Brussels, 03/09/2014 (Agence Europe) - The European Commission announced on Wednesday 3 September that it would double EU funding (from €30 million to €60 million) for the promotion of European agricultural products to help find new outlets following the Russian ban on the import of agricultural produce from Europe. It also raises the possibility of granting targeted compensation for the worst affected sectors.
Agriculture Commissioner Dacian Ciolos, presented a briefing note to the College of Commissioners on the situation in the various agricultural sectors, on the measures already taken and on possible future measures. This note will be presented to the European Parliament agriculture committee on Thursday 4 September and the following day to the Agriculture Council.
Ciolos pointed out that measures had been taken speedily (market withdrawals, free distribution and reduction in production in the perishable fruit and vegetable sector, private storage in the dairy sector, and measures for peaches and nectarines) to avoid any destabilisation of European markets, reduction in farmers' income and tumbling prices (see EUROPE 11141 and 11143). The new common agricultural policy (CAP) rules give the Commission the ability to act swiftly and provide it with a flexibility that it had not previously enjoyed, the commissioner pointed out.
Promotion. The Commission is considering measures to assist the search for new markets for EU products (dairy products, fruit and meat) banned in Russia. For this reason, it has been decided to double the budget allocation for promotion campaigns this year, Ciolos said. Initially, the Commission set aside €30 million in Community funding (to this must be added an identical sum from private investment and from the EU member states). It decided to increase this envelope to €60 million, taking the total envelope, therefore, to €120 million for programmes beginning in 2015. A new regulation has been adopted on promotional initiatives which provide, inter alia, for an increase in spending between 2014 and 2020. There will, then, be money for promotion, the commissioner promised.
Compensation. The Commission intends to hold discussions with the Council and the European Parliament on the issue of targeted financial compensation for certain sectors and certain categories of beneficiary, the commissioner said. In some sectors, SMEs have been badly affected as a sizeable proportion of their production was destined for Russia. On the question of targeted support, what is needed is joint action by the Commission and the countries of the EU, according to Ciolos. The Commission can only act within the budgetary limits set by the Council and Parliament, he pointed out. Budget resources are quite limited for the 2014-2020 period, and the reserve in the event of agricultural emergency is financed from within the CAP budget not from outside, said Ciolos, firmly of the opinion that Community action was needed in this area.
The emergency measures taken hitherto for EU producers have cost some €180 million. Ciolos also raised the possibility of the member states themselves providing targeted state aid.
For Italy alone, the bill from the Russian embargo would be €200 million.
Figures. Russia is the EU's second largest trading partner in the agri-food sector, with 10% of EU agri-food exports going to that country, the commissioner said. The Russian embargo has hit 4.2% of total EU agri-food exports, worth €5 billion in total. The worst affected sectors are fruit and vegetables (29% of European exports used to go to Russia), cheeses (33% of European exports were for Russia) and butter (28% of EU exports went to Russia). The countries hardest hit are the Baltic States, Finland and also the fruit and vegetable producing countries of the South. (LC)