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Farmers can be

be seen in the context of unfair EU competi-

Though it was designed as a "food security"

tion. Though the EU explicitly promised to

mechanism, the CAP has evolved into a system

excused for com-

remove quotas and tariffs on agricultural

for supporting inflated agricultural prices,

plaining that EU

imports from CEE, that promise never materi-

thereby securing the centrally determined

economic deci-

alized. The EU did, however, continue to

income levels of farmers. Those measures

dump its subsidized agricultural produce on

resulted in price levels that were constantly

sionmaking is

the CEE market, thus effectively increasing the

above world market prices. That, in turn, led to

eerily reminiscent

pain of the transformation process.72

overproduction and the notorious mountains

or lakes of agricultural produce. At the same

As Detlev Samland, chairman of the

of production

time, European consumers were prevented

Committee on Budgets of the EU Parliament,

quotas under

from purchasing food at lower prices. The 1992

testified before the British House of Lords

Soviet occupa-

CAP reform lowered the EU subsidies but intro-

Select Committee in 1997: "If you look at the

duced "a compensatory system of direct [farm]

balance today between the Eastern European

tion.

support . . . often connected with an undertak-

countries and the [European] Union, even in

ing to lay land fallow."69

the agricultural sector we are exporting more

to the East European countries than they to

Since the CAP encourages overproduction,

us. . . . Germany is exporting more agricultur-

it necessitates a system of production quotas.

al products to Poland than Poland to

Thus, the accession negotiators fought over

Germany. The reason behind this [is] not that

every sheep and liter of milk. For instance,

[Poland is] more expensive and we are cheaper;

Slovakia requested that it be allowed to pro-

we are only cheaper because of the system. We

duce 1.2 billion liters of milk, but the EU set

reduce the prices of products by 50 pfennings

the limit at 950 million liters per year. The

for each German mark. So 50 percent is sub-

union wanted Slovakia to raise only 218,000

sheep, but Slovakia wished to raise 400,000.70

sidy from the taxpayer. The Polish agricultur-

al sector is not able to compete . . . [because]

Slovak farmers can be excused for complain-

they get [only a] 15 percent subsidy [from their

ing that that type of economic decisionmak-

own government] instead of 50 percent."73

ing is eerily reminiscent of production quotas

under Soviet occupation.

Using flawed economic logic, the EU

The 10 candidate countries will receive 5.1

Commission has even boasted about the agricul-

billion euros from the EU between 2004 and

tural trade surpluses that the EU enjoys vis-à-vis

the applicant countries.74 In fact, those venerated

2006. That "direct" subsidy will be phased in

over a 10-year period. The CEECs will thus

surpluses are not an outcome of higher produc-

receive 25 percent of what the current members

tivity of EU farmers but a result of the EU's abili-

get in 2004, 30 percent in 2005, and 35 percent

ty to "outsubsidize" its eastern competitors.

in 2006. According to the terms of the settle-

According to the Hungarian opposition

ment, the new members will be allowed to top

party, Fidesz, which has been critical of the

off EU subsidies from their national budgets by

terms of the EU enlargement, Hungarian agri-

55 percent in 2004, 60 percent in 2005, and 65

culture may lose up to 1,300 billion forints ($6

percent in 2006. (Until 2006 the national top

billion) over the next 10 years. The EU acces-

offs can be cofinanced from the EU rural devel-

sion, Fidesz worries, may reduce Hungary's

opment funds. After 2007, however, the new

production capacity and endanger the export

member states will be allowed to use only their

orientation of Hungarian agriculture. "As a

national budgets to top off EU payments by up

consequence of the decrease of consumption

to 30 percent above the applicable phasing-in

and living standards we [Hungarians] might

levels of EU subsidies.)71

become net importers of such products that

we used to export before."75

To be sure, subsidizing agricultural pro-

duction out of their national budgets will con-

The EU agricultural policy goes beyond the

tinue policies that the CEECs already had in

CAP. The EU micromanages an array of eco-

place. The CEE subsidies do, however, need to

nomic activities, including marketing of veg-

11