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08/12/2016

EU farmers get another €165 million of aid after Russian food ban

Europe's East

EU farmers get another €165 million of aid after Russian food ban

vegetables russia.jpg

The European Commission has pledged an additional €165 million in aid for farmers affected by Russian sanctions, after being subjected to withering criticism from food producers across the bloc over its first aid plan.

“Because of the embargo, we could risk bankruptcy,” 25-year-old apple farmer Stefano Francia said in an interview with the Thomson Reuters Foundation before Monday night’s Commission announcement (30 September)

The previous EU agricultural support programme ran from 18 August to 10 September, when it was suspended because the full budget of €125 million had already been claimed.

>> Read: EU farmers handed €125 million to offset Russia sanctions

Francia and other farmers criticised the earlier funding plan, saying that Polish farmers received 80% of the aid, leaving little for anyone else.

“The problem is that Poland is a big apple producer and they exported a lot to Russia, leaving little [aid] left for Italian [and other affected] farmers,” said Francia, speaking at his farm north of Rome.

An EU official confirmed he had received complaints over the high percentage of aid funds going to Polish growers.

“This programme will be more targeted than the initial scheme,” EU Agriculture Commissioner Dacian Ciolo? said in a statement.

“These market support measures will provide short-term relief… to help ease the market pressure for fruit and vegetable growers following the Russian ban.”

In August Russia announced a one-year ban on meat, fish, dairy, fruit and vegetable imports from the European Union, the United States and other Western nations in retaliation for their economic sanctions over Moscow’s actions in Ukraine.

The new aid programme covers apples and pears, citrus fruits, table grapes, tomatoes, other fruits, peppers and cucumbers. But some crops included in the previous scheme, among them cabbages, cauliflowers and soft fruit are not part of the new initiative.

The growing global population and disasters linked to climate change will likely cause shocks to European food production in the coming years, scientists said.

They and economists are monitoring closely the way the European Union is distributing aid related to the Russian sanctions, which could have wider repercussions.

“Diverting exports from Russia would have implications for world supplies and world prices of these goods, but it is too early to tell the magnitude of these effects,” said Ekaterina Krivonos, an economist with the UN’s Food and Agriculture Organisation.

The EU’s 28 member states now seem to be following that strategy, competing for the continental market and putting “downward pressure on consumer prices” for the displaced products, Krivonos said.

Farmers in Italy said they want new international markets for their produce. But organising the contracts, shipping and marketing for perishable goods is not easy on a short time line.

Francia believes the standoff with Russia should give Europe an opportunity to become more integrated. “The EU should function more like the US,” he said. “Countries should work to have the same quality standards, wages and standards of living. The countries should not be competing with each other for exports, they should work together.” 

Background

In August, Russia declared a one-year embargo on meat, fish, dairy, fruit and vegetables from the United States, the European Union, Canada, Australia and Norway in retaliation for Western economic sanctions over Moscow's actions in Ukraine.

The import ban, signed by Russian President Vladimir Putin on 6 August, comes after he ordered retaliation for Western sanctions against Moscow. The decree halts or limits imports of agricultural products from countries that have imposed sanctions on Russia, ordering the government to come up with a list of imports to be banned for a year.

Russia is a major buyer of European fruit and vegetables but ranks 23rd among buyers of food from the United States, accounting for less than 1% of America's farm exports.