Eurasian Union joins forces on food market development

By Aidan Fortune contact

- Last updated on GMT

A single food market policy is being developed by the Eurasian Economic Union
A single food market policy is being developed by the Eurasian Economic Union

Related tags: Agriculture

The Russian-led Eurasian Economic Union (EEU) will develop a single food market policy in order to avoid unfair competition between the players involved and replace import supplies worth a total of US$ 42 billion, according to recent statements by EEU officials. 

Along with Russia, the EEU also includes Belarus, Kazakhstan, Kyrgyzstan and Armenia and, in the past year, it has faced numerous trade conflicts between its members. These include a re-export scandal at the end of last year, when Russia accused Belarus and Kazakhstan of supplying prohibited products from Europe to its domestic market. At that time Russia threatened to ban imports of meat and dairy products from both countries, which in turn posed a threat to the very existence of the EEU, according to experts.

EEU Minister of Industry and Agriculture Sergei Sidorsky said that, first of all, member countries would look at joining forces to improve the scientific and high-tech base of their livestock industries. According to Sidorsky, the EEU largely depends on imports of breeding materials, seeds, plant-protecting products, veterinary drugs, compound feed and additives. 

For instance, in 2014, imports of these goods and resources reached US$4.3 billion. As a result, the competitive advantages of our producers are largely determined by the use of foreign technology, machinery and equipment. However, with currency devaluations [which affected the currencies of each member of the EEU last year], a high dependence on imports of capital goods and resources leads to a significant increase in costs and reduces the competitiveness of producers​,” he said. 

In addition, we still import large quantities of agricultural products - in particular, meat and dairy products - which we could produce ourselves. In order to fully replace imports of meat products, EEU countries would need to increase overall meat production by 15% in the coming years​,” he added. 

EEU Meat Council president Mushegh Mamikonyan added that an important point of the program lay in equalising parameters such as the Aggregate Measurement of Support (AMS). According to him, this would make competition between EEU companies absolutely fair. 

If we do not agree on the structure of AMS, there could be increased competition between the pig producers of Russia and Belarus, for example, with a simultaneous loss in price competitiveness compared to imports. By coordinating actions on the joint development of meat industries in the EEU, it is possible to determine the degree of specialisation of our countries in various areas, and implement support for producers in these sectors to a level sufficient to maintain their competitiveness​,” he explained. 

In his opinion, this approach would also allow the governments of each country to optimise spend on supporting their individual meat industries in order to make them more effective. 

Related topics: Meat

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