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Belgium: no compensation for non-harvest

8% of turnover Russian retailers came from boycotted products

An average 4-8% of the turnover of Russian supermarkets in 2013 came from the products that are now boycotted. However, retailers say that they are easy to replace, especially fruits and vegetables. The government takes into account a 13% inflation of food prices, which almost doubles previous estimates. In Europe, the distribution of the compensation and how it will be provided is becoming clearer, although Dutch and Belgian agricultural organisations insist on a quick resolution of the compensation scheme for the withdrawal of eligible products. The quality of Polish apples must improve for it to be able to enter the European markets, argues Professor Edward Makosz. Russia is still in talks with countries to increase trade, with Egypt, Tunisia and Uzbekistan currently in the spotlight. 

Initial figures new compensation EC 
After the European Commission prepared a new compensation scheme this week, there is now more clarity on the distribution of the budget. The Netherlands may, for example, withdraw 22,200 tonnes of apples and 6,800 tonnes of pears from the market with a reimbursement from the emergency fund. Belgians may withdraw twice as much, and Cyprus will receive 4 million to withdraw 19.2 tonnes of citrus from the market.

Belgium extends temporary unemployment scheme 
The Belgian government has temporarily extended the unemployment scheme for the fruit and vegetables sector. In October and November, entrepreneurs can benefit from the said scheme. Companies facing trouble due to the Russian boycott can temporarily send some of their staff home; staff which will get a daily allowance from the National Employment Service. How many companies have so far made ​​use of the scheme, has not been disclosed.

Only compensation for withdrawals of Belgian produce 
The EU compensation will be used in Belgium only for the withdrawal of products from the market and not for non-harvesting. In addition, the interventions must be carried out through a producer organisation. The products withdrawn from the market will be distributed among charitable organisations or processed in an environmentally friendly manner.

Pressure for quick start of compensations 
LTO Nederland, NFO and GroentenFruit Huis urged the Dutch Ministry to implement the new compensation scheme the European Commission proposed as soon as possible. The organisations stress that growers should get more clarity. Although the authorities are satisfied with the measure, they are also disappointed that the scheme applies only to direct exports. "It is unfortunate that the Commission in determining the amount of funding based on the direct export of each Member State to Russia, because the Netherlands also does many shipments to Russia through Lithuania," states Albert Jan Maat of LTO. That each Member State will receive additional compensation for each 3000 tonnes is considered a positive measure for LTO, NFO and GroentenFruit Huis. The organisations see this as a temporary solution to limit the damage. If the market is restored and prices go back to a reasonable level, growers will be able to resume their normal activities.

Polish fruit quality must improve
"The Russian embargo showed that many growers were only focused on the export of apples to this country. A large percentage consists of Idared, a variety which cannot be sold in other markets," says Professor Edward Makosz, president of the Development Association Karlovy Orchards. The professor admits that the embargo imposed by Russia will result in losses for many apple producers in the country. "For years, warnings have been raised about the need to improve the quality of the fruit," explains Makosz, "but many apple growers, which mainly focus on exports to Russia, saw no reason for change. They claimed that it was too expensive." 

According to Makosz, the Russian restrictions not only resulted in increased awareness about the need to improve; they have also led to a greater grower integration. Polish apple production this year will amount to at least 3.5 million tonnes (compared to 3 million tonnes last year). On the European markets, a substantial portion of the apples cannot find a destination.

In view of the high production of apples in many countries of Western Europe, Makosz believes that Poland will consider it a great success if they manage to export 300-350,000 tonnes. He says that part of the production will have to be processed into biogas and cider. The situation will worsen for 60% of producers. Until mid-September, the purchase price of industrial apples stood between 3 and 5 cents per kilo, while in previous years it had ranged between 12 and 15 cents. 

More export Egypt 
During a meeting with the Egyptian Minister of Agriculture, the Russian ambassador handed over a list of products that Russia wishes to import from the North African country. The list includes more than 60 agricultural products, including citrus fruits, peaches, grapes, pomegranates, dates, guava, aubergines, onions, potatoes, garlic, melons, artichokes, beans, strawberries, broccolis, cabbage, lettuce, watercress, cucumbers, carrots, parsley, leeks, celery, herbs, peppers and tomatoes.

