Brussels, 28/08/2014 (Agence Europe) - On Thursday 28 August, the European Commission announced new measures to assist European producers of milk and dairy products, who have been hit by the Russian ban on imports of agricultural products from the EU.
As a result of this ban, there are too many dairy products and cheeses on the market and therefore prices are tumbling. The Commission explained that the announced measures will make it possible to store the products and thereby relieve the pressure on the market and buy some time to find new outlets for these products.
On Thursday, the Commission presented the management committee for the common organisation of agricultural markets with measures in the form of private storage aid for butter and skimmed milk powder. The committee will formally approve these measures next week. Additionally, the Commission proposed extending this market measure (private storage) to certain cheeses. Lastly, the Commission confirmed that the public intervention period for butter and skimmed milk powder would be extended until the end of the year.
Dacian Ciolos, European Commissioner for Agriculture, said that price signals on the European dairy market show that the Russian ban is starting to hit the sector. “In a number of member states, export earnings are being lost and new outlets need to be found”, he said. The European dairy sector “needs time and help to adapt so I am announcing today targeted market support, focusing on milk powder, butter and exported cheeses. If needed, further measures will follow”, he stated.
Butter and powdered milk. The EU budget will provide private storage aid for butter and skimmed milk powder to cover the daily costs for the storage of these products for between three and seven months. The products concerned will remain the property of the operators, which will then be responsible for selling the products when they are released from storage. A draft implementing act will be presented to the management committee for the common organisation of the agricultural markets next week, ahead of a formal vote by the experts of the member states.
Cheeses. Given the importance of certain cheeses in the value of EU exports to Russia (standing at nearly €1 billion in 2013), the Commission wishes to extend private storage aid to certain cheeses. However, the current legislation only authorises this type of support for “quality” cheeses (under protected indications and designations). However, the ban is mainly affecting cheeses of a lesser quality. The Commission must therefore present a delegated act to allow private storage to include the cheeses affected by the ban. Next week, the Commission hopes to have the figures on the quantity of cheeses concerned by these private storage measures.
Under normal circumstances, one third of the cheese exported from the EU is destined for Russia. For Finland and the Netherlands, 90% of cheese exports go to the Russian market, and this figure is 35% for the Baltic States and Germany.
Figures. Last year, exports of EU dairy products to the Russian Federation represented €2.3 billion, particularly in the form of: cheese (€1.0 billion), food preparations (€470 million), butter (€140 million), fresh dairy products (€100 million), finished products (€90 million), skimmed milk powder (€70 million) and whey powder (€30 million). 25 member states exported cheese to Russia in 2013, but the main exporters of EU cheese to Russia are the Netherlands, the Baltic countries, Finland, Poland, Denmark, Germany, Italy and France.
Cost of the measures. The private storage aid for butter, skimmed milk powder and cheese could, according to certain extremely provisional estimates, cost the Community budget €10-20 million. The Commission hopes to have the figures next week on the quantity of cheeses concerned by these private storage measures, which will help it to have a clearer idea of how much the measures will cost. The Commission adds that certain cheeses (in particular, Finnish ones) cannot be stored.
These measures come on top of the market support measures already announced for peaches and nectarines (€32.7 million) and for perishable fruit and vegetables (€125 million).
What happens next. “In the coming days”, Commissioner Dacian Ciolos will present to the member states (at the extraordinary Agriculture Council of 5 September) and the European Parliament a first full analysis of the (short- and medium-term) impact of the Russian ban on all major European agri-food sectors, “together with an overview of the policy options” to tackle the issue, said Commissioner Ciolos. “Where material risks of market destabilisation appear, I will continue to use the new CAP to act pre-emptively to stabilise the market”, he pledged. He is also to take stock of the situation within the College of Commissioners on Wednesday of next week. He may also address the press after the Commission's meeting. (LC)