EU struggling to cope with Russia food ban

The European Commission has since August earmarked €158 million for aid to fruit and vegetable growers who have had to take products off the market, as well as €30 million for dairy suppliers who are putting stock into cold storage.

The money is to come from a “margin” - money allocated by EU countries but unlikely to be needed - in the EU’s 2015 Common Agricultural Policy (CAP) budget.

The first payments are likely to start in late October due to delays caused by due process.

Ciolos also noted the compensation for citrus, apples, and pears will be paid out using new rules, to enter into life next week, which tie the money more directly to volumes affected by the Russia ban.

The change comes after Polish producers filed massive claims - worth €145 million - in the €125 million envelope.

The claims saw Ciolos suspend all applications in the sector. He is hoping Polish authorities will reduce the figure. But if they do not, all claimants will see payments go down as the commission applies a “reduction coefficient” to meet a proportion of Polish demands.

Ciolos spoke to MEPs after the parliament’s agriculture committee complained that he is not doing enough.

“Our producers do not have an outlet for their products and some of them might go the wall … We think the money is far from satisfactory”, Czeslaw Siekierski, the committee’s Polish centre-right chairman, said on Monday.

Krzysztof Kuzmiuk, a Pole from the anti-federalist ECR group, said the price of apples in Poland has gone down "30 to 40 percent" compared to last year.

Herbert Dorfmann, an Italian centre-right deputy from South Tyrol, noted: “I come from a region which produces 10 percent of the apples in Europe, and this year we’re looking at a record harvest, so the price for fresh apples is half what it was a year ago".

Davor Skrlec, a Croatian green, said up to 20,000 jobs in the mandarin sector could be hit.

MEPs also voiced worries about mushrooms, whisky, and fish.

Deputies from Lithuania and Poland, among the countries the hardest hit by the Russian embargo, voiced support for EU sanctions on Russia. But MEPs from Greece, Portugal, and Spain said their farmers have nothing to do with EU foreign policy.

“I’ve got no sympathy for [Russian leader] Mr Putin, but our foreign policy cannot be a gambling game with the interests of European farmers”, Pablo Iglesias, a Spanish left-wing deputy, noted.

For his part, Ciolos tried to steer a fine line between showing solidarity and sending out a message to Moscow that its food ban is causing pain.

“We are faced with a European crisis, but we have to give a response that is coherent, proportionate, and effective”, he said.

He ruled out relaxing EU quotas for milk output, saying this would flood the market and depress prices.

He noted that he is also proposing to use a “crisis reserve” fund in the CAP to give “targeted compensation” to farmers at risk of bankruptcy.

But the special fund is drawn by reducing normal CAP payments in other areas and does not represent new money.

“We’ll spend €2 billion or €3 billion if the member states give the money to the commission. But the commission doesn’t have its own money, we manage the money given to us by [European] legislators”, Ciolos said.

The commission estimates the Russian ban is worth €5.3 billion a year in lost sales.

But it is hoping the real figure will be much lower as EU producers find new customers, not least in countries such as China, which are due to export more to Russia, creating a gap in their home market.

“Russia still needs to eat, so if they don’t import apples from us, they will have to import more from somewhere else”, a commission official said.