WRITTEN QUESTION P-1874/00

by Michiel van Hulten (PSE) to the Commission

(6 June 2000)

Subject: European food aid to Russia

1. Has the Commission taken note of the report entitled Russians blame EU for pigs deaths' in NRC Handelsblad on 27 May 2000?

2. The report asserts that earlier this year, because French and German meat was being stored in the slaughterhouse at Jaroslavl, there was no storage capacity for pigs from local pig farmers, causing the deaths of thousands of Russian pigs. Is that assertion correct?

3. Does the Commission agree with its acting delegate in Moscow that the European aid package, worth US$ 500 million, has not disrupted the Russian market? If so, does it have figures to back up that proposition?

4. On what information is the acting delegate's statement that EU food aid to Russia has saved thousands of babushkas lives' based?

5. Does the Commission agree with a Dutch meat trader in Russia that EU food aid is putting pressure on prices in Russia and that the European Union and the US are rumoured to be dumping surpluses?

6. Is the Commission prepared to open an investigation into the impact of EU food aid on the pig market in Russia?

Answer given by Mr Patten on behalf of the Commission

(30 June 2000)

The Commission does not accept the criticism reported in the NRC Handelsblad to which the Honourable Member refers.

The food delivery programme was adopted by the Council in December 1998, after considering the request of the Russian government for assistance. Because of the poor harvest and financial crisis of 1998, the Russian government feared that there would be food shortages and speculative price rises in many Russian regions through the winter of 1998 and spring of 1999. To avoid this it was necessary to import a substantial quantity of food.

The products supplied were delivered to over 50 of the 89 regions of the Russian Federation and both the Community and American food delivery programmes (total quantity of about 5 million tonnes) had a significant impact in bridging the food needs deficit. As a consequence, prices for most food products rose gradually, rather than sharply as had been feared.

Before this crisis, around 85 % of Community food exports to the Federation (mainly beef and pork) went to Moscow and St Petersburg and the regions surrounding the two cities. These areas were specifically excluded from the Community food programme to avoid disruption to traditional export markets.

The proceeds from the sale of the food are being used for pension fund (80 %) and other priority social purposes (20 %). As a result the pension fund was able to clear arrears in full thus providing valuable income to those most in need. The total proceeds to be generated from sales will be about 7 400 million roubles ( 274 million) and it is generally acknowledged that this income has been properly targeted to ensure that the less fortunate have benefited.

The quantity of pork allocated to Yaroslavl under the Community programme was 5 000 tonnes, but the actual quantity delivered was only 2 413 tonnes. In fact, three of the four regional processing plants went bankrupt before delivery of Community pork, which demonstrates that the local industry was already in serious difficulty. Responsibility for discharge, internal transport, distribution and storage was the sole responsibility of the Russian authorities. However, the loss of three regional processing plants is likely to have been the main cause of any disruption in the market, rather than the presence of Community product in the cold stores. In relation to storage, the Commission considers that the percentage of total capacity utilised (private and state controlled) for the Community programme was negligible.

Under the terms of Council Regulation (EC) No 2802/98 of 17 December 1998 on a programme to supply agricultural products to the Russian Federation(1), the programme is being independently evaluated. The interim report of the evaluators has already been presented to the Council and a copy is sent direct to the Honourable Member and to Parliament's Secretariat. The final report will be completed in the near future.

(1) OJ L 349, 24.12.1998.