Huge mountains of surplus food would reappear if the countries of eastern Europe entered the EU with the present farm support system still in place, Mr Waldegrave told the conference.
'Over the next years Britain must make reform of the CAP central to European developments,' he said.
The Government had championed the entry of Poland, Hungary, the Czech Republic and Slovakia and later other states, but they were potentially huge agricultural producers.
If they joined a high-price CAP, production would surge, adding about pounds 10.5bn to the cost of the scheme. 'It would be simply crazy. That is why the CAP must change.'
Mr Waldegrave said he would chair a policy group of the 'ablest people' from inside Whitehall and outside with practical ideas on CAP reform. A long-term view of how farm support should develop would colour Foreign Office negotiations over new EU entrants.
The first debate of the conference brought repeated attacks on Brussels red tape binding farmers. Kay Twitchen, Southend East, described the CAP as a 'socialist protection racket'.
David Walters of Hexham said the CAP penalised efficient British farmers in favour of 'inefficient smallholders' on the Continent.
Mr Waldegrave promised a Bill in the coming parliamentary session aimed at bringing 'new blood' into farming by changing the law on tenancies.
Succession rights, guaranteed under a Labour Act of 1976, would be swept aside, leaving landowners and would-be farmers free to strike whatever agreement they choose.
Existing tenancies will not be affected by the Bill, which will be included in the Queen's Speech in November. The National Farmers' Union is likely to press for a minimum period for tenancies. The current legislation is blamed for a drying-up of tenancies, with landowners letting for just a year or on contracts, rather than risk losing control of a farm for perhaps 100 years.
Labour's commitment to give the public a 'right to roam' over mountain, moor and forest would replace co-operation with conflict in the countryside, Mr Waldegrave said. He commended instead the 'fine tradition of footpaths and rights of way'. But one farmer told the conference that the network needed 'rationalisation, not proliferation'.