WEST LOOKS EAST

The implications of integration between Western and Central-European agriculture depend on future market trends in Central Europe. Since the reforms began in Central Europe, agricultural output has declined. The decline has often been attributed to de-subsidisation of agriculture. However, it is difficult to say whether agriculture was indeed subsidised under the old regime. The recent decline in output is probably more due to the ongoing structural changes in agriculture, and to a deterioration in sectoral terms of trade for agriculture. Part of this price depression may be reversed in the future. More favourable market conditions would make it easier for agriculture in Central Europe to utilise its potential to provide for significant exports. Western Europe should open its market increasingly for agricultural imports from Central Europe, which should abstain from establishing 'CAP-like' policies.