Commission still reluctant to step in and provide relief to distressed pig farmers – EURACTIV.com
Brussels has said it will not yet intervene directly in what is one of the worst crises for European pig farmers, as the EU executive is still confident the sector will find a way out on its own.
The European pigmeat sector is suffering from a perfect storm scenario with prices falling due to the impact of COVID closures on catering services and soaring input costs, coupled with lower exports to the EU. China and the spread of African Swine Fever (ASF).
At their last meeting in Brussels on Monday, January 17, EU-27 agriculture ministers discussed the issue and again called on the European Commission to put in place exceptional market measures for the sector.
However, the EU executive informed ministers that, while they share their concerns about the difficult market situation, now is not the time to intervene in the market at EU level, as the recovery of the sector could take shape.
“With recovery in sight, let’s not pretend that EU measures can solve all the problems,” EU Agriculture Commissioner Janusz Wojciechowski told ministers, adding that market players should take responsible measures in this regard.
For the Commission, there are clear signs of market recovery in the fact that piglet prices started to rise in October and this trend has continued, which shows producers’ confidence in the future.
Pork carcass prices also bottomed out in November and started to rise just before Christmas and continued into January. This is seen as encouraging as, in the normal production cycle, prices fall at this time of year before rising again in the spring.
On the contrary, an intervention from Brussels at this time would send the wrong signal and would in fact encourage producers to maintain or even increase their production, according to the Commission.
“I’m not ruling out intervention if necessary, but we have to make sure we don’t harm the situation,” Wojciechowski told MEPs in the European Parliament committee last week.
However, pig farmers remain concerned because, although prices for pigs and piglets have recently increased slightly, they remain below production costs.
In the first week of January, the average price for pork in the EU was €1.33 per kilogram for a carcass weight of 100 kg and €34.20 per head for piglets.
“The pork sector is going through the deepest crisis it has ever known. The prices are low, and even if they are not the lowest ever, the cost of production is the highest ever,” Antonio Tavares, chairman of the Copa-Cogeca pig working group, told EURACTIV, the lobby EU farmers.
He added that even the most efficient herds lose more than €40 per pig.
Wojciechowski suggested that member states use existing actions such as targeted national measures for the pig sector and rural development program funds in the Common Agricultural Policy (CAP).
Another tool already available are so-called de minimis agreements, which constitute a derogation from the general state aid rules and allow national authorities to support farmers without needing the prior approval of the Commission.
“These tools, which have been in your hands throughout the period, are the most appropriate to deal with the situation,” Wojciechowski told ministers.
However, the Commissioner has so far excluded the programs provided for in the Common Organization of Agricultural Markets (CMO), the “safety net” of agricultural markets in the event of a price crisis.
The support tools of the CMO include, for example, measures to compensate for market losses linked to veterinary measures taken to combat animal diseases or even derogations from the normal rules of competition for pigmeat producers with regard to concerns, for example, processing, storage or production planning.
Another exceptional measure is a very traditional form of EU public intervention known as private storage aid (PSA), which involves the temporary withdrawal of products from disrupted markets with the aim of reducing an oversupply to short term and restore some balance in the long term.
ASF in Italy
The first confirmed cases of African swine fever in the Italian regions of Piedmont and Liguria – close to the “Parma ham” region – also cast a shadow over the sector.
“I have to acknowledge that the ASF outbreak in Italy earlier this month is very bad news,” Wojciechowski told ministers.
It is not yet known how the disease arrived in Italy, but the genotype of the disease is different from that of the island of Sardinia where they have had an endemic situation for more than 40 years without an epidemic on the mainland.
“However, we hope the damage can be contained. The situation will nevertheless have to be monitored very carefully,” said the Polish commissioner.
Developments in Italy have already been followed by action in third countries with Japan and Taiwan having already banned imports of pork and pork preparations from Italy.
There were indications of similar actions in Switzerland, Kuwait and Japan, which worries pig farmers in Italy.
[Edited by Nathalie Weatherald]