* Russia originally blamed food standards from Polish apple
* Moscow now declares broader ban is retaliatory measure
* Halt to Polish farm exports hurts farmers, economy less so
* Some Poles lament vocal criticism of the Kremlin
By Wiktor Szary
NOWE GROBICE, Poland, Aug 7 Slawomir
Kedzierski's workers had just finished loading 20 tonnes of
Polish apples onto two trucks destined for Russia when news came
through of the embargo. The fruit, and his business, had fallen
foul of the geopolitical crisis over Ukraine.
"The man who had placed the order rang up and told me not to
bother, because the apples wouldn't make it through customs on
time," said Kedzierski, whose Sun-Sad company is one of 800
Polish apple producers exporting to Russia.
Two days later, on Aug. 1, Russia officially closed its
borders to Polish fruit and vegetables, depriving farmers and
exporters of a market worth more than 300 million euros ($400
million) last year.
Moscow blamed repeated sanitary infringements by Polish
farmers, but the move was widely seen at the time as retaliation
for Poland's staunch support of Ukraine in its fight with
pro-Russian separatists and Warsaw's push within the European
Union for tougher sanctions on Russia.
"This is not about an infringement of any quality norms; the
decision is strictly political," Polish Agriculture Minister
Marek Sawicki told Reuters. "Russia is abusing (sanitary)
regulations for political reasons," Foreign Minister Radoslaw
Sikorski told a news conference.
The ban represented a targeted strike against the biggest
producer of apples in Europe, underscoring the EU's
vulnerability to retaliation as the bloc turns the screws on the
Russian economy, hoping to force President Vladimir Putin to
drop his support for rebels trying to break away from Kiev.
The EU and United States have slapped sanctions on allies of
Putin, businessmen close to the Kremlin and most recently the
Russian energy, defence and banking sectors.
This week Russia acknowledged its true motives. Putin signed
a decree on Wednesday ordering economic retaliation against any
country which had imposed the sanctions.
Then on Thursday, Prime Minister Dmitry Medvedev announced
sweeping bans on fruit, vegetables, meat, fish, milk and dairy
imports from the United States, the EU, Australia, Canada and
Norway, effective one year.
Medvedev also said he was considering banning flights by EU
and U.S. airlines through Russian airspace to the Asia-Pacific
region, responding to the grounding of a subsidiary of Russian
national carrier Aeroflot. This was forced by the
cancellation of a leasing agreement for the budget airline's
fleet due to the EU sanctions.
Banning such flights over Siberia would hurt Aeroflot, which
gets the fees foreign airlines pay for the right, but it would
also inflict significant costs on European carriers which would
be forced to fly longer routes and burn more fuel.
WINNERS AND LOSERS
Russia has traditionally reserved such punishment for
upstart members of its ex-Soviet backyard which are not part of
the EU, but trying to get there; these include the likes of
Georgia and Moldova, which have both suffered from Russian
import bans on their popular wines.
With the EU and United States frozen out, others stand to
gain from the huge Russian market. Timothy Ash, head of emerging
market analysis at Standard Bank, noted the potential for pork
and fruit exporters in Serbia, the dairy and meat sector in
Belarus, fruit and vegetables from Armenia - each country
well-placed due to their traditional ties with Russia.
"Inevitably, there will be some winners," Ash said in a note.
Agriculture Minister Nikolai Fyodorov said on Thursday that
Russia planned to step up imports of Brazilian meat and cheese
from New Zealand. The import bans would also be discussed with
Kazakhstan and Belarus.
Brazilian producers have already said they could ship more
chicken to Russia.
According to the Polish statistics office, Poland sold
Russia around 316 million euros' worth of now-embargoed fruit
and vegetables last year. Apples accounted for nearly 90
percent, with Poland having recently overtaken China as the
world's largest exporter of the fruit.
The Agriculture Ministry says over a third of Poland's
annual apple production of 3 million tonnes is sent abroad, with
around 700,000 tonnes going to Russia alone.
While farmers will take a hit, the overall effect on
Poland's $517 billion economy may be limited. The accumulated
effect, however, of escalating tit-for-tat trade measures
between Russia and the EU will take a toll.
Last week, in an interview with the daily Rzeczpospolita,
Deputy Prime Minister Janusz Piechocinski estimated that mutual
sanctions would trim 0.6 percentage points from Poland's
economic growth this year, previously forecast at 3.4 percent.
"In macroeconomic terms, the impact of the Russian embargo
on Polish fruit will not be significant," Jakub Borowski, chief
economist at Credit Agricole Bank Polska, told Reuters. "It
will, however, deepen the deflationary tendencies, decreasing
the inflation rate by 0.1 or perhaps even 0.2 percentage
The government, trying to limit any fallout on the coalition
that includes the Peasants' Party, is scrambling to support
farmers. Sawicki, the agriculture minister, said he planned to
meet executives of the largest supermarket chains and would
encourage them to give priority to Polish apple suppliers.
He also said he would ask the government to scrap taxes on
cider production until the end of the year and talk to the
Health Ministry about lifting a ban on cider advertising,
imposed as part of a drive to discourage young Poles from
Even with such emergency measures, Sawicki estimated the
damage at around 160 million euros this season.
This week, Polish campaigners took to social media posting
pictures of themselves taking a bite out of the forbidden fruit,
using the hashtag #jedzjablka, or "eat apples".
Statistics suggest the average Pole ate 13.5 kg (30 pounds)
of apples last year, down from 23 kg a decade earlier. "Eating
just one apple a day would provide significant relief for Polish
producers," Miroslaw Maliszewski, head of the Association of
Polish Fruit-growers, told a news conference last week.
Sawicki said the European Commission had recently granted 4
million euros for a marketing campaign to promote Polish apples
in India and China, part of an attempt to tap into new markets,
but success will take time.
The government is already showing the strain, with some in
the Peasants' Party, junior partner to the centre-right Civic
Platform, lamenting Warsaw's vocal criticism of the Kremlin.
Maliszewski, who is also a Peasants' Party member of
parliament, said Poland had got "carried away".
This week, the agriculture ministry filed a preliminary
compensation request to Brussels. "The EU stood together when it
imposed the sanctions on Russia," said Sawicki. "It must show
its solidarity with Polish farmers and take responsibility for
Kedzierski, whose trucks were held up by the ban, took
little solace. He usually exports to Russia a third of the
20,000 tonnes of apples he produces each year.
"Now I need to figure out where to send the 7,000 tonnes of
apples I used to send east," he said. "I don't get involved in
politics and nor do I want to. I'd much rather politics stayed
out of my business too."
(1 US dollar = 0.7476 euro)
(Additional reporting by Pawel Sobczak; Editing by Matt
Robinson and David Stamp)