries 8 External debt remains heavy…

Directorate for Food, Agriculture and Fisheries 9 Macro Economic Trends

Directorate for Food, Agriculture and Fisheries 10 ….Weighing down on investments

Directorate for Food, Agriculture and Fisheries 11 Agricultural World Market Context: The Evolving Economic Environment Increasing competition in world markets –Cereals from OECD –Renewed export subsidy use in EU (weak USD) –Meat, sugar, cotton, oilseeds from South America

Directorate for Food, Agriculture and Fisheries 12 Growing Competition in Meat and Oilseed Export Markets

Directorate for Food, Agriculture and Fisheries 13 Agricultural World Market Context: The Evolving Economic Environment

Directorate for Food, Agriculture and Fisheries 14 World Prices Remain Low in Real Terms

Directorate for Food, Agriculture and Fisheries 15 Agricultural World Market Context: The Evolving Economic Environment Changing consumer demand Growing civil society voice Changing market structures Increasing globalisation Shifting competition focus Growing role of standards

Directorate for Food, Agriculture and Fisheries 16 A Focus on Ukraine The policy situation –Low support levels

Directorate for Food, Agriculture and Fisheries 17 Support in Ukraine Generally Low…

Directorate for Food, Agriculture and Fisheries 18 …Also Compared to Other CEECs

Directorate for Food, Agriculture and Fisheries 19 A Focus on Ukraine

Directorate for Food, Agriculture and Fisheries 20 Big Differences in Levels of Support

Directorate for Food, Agriculture and Fisheries 21 A Focus on Ukraine

Directorate for Food, Agriculture and Fisheries 22 Most Support Given as Direct Payments

Directorate for Food, Agriculture and Fisheries 23 A Focus on Ukraine

Directorate for Food, Agriculture and Fisheries 24 High Tariffs Despite Low MPS

Directorate for Food, Agriculture and Fisheries 25 Lowering MFN Tariffs Does Not Affect Domestic Prices

Directorate for Food, Agriculture and Fisheries 26 Some Concluding Remarks Aggregate support levels are moderate Substantial distortion for some commodities No need for severe border measures Substantial scope for Ukrainian tariff cuts under WTO accession WTO membership would lay stronger foundations for ‘good’ agricultural policies…..and facilitate access to the global food value chain by Ukrainian farmers and food producers