Agriculture is one area, where EU Enlargement can cause a great deal of environmental and social damage. On the other hand, the New Member States (NMS) do have a chance to mitigate the possible negative impacts and make the accession a success. It will depend on how the newcomers use the EU farm subsidies available to them.

In comparison to the EU-15, farming systems in Central and Eastern European countries currently use lower amounts of pesticides and fertilisers. Additionally they are characterised by the involvement of many small farms and a large labour force, and they often hold richer varieties of plant and animal species.

The extension of the Common Agricultural Policy (CAP) and the elimination of the remaining trade barriers may have a number of negative impacts in the New Member States (NMS). The impacts of increased long-distance transport of food and animals, higher use of chemical pesticides and fertilisers in fields, more air, water and soil pollution, a huge loss of biodiversity, closing down of small food processing enterprises and a rise in rural unemployment; cannot be underestimated.

On the other hand, the EU will bring bans or restrictions on the use of certain hazardous pesticides and antibiotics, higher animal welfare standards, legislation and policies aimed at limitation and better management of pesticides and fertilisers and more money for environmentally friendly farming systems such as organic agriculture. In the end, it is up to the NMS to use the opportunities of accession and to tackle its adverse impacts. This article explores the types of farm subsidies the NMS will receive and how they are likely to use them.

Direct payments

During the accession negotiations, much fuss was made over the direct farm payments under the so-called first pillar of CAP. No wonder - direct payments, paid to each farmer's bank account every year, are the main CAP subsidies. Yet the NMS were only offered 25% of what the EU-15 farmers get in direct payments, however the payments will gradually increase to reach the full EU level by 2013. Additionally, the NMS were allowed to add some more direct payments from their own pockets or from the Second Pillar. Despite this, the previous accession countries to the EU such as Sweden or Austria received 100% right from the beginning.

Moreover, Friends of the Earth Europe has found that if counted per hectare, the "100% EU level" in 2013 will actually amount only to approximately 60% of the average direct payments in the old member states. The trick is in the calculation. Despite the "decoupling" of farm subsidies from production under the latest CAP reform, the payments for the newcomers were still calculated on the basis of recent production volumes rather than farmland area or farm employment. The farm productivity in Central and Eastern Europe is significantly lower than in the West, hence so too are the payments.

This unequal deal results mainly from the reluctance of some EU member states to spend more money on the enlarging EU. The European Commission also feared that immediate introduction of full subsidies would "ensure viability" (sic!) of the several million very small farms producing largely for their own consumption and thus prevent concentration of the farming sector. Ultimately, the unequal deal is a consequence of the EU's failure to carry out a comprehensive green transformation of its agricultural policy - prior to the enlargement. The last year's reform is just a shadow of what would be necessary. The CAP subsidies will continue to reward industrial farming, while destroying the landscape and biodiversity and polluting the environment - and this unsustainable agricultural model will be extended to the East.

Rural development

While direct payments will be lower than in the old EU member states, funding for rural development measures - the so-called second pillar of CAP - will be roughly equal. Rural development has raised less attention in the NMS, despite the fact it will actually bring them more money in the first years than the direct payments. Rural development also offers more environmental and social benefits, but the results depend on how it is used by each country. National governments draw up their Rural Development Plans (RDPs), choosing from a menu of available measures, approved and co-financed by the EU.

In a new report, the European Environment Agency, an official EU research body, warns that environmentally damaging trends in agriculture "are expected to become more pronounced" after the accession. To minimise these pressures, NMS "need to give a central role to well-targeted rural development measures".

However, the FoEE comparison of preliminary RDPs reveals that most of the NMS seem ready to shift up to 20% of funds from the second pillar back to the first pillar, to top up the direct payments - an option they won during the accession negotiations (see table above). Only about 17% of all money for RDPs across the 10 NMS is to be spent on agri-environmental programmes (compared to the already meager 27% in the EU-15). Environmentally speaking, these programmes are the best subsidies in the entire CAP. They are given to farmers who choose to manage their land in an environmentally friendly manner, for example by reducing chemical spraying, by sensitive mowing of grasslands or by preservation of wildlife habitats. Special premia are given to organic farmers.

Nevertheless there will be huge differences between countries in how they use the second pillar. The Czech Republic and Hungary probably will not shift any money back to the first pillar and seem willing to spend over 40% on agri-environmental programmes. In Slovenia, around 70% of farmland will be managed under agrienvironmental programmes.

On the other end of the spectrum, Poland and Lithuania will shift all the money possible back to the first pillar and use most of the remainder for modernisation and concentration of the farming sector. They plan to spend 10% on agri-environmental programmes at best. These decisions will crucially impact on farm wildlife, soil, water, air, as well as farmers and consumers in the NMS. Friends of the Earth member organisations in the NMS are stepping up their efforts to ensure environmental concerns are taken into account by the decision-makers.

Martin Konecny
Agriculture Campaign
Friends of the Earth Europe

Rural Development allocations planned in 7 New Member States for 2004-06

	Estonia	Latvia	Lithuania	Poland	Hungary	Czech	Slovakia	TOTAL (7 largest NMS)
Shift-back to the 1st pillar	13%	9%	20%	20%	0%	0%	15%	14%
Less favoured areas	19%	54%	24%	31%	11%	48%	50%	32%
Agri-environmental programmes	26%	6%	10%	9%	41%	46%	13%	17%
Afforestation of farmland	7%	0%	4%	3%	3%	3%	1%	3%
Early retirement of farmers	0%	2%	25%	18%	11%	1%	0%	13%
Meeting EU standards	26%	16%	11%	7%	23%	0%	11%	10%
Semi-subsistence farming	7%	8%	5%	11%	5%	0%	1%	7%
Setting up producer groups	0%	1%	0%	1%	3%	1%	1%	1%
Technical assistance	1%	1%	1%	1%	5%	1%	0%	1%