Patrick O'Donovan (Limerick, Fine Gael)
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8. To ask the Minister for Agriculture, Food and the Marine if he will provide an update on the situation regarding EU exports to Russia; the response of the EU to assist those affected producers; and if he will make a statement on the matter. [42797/14]

Patrick O'Donovan (Limerick, Fine Gael)
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My question relates to the impact the ban on EU exports to Russia, the second largest market for EU produce, is having in Ireland and across the EU. The Minister might use the opportunity to update Members on any discussion between the EU and Russia or any bilateral discussions between Ireland and Russia on the matter.

Simon Coveney (Cork South Central, Fine Gael)
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The Russian ban on agricultural products from the EU came into operation on 7 August. Russia is the second most important destination for EU agrifood exports. These exports are valued at just under €12 billion based on trade in 2013 and the products covered by the ban are valued at more than €5 billion, representing 43% of the EU’s trade in agricultural products to Russia and over 4% of total EU agrifood exports.

The ban came on top of a series of other restrictions imposed by the Russian authorities earlier this year, including an EU-wide ban on pork due to an outbreak of African swine fever in Lithuania and an EU-wide ban on beef trimmings due to alleged adulteration of beef consignments with pork in certain member states. While beef trimmings from Ireland were banned, we were not one of the countries involved in the alleged irregularity. In addition, Russia imposed temporary restrictions on exports from Ireland of beef offal, dairy powder products and seafood arising from a series of routine audits. Two weeks ago - the week before I went to China - I had direct discussions with the Russian ambassador on that matter

The EU response to date has focused largely on the fruit and vegetables and dairy sectors, and the measures taken are as follows. Support for market withdrawals, green harvesting and compensation for non-harvesting for perishable fruit and vegetables has been put in place. There has been an opening of private storage aid for butter and skimmed milk powder until the end of the year. There has been an extension of private storage aid to certain cheeses. There has been an extension of the intervention buying-in period for butter and skim milk powder until the end of the year. There is a commitment to add €30 million to the existing EU budget for promotion programmes in 2015.

Additional information not given on the floor of the House.

The Baltic member states and Finland are acutely affected by the ban on dairy products and the Commission is under pressure to introduce a targeted compensation package. There is, however, an issue about the funding available for this and for any further measures that may be required. There is a proposal from the Commission to reduce the budget appropriations for agriculture in the 2015 budget. This is the subject of negotiation between the Council, European Parliament and Commission in the conciliation process for agreeing the EU budget for 2015.

At Monday’s meeting of the Agriculture and Fisheries Council an overwhelming majority of member states, including Ireland, called on the European Commission to reverse its proposal and to set aside sufficient funds to address the impact of the Russian ban and to address any other crisis or market disruption that might occur in the next year. Accordingly, the Italian Presidency has sent a letter from the Agriculture and Fisheries Council to the President of the ECOFIN Council to register the dissatisfaction of EU Agriculture Ministers with the Commission's proposal.

Patrick O'Donovan (Limerick, Fine Gael)
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The Minister referred to storage aid and intervention. Will that be reviewed on an ongoing basis by the Agriculture and Fisheries Council? The decision to ban produce from the EU came as a result of what Russia did in Crimea. As that will not be resolved any time soon and certainly not before the end of the year, I presume the measures the Minister mentioned should be extended.

I refer to particular sectoral difficulties. Exports from Ireland to Russia are approximately €150 million, which is less than 3% of the total export value. However, I presume that of that €150 million, some companies and some sectors are disproportionately hit. There will be some companies that may have an overexposure to the Russian market. Are there any supports from Bord Bia, the Department or elsewhere for such industries that will experience a bigger hit than the rest of the sector?

Simon Coveney (Cork South Central, Fine Gael)
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They are all relevant points. There are issues around products that we could, and should, still export to Russia, which are not covered by its embargo, as they call it, or ban. For example, even though milk powders are banned, dairy ingredients products and casein are not banned. There are similar issues for other sectors. However, further restrictions apply to Ireland because of inspections that happened here and, therefore, we are trying to resolve these to make sure questions the Russian authorities have following those inspections a number of months ago are dealt with. That is what I met the Russian ambassador about last week and we had a constructive discussion.

With regard to supports for companies and sectors that have specific problem, Bord Bia put in place a unit to deal with companies that have an over-reliance on the Russian market to look for alternative markets for them, and it has been active in that area. The mackerel industry springs to mind. Ireland is Europe's second largest exporter of mackerel to Russia. We have had to look at helping the industry to find other markets. I was in China last week and I noted that significant volumes of mackerel go through China to the Japanese market. We are trying to target and help companies that have an exposure to the Russian market and that are adversely affected by this issue. We are putting as much pressure as we can on the Commissioner and the Commission to ensure we have a sufficient budget to deal with this continuing problem, which is the result of a foreign policy decision as opposed to an agricultural decision. This should go beyond the agricultural budget in terms of the compensation and the solution.

Patrick O'Donovan (Limerick, Fine Gael)
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I encourage the Minister to keep storage aids and interventions under review because the issue between Russia and the EU will not be resolved before 31 December and there has to be ongoing support. I note his comments on the banking of fish quotas. I read the report on mackerel on his Department's website last week. Cheese is one product that has a particular exposure to this market. There are a large number of dairy producers in my constituency. The Minister mentioned infant formula and a large volume of this product is manufactured in west Limerick for export. There should be supports for sectors that have an exposure to the Russian market. I welcome that during the Minister's trip to China, he examined opening up new markets. That will be part of the solution. I hope the storage aids and interventions will be maintained by the Department and Commission into the future.

Simon Coveney (Cork South Central, Fine Gael)
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The Deputy is spot on. One of the main dangers is that there has been attempt by some in the Commission to transfer unspent money in the agriculture budget to other non-agricultural expenditure programmes. We have been seeking additional money for agriculture to deal with this problem because it is primarily a foreign affairs issue and there is a risk the agriculture budget could be raided. Commissioner Hogan is very much fighting against that. Earlier this week at the Council meeting, we gave him a strong endorsement of that policy to make sure money taken out of the agriculture budget would be used for programmes such as this and not transferred to other areas.

With regard to infant formula, a Wyeth product manufactured in Askeaton, west Limerick is the premium plus product on Chinese shelves selling at many multiples of the locally produced infant formula. It is one of the most successful products in the Chinese markets under the label Illuma. Other Irish companies, including Abbot and Danone, are doing this as well. The Chinese market for high-end dairy products, in particular infant formula, is accelerating at an exciting pace.