03 September 1997
CAP reform may cut eastern Europes prices

By Amanda Cheesley in Brussels

FOOD production could escalate in central and eastern European countries, distorting prices, when the European Union is expanded, the European Commission said today.

Western European producers could then find it difficult to compete if Eastern countries dumped produce on the market.

The EC released a study in Brussels today looking at the economic effects of enlarging the Common Agriculture Policy (CAP) price support scheme to include new member states.

Under the Agenda 2000 proposals, a number of central and eastern European countries, including Poland, Romania, Hungry, Bulgaria, Lithuania and the Czech Republic, have been invited to join the European Union.

The EC study concluded that the more advanced states, notably Poland and the Czech Republic, could be brought into the CAP system overnight without distorting the market.

However, the less reformed states would need to be phased in slowly to prevent over-production and price distortions.