Belfast Telegraph

Tuesday 23 September 2014

Jobs warning on Russia imports ban

Putin's retaliation for sanctions has been described as a major blow to the Irish dairy industry

Ireland faces job cuts after Russia banned food imports from the West in a row over Ukraine, farming chiefs are warning.

President Vladimir Putin's retaliation for sanctions has been described as a major blow to the Irish dairy industry, which sells food worth tens of millions of euro to Russia every year.

Sean O'Leary, dairy leader within the Irish Farmers Association, said processing jobs at cheesemakers particularly will be hit as well as the income of farmers.

"This has really knocked us back," he said. "It is going to cost jobs and could have a severe impact on milk prices."

Last year Ireland sold food and drink worth 232 million euro to Russia, mostly prepared foods. Cheddar cheese and butter are among the big sellers of dairy exports worth 18 million euro.

Agriculture Minister Simon Coveney said he was worried particularly about the cheese industry which he estimated makes around 4.5 million euro from sales to Russia.

But Mr O'Leary said that figure sounded "totally wrong" and that the cost to Ireland's economy could be much more at a time when prices of other milk products were dropping after China cut back on imports.

"This is obviously a big blow, Russia being the largest market for EU cheese exports," he added.

Russian prime minister Dmitry Medvedev said at a televised cabinet meeting that the retaliatory ban covers all imports of meat, fish, milk and milk products, fruit and vegetables from the European Union, United States, Australia, Canada and Norway. It will last for one year.

But despite concerns by government and farming chiefs, John Comer, president of the the Irish Creamery Milk Suppliers Association, said European security was more important than any short-term losses.

"I think we could ride this storm," he said. "I wouldn't want to be seen as somebody who was whinging in terms of the loss of income to Irish farmers because of this."

Mr Comer accepted there will be a negative impact - because there is already a global oversupply - but he claimed it could be for the better in the long run.

"We have to find a new home for 4.5 million euro worth of cheese, it's not easy done overnight," he said. "In the short term it will have an impact on jobs and on production and farmers take home price.

"If you are one of those people that lose your job of course it is significant but I think when we get some time we'll be able to find new markets.

"Overall it might even have a positive impact on the market long term, it might force us to look at other markets and create other opportunities that will stand us in good stead in a year or two."

The Irish Dairy Board, which exports for Irish dairy companies and co-operatives to 90 countries around the world, would not comment on the development.

The ban is in retaliation for the US and EU freezing assets and banning loans on individuals and companies in Russia, which they accuse of increasing tensions in eastern Ukraine by supplying arms and expertise to pro-Moscow rebels.

It is expected to hurt Russian consumers too as experts believe local producers will find it hard to fill the gap.

EU Commission spokesman Frederic Vincent said it still has to assess the potential impact, and reserves "the right to take action as appropriate".

Agriculture Minister Mr Coveney said his officials are working to clarify the specific details of the ban.

"The impact on Ireland will depend both on the products covered by the ban and any knock-on effects on international market prices as banned product seeks replacement markets," he said.

The minister said Russia was an important market for Ireland in terms of increasing sales in the future.

"My department will maintain an ongoing assessment of the situation, where intensive engagement is already ongoing with Russian authorities regarding agri-trade issues including temporary restrictions already in place on certain exports in specific sectors," he added.

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