Over two-thirds – €344m out of €433m – of the funds put aside by the Commission for the 2015 reserve to counter impacts of the Russian embargo on European food imports has already been spent. The Commission says it now wants to reduce the wider 2015 European Agricultural Guarantee Fund (EAGF) by €448m, despite the sector facing challenges after being cut off from the €5bn-a-year Russian market since August.
The budget proposal led ministers of agriculture from Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, Finland, France, Greece, Hungary, Ireland, Latvia, Lithuania, Luxembourg, Poland, Portugal, Romania, Slovakia, Slovenia and Spain to announce at this week’s Agriculture Council their objections to the fund reallocation, urging instead these appropriations be used to finance the crisis measures related to the Russian embargo.
“The situation of several important European agricultural sectors is a matter of concern. Despite the measures adopted during the last few months, the economic conditions for some of the main products in the fruit and vegetables sector are still heavy-laden,” the ministers told the Italian Presidency of the Council in a joint declaration.
“Moreover, livestock markets – in particular dairy, beef and pigs - are significantly disrupted, with prices on a clear downward trend. The economic difficulties that this situation is causing may jeopardise a significant number of already vulnerable livestock farms.”
Certain agricultural and food products from the EU, US, Canada, Australia and Norway have been banned in Russia since the summer as means of retaliation against sanctions imposed by the international community on Russia as leverage in the conflict in Ukraine.
Budgeting for a deepening crisis
They said the Commission must take a watchful, reactive strategy on this market disruption, and be in a position to swiftly adopt further measures to prevent a deepening of the crisis.
They warned against resorting to the use of the Common Agricultural Policy (CAP) reserve to fund these measures.
“The reserve should therefore be preserved to maintain our response capacity in the course of 2015 in the event of a deeper or a new crisis.”
Paying twice for the ban
The EU farmer's association Copa-Cogeca welcomed the ministers' declaration.
The organisation’s secretary-general Pekka Pesonen said in a statement: “Prices have plummeted by up to 50% in some sectors. It is totally unacceptable that the Commission proposed to cut spending in 2015 when no support has even yet been allocated to the EU pig meat sector and when the Russian market has been closed since January.”
He said failure to act on this would mean farmers pay twice for the Russian ban. Copa-Cogeca said it had sent a detailed action plan to commissioner for agriculture and rural development Phil Hogan.
It said in some regions milk prices were down 30-40%, and as a result it "regretted" the Commission’s decision to temporarily suspend private storage aid scheme for cheese, which it said should have been left open for countries severely affected like Latvia, Estonia, Lithuania and Finland. New market outlets for beef and pig meat were needed and trade barriers like those on sanitation removed.
“Whilst the Commission refuses to act, we are losing 750,000 tonnes of exports in the Russian market whilst Canada and the US are gaining them and still exporting to Russia. Storage schemes could be used as a temporary stop gap measure until new markets are found in non-EU countries.”
It also urged action on fruit and vegetables from next January, for example removal from market and distribution to charities or for non-food uses.