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03/12/2016

Moscow pork embargo causes havoc in Brussels

Agriculture & Food

Moscow pork embargo causes havoc in Brussels

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The European Commission has ordered EU member states to stop holding bilaterals with Russia over the pork trade and has threatened to complain to the World Trade Organization, claiming that a Russian embargo on European pork is unwarranted. EurActiv France reports.

According to informed sources, France, Denmark and the Netherlands established bilateral contact with Russia in an attempt to end the embargo on European pork. The embargo, which began in January over concerns of African swine fever in European wild boar, blocks all European pork on sanitary grounds.

The Commission disapproved of bilateral talks and according to a French source “ordered EU member states to end bilateral discussions”.

Divide Europe

Brussels “called for Europe to speak with one voice, seeing as it is in Russia’s interest to divide Europe” claimed Fréderic Vincent, spokesperson for the Commission's health and consumers directorate.

The Commission has taken steps to contain the crisis. This week, it plans to release €3.5 million in aid to help the Netherlands and Poland establish measures of non-proliferation, including the funding of biological analyses and awareness campaigns. The money is also to help deal with financial losses sustained by Polish and Lithuanian farmers.

“We have also put in place region authentication measures, which will improve traceability. Unfortunately Russia still does not consider these measures sufficient,” Vincent further claimed.

The reasons for the embargo are considered insufficient by pork producing countries like Germany, France, the Netherlands, and especially Poland, which is directly affected.

The matter caused the Polish minister for agriculture, Stanislaw Kalemba, to resign on 14 March in protest against the idleness of his government in relation to Polish farmers. The preventive destruction of pork in supposedly dangerous areas was mentioned, but farmers believe that the risk of contamination is negligible. As of yet no cases of swine fever have been detected in European pork.

African swine fever

Bilateral talks, which were carried out by veterinary services, focused mainly on the conditions necessary to resume exports.

"What we feel is that the European Commission is paying for the rigor with which it handled the crisis of African swine fever in Russia, in 2006-2007. The Russians are now putting forward exactly the same arguments that the Commission used seven years earlier," said a source, who preferred not to be named.

The Commission says it has identified only four cases of swine fever among wild boars with since late January, in Lithuania and Poland, near the border with Belarus and Russia…, as infected animals may have crossed the border.

"These cases are linked to the extended presence of African swine fever in the western regions of Russia and its introduction in Belarus," said the French directorate-general for health and consumers, in a statement.

Outside Lithuania and Poland, the disease does exist in Europe, the Commission says, but only among wild boars in Sardinia. And as boars do not swim, the EU executive believes that the virus would not have been able to spread to the continent.

An already weakened market

A recent sectorial report from Brittany shows the economic effects of the Russian embargo.

Russian sales usually account for 4% of EU pork exports. The price of a kilo of pork in France fell from €1.48 to €1.32 in a year. The pork sector in Brittany claims that this price would be 25 cent higher if not for the Russian embargo.

In February, the French national Federation of Agricultural Holders' Unions called for bilateral talks with Russia, claiming that “French pig producers face a difficult situation characterised by weak cash flow and insufficient profit margins. They have no way to counter falling prices.”

The French pork sector fears that certain traders will source their meat from areas where prices are even lower, such as Poland.

The EU usually exports 70,000 tonnes of pork to Russia per month, of which 10% comes from France. “We are losing six to seven thousand tonnes per month, it is enormous, stocks are pretty much saturated”, claims Didier Delzescaux, director of Inaporc.

WTO complaint in the balance

As Russia contemplates blocking other meat products, it appears that a de facto trade war has begun, even if it is not the first time Russia has blocked imports on sanitary grounds.

However this time the EU’s response could be more aggressive, and unified. According to a source in the Commission, the member states could file a complaint to the WTO if the latest measures do not change Russia’s stance. This theory does not please producers, even if such actions are unlikely.

Background

The EU is the world’s biggest importer of foodstuffs. The meat import and export system has been completely harmonised and the European Commission acts on the part of all member states. Hence, there are no local level meat authentication systems. The EU is therefore the only negotiator with third party states on all issues related to the import and export of meat products.