In the dispute over Ukrainian agricultural exports, the European Commission has announced additional investments and financial aid to facilitate overland exports after the end of the grain agreement between Russia and Ukraine. Polish Agriculture Commissioner Janusz Wojciechowski said on Tuesday in Brussels after a meeting of EU agriculture ministers that he would work to support transport costs with EU funds. “Ukraine could get into a dramatic situation if it is no longer able to sell its grain,” Wojciechowski said. Transport over land is much more expensive than by sea. Russia is already speculating that, as a major agricultural exporter, it will benefit from the loss of Ukrainian exports. It is therefore “absolutely necessary that we get financing,” said Wojciechowski. How much that could cost is not yet clear.
A decision on whether the temporary import ban on wheat, corn, rapeseed and sunflower seed will remain in place after September 15 has been postponed until after the summer break. Further analysis of the issue will be carried out in September, Wojciechowski said. Last week, Poland advocated on behalf of Hungary, Romania, Bulgaria and Slovakia to extend the import restrictions “at least until the end of the year”, according to a position paper sent to the Council. “Anything that harms Polish agriculture must be blocked, replaced or compensated for,” Polish Prime Minister Mateusz Morawiecki previously said. From the Polish point of view, this has recently also included raspberries and strawberries, whose imports from the Ukraine are ruining prices for Polish fruit growers.
The danger of attacks on civilian cargo ships has increased
Like Russia, Ukraine is one of the world’s largest agricultural exporters. In particular, Ukrainian wheat, corn and other grains are considered essential for global food security. Before the war began, almost half of the sunflower oil sold worldwide came from Ukraine. Last Monday, Russia withdrew from the July 2022 grain deal brokered by Turkey and the UN. The danger of attacks on civilian cargo ships has increased. For the time being, overland remains the only way to sell Ukrainian agricultural products on world markets. This has increased the pressure on the so-called “solidarity corridors” – alternative export routes – promised by the EU and on the EU states bordering Ukraine.
According to EU information, 40 percent of the grain was recently exported via the Ukrainian ports on the Black Sea. The rest reached the EU by land and waterways and from there, if they were not stuck within the international community, via ports on the Baltic Sea and the Adriatic Sea and from Constanta in Romania to the rest of the world. In the short term, however, the EU capacities are not sufficient to compensate for the loss of the Black Sea route. From the entry into force of the grain agreement until mid-May this year, more than 1,080 ships and more than 30 million tons of food left Ukrainian ports.
As part of a solution, ahead of the meeting of EU agriculture ministers, Lithuania proposed by letter to the Commission to complete customs procedures and sanitary controls for Ukrainian grain in the Baltic Sea ports of the Baltic countries. As a result, the transports from the Ukraine were not stuck at the Polish border and could be accelerated. The Baltic Sea ports of Lithuania, Latvia and Estonia have a large handling capacity, a total of 25 million tons of grain can be processed a year.
In spring there were protests by farmers in Poland because raw materials from Ukraine had not been transported onward. Instead, they stayed in the country, silos were full, prices fell, Polish goods could not compete with the cheaper imports. Poland, Hungary, Slovakia and Bulgaria then arbitrarily blocked the import of Ukrainian grain; Romania had considered joining. The Commission reached a compromise with the five countries in May, promised them 100 million euros in emergency aid for farmers and imposed import restrictions until September 15. Only transit remained permitted.
Ukrainian President Volodymyr Zelensky expressed his displeasure with the import ban on Monday. “Any extension of these restrictions is absolutely unacceptable and clearly not European,” he said in his video message that evening. Led by Poland, the five most affected EU countries insisted on Tuesday in the Council of Agriculture Ministers to extend the measures. Poland’s Prime Minister Morawiecki recently announced that, if necessary, he would arbitrarily block Ukrainian agricultural products again.
The EU also wants to invest in the development of logistics
Federal Minister of Agriculture Cem Özdemir criticized this as an election campaign maneuver. “It’s not a wish, where you pick out what you like, take money from Brussels, but at the same time close the border,” said the Greens politician in Brussels. It cannot be “that solidarity with Ukraine is undermined because of a domestic election campaign”. The task now is to strengthen the alternative export routes, and that would depend on the EU Commission.
They had a spokesman tell them that the solidarity corridors were already working very well; In May and June alone, more than three million tons of Ukrainian grain were exported. In addition, “very extensive investments” in the required infrastructure in the EU are already planned. It would be conceivable, for example, to upgrade ports. This can also be understood as a reaction to the Polish Minister of Agriculture, Robert Telus, who on Tuesday urged financial aid for the affected EU countries to improve transit. The EU must help build the infrastructure, said Telus.