As the Russian ban on fresh produce continues to punish farmers and agriculture sectors around Europe, the European Commission (EC) is exploring the possibility of going outside of the Common Agriculture Policy (CAP) budget to provide extra compensation measures for those worst hit by the embargo. At www.freshfruitportal.com, we take a look at issues raised at a press conference was held directly after the first meeting of agriculture ministers in Brussels on Friday.

Agricultural Commissioner Dacian Cioloş and Italian politician and Agriculture Minister Maurizio Martina summarized the key points of the meeting.

One main area that ministers seem to agree upon is that the current CAP budget does not go far enough to help financially support farmers around Europe in the wake of the Russian ban.

Further compensation measures to prop up the sector may have to be sought from other European budgets.

"One fundamental point we all agreed on is that since the origins of this crisis lay outside agriculture and agricultural markets it is appropriate to assess the possibility of using funds from outside the agriculture budget," Martina told the press conference.

"Obviously we all know what is behind this crisis; it’s a political-diplomatic crisis so it's appropriate to think in those terms; to look for new margins going beyond the agricultural budget in our search for those resources.

"In agreement with Commissioner Cioloş, we have agreed to have an update item on this situation at the informal council in Milan at the end of September. That will be the next stage through which we will build on this afternoon's debate."

Echoing these sentiments, Cioloş firstly reviewed the Commission's work that has already been done to help farmers, including exceptional market support measures for peaches and nectarines worth €33 million (US$43.3 million) and other perishable fruit and vegetables worth €125 million (US$165 million), as well as last week’s announcement of €30 million (US$ 39.9 million) of additional funding for CAP programs starting next year.

Click here for more stories relating to Russia's ban on imported produce from a large range of countries.

He said there was a broad degree of support for the 'proportionate and rapid' work done so far.

"We were able to come up with affective measures. I have said that the Commission will continue to monitor the markets and to assess the impact of the measures taken," he told the conference.

"So far there is a certain amount of price stability for products which could have been the most affected by this. We have set up a task force within Director General Agri and we will continue to organize weekly management committee meetings within the Commission.

"This is the right forum to discuss technical points and to bring in information from the markets from member states and also to prepare any additional measures for other products where the harvest season is about to start and that is also the right place to assess the measures already taken."

Speaking about strengthening new markets, Cioloş said he had taken 'careful note' of requests made by practically all speakers in a closed-door meeting held just before the conference.

"The Commission has in fact already taken a decision to strengthen the promotion package…this decision has been welcomed but in our trade negotiations we will have to see how we can lift certain non-tariff barriers which have limited the access of our agri-food products to certain third country markets.

"This is something the Commission is looking into from a trade point of view."

Export refunds

Cioloş went on to talk about the possibility of export refunds, adding this issue polarized opinion among agriculture ministers.

"A number of member states have talked about export refunds, some have said they should be used, others have said they should definitely not be used. I have my own opinion; I don't think this is the most appropriate instrument in this situation.

"From our experience in the past, we've seen that export refunds don't necessarily lead to an increase in the amounts exported.

"Of course, we’ve got the point of principle regarding these export refunds. A modern agricultural policy should move towards other instruments so this is perhaps a rather old fashioned instrument which is not in line with the European Union's role on the international scene. So with promotion measures we’ll have to see how we can use them most efficiently."

Compensation for specific sectors

Cioloş closed his address with remarks about the possibility of targeted compensation and how funding could be distributed throughout Europe.

"There was a suggestion mooted for targeted compensation, I stress the word 'targeted'. We have to look at who has been the most affected, which category of farmers, in which sector and in which member states.

"There might be some farmers who above and beyond market measures might find that their income suffers very seriously this year so we will have to contemplate that possibility as well but it's going to depend on the budget which is made available to the Commission.

"And we also have to see how we can share this with member states, perhaps through state aid as Mr Martina has said we will continue our stock taking in the margins of the informal council."

Questions posed by the press

Members of the press were given the chance to ask specific questions following Cioloş' and Martina's summaries.

The first question, put by a journalist, asked for more details on the range of possible targeted measures and whether the Commission, by the end of September, could give an overview or is it relying on data from member states.

"I cannot give an exact deadline because it will depend on the data coming from the member states, we have already asked the member states to come with more concrete requests and more concrete data regarding sectors and the category of farmers affected but our intention is to come with analysis as soon as possible because the efficiency of this kind of measure is strongly linked to the rapidity of the action," Martina answered.

"We had a not so good experience in 2009 with the milk crisis when the compensation came one year after and this kind of compensation is not efficient so our intention now is not to wait such a long time in order to come with some analyse but of course this work will be done in parallel with the monitoring of the market and a follow up of the measures."

Another question posed related to the Commission's reaction to being asked to look outside of the CAP budget for aid measures.

"Taking into account the very difficult situation of the global budget of the Commission and taking into account the request of the member states on several headlines, we will analyze this possibility of course but it will depend on the global economy of the budget because we have a lot of restrictions in the budgetary utilization," Martina answered.

"We will look at all the possibilities. Politically we agree with the idea that this crisis is not because of the agricultural sector but the agricultural sector will pay the most important bill. For us it was important to take these market measures very quickly in order to limit the negative impact on the income of farmers.

"Up until now we were able to manage our budgetary needs and we will have more precise evaluation in the future and the resources for this."

Questions were also raised about future sanctions coming from Russia and whether the Commission was 'fearful' of further repercussions.

"We are not ruling anything out. These monitoring actions are on-going in a coordinated manner and they will help all the member states. We are all trying to get a better idea of what new instruments we can use as the situation develops," Martina said.

"A fundamental point for me was that we should take stock of the work done by the Commission and together build on that action and I think we had succeeded in that we have managed to reason in broader more strategic terms today.

"We have started thinking about strengthening promotion and we have raised a subject that is; this crisis has a more general background that goes beyond agriculture and so it would seem appropriate that the situation be remedied on a broader economic front and that is not just my opinion but it’s shared by many colleagues."

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