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Thursday, October 22nd, 2020

Speeches – Speech by Commissioner Phil Hogan at Interporc Conference (Madrid)

by October 18, 2016 General

Check Against Delivery

Minister Tejerina, Ladies and gentlemen,

Many thanks for inviting me here today. I would like to speak to you about the work the European Commission is doing to support your industry at home and abroad.

I would also like to share my thoughts on how I believe your sector must develop in the coming years to remain profitable and sustainable.

As Commissioner I have travelled all over Europe, meeting operators from every exporting sector. And I am convinced that if we make the most of our trading potential, agri-food sectors such as yours can be a key driver for prosperity, job creation and growth in the coming years.

People are often surprised when I inform them that the agri-food sector is the EU’s biggest employer, providing work for 22 million farmers and a further 22 million people in related industries. It must be our ambition to build on this strong foundation.

Let me begin by looking at the market situation for pigmeat products.

Broadly speaking, the pork sector in the EU has shown a strong performance in the recent years, despite the challenges encountered.

The sector continues to adjust and expand. In 2015 the EU was 110% self-sufficient in pigmeat.

In the same year, 2015, pigmeat production increased by 3.6% in the EU. Spain, Germany and France are the most important producers – together accounting for 50% of EU pigmeat.

In 2015 Spain became the first pig producing country with a total pig population of more than 28 million. This proves that all the investments and readjustment you have made in order to meet external demand has borne fruit: Spain increased its pigmeat production in the first 6 months of this year by 6%.  

This picture is also reflected at European level. In 2016, EU production increased by 2% up to June.

From a consumer perspective, pigmeat remains the most popular meat consumed in the EU, with an annual consumption of 32,5 kg/capita.

The EU average pig price has seen a tremendous recovery as of May this year, quoting currently at approximately 169€/100 kg, which is 12% higher than last year. This growth has happened in particular due to the excellent export opportunities on the Asian markets – mainly China and Hong Kong – as well as a long barbecue season.

Production is expected to stabilise in the months to come, with some Member States showing reduction in production for the first six months of 2016.

However, I would caution that while the current situation is positive, we cannot ignore the potential for challenges and risks down the line.

We have seen how sudden market shocks such as the Russian ban can negatively affect the sector.

I would remind you of the central role the Commission played in stabilising the market.

We repeatedly and consistently responded to the market crisis by mobilising more than €1 billion since my appointment as Commissioner to support a number of sectors, including yours. 

I believe that the measures taken by the Commission have paid dividends and made a decisive contribution to the positive market sentiment I mentioned earlier.

Thankfully, the EU pigmeat sector managed to find new outlets for its exports after losing the Russian market in 2014.

Indeed, I believe the potential for greater exports is the key to the sector’s future prosperity.

Currently, the EU exports around 14% of its pigmeat production.

We have seen a very positive development in the first six months of 2016: in the period Jan-July, exports showed an overall increase of +37% in volume and 34% in value compared to the same period in 2015.

China is the first, followed by Japan, Hong Kong, Philippines and the USA (+31%). By product category, there was an increase of +46% in total meats and +24% in lard, fats and offal.

Several initiatives taken by the Commission have helped to diversify and expand EU exports in recent times.

The promotion policy – of which your sector has been one of the leading beneficiaries – has proven to be an important tool. Our aim is to increase the consumption of EU products and gain new markets in an increasingly competitive world.

Under the reformed promotion system meat is eligible for promotion in all markets. Also, quality meats are eligible under the quality schemes.

In 2016 the budget for promotion measures has been increased to €111 million, including €30 million ring fenced for the co-financing of promotion measures for the milk and pigmeat sectors.

Furthermore, the export basket has been diversified, and the focus has been shifted more onto overseas markets, including emerging ones.  

The proposed annual working programme for promotion in 2017 will also support the pigmeat sector. I strongly encourage you to participate in the next call for proposals, which will be launched in January 2017.

In Spain, the EU has co-financed very successful promotion programmes of pig meat products, primarily under “Quality schemes”.

The case of “serrano ham” under the programme “Original Flavours: The Mediterranean Essence” demonstrates the positive benefits that promotion campaigns can have in terms of increasing market access and exports abroad.

To further promote exports, I have made it one of my priorities to ambitiously pursue new global markets. Significant progress has been made by the trade missions organized together with high representatives from EU agriculture and food business.

These diplomatic offensives have helped EU companies to identify export opportunities in expanding markets, but also to start to get rid of some trade barriers which EU exports are still facing.

I am happy to see that Spanish companies are among active participants in these missions – 7 pigmeat companies accompanied me in the mission to Colombia and Mexico, and 4 more visited China and Japan, of which Interporc was one.

Interporc will participate in the mission to Vietnam and Singapore in November.

And Invitations for missions to Nigeria and Canada in 2017 will be launched very soon and I encourage your organization to apply.

The Commission is also working to increase market access for EU agriculture.

As you all know, trade agreements are the key platforms for intensifying mutual trade and cooperation with our global partners. If you wish, following my intervention I can provide an update on a number of ongoing negotiations, including with China, Japan, TPP, CETA and Mercosur.

Let me also remind you of the efforts undertaken by Commissioners Malmström, Andriukaitis and I to bring down Non-Tariff-Barriers. Competition is at the root of any successful commercial operation both domestically and at international level. 

While respect for standards in the SPS area is recognized, an additional element to be taken into account is the common good dimension and the reputational value of high EU standards. It is in our common interest to defend these achievements.

“Safe pigmeat” requires safe feed, the safe use of veterinary medicines, the absence of antimicrobial growth promoters, and respect for hygiene requirements at the slaughterhouse. 

Finally, in case of a failure the rapid alert system provides the possibility of recalls.

The same is true for animal health: our ability to limit restrictions depends on our ability to control the spread of a disease and its eradication and to provide for a high level of accountability on the monitoring of the animal health situation.

All interested parties must therefore be fully aware that denting the reputation of EU SPS measures is damaging all EU producers because of the high level of interdependence. 

The Commission is ready to assist all EU producers facing unfair SPS obstacles and asks in return for their cooperation and responsibility.

Coordination and transparency among the different stakeholders and actors are essential to defending the single entity concept for the EU and to improve our market share in third countries. 

In conclusion, ladies and gentlemen, I believe the future is very bright for your sector, if together we keep doing the right things.

Last month I visited the Port of Rotterdam in the Netherlands. I watched as a container of European pigmeat was shipped to China – the top EU export product to this key global market.

It is extremely positive to note that there was a ubstantial increase in pigmeat exports to China in 2016.

I want to work with you to develop our export potential even further. At the end of the day, this means the creation of jobs in rural areas right here in Spain and throughout Europe.

Thank you for your attention.