EU Agriculture Commissioner Phil Hogan pledged to promote high-quality agricultural products and start negotiations on organic equivalence with top officials in Colombia and Mexico during the first leg of his ‘diplomatic offensive’ this week (February 8th to 12th).
Against a backdrop of falling prices, a slump in demand from China and oversupply on the market exacerbated by the ongoing Russian ban, the trip is well-timed, as it seems the only option available to the Commission is to trade its way out of the current agricultural crisis. Hogan is accompanied by a business delegation comprising representatives from 34 companies and producer organisations from fourteen Member States including Denmark, Germany, UK France, Italy and Ireland.
Top officials from Aurivo Cooperative in the West of Ireland (products include Connaught Gold milk and butter) and Ireland’s Ornua (formerly the Irish Dairy Board) are part of the trade delegation on the trip.
The Irish Commissioner is keen to tap into new market opportunities and show that Europe ‘is open for business … in particular for agri-food products.’ Speaking to reporters ahead of the visit to Latin America, he said the trade mission aimed at ‘opening doors for these companies.’
Both markets ‘are thriving and provide good potential for the dairy, pigmeat, fruits/vegetables, spirits and wine sector,’ he said, expressing his readiness to tap into ‘the enormous potential in these countries to improve our balance of trade.’ He described the current trade pact with Mexico (agreed in 1997) as ‘outdated,’ as it has not kept pace with economic development & population growth and said he would like to build on the existing free trade agreement with Colombia.
The next mission is planned for China and Japan after Easter starting off in Shanghai (April 16th and 17th), Beijing (18th and 19th) and Tokyo (20th to 22nd), with a trip to Vietnam and Indonesia on the cards for the second half of 2016. But the ‘diplomatic offensive’ is unlikely to stop there, with Hogan also eyeing new export opportunities in Iran – with an untapped market of nearly 80 million – following the lifting of trade restrictions and the elimination of UN sanctions.
Between January and October 2015, Iran imported around 43,000 tonnes of butter – up 29% on the same period in 2014 – with exporters eyeing further growth potential in milk powders and higher value dairy protein products.
European Agriculture Ministers travel to Brussels on February 15th for the first Farm Council under the Dutch Presidency, where the continuing downturn in dairy and pigmeat prices will be at the top of the agenda. The French are pushing for talks on new market rules and are seeking to ‘find allies in Europe.’
French President François Hollande met his German counterpart Angela Merkel in Strasbourg on February 7th where they discussed the recent crises in the farming sector. Commenting ahead of the meeting, French Farm Minister Stéphane Le Foll confirmed that he would send the Commission a list of proposed ‘market measures’ to address the drop in dairy prices.
The French Minister said he would like to ‘get things moving at European level’ as milk supply continues to outstrip demand. Le Foll slammed proponents of more liberalised trade, who say the market will readjust and find its own balance.
‘This is not my way of thinking,’ he concluded.
It will be interesting to see what Minister Simon Coveney will bring to the discussion on market measures and if he supports his age-old French ally – just a couple of weeks before the country casts its vote at the ballot box.
Rose O’Donovan is the Editor-in-Chief of the Brussels-based publication AGRA FACTS & a regular contributor to the video platform www.vieuws.eu