Polish pork targeted for added duties

The situation with pork imports has heated up in Estonia, with both advocates and opponents of tariff hikes stepping up their arguments as the government poised to raise customs tariffs.

A government market protection commission decided last week in favor of a proposal by the Agriculture Ministry to impose temporary protection measures against the import of cheap subsidized pork.

When the measure is introduced, the import tariff for pork would rise from the present 10 percent - 33 percent to 20 percent - 66 percent, depending on the product.

The commission suggested to impose the temporary measure for up to 200 days.

Experts warned that if import tariffs are slapped on cheap Polish pork the prices of sausage products on store shelves may rise by as much as 20 percent.

Kalev Villem, board chairman of the meatpacker Villem Lihakaup, said that customs tariffs were a tax which in the end is always paid by the consumer.

"The prices of retail meat products have declined substantially thanks to Polish pork," Villem told the daily Eesti Paevaleht. "When the tariffs are imposed, the downtrend in prices would be reversed."

The planned tariffs would make Polish pork 6 kroons (0.40 euro) - 7 kroons more expensive per kilogram for the food industry, he said.

At present, meat processors pay 20 kroons - 21 kroons for a kilogram of Estonian pork and 15 kroons - 16 kroons for a kilogram of Polish pork.

"If Polish meat, which is of significantly poorer quality, can be obtained at 21 kroons, then the price of Estonian meat will rise to 25 kroons - 26 kroons due to its quality," Villem explained.

Agriculture Minister Tiit Tammsaar said that the market was sufficiently flexible and that protective measures against cheap Polish imports wouldn't have an effect on the local price of pork.

The price of raw materials is twice lower today than it was a year ago, yet this hasn't shown in stores, Tammsaar said. The price of Polish pork, together with tariffs, would be the same as the Estonian producers' price, said the minister.

Elmut Paavel, manager of the meatpacker Valga Lihatoostus, said that rather than protecting the domestic industry with double customs tariffs, measures should be taken to halt the import of subsidized pork from Poland.

"In my opinion the double tariffs are not the right solution, the government should instead halt the import of Polish meat, which is subsidized by the Polish government," Paavel said.

He explained that in neighboring Finland a kilogram of pork costs on the average 21 kroons - 22 kroons wholesale, while Poland is offering pork at the equivalent of 13 kroons - 14 kroons per kilogram.

"If the tariffs rise to 20 percent - 66 percent depending on the product for everyone, then this would basically mean big trouble, because then Latvia could act in the same way, and we would have a lot of pigs left. That would be a worse option in the end," Paavel said.

If only the import of Polish pork were banned, however, the price for the customer wouldn't rise, argued Paavel.

The share of Polish pork in total pork imports to Estonia has risen steeply in recent months - from 7 percent in January to 42 percent in the first 20 days of April.

Meanwhile, the Foreign Ministry stated that under a decision of the joint committee of the Estonian-Polish free trade treaty signed on April 25, eased terms for the export of several categories of farm products to Poland would step into effect from May 1.

The new trade regime abolishes some import duties and introduces additional tariff quotas for a number of products that are of interest for Estonian farmers, such as dairy and meat products, juices, food preserves and confectionery products.

Poland ranked as the 16th biggest trade partner for Estonia by the main trade system in 2002.