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Pig Profitability Returning to Europe

by 5m Editor
10 September 2008, at 8:31am

EU - Rising feed costs have put European pig producers under pressure during the last year or so, but producer margins have improved gradually and are now approaching their long-term average, said agriculture commissioner Mariann Fischer Boel when she addressed World Meat Congress in South Africa yesterday.

Over the last 12 years, average pig producer margin was about £40 per 100 kilos, she said, but earlier this year it dropped “close to” zero. She acknowledged that in some member countries, margin was “even below” zero.

Analysis of the challenges facing the European meat sector should not mask its successes, she said.

“The European Union has responded very robustly to the food safety problems of the past. We have been rigorously enforcing high standards, and we have restored our solid reputation for safety and quality.”

She said it was not within her power to remove all uncertainty from the life of a farmer or a meat producer. "Nevertheless, I would like to see an environment which is as predictable as possible – in terms of trade, and in terms of domestic policy.”

It was an ongoing irritation that potential European meat exports were still shut out of markets around the world, without any justification. Some countries still used BSE as a pretext for banning beef imports, in a way that was not supported by the World Organisation for Animal Health.

The European pigmeat sector had not faced such a high level of trade disruption as the beef sector. Nevertheless, there had been a worrying development this year.

“So far this year, our pigmeat exports have been doing well. Then, very suddenly, the authorities in one of our biggest export markets – Russia - began blocking imports from various European companies, one at a time.”

The pretext given was the supposed presence of residues of antibiotics. But the antibiotic thresholds applied in Russia were far below admissible levels as laid out in international guidelines. Other countries around the world were faced with similar unexpected trade problems in the Russian market.

“Here again, I fear that food safety issues are being used as a smokescreen for protectionist behaviour. This is exactly the kind of measure that the meat trade does not need just now!”

Every country must apply rules to potential imports, she said, but these rules need not cause problems provided that they were reasonable, transparent and consistent. “Let's not have arbitrary restrictions.”

Fischer Boel said the break up of world trade talks a few weeks ago had been an enormous lost opportunity. “It was a chance to push ahead with a sensible, balanced package of trade liberalisation that could have brought widespread benefits – mainly, but not only, to developing countries.”

The European Union had strained every muscle to help get a deal, right up to the end, she said. “Admittedly, some people have actually breathed a sigh of relief. Parts of the Europe Union's meat sector were very nervous about what a successful Doha Round could mean.

“I can understand this – though I must say that some of the figures which certain lobbies used to support their case were misleading.”

5m Editor