Russia import ban could cost Denmark billions

Russia's announced ban on the import of food products from the EU has the potential to severely impact the Danish agriculture sector, particularly if the ban extends to meat and dairy products.

Russia import ban could cost Denmark billions
Food sector exports to Russia brought in nearly six billion kroner in 2013. Photo: Colourbox
Vladimir Putin’s announced one-year ban on food and agricultural imports from countries that imposed sanctions on Russia has the potential to cost Denmark billions of kroner. 
Putin on Wednesday imposed one-year bans and limits on food and agricultural imports from nations that have imposed sanctions on Russia over its aggression toward Ukraine.
The impact on Denmark could be significant. In 2013, Denmark’s total exports to Russia accounted for 12 billion kroner ($2.2 billion). That corresponds to two percent of Denmark’s total exports and makes Russia Denmark’s 13th largest market. 
Among Denmark’s most important export areas to Russia is the food sector, which accounted for 5.76 billion kroner in 2013, counting agricultural technology. 
According to the Kremlin, food products will be directly targeted by the ban. The Kremlin’s statement said that Putin's executive decree "either bans or limits… the import into the Russian Federation of certain kinds of agricultural products, raw materials and food originating from countries that have decided to adopt economic sanctions against Russian entities and (or) individuals."
Russia will reportedly publish a full list of banned products by Thursday evening but sources have reported that the list will include all fruits and vegetables produced in the 28 EU nations. According to Reuters, Russian PM Dmitry Medvedev said meat, fish and dairy would also be banned. If that is the case, the impact on Denmark could be much more severe. 
According to figures from the Danish Agriculture and Food Council (Landbrug & Fødevarer), fruits and vegetables only account for a small percentage of Denmark’s agricultural exports to Russia. The biggest export by far is pork, which accounted for half of the total 4.3 billion kroner food export total to Russia in 2013. Fruits, nuts and vegetables only accounted for a combined seven million kroner. Dairy products however accounted for 686 million kroner, while Denmark exported 284 million kroner worth of fish to Russia and beef products totaled 178 million. 
Landbrug & Fødevarer said that it was worried about “the potentially serious situation” created by Russia’s announced ban and is eagerly awaiting the final list of banned products.

“It will be very serious, also for the Danish food sector, if Russia forbids or limits the import of agricultural products. For now, we are awaiting a concrete list showing which nations and which products will be covered by the ban,” Landbrug & Fødevarer’s administrative director, Søren Gade, said in a statement. 
Danske Bank analyst Steen Bocian agreed that it was hard to predict the impact on Denmark until the final list is produced but said that it might not be as bad for Denmark as it looks.
“Many of the items that can’t be sold on the Russian market will be sold in other markets,” he told Ritzau.

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Will Denmark see the return of mink farms in 2022?

After all mink breeders were last year forced by the government to close down their farms, discussions are beginning on whether the industry could return in 2022.

Will Denmark see the return of mink farms in 2022?
A mink at a North Jutland fur farm in August 2020. Photo: Henning Bagger/BAG/Ritzau Scanpix

All fur farm minks in Denmark were culled late last year and the practice banned until 2022 after an outbreak of Covid-19 in the animals at several farms led to concerns over mutations of the virus.

The mink industry was subsequently given a gigantic compensation package worth up to 18.8 billion kroner.

Parliament’s environment and food committee will meet on Tuesday to discuss whether to extend the current ban or allow the industry to return. Political negotiations were scheduled to take place following an orientation published the same day by the State Serum Institute (SSI), Denmark’s national infectious disease agency.

In a statement released on Tuesday morning, SSI maintained an earlier risk assessment that mink breeding constitutes an health risk of “unknown proportions” for humans in Denmark.

READ ALSO: Danish PM Frederiksen to be questioned over Covid-19 mink culls

The assessment, made by the agency in June, remains the position held by SSI, the infectious disease agency said.

“It is the general assessment of the State Serum Institute that breeding of mink in Denmark after 2021 could constitute a health risk for humans of unknown proportions,” the June assessment stated.

Three key risk factors were identified by SSI in June:

  • Breakthrough Covid-19 infections in vaccinated mink breeders and skinners
  • The potential of mink farms to act as an “infection reservoir” where the virus can continue to survive
  • Emergence of new Covid-19 mutations in the animals and their spread to humans

The SSI assessment was solely concern with potential risk to humans, and did not have the task of considering safety measures for reopening farms.

Prior to the release of SSI’s statement on Tuesday, the interest organisation for the mink fur breeding industry, Danske Mink, criticised the appraisal made by the agency in June.

The formulation of the assessment was imprecise and “quite erroneous”, Danske Mink chairperson Louise Simonsen said.

The earlier orientation did not give an accurate representation “both with the number of animals and with the vaccination situation,” Simonsen argued.

Around 1,000 mink farms operated in Denmark at the time the industry was shut down.

Simonsen, in comments prior to Tuesday’s SSI statement, said she was uncertain how many were likely to restart their shuttered breeding grounds.

“We’ve had several messages from breeders who want to start up. But that number won’t stabilise until we know what we’re looking forward to,” she said.

The Conservative Party said through its spokesperson Per Larsen that SSI should have conducted a “risk assessment using groups of, for example, 50,000 or 100,000 minks” to see how “vaccinated mink, vaccinated staff and weekly testing could work”.

“Saying there’s a risk of unknown proportions is of no use whatsoever. It could mean nothing or many things,”” Larsen said.