RUSSIA READY TO AUDIT U.S. BEEF AND PORK

UNCLAS MOSCOW 002656 SENSITIVE SIPDIS USDA FAS FOR OCRA/FLEMINGS, KUYPERS; - OSTA/HAMILTON, BEAN PASS FSIS/HARRIES, DUTROW PASS APHIS MITCHELL STATE FOR EUR/RUS, EB/ATP/SINGER STATE PASS USTR FOR PORTER BRUSSELS PASS APHIS/FERNANDEZ VIENNA PASS APHIS/TANAKA E.O. 12958: N/A TAGS: EAGR ETRD TBIO WTO RS SUBJECT: RUSSIA READY TO AUDIT U.S. BEEF AND PORK FACILITIES REF: A) HANSEN/DUTROW EMAIL, B) MOSCOW 2620 SENSITIVE BUT UNCLASSIFIED ¶1. (SBU) SUMMARY: The Russian Federal Veterinary and Phytosanitary Surveillance Service (VPSS) informed via official letter that it is ready to participate in joint inspections of 31 U.S. pork facilities beginning September 29. In addition, VPSS stated its readiness to send a team of inspectors to jointly inspect 30 U.S. beef facilities in October 2008. VPSS requested a visit to several cattle and swine farms during the audits. Original scanned copy and courtesy translation were sent to USDA's Food Safety and Inspection Service (FSIS) on September 4 (REF A). An informal embassy translation of the letter follows. END SUMMARY. ¶2. (SBU) BEGIN TEXT: Moscow, September 3, 2008 No. FS-NV-2/8889 Assistant Administrator FSIS Office of International Affairs, USDA Dr. William James The Federal Veterinary and Phytosanitary Surveillance Service (VPSS) thanks you for your efforts in preparing a visit of Russian specialists to the United States for joint inspections of a sample of pork and beef establishments, which complies with the Agreement of November 19, 2006, on inspection and certification of U.S. establishments. In response to your letter dated August 8 and August 11, 2008, I would like to inform you of the following: We agree with your proposal to start joint inspections of U.S. pork facilities on September 29, 2008 and to organize three groups of inspectors. However, our proposals regarding the conditions of U.S. pork facilities audit in September and U.S. beef facilities in October 2008 described in our letter No. FS-GK-2/7899 of August 8, 2008 are still in force. In this connection, we ask FSIS to send us via the American Embassy in Moscow an official invitation for specialists listed in our previous correspondence (letter No. FS-GK-2/7899 of August 8, 2008),and also please send us the itinerary for the joint inspections. A list of Russian delegates with group allocations will be sent you shortly. �0A; In order to increase the effectiveness and likelihood of getting reliable results, each inspection group should include three Russian specialists who will audit no more then one establishment per day without any relation to which firm the establishment belongs to. Attached please find an amended list of the Russian delegation with group allocation. Please include in the joint audit program 2-3 farms suppliers of animals for slaughter at the beginning of the inspections. For your convenience please find attached passport data of Russian specialists and list of U.S. beef and pork establishments subjected to the inspection. Dr. James, please accept my assurances of the deepest respect. Attachment: 7 pages (not included in this cable) Deputy Head N.A. Vlasov END TEXT. ¶3. (SBU) On August 29, VPSS officially informed Post that it had delisted 19 U.S. poultry facilities, all of which were among the 39 facilities audited by Russian inspectors in July and August (REF B). VPSS stated that its inspectors found "large numbers of deficiencies" during the audit leading them to temporarily banned poultry exports from those facilities as of September 1. VPSS also issued a cautionary statement on 29 other U.S. poultry plants saying that product originating from those plants tested positive for arsenic, E. coli, Salmonella, and antibiotics. News first broke August 28 in a CNN interview with Russian PM Vladimir Putin during which he announced the outcome of the poultry audit and stated that the results had nothing to do with recent tensions between the United States and Russia over the Georgia conflict. ¶4. (SBU) Over the past two weeks, senior Russian Government officials have emphasized the need to protect the domestic agricultural sector from imports. Agriculture Minister Gordeyev announced August 27 that his ministry would focus on protecting Russia's poultry, pork and dairy sectors. Those sectors have been unprofitable because of poor management, the use of old technology, and rising input prices. Agriculture Minister Gordeyev stated that "the time has come to change the quota regime and reduce imports, which have unfortunately been on the rise recently" and hurt Russia's interests. He said that Russia had "been cheated, to put it mildly," and noted that quotas for pork and poultry imports could be cut by "hundreds of thousands of tons." ¶5. (SBU) On August 26, First Deputy PM Viktor Zubkov said the government planned to spend an additional 102 billion rubles ($4.1 billion) on domestic agriculture subidies over 5 years. Zubkov's announcement came after PM Putin and First Deputy PM Shuvalov stated August 25 that Russia should suspend or renegotiate some of the commitments made during WTO accession talks in an effort to support domestic farmers. -------------- COMMENT -------------- ¶6. (SBU) Given the recent statements from senior GOR officials calling for restrictions on agriculture imports, Post recommends that FSIS coordinate with FAS and APHIS to include a visit to cattle and swine farms, as requested in the VPSS letter. VPSS stated that its inability to visit U.S. poultry farms was one of the primary reasons for suspending imports from 19 plants, even though the U.S.-Russia poultry agreement does not contain a provision for on-farm visits during routine yearly audits by VPSS inspectors. Given the current protectionist rhetoric from senior GOR officials, it is certainly possible that the desire to protect domestic agriculture interests will be more important to VPSS inspectors than what they actually see on the ground. Nonetheless, post believes that the chances for more favorable audit results will go up if an effort is made to satisfy VPSS's request to visit a few cattle and swine farms prior to the audit. BEYRLE