EU pledges aid for dairy

The European Commission on Thursday announced financial support for the dairy industry hit by Moscow's embargo on Western food imports.

Russia implemented a one-year ban earlier this month, targeting all meat, fish, dairy, fruit and vegetables from the European Union, the United States, Canada, Norway and Australia, in retaliation for Western economic sanctions over Moscow's role in the Ukraine crisis.

"Price signals on the European dairy market show that the Russian ban is starting to hit this sector," EU Agriculture Commissioner Dacian Ciolos said on Thursday, adding that the dairy sector needed "time and help to adapt" to the restrictions.

According to the European Commission, EU dairy exports to Russia were worth 2.3 billion euros ($3 billion) in 2013. Cheese accounted for almost half of that.

Under the dairy proposal, the commission said it would help cover the cost of storing surplus goods that had to be taken off the market for up to seven months - giving producers the option to sell their goods at a later date. The aid would apply to butter, skimmed milk powder and certain cheeses.

"This will ease the price pressure... It gives us time to find other markets where hopefully we can ... sell these products," said Ciolos' spokesman, Roger Waite, adding that cheese posed a particular dilemma because it doesn't store well.

Aid for fruit and veggies

The commission has not specified how much money it is prepared to set aside for the dairy industry. Unnamed EU officials cited by Reuters said the measures could cost between 10 and 20 million euros.

However, the proposed aid must first be formally approved by member states. If accepted, the support would add to emergency measures announced earlier this month to provide up to 125 million euros in compensation payments to fruit and vegetable producers affected by Russia's ban.

EU agriculture ministers are scheduled to meet in Brussels on September 5 to further discuss the consequences of Russia's import ban.

nm/hc (Reuters, dpa)