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Saturday, December 16, 2017
 Squeezed Dry by Sanctions: German Dairy Farmers Cut Output to Increase Demand  

In October, around 10,000 dairy farms in Germany are due to reduce milk production, in a bid to increase demand for milk in the world market and drive prices back up.

 

The move comes as no surprise, given that the milk prices collapsed after Moscow introduced food embargo in response to the EU’s anti-Russian sanctions.


In an interview with Sputnik, Frank Feuerriegel, executive director of the Regional Union of Milk Producers of Lower Saxony, touted Russia as “our most important export market outside the EU.”


“This market quickly disappeared due to the embargo, dealing a heavy blow to the [German] milk producers,” he said.


Russian customers were the third largest buyers of German dairy products, such as butter and cheese, after the German domestic market and the EU market, he added, referring to milk producers in other EU countries who were also hit by the Russian food embargo.

 


Feuerriegel expressed hope for an early end to the anti-Russian sanctions, saying that “we always insist on a political solution” to the problem.


At the same time, he remained downbeat about the economic situation being improved quickly after the embargo is lifted.


“We do not expect that there will be great demand for German products in Russia as it was before. Firstly, the Russian market went through a process of self-regulation, and secondly, the purchasing power of Russians has decreased due to the sanctions,” he said.


Foyerrigel suggested that the milk prices will increase in 2017 as the EU currently tries to reduce the production of milk with the help of 150 million euro compensation package.


The United States, the European Union and some of their allies have imposed several rounds of restrictive anti-Moscow sanctions targeting key sectors of the Russian economy, as well as a number of individuals and entities.


The sanctions were slapped on the country following Crimea’s reunification with Russia and Moscow’s alleged involvement in the conflict in Ukraine, which started as Kiev launched a military operation in the country’s eastern regions in April 2014.


Russia has repeatedly refuted the allegations, warning that the Western sanctions are counterproductive and undermine global stability. In response to the restrictive measures, Russia has imposed a food embargo on some products originating in countries that have targeted it.


In July 2016, the EU Council prolonged the anti-Russian sanctions until January 31, 2017, and Russia responded by extending its counter-sanctions until December 31, 2017.


Source: Sputnik News
 


Posted on Friday, September 30, 2016 (Archive on Friday, October 07, 2016)
Posted by bholcomb@adpi.org  Contributed by bholcomb@adpi.org
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