Russia wants to import from Tunisia 
The Russian government also relies on the potential of Tunisian exporters after the boycott. Russia wants to increase imports from the country, including fruits and vegetables.

Omsk invests in logistics centre and cultivation 
The Omsk region is investing in a logistics centre and agricultural production to be able to ensure year-round supply. The complex has an area of ​​4,000 m2 and should have a capacity to process 100 MT of fruit and vegetables per day. This year, the centre aims to distribute 50.000 MT of fruit and vegetables. According to the regional government, Omsk will be 93% self-sufficient, and the biggest challenge lies in the distribution of the products. The complex also handles imported products; for example, it is equipped with ripening chambers for bananas. The storage capacity of the complex stands at 1.5 million MT; additionally, a tomato greenhouse must be built with an area of ​​3 ha.

Up to 10% of supermarket revenue came from boycotted products 
The main Russian supermarkets, including X5, OK, Dixy and Lenta, have published figures on the share of the boycotted products in their total turnover for 2013. On average, these products accounted for 4-8%, with a maximum of 10%. Fruits and vegetables, according to the retailers, were easily replaced. They have switched to fruits and vegetables, for example, from Turkey, Macedonia and Serbia, and Russian regions such as Krasnodar and Stavropol. Supermarkets however admit that quality is not always ideal. 
The Russian minister meanwhile has to deal with inflation on food products of 12-13%, which stood before at 7.2-7.4%. The boycott is especially affecting non-seasonal products. Of the 1.8 million MT of non-seasonal products, 1 million MT was imported. 

Government Rostov optimistic 
The Government of the Rostov region is optimistic about the potential of the region. According to the governor, the region can provide agricultural products for the local and domestic market. The agricultural sector is large in the region, with 13% of the Gross Regional Product coming from agriculture. Each year, the sector is growing. This year, the index should already reach 124%.

Bonduelle also hit by boycott 
Russia's boycott has also limited the growth of canning manufacturer Bonduelle. Due to the fact that the company's plants are located in Poland, it now wants to promote frozen foods in Russia. Bonduelle still has no plans to open a new processing plant in Russia. Bonduelle is represented in Russia by LLC Bonduelle Kuban, with two plants in Kuban. The company has an average growth of 10.000 MT per year. The market share of canned food in Russia is about 45.9%.

Increased trade Uzbekistan-Russia 
By 2016, Uzbekistan is expected to double its export volumes of fruit and vegetables to Russia, reaching 500.000 MT. According to official figures, the country exported 200,000 MT last year, which accounted for $ 300 million. This year, exports will grow by 50-70.000MT, reaching approximately 400 million dollars. Approximately 80% of the fruit and vegetable exports from Uzbekistan go to Russia. 
Uzbekistan's fruit and vegetable production grew last year by 8.4%, to 10.6 million MT.

Russian analysis: we can go on without imports 
The Russian website published an analysis of the situation in the Sverdlovsk region of central Russia. For fruit and vegetables, the conclusion was that the region is self-sufficient, but that there are problems with seeds and seedlings. Potato producers in the region, for example, require Dutch or German seeds, which are used for 70% of the plantations. This seed is more resistant to the climate in the Urals and results in higher yields. Russian breeders claim to have a variety with a yield of 60 tonnes/ha, which would be better than the European breeds. The problem is that the breeders cannot deliver it on a commercial scale, and that is also the conclusion of the analysis: Russia can survive without European products, but there are technical and organisational challenges.

Spar opens new stores in Russia 
In late September, in the Russian city of Biysk, the first Spar store opened its doors. It is an 'Express' store; a fast service shop with an area of 100-200 square metres. In December, a second Spar will be opened in Barnaul. This will be a "EUROSPAR" with a retail area of ​​1,000-3,000 square metres.
Spar International is the largest retailer in the world, with a total turnover of more than EUR 27 billion per year. Spar has more than 15,000 stores in 34 countries (mainly in Europe, but also in South Africa, Australia or Argentina). Russia has more than 300 stores in many cities across the country.