EU prepares compensation for farmers hit by Russia sanctions

BRUSSELS - EU officials will this week draw up a plan to compensate farmers if they are hit by Russia’s ban on food exports.

Agriculture commissioner Dacian Ciolos cut short his summer holiday to set up an expert panel last Friday (8 August) tasked with looking at the potential impact of the export ban ahead of a meeting with representatives of EU governments on Thursday.

“We are looking at precisely what is involved but also the potential impact looking at all products,” commission spokesman Roger Waite told reporters on Monday.

“By Thursday ... we will be in a position to have a clearer picture”, he added.

Moscow imposed the year-long ban on EU produce last week in the latest round of its tit-for-tat sanctions battle over Ukraine.

The import ban also applies to the US, Canada, Australia and Norway, although Iceland was exempted.

For its part, the EU recently imposed its toughest sanctions yet on Vladimir Putin’s government, including restrictions on food imports and financial assets, after it continued to support Ukrainian rebel groups believed to have been responsible for shooting down Malaysian flight MH17 last month.

Figures from the EU’s statistical agency Eurostat suggest that the move will cost Europe more than €12 billion in lost exports, which represents around 10 percent of total EU agricultural sales outside the bloc.

But it will also hit Russian consumers, since EU produce accounts for over 40 percent of Russia’s food imports.

The bloc’s common agricultural policy gives the commission a €420 million cash reserve that could be used to compensate farmers, but officials are refusing to jump the gun on whether the fund will need to be tapped.

“We still feel we are a little bit too soon to be discussing exact amounts,” said Waite, adding that “we can support farmers if there are problems but we have to assess what the impact is”.

“European exporters have lost one market but we can’t say that we won’t be able to export to other markets [to replace Russia]”.

Ministers from Poland, Bulgaria, and Finland have already stated their intention to request compensation for their farmers from the EU executive.