Concern over impact of Russian sanctions on Irish food industry

There is concern this afternoon about the possible impact Russian food sanctions will have on the Irish agriculture industry.

Russia announced today it will ban fruit, vegetables, meat, fish, milk and dairy imports from the United States, the European Union, Australia, Canada and Norway.

The move is a sweeping response to Western sanctions imposed over Moscow's support for rebels in Ukraine.

Minister for Agriculture Simon Coveney said earlier the impact, particularly the cheese sector, was a "real worry". Mr Coveney was speaking before the full list of affected foods was announced by Russia.

"I think the big worry in Ireland will probably be cheese – last year we exported about €4.5m worth of cheese to Russia. That would be a real worry for us," he told RTÉ Radio.

Mr Coveney said Russia had a dairy deficit and needed to import from somewhere but was actively talking to south American countries about substituting EU imports.

However Mr Coveney hoped the sanctions were “ not going to have a big impact on Ireland”. While the sanctions would have a “huge impact” on the EU fruit and vegetable sector that did not impact Ireland hugely, he said.

Mr Coveney noted Russia had already this year banned the importation of pigmeat from the EU because of swine flu in the Baltics and Ireland was no longer exporting dried milk to Russia.

In 2011 Ireland exported €150m of food and drink to Russia.

Russia wanted to inflict “maximum amount of damage” on countries imposing sanctions on Russia while minimising the impact its ability to feed itself. Certain products and countries will be targeted, he said. “We don’t know if Ireland will be on that list yet or the products from Ireland on that list yet,” he added.

While the Russian market was important Mr Coveney said he hoped it was something Ireland could cope with. He noted that Ireland was only 13th largest EU country exporting to Russia in terms of food and drink value, despite Ireland being a large food exporter.

Irish Farmers’ Association president Eddie Downey said as an export-led sector “any threat to a market for Irish food is a concern.” He said it was difficult to konw what the impact would be. The Irish farm family and Irish economy could potentially feel the pain of this, he said.

Mr Downey said the possible impact of the ban was “another example of external shocks that can lead to uncertainty and volatility on Irish farms”.

The development highlighted the importance of the Common Agricultural Policy (CAP) to provide a secure food supply for Europe, he said.

“This has to be the focus of future reviews of the CAP. There is a role for our Government also, to implement measures through the taxation system that tackle increasing income volatility,” he said.

Irish farming was “never happy to see markets being closed to our food and agri-exports”, president of the Irish Creamery Milk Suppliers Association (ICMSA) John Comer said today. Mr Comer noted that as a long-standing EU member it was important for Ireland to recognise the importance of acting together.

Irish farmers would “await the normalisation” of relationships with Russia , he said. He hoped this would come “sooner rather than later”. At this point Mr Comer was confident the excellence of Irish food exports and professionalism of marketing “would ensure that we would regain our Russian market share and begin to grow it accordingly.”

The decision by Russia follows a decree signed by president Vladimir Putin ordering the government to ban or limit food imports from countries that imposed sanctions on Moscow for its support of rebels in eastern Ukraine and the annexation of Crimea.

“There is nothing good in sanctions and it wasn’t an easy decision to take, but we had to do it,” Russian prime minister Dimitri Medvedev said. The ban is valid from today and will last for one year, he said.

Moscow is by far the biggest buyer of European fruit and vegetables and the second biggest importer of US poultry.

Foods banned by Russia today for import include:

- cattle meat, fresh, chilled or frozen;

- pork, fresh, chilled or frozen;

- poultry and its subproducts, fresh, chilled or frozen;

- all salted, dried or smoked meats;

- fish, shellfish, scallops and other aquatic invertebrates;

- milk and dairy products;

- vegetables;

- fruits;

- nuts;

- sausage and similar meat products;

- cheese and similar products.

Additional reporting Reuters