EU Accession affecting the Competitiveness of Agriculture and Food Industry in Poland and Hungary
EU accession imposes a substantial change in the economic environment for the Hungarian and Polish agro-food industries. The ac cession to the EU substantially changes levels of protection and in flows of foreign direct investment (FDI). To analyze both effects on international and private competitiveness of different agricultural and food Processing activities the classical DRC analysis is combined with the advantages of the general equilibrium analysis. The CAP imposes substantial distortions on the agro-food industries. While an increase in FDI due to accession compensates for some of the negative effects of the CAP, the identified distorting effects of the CAP depend on the extent of the increase in agro-food protection during EU accession. By a less protective CAP, however, the losses of competitiveness could be avoided and the benefits resulting from FDI could be even more visible.
