EU DOSSIER

After flooding Estonia with cheep cheese, Lithuanians are now trying to conquer the local egg market as well and have already managed to bring down wholesale prices, the daily Postimees reported. Kalju Voogne, manager of the importer-wholesaler Kardemon, said that the overproduction of eggs is a problem across Europe. "Producers of new member states hoped that EU enlargement would give them a bigger market, but before May 1 the Netherlands had already managed to flood Western Europe with eggs," Voogne said, noting that the consumption of eggs has declined in Europe and Estonia alike. "Wholesale prices have already come down by a fifth, to 0.70-0.80 kroons." Lithuanians offer eggs at prices that are more than one-third lower than those of Estonian producers. Egg imports have forced Estonian producers to cut output, and if oversupply lasts much longer Estonian chicken farmers could again have to start cutting production.

Latvia's sugar factories have seen a dramatic fall in sales over the past month as a large volume of sugar from an unknown origin was imported after May 1. Liepajas Cukurfabrika board chief Valija Zabe said that in May 2003 the company sold 2,500 tons of sugar compared with just 700 tons in May this year. Jelgavas Cukurfabrika's Janis Blumbergs said his company also saw a market decrease. "Selling has practically come to a halt. This is the present situation, and I don't see it improving," said Zabe. Although the origin of the imported sugar is not known, she did not rule out the possibility of contraband. Control services could establish from which country the sugar was imported; however, the process is not currently being carried out, she said.

There has been no mass influx of agricultural goods from other EU member states after Latvia joined the organization, Agricultural Market Promotion Center's head Inguna Gulbe said. She said that the supply of beef had even fallen. Latvia used to buy beef from Poland, but now Poles are selling more products to Western countries, where prices are higher.

As many as 69,457 farmers in Latvia have applied to receive direct payments from the EU, rural support service official Girts Krumins said, adding that the number was in line with expectations. Farmers were to apply for direct payments by May 23, and those applying late will have a 1 percent reduction per day in the volume of direct payments paid to them. A total of 3,565 farmers applied after May 23; however, the official application deadline has been set as June 15. In line with EU law, the farmers will receive the payments between Dec. 1 and April 1, 2005. At present the new member states should receive 25 percent of the amount paid in direct payments to the old member states. For Latvia, the total amount should be 18.1 million lats (27.6 million euros), which will be used for cultivated agricultural land.