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In response to Russia’s recent aggressive actions in Ukraine, the European Union (EU), together with other nations, imposed sanctions on Russia. In response to those sanctions, Russia quickly moved to boycott produce farmed anywhere in the EU, affecting everyone from Finnish dairy farmers to Polish apple growers to Spanish nectarine orchards. Finally, in response to the boycott, and noting the perishable status of such products, the EU has decided to double the budget available for promoting its farm goods.

Man holding corn cobThis latest move is a welcome one for farmers, who note that they cannot simply store dairy, fruit, vegetables, or meat until the conflicts are resolved. Instead, they need to find buyers to replace Russian purchasers of their products. Estimates suggest that Russia accounts for approximately 10 percent of the EU’s agricultural export market, equivalent to around 5 billion Euros, so the boycott represents a significant loss of business.

By making more money available to market and promote agricultural goods from the EU member countries, the initiative hopes to open new markets and expand existing ones. In the meantime though, as Russia defends its annexation of the Crimean Peninsula and expanding actions in the rest of Ukraine, the possibility of this sales channel reopening for EU farmers seems sadly remote.

SOURCE:James Kanter, “Hit by Russian Boycott, European Union Increases Marketing Budget for its Farm Goods,” The New York Times, September 3, 2014, http://www.nytimes.com

Discussion Question

What kinds of marketing should the EU and its farmers undertake with this additional funding to counteract the loss of sales to Russia?