Funding

ARCOTRASS GmbH, Köln, Germany

Sub-contract of project: European Commission, Directorate-General Agriculture, Contract no. AGRI-2005-G4-11

Duration

January 2006 – November 2006

Organisation

Project leader:

• ARCOTRASS GmbH, Köln, Germany

Sub-contractors:

• EuroCARE GmbH,
• Vakakis International S.A., Athens, Greece and
• AKI, Athens, Greece

Objectives

The objective of this study is to provide for each of the five Western Balkan countries (Albania, Bosnia and Herzegovina, Croatia, the former Yugoslav Republic of Macedonia, and Serbia & Montenegro) detailed and reliable information and analysis about the state of agriculture, rural development, and trade aspects, a medium-term outlook for agriculture and rural areas and an impact assessment of their accession to the EU.

Consortium Structure & Roles

European Commission, Directorate-General Agriculture Contract no. AGRI-2005-G4-11

Tasks

Task I - Collection of historical data

Historical data (1995-2005) for Albania, Bosnia and Herzegovina, Croatia, Kosovo, the former Yugoslav Republic of Macedonia, Montenegro and Serbia was collected by national experts. These data collection comprehended data on agricultural production and structures, employment, prices and trade. Incompleteness and inconsistency of these data was tackled in the 'COCO' module, which is a shared software for CAPSIM and CAPRI. This module was designed to establish the EU25 database for both models. The basic procedure to set up the modelling database remained similar for the Balkan countries, but a number of difficulties (missing data, different data definitions etc.) arised from the data collections forced the modelling teasm to modify the COCO module thoroughly. The result was a consistent database including main macro-and socio-economic data, market balance sheets and prices for the main agricultural commodities, structural data for agriculture (e.g. farm structure, employment, population, subsistence farming etc.). Further it includes supplementary data for auxiliary analyses.

Task II - Descriptive analysis of the current situation and

Task III - Policy analysis

The database further includes supplementary data for auxiliary analyses. For each of the seven Western Balkan countries a country report was provided including analysis on agricultural and food sectors, and rural area. It covers information on key macro- and socio-economic data, importance of agriculture in the economy, agricultural production and consumption, agricultural trade, farm structures, agricultural prices and family farm income, rural development, upstream sectors and food industry. A further descriptive analysis of the agricultural and rural policy, including institutional framework, legal basis, support measures and instruments, and budgetary expenditure in each of the five Western Balkan countries was carried out in the country reports. Furthermore, these analyses also contains a comparison with the EU-policy, measures and instruments (i.e. a gap analysis).

Task IV - Medium-term outlook

The study provides a medium-term outlook for agriculture and rural areas for each of the seven Western Balkan countries as well as for the EU-25 as a whole, essentially based on quantitative analyses. The modelling analysis was carried out mainly with the CAPSIM modelling system relying on the experience from the recent agricultural outlook to 2025 on behalf of the European Environmental Agency (EEA) . Key variables for projections are:

• Areas
• Crop yields
• Market balance sheets for crop production
• Meat and milk markets

Task V - Impact assessment of accession

The study provides an impact assessment of accession on agriculture (e.g. markets, income, farm structure, competitiveness in the food chain) and rural areas (e.g. demographic trends, socio-economic developments, environment and quality of life) over a long-term perspective for each of the seven Western Balkan countries and for the EU-25 as a whole, including an estimation of the costs of extending the CAP to these countries. Accession impacts on markets will rely to a larger extend on formal modelling with CAPSIM starting from the outlook prepared under task IV. Policy parameters as

• Budgetary spending on agriculture for direct payments and subsidies
• Border measures (tariffs, export subsidies) were adjusted to work out the accession impacts. There are two accession scenarios, which are defined as follows:
• Accession of Croatia in 2010, other Balkan countries in 2015
• Accession of all Balkan counties in 2015

Additional information:

• Arcotrass (2006): Study on the State of Agriculture in Five Applicant Countries Final Report (not yet published)