Economist says milk ban may cause financial bleeding

Economist Leanid Zaika says that Russia's ban on dairy imports from Belarus would hit Belarusian farmers hard. Russia’s consumer protection watchdog Rospotrebnadzor banned the import of some 500 titles of Belarusian dairy products last week and later announced plans to add 800 more titles to the ban list. The agency cited the producers’ failure to obtain necessary permits in accordance with Russia’s new food standards in effect since December 2008.

On Tuesday, Prime Minister Syarhey Sidorski ordered Belarusian officials to end what he called “the war of words” with Russia over the export of dairy products.

Zaika says that Russia moved to stop Belarus' expansion to its market.

"Belarus' dairy export to Russia rose by 37 percent last year. Wasn't Russia supposed to react to that? The internal demand is shrinking amid the crisis, while Belarusians keep flooding it with milk," Zaika told ERB.

He says that the ban may lead to a loss of $200 million to $300 million for Belarus' economy. In addition, he says, farms may face a shortage of money to pay wages to farm workers.

"This is a geopolitical weapon. All 118 districts in Belarus may face a shortage of cash," Zaika predicts.

He adds that Rospotrebnadzor may also impose a fine on Belarusian dairy farms for failure to comply with the standards. It may be as big as $500 million. Belarus expects Russia to release the same amount of money as a loan.

Meanwhile, Belarusian officials have reportedly begun talks with Baltic states, Georgia and Azerbaijan and other possible destinations for milk export.

"No one waits for us in other markets. This is not a matter of days. It is impossible to capture new markets so fast," economist Mikhal Zaleski comments on the situation.

Photo — naviny.by