A new report from Rabobank suggests that the fresh produce sector should look to the new EU member states for growth when CAP reforms come into effect in January next year.

Income support in the form of direct payments will continue to be phased in in the new member states, although the increments will not be as significant as when direct payments were first introduced. This, coupled with fixed rising costs for example and land prices which have almost tripled in Poland since 2004 will increase growers' urgency to boost production to meet their income needs, and could lead to widespread consolidation of farms in new member states.

Report author Harry Smit explained: 'The potential to increase production in the new member states is enormous. Yield gaps – the difference between the technically feasible yield and the actual average yield – in the new member states are large compared to the old member states.'

It will take some time for changes to be felt but growers in the new member states will be expected to utilise this potential and increase productivity, and thus production, to maintain their incomes, according to the report.

The speed of production growth will vary from country to country because direct payments are set to rise by different levels in different countries – in Bulgaria and Romania payments will increase by more than 50 per cent while the Czech Republic, Hungary and Slovenia will see rises of less than 10 per cent. There will also be differences between sectors.

Smit told FPJ: 'There will be more production, but there will also be more demand as incomes per capita rise, fruit and vegetable consumption will go up too. A lot of that demand will be met by domestic production but there could also be opportunities for the EU15 to export.'

These changes will be gradual, Smit believes, between 2015-20.

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