The European Union, adding dairy to agriculture sectors
which could receive support after Russia's ban on Western food import, may open
up private storage aid for milk products affected, Agrimoney.com has learned.
European Commission officials on Friday, at a meeting which fleshed
out support for producers of peach, nectarines and other perishable fruits and vegetables,
said they may extend assistance to dairy exporters too.
"The commission… will not hesitate take any further
emergency market support measures if necessary, notably for certain dairy
products where the impact of the Russian ban seems obvious," the commission
said in a statement.
Support for dairy groups, some of which have seen the prices
of their products tumble after being denied access to the Russian market, will
be discussed at a meeting of agriculture experts on August 28.
The support could include opening up private storage aid to exporters
affected, allowing an alternative to selling off product at low prices, and
disrupting local markets, a Brussels source told Agrimoney.com.
"That would be a way to deal with a short-term problem," the
"I don't think it is clear how the programme would operate.
It might just be limited to the worst affected areas, which appear to the
Finland and the Baltic states, and maybe the Netherlands, although that is not
It may also be limited to butter and skim milk powder.
"But it would allow breathing space to find alternative
markets for dairy products which in the short term is not possible."
Roger Waite, spokesman for agriculture and rural development
at the commission, said he could not comment further on "where we are" as
regards progressing dairy support.
However, he said that private storage aid had proven itself
an "effective means of dealing with oversupply" situations.
The commission lists private storage aid, in which it offers
financial support for warehousing product, among measures "which work as a
safety net in case of serious imbalance in the market".
This support - which has historically been applied in
particular to butter, for which production sees swings in tune with the
seasonal cycle in milk output - "helps
producers to take product temporarily off the market, as an alternative to
The impact of Russia's food import ban has been seen in
European dairy has been particularly evident in Finland, where Valio, the
country's biggest dairy producer, says it stands to lose E240m in exports.
Valio is redirecting large quantities of Oltermanni, one of
Finland's most popular cheeses, on the local market, where it is being sold at
roughly price, and being dubbed "Putin cheese".
However, Finland was actually in 2013 only the third-largest
EU cheese exporter to Russia, after the Netherlands and Germany.
Finland was the top EU exporter of butter to Russia, ahead
of France, and the fourth biggest from the bloc on skim milk shipments, behind France,
Poland and Belgium.