Price of pork still hogs the spotlight

  • 1999-01-21
  • Steven C. Johnson
RIGA - When the Latvian government withdrew its support for quotas on Estonian and Lithuanian pork imports last week, it appeared to have ended the Baltic 'pork war' before it even started.

But as the Agriculture Ministry considers a subsidy for local farmers instead, Social Democrats in the Parliament are looking to start hostilities anew. The faction introduced a bill that would establish the very same quotas and tariffs abandoned by the government.

"Latvian farmers had to slaughter 270,000 cattle last year. We cannot afford the same to happen with pigs," said Social Democrat MP Leons Bojars

With the Russian crisis creating a surplus of agricultural and dairy products in all three Baltics, the Latvians started complaining last fall about cheap Estonian imports undercutting its own producers. The government had been pushing quotas of 45 tons of pork and 13 tons of live pigs per month from Estonia and seven tons of pork and 22 tons of live pigs from Lithuania. Imports that exceeded the quotas would have been subject to tariffs equal to 42 percent of the price of the goods.

But criticism from Tallinn, Vilnius and the IMF, all of whom said the measures would violate the Baltic Free Trade Agreement, forced Riga to reconsider.

In a dizzying about-face all too characteristic of Latvian politics, Prime Minister Vilis Kristopans actually started leading the charge against his own government's proposals. "Parliament may come to the conclusion that we can do without this thing," he said during a press conference in Tallinn, just days before he decided to pull the proposal off the table completely.

The Social Democrats say that's no way for the general to comport himself in battle. Nor are they impressed with the Agriculture Ministry's plans to grant an as yet undetermined subsidy to local farmers.

"A one-time subsidy to a farm is not a solution to the problem," said Bojars. "There needs to be serious support." Some in the party, including faction leader Egils Baldzens, have even talked about a temporary ban on pork imports altogether, though this would certainly mean breaking the free trade pact.

"Those who signed the [free trade] agreement did not think about the consequences," said Bojars. "In all European countries, they invent something to protect their producers, such as special quality requirements. Latvia has just joined the WTO and the organization allows quotas for three years after joining."

That may change if the Kristopans government can convince the Parliament to accept proposed anti-dumping laws that would prohibit foreign producers to unload products on the Latvian market at an excessively low price.

For Fatherland and Freedom, one of the three government-forming parties, has said it will support the Social Democrats' bill.

In addition, the party might find unlikely allies in The People's Party, a pro-business, right-of-center group that's been long at odds with its fellow opposition members. To a point.

The party supported the government's decision to withdraw the quotas, but questions the wisdom of subsidies.

"The concern is if you subsidize those not able to compete, you do not work toward improving the quality of production," said People's Party MP Vaira Paegle, who said the government has been "indecisive" thus far.

Paegle said the party supports a long-term fix that would include improving product quality, weeding out those who can't compete, and establishing a system that allows the country to reject pork parts of unknown origin. Both the Social Democrats and the People's Party have criticized Estonia for using its zero-tariff, zero-trade policy to re-import second-rate pork imports from other countries to Latvia.

"Estonian farmers do not grow so many pigs as their export to Latvia would suggest," said Bojars. "It's clear we get pork of unknown origin."

But any possible collaboration among opposition parties ends there. Janis Jurkans, leader of the left-wing National Harmony Party that rounds out the opposition, said neither subsidies nor quotas will be good for Latvia in the long run.

"I think it's time we comply with our international obligations. Why should we support farmers who don't want to readjust and who think they still live in the Soviet Union," said Jurkans, espousing a decidedly free-market approach for a leader of a party regularly accused by its political colleagues of being communists.

The Parliament will tell. It could debate and vote on the Social Democrats' bill as early as Jan. 21. Bojars is confident. "They will definitely vote in support of it. If they don't, how can they look in the eyes of our farmers?"