Brussels, 24/09/2014 (Agence Europe) - The European Commission decided on 22 September to end the measure for private storage aid for cheese that was to apply to a maximum of 155,000 tonnes. The reason is that the requests received hitherto show that the scheme is being applied disproportionately by some cheese producers from areas which, traditionally, do not export huge quantities of products to Russia.
Blame can be laid directly at the door of Italy since it has notified 83,956 tonnes of cheese out of a total of 100,464 tonnes - that is, over 80%! - in the first two weeks that the scheme has been in operation (from 8 to 21 September). The other countries that have submitted notifications are France (269 tonnes), Latvia (30 tonnes), Lithuania (150 tonnes), Sweden (2,375 tonnes), the Netherlands (6,098 tonnes) and Ireland (7,109 tonnes). While the effects of Russia's ban on imports will potentially be felt by the European Union cheese market as a whole, the most affected member states will, in the opinion of the Commission, be Finland and the Baltic States, for which Russia is the only trading partner in this sector, along with Germany, the Netherlands and Poland, for which Russia is a major export market for cheese. Furthermore, even though cheeses which have been awarded a geographical indication have been affected by the ban on imports they represent only a very small part of all the cheeses exported to Russia. It is astonishing to see that Finland has not yet found time to request aid despite being hard hit by the embargo.
The Commission came to the conclusion that the scheme does not appear to be the most appropriate to address market disturbance resulting from the embargo put in place by Russia properly and effectively. It took the decision, therefore, to suspend it. In 2013, the EU exported 250,000 tonnes of cheese to Russia (including a number of fromages frais which cannot be stored and which, therefore, may be eligible for private storage aid), roughly one third of all EU cheese exports.
It should be pointed out that the EU will have to pay for the quantities of cheese affected hitherto by the private storage measures. The cost of private storage for cheese is estimated at between €10 and €15 million for 150,000 tonnes. Two thirds of this amount then will have to be paid as 100,000 tonnes have already been notified. It would seem unlikely, in view of the budgetary constraints, that the Commission will put in place another, more targeted, scheme for the private storage of cheese.
The Commission, however, will very shortly bring forward a new package of emergency measures (worth at least €125,000 million) for perishable fruits and vegetables (the scheme was suspended because of unreasonable requests from Poland.)
Butter and skimmed milk powder. The EU has also put in place, from the start of September, an aid measure for the private storage of butter and skimmed milk powder which remains in force. Notifications for skimmed milk powder currently (after two weeks, from 8 to 21 September) stand at 4,342 tonnes (2,356 tonnes from Germany, 293 tonnes from Ireland, 1,058 tonnes from Spain and 635 tonnes from Lithuania) and for butter, volumes notified are 8,825 tonnes: 1,875 tonnes from Belgium, 139 tonnes from Lithuania, 2,697 tonnes from the Netherlands, 3,357 from Ireland, 270 tonnes from Germany, 60 tonnes from Poland and 427 tonnes from the United Kingdom.
No quantities of butter or skimmed milk powder have been offered into public intervention.
Budget. Internal discussions have taken place within the Commission on how to finance support measures for the farmers affected by the Russian embargo. What is certain is that the money will be taken from the EU's 2015 budget, either from funds available in the budget of the common agricultural policy (CAP) or, if there is no margin (the mid-October amending letter will provide indications of spending needs), by drawing from the agricultural crises reserve, which holds roughly €400 million. This reserve is financed by reducing direct payments to EU farmers of more than €2,000 by 1.3%. (LC)