8 September 1995

CEECs threat to set-aside

ACCESSION of Central and East European Countries (CEECs) could undermine CAP stability and force a 5% increase in EU set- aside rates, says head of Savills research Jim Ward.

Cereal surpluses within the CEECs are expected to reach over 6m tonnes by the year 2000, he says. In particular, the excess within the four countries most likely to join first – Poland, Hungary and the Czech and Slovak Republics – could grow to 3.1m tonnes.

By the same time, EU exports look set to be 6m tonnes over the GATT limit for subsidised exports, according to recent European Commission projections.

As wheat prices are unlikely to stay at their current high levels, refunds would be required to export the excess, he says. And if the current CAP regime were extended to the CEECs this would only exacerbate the problem.

Mr Ward says the threat to the dairy sector is smaller because the CEEC milk surplus is predicted at just 1.7m tonnes by the year 2000 (about 1.5% of EU production). &#42