Russian sanctions hitting Maltese pig farms

Some Maltese pig farms could be forced to shut down as the impact of a Russian trade ban on European food starts to bite. 

“For some farmers, this latest politically-induced crisis was the last straw,” Pig Breeders Association general manager Oliver Frendo told MaltaToday. “Without any aid forthcoming, some of our members who have invested their lives and finances into their farms have already begun to depopulate. In some cases, entire families have been or will soon be forced to find other ways to make a living.”   

Russia imposed a year-long ban on food imports from the EU, the United States, Australia, Canada and Norway last summer in response to economic sanctions for Russia’s role in the Ukraine conflict. 

Although Maltese pig farmers do not sell their pork directly to Russia, the EU had exported 800,000 tonnes of pork to Russia each year before the embargo – and that represented a hefty 24% of the EU’s total pork exportation. 

As Labour MEP and economist Alfred Sant explained, the consequence of this sudden imbalance between pork supply and demand was a glut of pig-meat within the EU market. 

European pig farmers were inevitably forced to slash their prices, with some cutting them by as much as 18% within a few months of the embargo. Many EU pork producers cut their sale prices to below the Maltese production cost, making it tough for Maltese farmers to compete. 

This, Frendo said, has led to a “massive invasion of foreign pork into the market, led by large-scale importers whose only real concern is their bottom-line.”

Moreover, while the importers are certainly benefitting from cheaper pork prices, pork is still being sold to consumers at the original prices. 

“The Maltese farmer has been left with two terrible options,” Frendo said. “They must either slash their prices drastically to invade foreign markets in turn, or keep their pigs on their farm and continue to feed and care for them without any proportional increase in income. 

“All have suffered huge losses.”

Indeed, local pork sales were 10% lower in the first weeks of 2015 than they were in the first few weeks of 2014. 

‘Europe trying to minimise the problem’ 

Sant accused European Agriculture Commissioner Phil Hogan of attempting to minimise the severity of the problem.

“Early last fall, I asked the European Commission whether they will consider any form of aid to cover these circumstances, but they were non-committal in their reply,” Sant said. 

Last week, Hogan announced that the EU will financially aid pork producers to stockpile their pork products, so as to raise prices. While Maltese pig farmers may eventually benefit indirectly from this scheme, Frendo argued they will not receive any direct financial aid. This is because the scheme requires average local farm-gate prices to be lower than €1.50 per kg of carcass. Short supply chains and negligible transport costs allow Maltese farmers to keep their farm-gate prices relatively high.