Development of Agricultural Market and Trade Policies in the CEE Candidate Countries.

This synthesis report focuses on the evolution of agricultural market and tradepolicies in the Central and Eastern European (CEE) candidate countries in theperiod 1997 to 2001. The developments were crucially influenced by (OECD,2000a):• the situation in world agricultural markets;• the overall macroeconomic development in the countries considered;• the prospective EU accession;• bringing domestic agricultural policy in line with the UruguayAgreement on Agriculture (URAA).High 1997 agricultural prices on world commodity markets were followed by amarked depression in 1998. With the exemption of milk products this trend continuedin 1999. Likewise the economic and financial crisis in Russia had a considerableimpact on agricultural policies. It hit the regions´ exports resulting in adecline in industrial as well as agricultural output1. Thus, compared to the previousyears most of the CEE candidate countries experienced a slow down or evennegative rates of growth in their Gross Domestic Product (GDP) in 1998 and1999. In addition those countries felt increased budgetary pressures. Agriculturalmarket and trade policies largely reacted to these developments. Border protectionwas increased in many countries in 1998. This was combined in some caseswith export subsidies, and ad hoc producer aids to mitigate the adverse effects.The prospect of EU accession also had an influence on the agricultural policydesign in the region with many countries implementing EU-type policy instruments.Thus, the importance of per hectare and per head payments increased inthe region, quota like measures were implemented in some countries and as partof this development Estonia introduced tariffs for agro-food imports. Finally,many countries also continued to adjust their policies to comply with theircommitments agreed to in the World Trade Organisation (WTO).Despite these general tendencies there are also differences in the development ofagricultural policies between the various CEE candidates. Chapter 2 thereforeprovides an overview of the changes of agricultural market and trade policies ineach of the 10 accession countries. It addresses the policy issues market access(e.g. tariffs, special safeguard measures), export subsidies (value and quantities)and domestic support (intervention policies, direct payments, input subsidies, production quotas). Chapter 3 provides a brief assessment of recent policy developmentsin the region in the light of EU accession and WTO commitments.The development of prices and values, e.g. export subsidies, agricultural supportexpenditure, were presented in the background papers provided by the countryexperts in current prices in national currencies. In this synthesis report they arein addition converted in Euro. This firstly allows for a better comparison amongthe CEE candidate countries as well as between those countries and the EU.Some of the accession countries still suffer from high inflation and thus a strongdepreciation of their currency. Thus secondly, the conversion to Euros allowsthe comparisons to be made in real terms.