Will the swine flu cause a u-turn at the European Commission?
Paul-Florent Montfort, chargé d’études de momagri
The international headlines have clearly been dominated by the so-called “swine” 1flu, which broke out in Mexico, and now threatens to spread worldwide. In addition, discussions are currently being held regarding the real chances of this flu becoming a pandemic. This development has done nothing to help the already ailing French pork sector.
The crisis has caused the price of pork to fall on the international markets, 2as well as a possible decline in pork consumption following “panic” reactions. It also risks compounding the problems that the pork sector has been facing for the past two years. In fact, according to the National Pork Federation, close to 15% of pork farmers have been close to suspension of payments over the past few months. According to the Federation’s calculation, each producer loses 13 euros for pork sold today, because of the regular fall in prices, which is accompanied by an increase in input costs.
Within this context, the French government, at the start of April, announced the implementation of a 33-million euro support plan for the sector. In an effort to obtain the European Union’s assistance it has, therefore, multiplied calls to the European Commission, along with Germany and Ireland. This has so far proven unsuccessful: on April 24th, the European Commission opposed these intervention requests, and its Commissioner for Agriculture, Mariann Fischer Boel, argued for “price stabilization linked to a fall in production.”
But the Mexican flu could change things. Even though some experts agree that “neither the pigs nor their meat are vectors of the disease,“3 there are increasing numbers of embargoes being imposed worldwide. Two major importers, China and Russia (the 2nd largest importer worldwide), have already banned imports of pork from zones affected by the Mexican flu; and many other countries such as Thailand, Indonesia, Lebanon, Bahrain, Croatia, Serbia and Montenegro have followed suit. Egypt has even gone as far as deciding to immediately cull all pigs in the country, which has triggered riots by the country’s Copt producers.
In the light of these reactions, which could cause panic among consumers, the French Minister of Agriculture, Michel Barnier, reiterated his request for aid to the European Commission on Sunday, April 26th. He also demanded adequate measures adapted to the gravity of the situation in this sector, particularly, in the form of export aid.
Will the recent events cause the European Commission to make a u-turn on its decision? Nothing can confirm it will. Still, regardless of the decision it takes, it is interesting to question the tools available to public powers to deal with the upheaval on the international agricultural markets. For, as the example of the pork sector in face of the Mexican flu illustrates, during a crisis, the situation can quickly get out of hand, and even more so, if the sector is already weakened.
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