It is now accepted that the CAP must be overhauled before new member states accede to the EU. This month's Luxembourg Council concluded that "European agriculture must, as an economic sector, be versatile, sustainable, competitive and spread throughout European territory including regions with specific problems. The process of reform, begun in 1992, should be continually deepened, adapted and completed, extending it to Mediterranean production."
The CAP at present costs the 15 member states around Ecu 41 bn per year and the Commission calculates that further reforms can generate savings of Ecu 3.7 bn by the year 2006. This comprises Ecu 1.4 bn for cereals, 1.2 bn for beef and Ecu 900 m for milk.
To cushion the blow, the Commission is proposing a system of direct compensation aids of around Ecu 7.7 bn to farmers. Further measures to protect the environment, to help with re-afforestation and to develop a rural policy are also proposed.
As far as the new member states are concerned, the Commission is proposing Ecu 500 m pre-accession aid for agriculture, to be followed by further aid ranging between Ecu 1.7 bn and Ecu 3.9 bn when the new countries actually join. The Commission calculates that the funds can be provided from the present budgetary guidelines but reaching an agreement acceptable to all interested parties is not going to be easy.