Enlarging the European Union eastward: surplus labor versus surplus produce.

Under the European Commission's Agenda 2000 proposals, CEECs' agriculture would not, after EU accession, obtain compensation for cuts in support prices in the EU15. The aim is notably to keep these countries from further overproducing. However, a comparative analysis of the sector on both sides hardly supports this view. The competitive recovery of farm production in the CEECs is hindered owing to the ability, given the high rural jobless rate, of the dual structures inherited from Communism to lastingly shield underproductive labor. This pattern is protected through customs, land policy, and loose regulations about the quality of agri-food produce. The early removal of this protection on EU accession would cause an agricultural recession, a further deterioration of this sector's trade balance with the EU15 and a sharp drop in farm labor. All this would mainly affect livestock production while fostering grain surpluses. The social consequences could be delayed by transition periods, and mitigated by appropriate rural development policies.