Impact of the European Enlargement and Cap Reforms on Agricultural Markets. Much Ado About Nothing? The

Policy reforms in the EU require careful consideration because the EU is a significant player in international agricultural markets for many commodities. We analyze the effects on world agricultural markets of the 2003 Common Agricultural Policy (CAP) reform and the accession of ten new member states (NMS) to the EU on May 1, 2004. Given past reforms, changes introduced in the 2003 CAP have only a moderate impact on the EU-15, causing small decreases in production for most commodities and raising domestic prices marginally. Beef, rice, and dairy experience the greatest changes. Accession leads to substantial increases in domestic prices of several commodities in the ten NMS because their prices were historically below EU-15 prices. Consequently, consumption of agricultural products in these countries decreases while production rises. Trade with the NMS causes EU-15 prices to decline modestly, and the two reforms combined have moderate or negligible effects on world markets.