July 23, 2013

 

EU to remove meat export refunds

 

 

Following a 20-year liberalisation process, the EU will scrap the last remaining export refund available for meat exporters, which was implemented to fund the difference between global prices and EU prices, where EU prices are higher.

 

The EU's Management Committee for the Common Organisation of Agricultural Markets: Animal Products has agreed to scrap refunds payable for exports of frozen whole chickens (65-70%) to certain destinations, notably in the Middle East and the Commonwealth of Independent States (ex-USSR countries).

 

With exports refunds on the remaining pig meat products being abolished last year, these poultry payments were the last of the subsidies.

 

For the first time since the 1970s, the EU no longer subsidises any products at all for export. "Twenty years ago EU spending on export refunds amounted to more than Euro 10 billion (US$13.2 billion) a year," said one Brussels source. "Successive reforms of the Common Agricultural Policy have led to a more market oriented and competitive sector, and spending on refunds has fallen steadily."

 

EU member states which benefitted from poultry refunds in 2012-13 were Bulgaria, Denmark, Germany, Spain, France, Italy, Lithuania, Hungary, the Netherlands, Poland, Portugal and Romania. France was the main beneficiary, supplying 94.7% of poultry exported with refunds, receiving 93.7% of the budget.

 

France was by far the main beneficiary, accounting for 94.7% of the quantities exported and receiving 93.7% of the Euro 55 million (US$72.6 million) budget. The French have reacted angrily to the move with the French government considering ways to respond to the move.

 

Several member states benefiting from this measure backed the European Commission's proposal to fix the refunds at a zero rate (so formally keeping them in place), while others abstained.

 

Commission representatives at the meeting argued the refunds were unnecessary because of high available poultry prices, the foreseeable reduction in feed costs (notably soy, corn and wheat) and increasing EU exports.

 

Available refund rates for frozen chickens had already fallen from Euro 32.50 (US$43) per 100 kilogrammes (kg) to Euro 21.7/100 kg (US$28.7) last October (2012), and then to Euro 10.85/100 kg (US$14.32) in January (2013). From July 1, 2012, to June 30, 2013, 264,754 tonnes of poultry meat were exported from the EU with refunds, on a Euro 55.36 million (US$73 million) budget.

 

Provisional data suggest that, over the past 12 months, a total of 264,754t of poultry meat was exported with refunds, which were available on frozen whole chickens to certain destinations, notably in the Middle East and the Commonwealth of Independent States.

 

In the recent CAP reform, it was agreed that the instrument of export refunds would be retained in future, but only for use in market crises.