The European Commission has stepped in to help North East dairy producers affected by Russia’s import ban on EU food.
The Commission opened Private Storage Aid for producers of butter, Skimmed Milk Powder (SMP) and certain cheeses, who may be negatively impacted by the Russian measures.
Senior members of the National Farmers’ Union (NFU) suggest the restrictions do not pose an immediate risk to North East diary producers, although knock-on pricing issues could impact the region.
The Commission will provide Private Storage Aid for butter and SMP to cover the daily costs of storing these products for three to seven months. A draft implementing Act will be presented to the Committee next week for a formal vote.
EU Agriculture & Rural Development Commissioner Dacian Ciolo explained: “Price signals on the European dairy market show that the Russian ban is starting to hit this sector. In a number of member states export earnings are being lost and new outlets need to be found.
“The European dairy sector needs time and help to adapt so I am announcing today targeted market support, focusing on milk powder, butter and exported cheeses If needed, further measures will follow.
“In the coming days I will also present to member states and the European Parliament a first full analysis of the short and medium term impact of this Russian ban on all major European agri-food sectors, together with an overview of the policy options.
“Again, my message to EU producers today is clear: Where material risks of market destabilisation appear, I will continue to use the new CAP to act pre-emptively to stabilise the market.”
A statement issued by the NFU read: “Today’s announcement of emergency measures for the dairy industry by the European Commission is welcomed by the NFU. EU dairy wholesale prices have decreased due to excess supply and limited trading since the Russian trade ban and it is important that action is taken to protect the EU and UK markets.
“These measures should help to stabilise the situation and prevent an excessive oversupply of dairy commodities across member states. This will help the market to continue in a more normalised manner, before product is released for sale in a controlled way.
“We will continue to monitor the situation closely, working with Defra and industry partners to minimise the effect on NFU members across the dairy sector. We will continue to lobby to ensure that any measures are relevant and effective for UK dairy farmers.”
Dr Judith Bryans, chief executive of Dairy UK, added: “We welcome the European Commission’s decision to open Private Storage Aid for dairy products affected by the Russian ban. This measure will help prevent an oversupply of dairy products in the EU and stabilise the market.
“It will also give more time for the global dairy market to adapt to recent developments and absorb the impact of the ban.
“We also welcome the Commission’s willingness to extend PSA to non PDO/PGI cheeses and we will strongly argue for the need to include cheddar in any PSA measures. Cheddar is one of the most widely internationally traded cheeses and its exclusion from PSA would be detrimental to the UK dairy industry. We will be lobbying the Commission to argue for such an extension.
“We will continue monitoring the situation and keep working closely with Defra, the European Dairy Association and other stakeholders to mitigate the impact of the Russian ban.”
Last year, total food and drink exports from the UK to Russia, including alcohol, equated to just £115m, which included £5.7m of cheeses. Overall EU dairy exports to Russia last year were worth €2.3bn, notably in the form of cheese.