Written by Antonio Albaladejo Román.
What happened?
On 15 April 2023, the Polish government announced a ban on the import and transit of Ukrainian agricultural products until June 2023. The governments of Hungary, Slovakia and Bulgaria mirrored Poland’s decision, although Slovakia and Bulgaria’s ban do not prohibit the transit of agricultural products. Czechia has publicly ruled out similar measures. After reaching a deal with Ukrainian authorities on 18 April 2023, Poland agreed to lift the transit ban, but the import restriction remains. At the time of writing, no other EU Member States bordering Ukraine have adopted or announced a ban on Ukrainian agricultural products.
Why was Ukraine exporting grain through its neighbours?
Since the start of the full-scale invasion in 2022, Russia has deliberately targeted Ukraine’s agricultural production, and occupied or blockaded its Black Sea ports, through which most of its agricultural commodities were exported. Moscow’s objectives are twofold. By destroying Ukraine’s agricultural industry – an important share of its GDP – Russia aims to cripple the Ukrainian economy, and thus Kyiv’s will and ability to resist the Russian aggression. Additionally, by depriving international markets of Ukraine’s substantial agricultural exports, Russia seeks to provoke a global food crisis, putting pressure on the international community to concede to Moscow’s demands.
The EU and its international partners are responding to Russia’s strategy by helping Ukraine’s farmers maintain production levels, and by facilitating the export of Ukrainian grain and other agricultural commodities critical to global food security.
On 12 May 2022, the European Commission and EU Member States bordering Ukraine launched the EU-Ukraine Solidarity Lanes, allowing for the export of blockaded Ukrainian goods through EU road, railway and river networks. Additionally, the EU agreed on temporary trade liberalisation to facilitate exports to the EU single market and support Ukraine’s battered economy.
What was the effect of these measures?
EU solidarity lanes allow safe transport of much-needed Ukrainian grain and other agricultural commodities to international markets. Some 56 million tonnes of goods, including 29 million tonnes of agricultural products have been exported from Ukraine, thanks to the EU solidarity lanes. In combination with the United Nations-Türkiye sponsored Black Sea Grain Initiative, the EU solidarity lanes contributed to the stabilisation of international markets, and the steady decline in world food prices, following the initial disruptions caused by Russia’s invasion and averting a greater humanitarian crisis.
However, the influx of Ukrainian agricultural products into the EU also impacts regional markets in neighbouring Member States. In its recent agriculture short-term outlook report, the European Commission acknowledges that ‘the sharply increasing imports from Ukraine created oversupply, downward pressure on prices and saturated logistical chains in some EU regions’ (Bulgaria, Poland, Romania). Competition from Ukrainian producers, and the downward pressures on agricultural prices led farmers in these countries to call for the reintroduction of import restrictions.
How did the EU respond to these concerns?
The EU has devoted substantial support to European producers affected by rising energy, feed and fertiliser prices, including a €500 million package adopted in March 2022, and by approving national State aid measures which, in the case of Poland, reached €836 million.
Additionally, after the Member States affected raised concern regarding the consequences of the solidarity lanes for their markets, the European Commission mobilised €29.5 million in funding to support Polish farmers (€16.7 million for Bulgaria and €10 million for Romania), which could be complemented using national funds to reach 100 %.
What could be the consequences of the ban?
Trade policy is an exclusive competence attributed to the EU by Member States. Any restriction on agricultural imports from Ukraine therefore requires adoption at EU level.
The most recent Eurostat data shows persistently high food inflation in Hungary, Poland, Slovakia and Bulgaria – well above the EU average. As the European Commission points out, Ukraine grain imports brought agricultural prices down and compensated for production shortages in the EU after a hot and dry summer. Should the bans remain – particularly for transit – and given the uncertainty regarding Russia’s commitment to the Black Sea Grain Initiative, global food prices could rise sharply once more, affecting European consumers everywhere, especially if extreme weather continues during 2023.
What is the position of the European Parliament?
During the March II 2022 plenary session in Brussels, the European Parliament called for the establishment of safe transport and food corridors to and from Ukraine, as well as support for EU farmers affected by the war in Ukraine. On 24 April 2023, the European Parliament’s Committee on Agriculture and Rural Development (AGRI) is expected to hold an exchange of views with Markian Dmytrasevych, Ukrainian Deputy Minister of Agrarian Policy and Food.
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