Cross compliance, introduced with the 2003 CAP reform, links direct payments to
farmers to their respect of regulations in the field of environmental protection, public, animal
and plant health and animal welfare. This paper focuses on the additional costs cross compliance may generate in
the beef and pig sector. For both products the most relevant standards were identified and an
assessment was made of the level of compliance and the cost of compliance. The subsequent
analysis then focused, first, on the additional cost of compliance if compliance levels were to
become universal, and second, on the impact this would have on trade flows of the EU with
the US and other competitors on the world market. The second section of this paper is dedicated to the impact of the Nitrate Directive and Regulations that are currently applicable to pigs farms. It was found that the extent to which the Nitrate Directive may create extra costs to the pig sector
depends on the pig density per hectare in each Member State, on the percentage of pigs
present in Nitrate Vulnerable Zones and on the degree of compliance of pig farmers to the
Nitrate Directive. These three data differ very much from country to country and explain
primarily the very different sector cost increases for the pig sectors of EU Member States. The
overall EU cost increase to be attributed to the pig sector due to attain full compliance with
the Nitrate Directive has been estimated at 0.55%.
From a comparison with the impact of the Clean Water Act in the US it turns out that
this act raises the cost for the American pig sector with 1.08%, an almost double cost effect
compared to the impact of the Nitrate Directive in the EU. The reason for this substantial rise
of costs has to be attributed to the large percentage of pig affected by this measure and its
rather recent application to US pig farms, which still implies a rather low degree of
compliance.
A calculation of the animal welfare regulations for pig farmers in the EU shows, that
the cost increase is very limited. The reasons for this minor cost impact are a high degree of
compliance with the standards and the limited rise of costs for farmers which still have to
adapt their farm to the new legislation.