Milan, 30/09/2014 (Agence Europe) - EU agriculture ministers have failed to agree a united stance on the best response to the effects of the Russian ban on imports of agricultural products from the EU. This emerged from the debates held at the informal meeting of the Agriculture Council in Milan, Italy, from Sunday 28 September to Tuesday 30 September.
The EU is struggling to come up with the right ways to compensate farmers who have fallen victim to the Russian ban. And the current constraints on the 2015 budget of the EU, which is almost in payment default, are not making things any easier. The European Commission has made around €300 million available to come to the rescue of farmers affected by the Russian restrictions, but it still does not know how it will pay this tab. The Commission is firstly looking in the remaining agricultural budget, before considering mobilising the agricultural crisis reserve. This reserve, of around €400 million a year, is funded outside the EU budget (as called for by the Council but to the great consternation of the Commission) and is formed by reducing direct aid to farmers. This solution is satisfactory to very few.
“It is out of the question to look at sources other than what we have in the agricultural budget”, said Dacian Ciolos, European Commissioner for Agriculture, speaking at a press conference in Milan on Tuesday 30 September. He said that it was important to use “all of the margin that we have in the agricultural budget to fund the measures related to the ban”. In the opposite corner, Italian Minister Maurizio Martina, President-in-exercise of the Council, called for funds other than the agriculture budget to be used to bail out the struggling farmers. The Irish delegation also feels that other funds should be used, an idea which was supported by other countries, including Hungary. For its part, the European Commission believes that it can pay for the measures related to the ban out of the 2015 agriculture budget, but is awaiting the update of the requirements, which will be published in the amended letter to be published on 15 October.
Exceptional measures require correction. Several countries took umbrage at the fact that, due to unreasonable applications from Poland on fruit and Italy on cheese, the European Commission had to break off these programmes. Although it has proposed a new, more targeted support system for perishable fruit and vegetables, with an envelope of €165 million (see EUROPE 11165), it is unlikely that a further regime of aid for private storage of cheese will see the light of day. The Commission also believes that the private storage aid schemes for butter and skimmed milk powder, which are ongoing, are enough to stabilise the market.
Finland criticised the fact that the new fruit and vegetables programme had been adopted so quickly, whilst it was calling for compensation measures which were slow to come.
The Dutch minister for agriculture, Sharon Dijksma, hit out at the lack of solidarity shown by certain countries “in taking advantage of certain measures introduced by the Commission. European countries should stick together in times of crisis”, she added.
Better coordination required. Stephane Le Foll, the French agriculture minister, told a small group of journalists on Monday that, as regards the measures taken so far in response to the Russian ban, “there has to be coordination of the whole mechanism. If everybody comes to the counter and only the first to arrive gets anything, it will not work”. He argues that the funding available should be managed “in a spirit of solidarity”. France explained that each country has specific problems and that there should be a little “subsidiarity” in the management of the funds made available to them, in order to adapt, to “best manage things with commercial promotions and export assistance and withdrawal policies when required”, he said. France would like to see a national envelope with a little leeway to take account of the various constraints affecting the different countries. Referring to the exaggerated Polish and Italian claims, the French minister said: “We have tools, but if we cannot manage them collectively, we will destroy them before they've even been used”.
The problem of the Russian ban is linked to the fact that, if there are no more exports to Russia, this could have a destabilising effect on the European market. “It's not a case of saying: I'm losing out because I export this much and therefore I want this much. We need to find a solution so that what is no longer exported does not flood the European market”, France summed up.
The Italian minister, Maurizio Martina, told the press on Monday that he expected the Commission to update all of the instruments and make them available to the farmers. “We are working with the Commission to improve the regulation on private storage”, he said. He added that the regulation should be adjusted to make it more effective. He warned against any tendency towards geographical divisions. He argued that all countries, North and South, have been affected by the Russian ban.
Compensation. Finland and the Baltic states are reported to have agreed to apply for between €100 and €150 million in compensation for losses incurred by their farmers due to the Russian ban. Finland has sent in figures on losses of between €75 and €95 million a year for the dairy sector. Finland has called for a swift decision on the compensation, before the mandate of the current Commission ends.
Ciolos said that he was waiting for figures from the member states, because aid of this kind “needs to be tailored in favour of the worst-affected farmers”, he explained to the press. He pointed out that Finland and the Baltic states had been particularly hard hit, particularly because their produce cannot be stored. How can these measures be funded? With national support and/or EU support, Ciolos suggested, acknowledging that it would be a matter for the next Commission to decide. He added that it would be unrealistic to have much faith in the option of finding some of the money outside the budget of the common agriculture policy (CAP).
However, certain countries, such as Germany and France, are opposed to targeted compensation of this kind. Le Foll told the press that he was “not in favour of targeted individual compensation, other than in exceptional cases, at this moment in time”. Before we move to individual European aid, there should be an overall vision of market management, he advised.
SCA. The Special Committee on Agriculture (SCA) met in Milan on Monday 29 September and discussed the Russian ban. France (artichokes, cauliflower) and Poland (red cabbage, Chinese cabbage) called in vain for the fruit and vegetables programme to be extended to this produce. Certain countries, among them France, asked to be allowed to adapt withdrawal prices (fruit and vegetables). Germany and France, amongst others, argued to be able to use the unused funds in the agriculture budget to pay for measures, in order to avoid having to mobilise the crisis reserve. Several countries took the view that the milk measures are insufficient (Poland, Finland and the Baltic states). Others - Hungary, Romania, Bulgaria and Croatia - called for second level measures (farmers indirectly affected by the ban). Denmark said that measures should be as targeted as possible, to avoid repeating the errors of the past (disproportionate applications from Poland on fruit and vegetables and from Italy on cheese). (LC)