Turkey’s accession to the EU: what will the Common Agricultural Policy cost?

Abstract

At the EU Council in December 2004, European heads of governments decided to start EU accession negotiations with Turkey in October 2005. Various recent analyses assess the cost of applying the Common Agricultural Policy of the EU (CAP) to Turkey; most of them without taking into account the specific structure of the agricultural sector in Turkey, which would determine the receipts from EU funds. This paper assesses potential budgetary effects resulting from the application of the CAP to Turkey. The analysis is based on macroeconomic projections, equilibrium modelling of the Turkish agricultural sector, and projections of the future development of the CAP. It is found that total EU budgetary outlays for the application of the CAP to Turkey could total about Euro 3.5 billion in 2015 and rise to Euro 5.4 billion in 2025 due to full phasing in of direct payments and rural development policies. The resulting net transfer under the CAP to Turkey would be about Euro 1.7 billion in 2015 and could increase to Euro 2.9 billion in 2025. Such sums take a backseat to projected transfers under the structural policy of the EU and the overall political project of including Turkey in the EU.