Lithuania is Sole Gainer As EU Member States Count Cost of Enlargement FARMING

By DAN BUGLASS

ENLARGEMENT of the European Union has done little for the prosperity of farmers in the 15 member states which welcomed 10 new countries to the community in May 2004.

According to figures released in Brussels, the value of agricultural products declined by 6.5-per cent in the first 12 months of the much-expanded EU. Input costs also declined, but not enough to prevent an overall fall of 4-per cent in the real value of agricultural trade.

The only country to see a real increase in producer prices was Lithuania, where returns rose by almost 7-per cent. In the remaining member states producer prices were well down, with the rate of decline ranging from 8-per cent to more than 17-per cent. The countries which appear to have suffered most were Belgium, the Czech Republic, France, Cyprus, Hungary and – to no one’s great surprise – the UK.

The major changes came in the arable sector where prices, on average, slipped by more than 10-per cent, with cereal values declining by around 20-per cent. The cost of feeding livestock, not surprisingly, came down by 13-per cent, and this helped to take some of the pain from lower returns in the intensive sector.

It is becoming clear that agriculture throughout the EU is a declining industry, and one that the politicians seem, with a few exceptions, happy to ignore. Even in France, where the clout of the rural communities has for years been considerable, cattle numbers are on the slide.

The latest census figures indicate a fall of almost 1-per cent in the total cattle herd. However, the real pointer to the future is a decline of more than 5-per cent of heifers in the dairy herd.

French milk prices are now much in line with the UK.

However, it is now becoming increasingly clear that farmers have had enough of unrewarding milk prices. The fact that the June UK census shows a fall of almost 3-per cent in the total size of the dairy herd should send a message to the processors and, most importantly, the supermarkets.

Unless there is a fairer division of margins, milk will be in short supply, and sooner than some analysts appear to believe.

France used to take pride in feeding the nation, but all the trends suggest that imports of beef and lamb will increase significantly over the next decade. This has the potential to be good news for the UK, especially when the export ban is lifted, probably early next year.

In the UK there has also been a decline in livestock numbers, according to figures just released by the department of the environment, food and rural affairs.

The cattle herd has fallen by more than 2-per cent, and signs from the sheep sector are ominous. In the last year the total of breeding ewes has fallen by 4.6-per cent to 16.8 million – a drop of more than three million since 1999. There has also been a parallel decline in the total number of younger breeding sheep.

The pig sector has not had its troubles to seek, and again the DEFRA figures are far from encouraging, with a fall of 6-per cent in the total herd to 4.8 million. More worrying is the 9-per cent fall in the breeding herd to 468,000 sows. As of December 1999, the UK had a pig breeding herd of 661,000 head.

Consumers are not eating less food, but the tragedy is that a steadily rising proportion of that diet is being imported at a considerable cost to the balance of payments.