EU officials seek to limit impact of Russia’s food import ban


European Union regulators on Monday began analyzing, product by product, the impact of a Russian ban on EU food imports and agreed on emergency measures to support peach and nectarine growers in what they described as a “signal of intent.”

The Russian ban, announced last week, was in retaliation for Western sanctions over Moscow’s actions in Ukraine.

European Agriculture Commissioner Dacian Ciolos interrupted the traditional European Commission August break to return to Brussels on the weekend, together with other senior staff, and on Monday they set up a task force.

The aim is to work out alternative markets and to analyze the fallout from Russia’s one-year ban on imports of meat, fish, dairy, fruit and vegetables from the United States, the EU, Canada, Australia and Norway.

With some member states piling on the pressure for redress, they could also agree to award compensation from a special €400 million ($535 million) fund signed into law at the end of 2013, as part of agricultural reforms. To date, the fund has never been used.

The European Commission opted to support peach and nectarine sectors by boosting to 10 percent, from 5 percent, the share of production they can withdraw from the market and distribute for free. Producers are compensated for fruit withdrawn from the market.

In addition, extra funds will be provided for marketing. The Commission did not specify how much money would be paid out, or if it would come from the €400 million fund.

“This first measure today is a signal of intent,” Ciolos said. “We are monitoring markets closely and I will not hesitate to do likewise to assist other sectors dependent on exports to Russia, should it be necessary,” he added.

Agricultural experts from the EU’s 28 member states will meet in Brussels on Thursday to plan a coordinated strategy.

Last month, the EU agreed on its toughest sanctions yet against Moscow in response to Russia’s annexation of Crimea and its support for separatist rebels.

Moscow initially said it would not stoop to a tit-for-tat response, but last week it took aim at Western food imports, a move many analysts say could hurt Russian consumers more than it affects Western exporters.

Analysts said as Russia turned to alternative suppliers in regions such as South America it could drive up prices in those markets and open up new opportunities for the EU and United States, whose prices would become more competitive.

“Rearranging the deck chairs on a ship is a good analogy right now,” said Robert Yonkers, vice president and chief economist for the International Dairy Foods Association.

“Yes, some countries might see some short-term impact on demand for their dairy products. But in general, unless Russia is truly thinking of cutting off all imports of food stuffs, then there is still going to be a deck and there are still going to be chairs.”

Ciolos has said he is confident the EU farm sector can quickly find new markets for exports to Russia, worth around €11 billion, roughly 10 percent of all of the EU’s agricultural sales.