NFU research highlights food export opportunities - UK - NFU President Tim Bennett will today launch a groundbreaking research paper, ‘EU Enlargement – The Challenge for British Farming,’ that looks in detail at the challenges facing the UK farming industry when ten* new countries join the EU (May 1st).

Researched by a team of NFU economists and advisers, the report sets out the opportunities and threats faced by Europe’s food producers.

‘EU Enlargement – The Challenge for British Farming’ highlights several viable market opportunities for UK farmers, with demand indicated to be particularly strong for dairy products, poultry and ornamentals.

The report urges farmers, processors and retailers within the food supply chain to work together to secure these new markets, and establish export links while the opportunity exists.

Commenting on the launch of the report, NFU economist Simon Michel-Berger said: “In the formative years, production systems in the new member states will often be less efficient than that of the existing EU-15, with lower yields, less capital, and fledgling supply chain structures.

“However, as these gradually develop, farmers in these countries will become ever more competitive on an increasing range of products. Production in the new member states has great potential. Even today arable land alone accounts for 40% of existing EU-15 levels.

“It is a fallacy that the UK will be a victim of a flood of cheap imports - agricultural trade with many of these countries has already been liberalised to a large extent, therefore competitive pressures are forecast to increase only gradually.

“UK farmers will face immediate new competition in the sale of commodities such as oilseeds, fruits, vegetables and poultry. However, farmers exporting these products to the existing EU-15 will also have to comply with European-wide health and safety regulations, which are often very costly to implement.”

Mr Michel-Berger continued: “Whilst farmers in the new member states struggle with a lack of capital, inadequate transport infrastructure, and the need to comply with EU food health and safety standards, enlargement is a great prospect for British producers to establish a strong position in the new markets.”

NFU President Tim Bennett said: “CAP reform has given British farmers greater flexibility in the marketplace, and enlargement has opened up the door in terms of what to sell to which country, and at what price.

“Enlargement will bring further export opportunities, with high economic growth rates a trait of new entrants over the next decade. Over time, an increasing number of people in the new member states will benefit from rising incomes. When this happens, they will look to buy more value-added and premium products such as luxury dairy products, cheese and poultry, thus offering British farmers a lucrative opportunity - but they will need to take on the challenge of other competitors to win these markets.

“Rather than seeing enlargement as a threat to their livelihoods, British farmers must embrace the change and rise to the challenge, viewing it as one of the most exciting chapters of British agriculture this century.

Mr Bennett added: “If anything, it is efficient British farmers that are a threat to the new member countries.”

Additional information

*The ten new countries joining the EU are the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, Slovenia, Cyprus and Malta.

The research report, ‘EU Enlargement – The Challenge for British Farming’ is available from the press office.

The report will be launched at NFU HQ on Tuesday, 27th April at 6.00pm.

EU Enlargement – facts and figures

• The EU will be enlarged by more than 700,000 square kilometres - about three times the size of the UK.
  
  

• In Poland, the average farmer in 2002 had 11 hectares, but there also were around 3,000 farm enterprises with an average of over 800 hectares and over 70% of all farmers had less than 5 hectares.
  
  

• The Czech Republic already devotes a greater share of land to organic produce than Britain.
  
  

• The European Commission estimates that between 70,000 and 150,000 people will move to the EU-15 every year after enlargement.
  
  

• Pig meat production in the Czech Republic is somewhat of an exception. Over 90% of pigs in 1999 were reared in specialised enterprises. For comparison, the figure for Poland in 1997 was only around 13%, with the remainder kept in family enterprises with a herd size of 1-5.
  
  

• British exports of live poultry occupy leading positions in all of the three major new member states markets.
  
  

• Enlargement could add around 20% to EU egg production levels.
  
  

• Very significant reductions in dairy herd size have been taking place since the 1990s. In case of Poland, numbers of dairy cows declined from 4.9 million in 1989 to 2.7 million in 2002. There have also been significant efficiency gains in countries like the Czech Republic and Hungary, where yields are close to or above EU averages.
  
  

• Almost half of all milk production in Poland is consumed locally and is not entering the larger national market.
  
  

• Common wheat yields in the three biggest producing countries of Poland, the Czech Republic and Hungary are roughly 2-3 tonnes lower than in the EU-15. During the final years of communism in 1988-1990, average yields were higher in Poland by about 0.7 tonnes and in Hungary by 1.2 tonnes per hectare.
  
  

• Much land used for production until the end of communism was retired to fallow, or is currently used for low value-added crops like feed potatoes. The size of this reserve varies across countries, but current estimates put it at 6.5 – 7.5 million hectares in total. This compares with a total area of 5.8 million hectares devoted to arable in the UK in 2002.
  
  

• Czech apple production today alone is greater than British. Poland has an output of apples more than ten times higher than in the UK.
  
  

• Hungary has a long history of producing canned vegetables for export and is well known for the quality of its produce.
  
  

• There are almost no British ornamentals exports to the new member states. In 2002 the Czech Republic imported a net value of around €72 million of ornamentals from the EU. Hungary in that year imported around €57 million and Poland almost €87 million.
  
  

• The Polish potato crop in 2001 was almost half of the entire EU’s production in the same year.

Source: National Farmers Union - 27th April 2004