Russian ban: EU should have been much quicker off blocks
In the bad old days of unwieldy co-op boards, management reactions to markets were slowed by lack of agreement in crowded boardrooms.
Meanwhile, two weeks after the EU agri-food industry was confronted by a potentially momentous event, the only decision out of Brussels has been to introduce support measures for EU producers of perishable fruit and vegetables — which might have happened even without the Russian ban, because of the difficulties in the fruit and vegetables sector this summer.
It will be tomorrow before any EU decision makers sit down together again to consider a wider response to the Russian ban. And it will be September 5 before agriculture ministers from the 28 member states meet.
It was probably not a coincidence that the Russians picked August to drop their bombshell food imports ban, by way of reaction to the tougher EU sanctions which were announced in July to punish Russia for escalating tensions in Ukraine, having annexed the Ukrainian region of Crimea last March.
EU decision makers probably went on their holidays after their July announcements, and much of the EU administration closes down in August.
In contrast to EU inaction, Russian trade officials are believed to have been busy travelling the world looking for new suppliers to replace the food imports they have banned from most of the Western world.
With an estimated €5.2 billion per year of alternatively sourced imports needed, the Russians will have few problems finding new suppliers.
Brussels sources say EU officials have been talking to trading allies to dissuade them from replacing EU produce in Russia.
But the EU has no legal means to force countries to comply, other than point out the political consequences of trying to make a quick buck in the face of sanctions against Russia for its actions in Ukraine. Those European traders might have been better employed finding new markets for displaced EU exports.
Brazil and China are expected to lead the drive to take over Russian markets from the EU. Argentina, Egypt, Turkey and Iran are also ready to sign up.
While this major re-drawing of the global agricultural trade map takes place, there is relative inactivity in Brussels.
EU farmers and food exporters can only hope that they will continue to access the Russian market through Russia’s neighbouring allies, such as Belarus and Kazakhstan.
These countries say they will continue to take EU produce, much of which could find its way into Russian shops, because these countries have open borders with Russia.
But that is no excuse for Brussels inactivity.
Irish dairy farmers are among those who would like to see some action immediately, because dairy exports are so important for us, and Russia accounts for one third of EU cheese exports (by volume), and just under a third of butter exports.
Last week, milk processing plants were shut down in Finland and workers were laid off as a result of the Russian food import ban.
Lack of EU action must be particularly galling for Finland and Lithuania, which send 40% and 45% of their food exports to Russia, respectively.
But how long before the shock waves in the dairy markets of Finland (which has the best paid dairy farmers in the EU) reach the export markets which Irish dairy farmers depend on?
With nearly one-third of all fruits exported out of the EU last year going to Russia, and thousands of tonnes of perishable produce coming onto the markets, it was fitting that sector was aided first.
However, considering it spends €59 billion per year on its Common Agricultural Policy, the EU should be perceived to be much quicker off the blocks on this occasion.
