AGRICULTURE: EU MARKETS PUT THROUGH AGENDA 2000 MILL.

In the light of estimates of what effect phasing in the CAP (Common Agricultural Policy) reform will have on the different products, the European Commission drew up a report (published at the end of last year) on the key market trends for the 2000-2006 period. The export prospects are bright for some cereals, such as soft wheat, but this is not the case for coarse grains and oilseeds, beef and dairy products (for example). The European Commission also speaks about the continuing problems with trying to keep down public stocks.Cereals.From 2002/03 onwards, the full implementation of the reform across the arable sector should generate a further increase in cereal acreage of around 200,000 to 300,000 hectares as oilseed and non-textile linseed area declines more significantly. After peaking in 2002/03 at 37 million hectares, cereal-growing area is expected to stagnate between 36.8 and 37 million ha over the medium term. Yield trends observed since the beginning of the 1980s are likely to continue over the projection period, albeit at a lower rate. Average cereal yields should reach 5.88 tonne/ha in 2006/07. Total harvested cereal production should increase from 199 million tonnes in 1999/00 to 216.7 million in 2006/07 driven by increasing yields. In line with higher area and yield projections (above 5 % for both as compared to 1998/99), soft wheat production would rapidly expand over 100 million tonnes and reach a historical high of 105.4 million in 2006/07. Barley production is projected to suffer a regular decline over the next eight years owing to low profitability prospects.Following the strong rise in domestic use of cereals generated by the 1992 CAP reform, the implementation of Agenda 2000 is expected to provide a further boost to domestic demand by improving the grain sector's competitiveness. Total cereal demand in the EU is projected to increase steadily over the medium term, from 177.3 million tonnes in 1998/99 to 192.4 million in 2006/07 (i.e. a 15 million tonne growth). Higher demand for feed products combined with an improved market share is expected to generate a rise in total feed use of cereals estimated at more than 10 % from 1998/99 to 2006/07, when total cereal feed usage would amount to 121.6 million tonnes (an 11.1 million tonne increase as compared to 1998/99). Non-feed uses of total cereals are projected to increase by 4 million tonnes, from 66.8 million in 1998/99 to 70.8 million in 2006/07 (mainly industrial...

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