Is there the threat of a new Cold War? And what are the consequences of Putin's rhetoric about federalism for domestic politics? Russian media also analysed the situation and concluded that an end to the economic warfare is still far away. The compensations in the EU are part of the policy of the Union, which since its inception has been focused on two goals: no more war; never hungry. Polish growers find the compensations too low and demonstrated in Brussels. In Bulgaria, the Ministry has already received the first applications for compensations. The Russian region of Stavropol published concrete figures on agricultural subsidies for 2015 and the national government is not considering price adjustments on boycotted products. Italy is searching for new markets, with a focus on Asia, North Africa and the Middle East.
New Cold War
The growing tension between the West and Russia is increasingly starting to look like a Cold War. Both Russians and the West cannot go back without losing face. Russia cannot just give up on the issue of separatism in Ukraine and the West cannot look away from the situation.
Although it does not have to come to a military conflict, the period of economic warfare can persist for a long period. The abolishment of sanctions often takes longer than their imposition.
Furthermore, in addition to an international conflict, Putin also has a domestic problem, describes The Moscow Times. By painting the separatists in Ukraine as federalists, he simultaneously creates a domestic problem. Russia consists of a patchwork of peoples and local and regional politicians are often appointed on the basis of their loyalty to the Kremlin. Several of these nations seek a form of autonomy; the Chechens are the best known example.
In the current situation, a debate about federalism in Russia is impossible, yet a debate on federalism is inevitable, especially now that Putin seems to support separatists on this point.China does not support sanctions
China reacted negatively to the additional EU sanctions. The country says that additional sanctions will only make the situation more complex. The Chinese are calling for a political solution to address the underlying problems in Ukraine. In China's position there are also different interests at play, including domestic politics with regard to regions like Tibet, which strives for more autonomy. They also want to avoid confronting Russia directly.
Compensations EU logical
The Belgian Growers Association argues on its website why EU support to growers is a logical step, pointing out the two principles on which the EU was created after World War II: never again war; never hungry. The latter resulted in a stronger focus on a common agricultural policy.
Moreover, the demand for food does not rise proportionally as the price drops. The non-harvesting of pears, according to the Association, is an understandable measure, because sharp price drops would entail trouble for many growers. The picking, sorting and storing are usually the costlier processes for a grower. By taking pears off the market before such expenses are incurred, the market is less affected.
Dutch sector surviving through crisis
The Dutch sector is currently still successfully shipping many products, for example into the European market. In this, traders face competition from e.g. Spain. Furthermore, other EU countries look for new outlets in the Netherlands. Winds and dark weather have predominated recently, so that the yield in the greenhouses is lower than previously expected; as a result, supply and demand have become more balanced.
Poland campaigning for apples
Russia was the largest buyer of Polish apples, accounting for more than half of the fruit's exports; the boycott has therefore deeply affected Poles. A social media campaign has started under the slogan "Eat apples to annoy Putin", but four weeks after the sanctions were imposed, Poles do not seem to be consuming more than before. Supermarkets claim sales have remained stable. Polish growers went Saturday to Brussels to demonstrate; they want higher compensations from the EU.
Bulgarian growers requesting compensations
The Bulgarian Ministry of Agriculture has already received the first requests for compensations from growers. The Ministry has forwarded this information to the European Commission, which sets the compensatory payments. According to experts, it is important for countries to report to the Commission as soon as possible, because compensation will stop when the money runs out.
Alternative markets for Italy
Like other EU countries, Italy is affected by the boycott. Approximately 3% of Italian fruit and vegetables went straight to Russia, in part through re-exports from, for example, Lithuania. Colleagues Freshplaza.it compiled a list of emerging markets that may be interesting for Italian products. For kiwis, China, Hong Kong, Malaysia, Singapore and Taiwan have potential. North America is also a popular option, like Brazil and the Middle East. These countries have in recent years imported more kiwis.
For apples and pears, North Africa and the Middle East are seen as markets where growth is possible. For pears, Brazil is also perceived as a potential market. Italian exports to these markets have increased in recent years.
For stonefruit and grapes, the greatest opportunities are in the traditional markets in Northern Europe. New potential markets are, among others, North Africa, the Middle East and countries such as Vietnam and Indonesia.
Belarusian company increases exports
Joint Venture Arnika, a company that has brought Belarusian, Dutch and French parties together, aims to significantly increase exports to Russia. Since 2001, Arnika cultivates apples, vegetables and soft fruit on 500 hectares. The company sells half of the production to Russian wholesalers and retailers. The boycott has increased the demand for Belarusian products, such as cabbage, raspberries, potatoes and apples, which are high in this period. The joint venture aims to increase exports next year. Over the past few years, the company's revenue has tripled.
Russia does not want to establish fixed prices
The government has rejected the proposal to establish fixed prices for products affected by the embargo. The government prefers self-regulation. The various parties have reached an agreement on a maximum of 10% this year.
Russia's motivation to boycott Moldova
In July, Russia imposed its first sanctions on Moldova. One reason for the sanctions was the Free Trade Agreement of Moldova with the EU. According to the Russians, by signing this agreement Moldova did not sufficiently take into account the interests of other countries in the Commonwealth of Independent States. Although Russia imported $ 3.6 million worth of vegetables and $ 121.5 million worth of fruit in 2013, the Russians think that Moldova will be used as intermediary to deliver European products to Russia.
Own cultivation Russia
In the Stavropol region, the state aid for the agricultural sector will increase next year. This year, the sector will receive 7 billion Rouble (143 million Euro) in subsidies, and next year this amount will grow by 6 billion Rouble (122.5 million Euro). The money will be spent on expansion of its own production and storage facilities. By 2018, the region should be able to store 300,000 tonnes of additional fruits and vegetables. The plan to support the agricultural sector dates back to 2013.