Friday 26 December 2014

Farmers can't carry Russia trade war costs - O'Leary

Declan O'Brien

Published 27/08/2014 | 02:30

Russian President Vladimir Putin has banned food imports from the EU
Russian President Vladimir Putin has banned food imports from the EU

ICOS has warned that Europe's farmers and food processors cannot be expected to carry the cost of the trade war that has erupted between the EU and Russia.

ICOS president Bertie O'Leary said given the political stance taken by the EU in pushing for a trade deal with Ukraine and in their subsequent backing for sanctions against Russia, Brussels officials would have to look at all the possible tools available to underpin the EU dairy market.

The co-op representative called on the EU Commission to immediately commit to the opening of maximum private storage aid options. Further actions being sought by ICOS include:

1. The increasing of all avenues of support to help EU dairy companies to gain access to alternative markets around the world;

2. The introduction of fat correction factors on delivered milk;

3. That the EU does not use the 'Crisis Reserve' as this is EU agriculture's own money in direct payments and will be taken off farmers. The EU must support the consequences of their own political decisions from elsewhere in the budget;

4. Current superlevy fines taken by the Commission for the 2013/14 quota year should be immediately ring fenced and used specifically to help the current dairy situation;

5. A careful economic analysis is required as to the merits of re-introducing export refunds, to see can they help alleviate the current situation, and assist in the orderly disposal of mounting EU cheese stocks from the marketplace.

6. Ensure that there are no delays in the issuing of export certificates for dairy product.

Mr O'Leary insisted that the cost of funding the market consequences of the EU stance should come from outside the current CAP budget, because of the geo political nature of the stance taken by the EU on relations with the Ukraine.

ICOS's concerns on the Russian sanctions were echoed by ICMSA. Association president, John Comer, said there was a clear responsibility on the EU to ensure that farmers do not become the fall guys in terms of financial losses as a result of this political ban.

He said there were already indications across the EU that the farmer were being directly hit because of the sanctions because processors were "simply passing back the pain."

"While the possibility of an Aids to Private Storage Scheme is a welcome development, it is of limited value and the reality is that the product will have to be sold at some stage into the future," Mr Comer pointed out.

"At EU and at national level, a strong focus must be placed on finding new markets with price supports if necessary. With food prices rising in Russia with reports of increases of up to 60pc and on average 15pc for meat to date, it is quite clear that to meet Russian requirements, displacement will take place in other markets," he said.

Mr Comer said it was absolutely essential that state agencies such as Bord Bia were given the necessary resources to support to agri-food exporters to maintain existing markets and contracts for produce and develop new markets where required.

Indo Farming

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