Archive Article: 1997/12/13

13 December 1997

By 2000, arable production in Eastern Europe could present a serious challenge. Gilly Johnson checks out the figures from a farm survey.

THE COLD War may be over, but Europe faces a new threat from the former Eastern Bloc countries: commercial competition.

Arable production in Hungary, Poland and the Czech Republic is highly cost effective. Given some improvements to the infrastructure and better marketing, these growers could potentially overtake French, German and British producers by the year 2000 – and thats without any help from EU area aid.

A detailed study of comparative large-scale businesses in Europe, the US and the Eastern Bloc was undertaken by Andersons Farm Business Consultants last year, sponsored by fertiliser manufacturer Hydro Agri.

The aim was to assess where UK growers stood in relation to world wide competition – and to make some educated guesses about our future prospects.

Using wheat as a base line crop, gross and net margins were compared for 1995 and 2000. Fuelled by yield improvements, coupled with the low cost of labour and rent, the efficiency of the Eastern Bloc pans out ahead of the UK by the year 2000. But most alarming is the fact that wheat can be grown so competitively without EU area aid.

"Social problems, inflation and exchange rate movements could all affect these financial predictions," says George Brewis. "But we should be aware of the potential for efficient wheat production in countries now outside the EU.

"The question for us is how long will it take for these obstacles to production fall away in eastern Europe?"

Sooner or later, such potential competition must mean further rationalisation – fewer, bigger farms – in the UK, he concludes. "We must maintain our high yields. Otherwise there is no contest between their system and our high cost production; eastern Europe would win hands down."

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