The Russian Ministry of Industry and Trade has prepared a draft government resolution “on measures to protect Russian pig farming”, which includes a 35% increase on duty on imports of live pigs from the EU.
This would see the duty on live pig imports return to 40%, which is the level it was before Russia joined the World Trade Organization (WTO). The country dropped the duty down to 5% on 23 August as part of its WTO entry agreement.
The measure was developed after consultation with the Ministry of Economic Development and has received support from most of the government, including the Ministry of Agriculture and the Federal Customs Service. Only the Ministry of Finance and the Ministry of Foreign Affairs have disagreed with the move.
However, the decision to increase export duties must be approved by the Eurasian Economic Commission (EEC), which will first carry out a special investigation.
“[The EEC] has to conduct an investigation, which will show whether imports may rise in the market and whether it infringes upon interests of domestic producers. Statistics can be collected over one to three months,” said the deputy director of the Department of Trade Negotiations of the Ministry of Economy Development Catherine Mayorova.
Pig production losses
Experts have warned that the reduction of duty on the import of live pigs to 5% could result in large losses for the pig production industry. Director general of the National Union of Pig Farmers Yuri Kovalev said the experts at the EEC should recognise the impact that WTO accession is having on the industry.
“The industry is developing on subsidised loans. All pig farms are in debts to the banks, and it makes it difficult to compete with foreign producers. No questions on compensatory measures have been resolved yet. If the government does not accept [the resolution] then 30-40% of the companies will come close to bankruptcy. And if it takes compensatory measures in full, then only 10-15% of companies will go bankrupt, but this amount will be reimbursed by the growth of production volume from efficient companies. The whole pig community now expects concrete measures from the government,” he said.
The National Union of Pig Farmers has already send the request to EEC to conduct an investigation on the damage of Russian pig farming caused by the country’s entry into the WTO.