Meat processing crisis hits Crimea

15-Jun-2014 - Last updated on 16-Jun-2014 at 09:09 GMT

Crimean processors say it is too expensive to import meat from Russia

In the coming months the Crimean peninsula could be left without meat products, with almost all companies involved in meat processing at risk of bankruptcy, experts have predicted.

Since the annexation of Crimea, Russia has banned the supply of raw meat from the continental part of Ukraine, which has resulted in local meat processing plants left empty. And the situation has now become critical, according to local producers.

"All production and processing companies in Sevastopol [the largest city in the peninsula] are now being tested under the specific requirements of Russian veterinary laws, and Ukrainian meat usually does not correspond to these demands," said Andrei Kovalenko, director of locally-based meat processing enterprise Druzba.

"Due to logistical costs, it is simply unprofitable for companies to import meat from Russia. As a result, local businesses are cutting staff and have been forced to stop production for a while," he added.

Victor Pavlenko, director of local meat producer Crimean Meat, added that local meat processors appealed to the authorities to lift restrictions on the imports of raw meat from Ukraine, at least temporarily. According to information from Ukraine, the level of self-sufficiency in raw meat production in Crimea does not exceed 40%.

Local pork and poultry farms are also facing problems as Russian veterinary rules are stricter than Ukraine, and they are under pressure to modernise or they may lose the possibility of selling their meat products.

However, Vladimir Menyakin, head of veterinary surveillance in foreign trade and transport at the Russian veterinary watchdog Rosselkhoznadzor, promised state support to local producers and processors. "The business must wait for a while, and submit the application for financial assistance to the government. And it’s even better to consider supplies from foreign markets: South America, Argentina and or Europe. They may supply even cheaper meat," he said.

Low level of state support

At a recent government meeting, Russian Prime Minister Dmitry Medvedev announced that the state would provide support to meat producers and meat processing enterprises in Crimea, but that this support would be lower than initial forecasts.

This year, the Crimean and Sevastopol budgets will be allocated RUB340m (US$11m) in support for regional programs in the area of agricultural activity, and RUB70m (US$2m) to support the livestock industry, he said.

Agriculture Minister Nikolai Fyodorov, in turn, explained that, in 2014 in Crimea, a simplified procedure for granting federal subsidies will be implemented under the financial support for regional programs, without co-financing from the budgets of the Crimea and Sevastopol.

However, one local meat processor, which wished to remain anonymous, said local authorities initially promised them an amount of support for this year that was about two to three times higher than the current figure.

Also, from 2015, grants from the federal budget to the Republic of Crimea and Sevastopol will be carried out under general conditions in accordance with the state program.

This means that, from the beginning of the next year, any extra state support to meat producers and processors in Crimea will be cancelled.