Brussels, 20/11/2014 (Agence Europe) - Following the announcement of aid for milk producers in the Baltic States, Finland said on Thursday 20 November that it was “disappointed” not yet to have been included in the targeted support measure to alleviate the impact of the Russian embargo on the import of agricultural products from the EU (see EUROPE 11200).
But why does Finland not qualify for the aid package promised to the Baltic countries? Prices in Finland have not fallen as low as those in the Baltic States because the main Finnish cooperative, Valio, has cut its profits and tried to keep prices quite high. It recently announced, however, that it was about to cut 168 jobs as a result of the Russian embargo. “As long as the main Finnish cooperative absorbs the fall in prices without passing it on to producers, the Commission will find it difficult to accept that Finland needs money”, said a source.
In Finland's view, however, aid is essential because the country's farmers are feeling the losses at least as much as those of the Baltic countries. “We are still trying to persuade the Commission that the system in Finland is different from that of the Baltic countries, but the losses are the same”, said a source. One fifth of Valio production used to go to Russia but that has stopped today.
In a press release, Finnish Agriculture Minister Petteri Orpo has expressed his disappointment. He says that he had actively negotiated with the Commission on “compensation for the Finnish dairy sector which is each month suffering losses worth approximately 10 million euros (this since last August) due to a total stop of dairy exports to Russia”.
Losses have not been immediately felt by the farmers as the milk is sold to cooperatives. However, the cuts in producer prices and losses will be more clearly shown at the end of the year when the cooperatives must adjust their year end payments (to the farmers) to the changed situation, says the Finnish minister.
Orpo says that prices continue to go down in Finland and “Finland will fill the criteria for compensation - unfortunately”.
Between September 2013 and September 2014, producer prices fell by 27% in Estonia, 26% in Latvia, 33% in Lithuania and 11% in Finland, according to the Finnish minister.
Commission gives assurances that it has not forgotten Finland
The Commission has said that it is awaiting information from Finland on prices in September before taking a decision on whether to include the country's farmers in the aid scheme.
European Agriculture Commissioner Phil Hogan spoke to Orpo by telephone on Wednesday 19 November. “I fully understand the difficulties being experienced by dairy farmers in Finland and I am seeking a solution that is fair, reasonable and justifiable”, Hogan said. Orpo has offered to send his secretary of state and statistics experts to Brussels next week for talks with DG Agri officials. “This should allow the European Commission to examine all the relevant data and establish the full picture in terms of the price drop experienced by Finnish farmers. Should the information justify measures, then we should be in a position to make progress on a package targeted to the dairy sector in Finland”, stated the commissioner. He made it clear that “the budgetary situation is extremely tight and this will be taken into account in any calculation”.
The Coalition of Baltic Farming has welcomed the decision of the Commission to “recognise the exceptional challenges faced by our farmers”; it says that this is “an important signal of European solidarity” in support of those worst affected by the Russian import ban. At the same time, although this package will provide short-term relief, “the medium-term outlook for dairy producers in the Baltic countries and Finland remains critical if the sanctions stay in place and access to our largest export market remains blocked. Further targeted measures will be necessary in due course”. (LC)