ICOS has welcomed the decision by the European Commission to facilitate the delivery of short-term export credit insurance for EU companies in light of the increased risks brought about by COVID-19.

Export credits allow buyers of goods and/or services to defer payment, therefore creating a risk for sellers, ICOS said.

“Given the current circumstances and increased volatility in normally stable and trusted markets, there was a surge in demand by EU exporters for insurance against this risk of payment delays or indeed payment failure,” the body representing the co-ops has stated.

Tip of the iceberg

However, ICOS believes this is only ‘the tip of the iceberg’ in terms of what is required to assist the agri-food sector, which is becoming increasingly more fragile as the pandemic unfolds.

ICOS and co-operative organisations from across Europe are jointly calling on Commissioner Wojciechowski, and DG AGRI to act now and activate market management tools, including private storage aid for butter, skimmed milk powder and cheese, to signal a boost of support for the market and prevent a drop off in milk price.

New challenges are surfacing for co-operatives on a daily basis

Vital derogations

Alison Graham, European affairs executive of ICOS said: “We see that dairy prices across the EU are falling. We know that as tough as things are now, they will only get worse if no action is taken.

“We are also seeking a number of vital temporary derogations from EU legislation to provide increased flexibility to support the logistics network and transportation workers. It is vital that we keep the chain moving, maintaining the delivery of critical inputs as well as the continued supply of exports across the EU and globally.

“We are learning from the experience of our cooperative colleagues in countries such as Italy, Spain and France, who are further ahead of us in terms of managing operations within a lockdown and facilitating the continued operation of logistics.

New challenges

“New challenges are surfacing for co-operatives on a daily basis as they try to maintain the collection, processing and distribution of milk and dairy products while maintaining the safety of farmers and staff and managing the surge of peak production.

“Irish dairy co-operatives produce a significant number of products for the food service industry, which was shut down almost entirely across much of the EU and US, over the course of a week, with no end date in sight for the restrictions. There is also a significant concern that there will be an economic downturn in our key markets, the US and China, but also in Africa and the Middle East,” she said.

Cost of exporting

Graham said the cost of exporting has increased considerably, due to both a shortage of freight containers and logistical staff in the transport network.

“In Ireland logistics companies were running at about 50-80% of normal capacity last week, with some workers ill or needing to self-isolate, and others not willing to travel abroad or even within Ireland, for fear of exposure. Our ports are also operating at considerably reduced capacity, with only one ship being unloaded at a time.

“With tighter restrictions on movement announced by the Irish Government on Friday evening, these operation levels are anticipated to fall further still over the coming week. This is slowing down the full chain, and cooperatives are struggling to get trucks and haulier companies confirmed for operations,” she said.

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