In 2005, a further six countries are expected to join the European Union, and, in the case of most, agriculture is the mainstay of their economies.
Last June, negotiations began with five of the six on the critical issue of how their agricultural sectors will be treated by the EU when they join. This has significant implications for them and for existing member countries. Precisely what their admission will mean for Irish agriculture is not absolutely clear, but the Government is politically positive towards EU enlargement, which, from an agricultural perspective, is widely seen as an opportunity rather than a threat.
The EU has already gone through four enlargements, with membership increasing from six to 15 between 1973 and 1995. The current proposals for enlargement, involving the so-called "Luxembourg group", would bring in another six members: Cyprus, Poland, Estonia, the Czech Republic, Hungary and Slovenia. This group has been in negotiations with the EU since March 1998.
Phase two of talks with the so-called "Helsinki group" began in February of this year and would add Slovakia, Lithuania, Latvia, Romania, Bulgaria and Malta. In a separate development, Turkey has also signalled its interest in joining.
These 10 central and eastern European countries, together with Malta and Cyprus, would increase the current EU area by 34 per cent and would raise its population by 106 million. At present, however, their GDP (adjusted for their lower cost of living) is around 40 per cent of the EU average. Their reliance on agriculture is also much greater than that of the current EU 15. The accession of the 12 new countries would increase EU agricultural land area by 45 per cent and more than double the EU farm population. These are the statistics that concern Mr Con Lucey, chief economist of the Irish Farmers' Association (IFA).
"The idea that up to 100 million extra people could be added to the Union whose per capita income is one third of the EU average and whose dependence on agriculture is 3.5 times that in the EU, with no additional budget resources being allocated to it, lacks credibility," he says.
"Whatever way you look at it, enlargement is going to be expensive for the EU budget - particularly in the areas of structural funding and the Common Agricultural Policy (CAP). There are a lot of unanswered questions right now, like how much all of this is going to cost. Enlargement is a political decision and it's an issue of great significance in historic, political and economic terms. But it also involves major challenges and we are naturally concerned that Ireland may lose out, especially in relation to the CAP.
"The current assumption that CAP direct payments will not have to be extended to farmers in the incoming countries seems a very optimistic one. It raises the question: what is the advantage of membership of the EU if these countries are excluded from one of its main budget expenditure areas? It also raises the question as to whether an EU common policy could be operated in such a differentiated and discriminatory way. Increased demands on the CAP budget have obvious implications for future receipts by Irish farmers and by Ireland overall.
"Irish farmers are not feeling unduly threatened by the prospect of the new members. EU membership and the CAP have been broadly positive for Irish agriculture. In a nutshell, our gains were threefold: product prices were raised by between 25 and 30 per cent; we got access to the large mainland European market; and we benefited from investment aid schemes for items such as farm buildings and pollution control. What is not clear right now is the effect enlargement may have on price supports, direct payments and issues of animal and plant health - as well as how it may affect the governing and decision-making processes of the Commission itself."
Existing EU members will have breathing space before the impact of enlargement really bites. It will take incoming countries some time to bring their agriculture and food processing industries up to standard and make them compliant with EU regulations. They also face major challenges in terms of structural reform as traditional labour-intensive collective farms are dismantled.
In Hungary, for example, 80 per cent of the land area used to be in collective farms. In the Czech Republic, the figure was 60 per cent, with a further 38 per cent in state farms. Poland was the exception, with only 23 per cent of land in collective or state ownership. However, the majority of the privately owned farms in Poland were very small at under seven hectares in size.
Mr Pat Collier is an economic and development consultant specialising in agriculture. He is currently working in Latvia and Estonia, helping to prepare both countries for EU membership.
"There are far more opportunities than threats for Irish agriculture through the accession of the Baltic states," Mr Collier says. "Individually or collectively, they are very small countries and, for most products, they are below self-sufficiency level and therefore are net importers. Only in the case of dairy products are they exporters.
"Ireland and Irish history has many similarities to the Baltic states and, as in Ireland, agriculture is a very important sector of the economy in Latvia and Estonia. On their accession, Ireland is likely to find allies in the Baltic states at the Council of Agricultural Ministers."
