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05/12/2016

EU agriculture ministers call for fresh funding to cope with Russian embargo

Agriculture & Food

EU agriculture ministers call for fresh funding to cope with Russian embargo

Dairy products are one of the food types banned under the Russian embargo.

[Paul Wilkinson/Flickr]

Agriculture ministers from 21 EU member states called for extra funds to deal with the Russian embargo during the Agriculture Council on Monday (11 November). Farmers have criticised the use of the emergency funds from the CAP. EurActiv France reports

Most EU member states are opposed to the measures taken by the European Commission to support farmers since the start of the Russian embargo.

At the Agriculture Council, ministers from the EU’s 28 member states discussed the use of the Common Agricultural Policy’s (CAP) emergency fund, currently deployed to support farmers affected by the embargo.

This reserve, introduced as part of the last round of CAP reforms, was designed to provide the EU with an emergency fund to respond to crises in the European agricultural market, such as the collapse of prices or the overproduction of certain products.

Emergency fund depleted

The European Commission has already used 344 of the 433 million euros put aside for the 2015 emergency fund following Russia’s embargo on European food imports.

This has been condemned by a majority of EU countries. The French Agriculture Minister commented at the end of the Council meeting that “France, supported by 20 member states, has opposed the reduction of CAP appropriations proposed by the Commission, which would make the use of the emergency fund necessary”.

>> Read: Dairy sector to receive emergency EU funding following Russian trade ban

In a joint declaration delivered to the Italian Presidency of the Council, the 21 ministers stressed the need to “preserve the agricultural crisis fund”.

Signatory countries include: France, Austria, Belgium, Bulgaria, Cyprus, Croatia, Spain, Estonia, Finland Greece, Hungary, Ireland, Lithuania, Latvia, Luxembourg, Poland, Portugal, the Czech Republic, Romania, Slovakia and Slovenia. 

“The agricultural crisis reserve should be preserved in order to maintain our ability to respond to any increased difficulties in 2015,” read the joint declaration.

A sustained embargo

Since 6 August, certain agricultural and dairy products, food stuffs and raw materials from the European Union, as well as the United States, Canada, Australia and Norway have been banned in Russia in retaliation against sanctions imposed on Moscow over the conflict in Ukraine. The European Commission responded by introducing measures to support the agricultural industry, particularly producers of dairy products and fruit and vegetables.

>> Read: Russian embargo hits European farmers

The crisis fund now only contains a total of 88 million euros for the continuation of this policy in 2015.

The European Commission’s actions have provoked particularly strong reactions from the French agricultural sector. “The European Commission uses the CAP as an adjustment variable for the European budget,” Xavier Beulin, the President of FNSEA, wrote in a letter to the President of the European Parliament’s Budgets Committee, Jean Arthuis.

The President of the French Chambers of Agriculture, Guy Vasseur, added that “the danger is that this picking away of finances will go beyond the crisis fund and will deplete the CAP”.

Discussions in the Commission

“I have taken into account the member states’ concerns about the use of the crisis fund, which is already bringing down payments to farmers for 2015, in addition to the issue of falling prices,” said Phil Hogan, the Agriculture Commissioner. He promised to raise this point at the European Commission’s weekly meeting on Wednesday 12 November.

“Obviously budgetary constraints mean we are not really in a position to respond as the member states would have liked,” the Commissioner added, referring to the EU’s debts, which leave very little room for manoeuvre within the budget.

>> Read: EP Budgets Committee Chair: ‘EU debt goes against treaties’

Positions

Copa-Cogeca, the EU farmer's organisation, welcomed the efforts of the EU’s agriculture ministers as a step in the right direction. Copa-Cogeca Secretary-General Pekka Pesonen said “I am pleased that EU Farm Ministers oppose the EU Commission proposal to cut support in the EU agriculture sector in the 2015 budget in this difficult time. 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 pigmeat sector and when the Russian market has been closed since January”.

Background

The European Union imposed sanctions on Russia in July in response to Moscow's activities in Ukraine.

For the first time the sanctions target the most important sectors of the Russian economy: oil, banking and defence.

Under these measures, the large Russian state banks are excluded from European markets. The gas sector, on which Europe strongly depends, is not affected by these sanctions.

Russia responded to the sanctions by placing an embargo on food products from the West, which may lead to food shortages and price inflation in Russia as well as affecting the European agriculture and foodstuffs sectors. 

Further Reading