Dods EU Briefing: Plenary debate on impact of Russian trade ban

On September 15 2014, the European Parliament debated the impact of the Russian trade ban on the EU agri-food sector.

By Dods EU monitoring

16 Sep 2014

Please note that this does not constitute a formal record of the proceedings of the meeting. It is dependent on interpretation and acts as an unofficial summary of the debate.

On September 15 2014, the European Parliament met in Strasbourg to debate an oral question from the AGRI Committee on the impact of the Russian trade ban on the European agri-food sector. Although rapid measures taken by the European Commission (EC) were welcomed, the general tone was that “this is not enough” and that money must be mobilised from other lines of the budget rather than the CAP, and to benefit other food sectors such as citrus fruit growers, meat and fisheries industries. MEPs across the political spectrum called for a longer-term approach to Russia, described as an unreliable trading partner, and insisted that the EU should be shifting its dependency from the Russian export market to new markets outside the EU. The Greens expressed great support for the promotion of the European agri-food sector within the EU, and joined many others in applauding measures to avoid food waste by giving the food to schools, hospitals or the poor. MEPs from GUE/NGL, EFDD and the ECR criticised the EC for a lack of foresight, arguing that Russian counteractions should have been expected and better prepared for when economic sanctions were initially adopted. Commissioner Cioloş ensured the MEPs that both short-term measures (new support measures to be announced this week) and long-term measures (diversifying export markets) are underway.

A detailed overview of the debate can be found below.

Czesław Adam Siekierski (EPP, PL) presented the OQ on behalf of the AGRI Committee. The Russian embargo means that European producers are hit, in particular, on perishable fruit and vegetable exports. There is now a risk of bankruptcy for many, he said. The AGRI Committee is very happy with the emergency measures launched by the EC, but thinks that the money is “far from satisfactory”. The embargo is of a political nature, rather than a natural catastrophe, which is why the EU must help the farmers. Money from other budgetary lines should be made available, he said. Some measures were suspended last week, he said, because claims were so extensive that the ceiling would have to be extended. Another problem is that many farmers - in particular in new member states - do not belong to a Producer Organisations (PO). On behalf of the AGRI Committee, he appealed to the Commissioner to inform on the measures which have been taken and on those who will be taken. Will there be more money, he asked, and will they include the meat sector? Will there be special measures for those farms facing bankruptcy?

Commissioner Dacian Cioloş underlined that Russia is the number two export market for the agri-food sector, which explains this European crisis. The response must be coherent and effective. Already in the month of august, measures were taken on three levels:

  • Market measures for products which were not exported and returned back to the EU market, leading to falling prices
  • Support to the European agri-food sector and research for new markets, in order to send this signal to Russia as well
  • Open a political debate on the question of possible targeting compensation as suggested by the author of the OQ

In terms of the first package of measures, the EC opted for an immediate response to the sector which was urgently affected – fruit, vegetables and dairy. Fruit and vegetables were important because they are perishable goods and can lead to falling prices. Measures taken in August have been implemented. The budget was 520 million euros, and the ceilings were calculated according to export figures. Free distribution of these products was encouraged. Where the ceiling has been exceeded, delegated acts were activated. The EC is preparing a new measure for the fruit and vegetable sector which will hopefully be announced this week. It will be a targeted measure which will avoid unjustified notifications.

The EC also launched the market management instrument – measures for the storage of butter, skimmed milk powder and cheeses. In the meat sector, the situation is more nuanced; there has been an embargo from Russia in place since the beginning of the year as a consequence of swine fever. In the bovine sector there is structural decline, making it a very vulnerable sector, he also pointed out. The closing of the Russian market requires an intensification of measures. He asked his services to take a close look at the meat sector in order to be prepared to act. The necessary instruments are there, he ensured. The DG AGRI task force will monitor the market situation and hold regular meetings with member states in order to act rapidly. Thanks to delegated powers under the CAP reform the EC is able to react rapidly in crisis situations, he said. Looking at management measures, the EC needs to prepare for the future and look at new markets outside the EU. The EC decided to double the budget for promotion of EU products: EUR 30 million will be added to the existing EUR 30 million, adding up to 120 million euros when private funding is included.

There is a need for targeted compensation for producers in order to ensure that certain important companies do not disappear, the commissioner included. These require a political discussion, he said. As for the financial package for this compensation, he noted that some have asked for this money not to come from the CAP but from other budgetary lines. He agreed that the budgetary margins are very tight. In order to be useful, the money needs to reach the farmer in time. The commission is open and flexible but the budget allocation needs a political discussion.

Albert Dess (EPP, DE) pointed out that today’s debate is a consequence of the annexation by Putin of Ukraine, which is against international law. The ban on food sector has had different effects on various regions, he said, and praised the EC for its rapid response. Poland and the Baltic states desperately need targeted measures, he said, and added that there are serious problems also in the Mediterranean. A shift in the budget is needed, he said; solidarity is required in order to save the farmers. He criticised large trading companies, who misuse the ban in order to put pressure on the prices.

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