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.

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