The most serious current problem in European agriculture, i.e. the crisis situation that has developed on the milk, pork and sugar markets, was the topic of last week’s meeting of Visegrád Group (V4) Agriculture Ministers in Prague, at which Hungary was represented by Minister of Agriculture Sándor Fazekas.
The importance of the issue is indicated by the fact that Agriculture Ministers from Slovenia, Romania, Austria and Bulgaria were also present so that the statement adopted as a result of the meeting could be used to jointly call for the effective application of crisis management instruments on the part of the European Union’s Commission.
In his assessment of the situation, Mr. Fazekas explained that the process, which has resulted in the producer prices of major consumer foodstuffs having now fallen to well below cost price, has been going on for two years on the European agricultural products market. Consumers are perceiving nothing of this, because retailers are swallowing the price difference. The drop in prices is partly due to the drastic reduction in the price of oil on the world market, which has led to a reduction of demand primarily on the Chinese and Russian markets. However, a correction at the supply end of the chain is being delayed in view of long-term positive expectations, in addition we can count on a further increase in worldwide production. European producers now find themselves in a cumulatively disadvantageous position because in addition to global processes they have lost a significant market as a result of the trade embargo introduced against Russia, which unfortunately coincided with the phasing out of milk quotas by the European Union.
Similarly to his colleagues, Minister Fazekas thanked the Commission for last year’s aid package but clearly stated that he does not view it as sufficient for solving the crisis and accordingly is urging for the allocation of further financial resources. According to calculations by the Hungarian Chamber of Agriculture, the EU countries most affected by the introduction of the Russian embargo and the termination of the milk quota system have suffered losses of over 5 billion euros during the past two years, which has so far only been compensated with 500 million euros in funding. In his speech, Mr. Fazekas also mentioned the fact that to the best of his knowledge certain western retail chains refund significant sums of money to producers with relation to their own, branded products, a practice which he recommended should be investigated immediately. The Ministers of the regional meeting agreed that they have an interest in a strong Common Agriculture Policy that is capable of effectively reacting to global challenges, and which can be reformed via the in-depth evaluation of the current financing period and learning from the results.
Hungary has already applied every possible instrument within its national sphere of competence to alleviate the situation of farmers, but the situation at home is also worsened by the fact that uncontrolled shipments of VAT-free foreign milk – usually from Slovakia – are appearing on supermarket shelves, thus creating a hopeless competitive position for Hungarian producers. The V4 meeting provided an excellent opportunity for the Agriculture Ministers of the two countries to discuss both this issue and Hungarian-Slovakian agricultural relations in general. At the meeting, Gabriela Matecna, who was appointed Minister of Agriculture following the Slovakian general elections last year, assured her Hungarian counterpart of her full support and suggested that an agriculture working group be set up within the next two months to discuss various agricultural issues between the two countries.