Poland aims to export their apples to Canada
Switzerland supports Europe and with further sanctions against Russia
With current reports about Russian soldiers operating in Ukraine and various organisations showing satellite images of Russian military activity in Eastern Ukraine, the EU and the U.S. are likely to expand the sanctions against Russia, which already responded with a warning that a response from the West will result in additional penalties. Remarkably, Switzerland decided to introduce more sanctions against Russia, considering that Swiss banks have a lot of Russian capital. Russia continues to search for new suppliers, focusing, among others, on the Association of South-East Asian Nations (ASEAN). Additionally, the treaty between the EU and Ukraine may have put an end to the non-GMO policy of the Ukrainians.
Compensations in the Netherlands
For the Dutch growers, the National Entrepreneurial Service released a list of compensations. Apple growers will receive up to 13.22 Euro per 100 kilograms. For pear growers it will be 12.59 Euro. Tomato and cauliflower growers will receive a maximum of 7.25 and 10.52 Euro per 100 kilos. For the other products that are on the intervention list, compensations are still unknown. Secretary of State Dijksma argued in Brussels for an expansion of the list, but no decision has yet been made.
Belgian growers meet Commissioner
The Belgian auctioneer Haspengouw was received by European Commissioner for Trade Karel De Gucht. He spoke with Belgian growers about the compensations and the decisions taken. De Gucht does not expect a quick resolution for the conflict, but he told growers that in addition to the 125 million Euro that the EC has reserved for support, the agricultural budget crisis, which has over 400 million Euro, is still untouched. The Commissioner could not make big promises or appease all the concerns from the growers. The EC has its eyes set on the American market and is working on a free trade agreement with Canada; the EC also urges the United States to open its borders to European products, as Europe has been more affected by the boycott.
Poland negotiating solo with Canada
The Polish ambassador in Canada chose not to wait for a trade agreement between the EU and Canada. He negotiated earlier this week with the Canadian Food Inspection Agency and was promised that Canada would speed up the certification process for Polish apples, which will allow their export. Additionally, Canadians are willing to sign agreements for other agricultural products. The negotiations between Poland and Canada started back in 2012.
EU compensation not enough?
According to the European lobby group Copa-Cogeca, European growers need more support from the EU to enter new markets. According to Copa-Cogeca, the EU's compensation budget is not sufficient, because price drops of up to 50% have been reported.
European top fruit growers are facing an extra difficult season. Interpoma describes the three challenges: firstly, an abundant apple harvest in most of Europe; secondly, large volumes of top fruit stored from the previous season; and thirdly, the Russian ban.
Switzerland stands behind Europe
The country had already introduced a ban on the trade of weapons and products used for military and civilian purposes: so-called "dual use products". The new sanctions are of a financial and technical nature. Russian banks need an authorisation to be able to access funds in Switzerland; however, the measures do not apply to the banks' customers, provided that they do not do business on behalf of the bank. Furthermore, Swiss financial intermediaries will not be allowed to set up new business deals with 11 Russians and Ukrainians, whose names have not been announced. The country has also stopped the export of equipment for oil and gas drilling in Russia. The Swiss government confirmed again not to be willing to collaborate on bypassing the Russian boycott on fruit and vegetables.
... but has close ties with Russia
The Alpine region is between two storms. On the one hand, it wants to maintain its neutrality, but on the other, EU countries have criticised Switzerland's position.
But there is more. Switzerland and Russia are economically closely linked. The Russians have invested an estimated $ 15 billion in Swiss banks, and 75% of Russia's oil and 66% of the Russian grain is traded in Geneva; an international marketplace for commodities.
Russia was disappointed about the steps taken by the Swiss and the Kremlin has questioned the region's neutrality, but is not planning to impose any sanctions against the export of Swiss cheese, watches or chocolate. The Russians do however expect that businesses will respond and perhaps withdraw their capital from the country.
Russia looks to Asia
In Naypyidaw, the capital of Myanmar, the Russian Minister of Economic Affairs attended a meeting of ASEAN, the Association of Southeast Asian Nations. Russia wants to increase food imports from these Asian countries to replace boycotted products. Last year, Russia's trade with ten Member States of ASEAN was worth $ 17.5 billion. "We are familiar with the high quality standards of your products and we welcome them in Russia," said the minister at the meeting.
Russia pursues a heavy increase in its investments in these Asian countries, which currently reach $ 1.6 billion. The country has plans to invest $ 20 billion in a project in Vietnam and 7 billion in a project in Indonesia.
The border between Kyrgyzstan, Kazakhstan and Russia has an 'emergency line' open for perishable products from Kyrgyzstan, such as strawberries and raspberries. The Russians are working on a direct route for agricultural products from Kazakhstan into the Russian market.
Russians await Greek fruit
Russian Food and Drugs Authority says that Greece can resume its exports to Russia once the sanctions are lifted. The authority wants to stay in contact with the Greeks so that when the borders are open, the Greeks can export without delay. Although Turkey is mentioned as a replacement for Greece, the Authority expects that the Greeks could resume their former position again after the boycott. For other countries it is different: "For some countries it will be almost impossible to regain their old position in the Russian market."
But as yet the Russian border remains closed for the Greeks, and Greek traders forecast large volumes of peaches this season in the domestic market. Traders expect "the best and most favourable prices for producers."
High expectations Tartars
The Tatars, in the Russian republic of Tartarstan, expect demand for its products from the retail to increase as a result of the penalties. The Tartars see an opportunity to market and promote their products across Russia. Reportedly, negotiations are underway with supermarket chains Auchan and Magnit.
Investment in processed fruit and vegetables and abuses in greenhouses
In the Belgorod region, the Morozko Company is considering investing in the creation of a line of processed and frozen vegetables. The complex would be able to process up to 15,000 tonnes of broccoli, green beans, onions and potatoes per year. Initially local growers were considered for their supply, but their production is too small; therefore, the company has set up its own 80 hectares, which next year plans to increase to 1,000 hectares.
The Russian Food and Drugs Authority discovered cases of serious regulation breaches in a greenhouse complex in Sverdlovsk. The inspection discovered, among other things, that the fertiliser was stored in the open air, next to cucumbers and tomatoes, and in another greenhouse chemicals were present two metres from the water and uncertified seeds were used.
Ukraine allowing GM crops?
The international research organisation Oakland Institute examined the deal with Ukraine aligning with the EU and other international institutions. Besides the geopolitical aspects that play in the conflict, the researchers point to a line from the agreement with the EU that may affect the Ukrainian agricultural sector; both parties will work together to increase the use of biotechnology. According to the researchers, this means that the use of genetically modified crops (GM) will be allowed, while the use of these crops was previously banned in Ukraine. This measure would give Western companies an advantage.
Furthermore, the Ukrainian government has approved heavy austerity measures and reforms in exchange for funds from the IMF and the World Bank which will lead to structural changes in the economy. This is the direct result of the new agreement that the Government had to close after having to discard the deal that the previous government had made with Russia.
Publication date: 8/29/2014
Author: Rudolf Mulderij