91998E3372

WRITTEN QUESTION E-3372/98

by Concepció Ferrer (PPE) to the Commission

(17 November 1998)

Subject: Crisis affecting the pigmeat and pigskin processing industry in the EU

The financial instability in Russia has resulted in numerous problems for pigmeat and pigskin processing enterprises trading with Russia. In the past five years, the total value of food products purchased by Russia from EU undertakings increased fourfold so that EU exports increased from PTA 218 000 million in 1992 to PTA 880 000 million in 1997.

As a result of the devaluation of the Rouble due to the financial crisis, companies which had made large investments in order to be able to meet the demand from the Russian market can no longer maintain the volume of exports to Russia and are thus incurring severe financial losses.

In view of the possible consequences in terms of plant closures and concomitant job losses, does the Commission plan to intervene in any way to alleviate the temporary effects on these companies of the closure of the Russian border as a result of the crisis?

Does the Commission not consider it necessary to adopt measures to allow the undertakings concerned to renegotiate loans or to take up special loans to help them overcome this financial slump?

Answer given by Mr Fischler on behalf of the Commission

(11 January 1999)

The exports of pigmeat from the Community to Russia have increased rapidly over the last few years, and in 1997 they amounted to 359 000 tonnes (product weight). In the first half of 1998 exports were still increasing, but were sharply reduced in August after a financial crisis hit the Russian economy. Since then the exports seem to be recovering slowly.

The rapid reduction in exports to Russia increased the pressure on the Community pigmeat market, which was already experiencing very low prices.

The Commission has taken several measures to help the European pig industry overcome the difficult situation. On 28 September 1998 the Commission introduced an aid for a private storage scheme (over 60 000 tonnes have been taken to the scheme during the first two months). In October the export refunds were raised for fresh and frozen products. In November, the Commission made an extra increase for the refunds with Russian destination (from ECU 40 to 70 per 100 kilograms for carcasses and certain cuts).

Also in November, the Commission agreed on a food supply programme to Russia, which includes 100 000 tonnes of pigmeat.

These measures should help the European pig industry to re-enter the Russian markets.