Press release, 12 September 2014
Members of the Seimas Committees on European Affairs, Rural Affairs and Economics, and Lithuanian Minister of Agriculture, Virginija Baltraitienė, have met with Member of the European Commission responsible for Agriculture and Rural Development, Dacian Cioloş.
The objective of the meeting was to discuss the issues related to the Russian ban on the import of most agricultural and food products from Lithuania and other EU Member States, the EC actions and financial support to Member States seeking to mitigate the negative impact of the ban on Lithuanias agricultural sector, and other agricultural sector issues relevant to Lithuania.
During the meeting Mr Cioloş confirmed that Lithuania can expect up to 70 per cent of advance payment of compensations for the losses incurred due to the restrictions on the export of agricultural and food products to Russia. He stressed that the EC would target the support at the most vulnerable agricultural sectors whereas the EU and its Member States, in their turn, had to put efforts to find new markets for the sales of their agricultural and food products.
On 7 August, Russia announced a ban on most food and agricultural production imports from the EU. As Eurostat suggests, Lithuanias export of agricultural products to Russia alone has accounted for 20 per cent of the total annual EU export. Lithuania used to export to this market a significant share of its food and agricultural products, including approx. 30 per cent of dairy products and 50 per cent of its beef production (in monetary value).
Lithuanian farmers felt the effect of the Russian embargo immediately when the milk purchase price was reduced by up to 40 per cent and that of the livestock by about 20 per cent. Animal breeding farms have faced difficulties already as, due to the increased supply in the EU internal market, the prices of meat products have started dropping. On top of that, Lithuania is still suffering from the outbreak of African swine fever, which aggravates the situation even further. Together with its neighbouring countries, Lithuania has drafted a programme of measures of prevention and control of swine fever as well as liquidation of focal points of the disease and is going to request the European Commission to allocate resources for their implementation.
When assessing the current situation in the Lithuanian agricultural sector it is obvious that appropriate measures need to be put in place in response to the crisis situation.
Support for the private storage of butter and skimmed milk powder and some kinds of cheese has been proposed by the EC as one of the market regulation measures. The EC has confirmed that intervention purchases of butter and skimmed milk powder would be extended till the end of 2014. However, the prices of intervention purchases are considerably lower compared to those prevailing in the market today: the price of skimmed milk powder is roughly 50 per cent lower while the price of butter is even
70 per cent less compared to its market price. Therefore, in practical terms this measure is not really effective even though the review of intervention prices was raised as early as during the negotiations over the Common Agricultural Policy reform.
Lithuania is requesting to consider compensations to the farmers who suffer from swiftly dropping purchase prices. In its view, the principle of solidarity among Member States should be observed when discussing this issue. The fact that Lithuania is the country which has suffered most painfully from the Russian ban on the EU imports, should be also taken into consideration. At an Extraordinary Agriculture and Fisheries Council on 5 September 2014, the Lithuanian Minister of Agriculture, Virginija Baltraitienė, asked the European Commission for EUR 46 million to compensate for the losses incurred by the country farmers. However, no approval of this measure has been received so far.
It has to be noted, however, that in 2011 the ECs response to the crisis triggered by E.Coli bacteria in vegetables sector, was much faster and within less than a month the EU farmers in Spain, Poland, Italy, Holland and Germany received EUR 227 million support.
Jolita Šedauskienė, Adviser to the Committee on European Affairs, tel. +370 5 239 6860, mob. +370 620 90 788, e-mail: [email protected]
Morta Vidūnaitė, Adviser to Gediminas Kirkilas, Deputy Speaker of the Seimas, tel.+370 5 239 6278, mob. +370 612 01121, e-mail: [email protected]
