Negotiations over a European import ban on Ukrainian grain between the European Commission and its eastern flank members were stalled as of April 23.
Poland, Slovakia, Hungary, Romania, and Bulgaria asked to extend protection measures after the EU's one-year decision to abolish customs duties, while they claim Ukrainian grain glut threatens their domestic market.
After three days of negotiations between Warsaw and Kyiv, Poland agreed to ease its April 15 ban on Ukrainian food products passing into the country, authorizing transit under strict conditions starting April 21.
From now on, Ukrainian products will be sealed, with traceable devices attached, and ferried in special, guarded convoys to Polish ports and border crossings on their way to other countries so that "not a single ton of (Ukraine) grain will remain in Poland," Polish Agriculture Minister Robert Telus said on April 18.
Hungary, Slovakia, and Bulgaria also restricted imports while authorizing grain transit until June 30. However, the Polish Ministry of Agriculture plans to ask the European Commission to extend the import ban until the end of 2023, Telus said on April 25.
This episode marks the culmination of a long-running crisis over Ukraine's glut of agricultural exports on the European market, more collateral damage of Russia's war in Ukraine.
After starting its full-scale invasion, Russia blocked Ukrainian ports on the Black Sea, hindering Ukraine from exporting its grain via sea and forcing Kyiv to start exporting through neighboring countries, primarily Poland.
Soon, large quantities of cheap Ukrainian grain stayed in neighboring Poland, Hungary, Slovakia, Romania, and Bulgaria, affecting the prices and sales at domestic markets and causing an uproar among local farmers.
While expected, Poland's harsh decision shocked Ukrainian farmers. Roman Slaton, the head of the Ukrainian Agribusiness Club, called the decision "unfair."
"We were shocked by this news," he told the Kyiv Independent, calling it an "emotional decision" from the Polish government under the pressure of some Polish farmers complaining about the prices while blaming Ukrainian producers.
"But the situation is the same everywhere because it's a global trend," Slaton said.
Ukraine's overload of food exports to the European Union has become a thorn in Kyiv's relationship with its close neighbors against the backdrop of a long-running political conflict between these countries and the European Commission.
According to French-Polish farmer Hubert Bricout, the Polish government is using Ukraine as a scapegoat for its own mistakes.
"Everybody's panicking here," Bricout said. "The government is trying to find a scapegoat for its bad decisions, whether the EU or Ukraine."
In November, Poland's Ministry of Agriculture told farmers that they should keep cereals because prices would go up, said Bricout, who owns a farm in Poland.
As a result, 70% of farmers kept their grains, and the storage facilities are now filled to the brim.
"One of my neighbors has 60,000 tons, everything is full, and he can't sell anything," Bricout said.
Farmers are furious at Poland's executive branch, Bricout said. "The government is incompetent or cynical," he said.
Poland's governing Law and Justice party is scrambling to find a solution, sending contradictory messages to farmers, a key electoral base, before a general election in October.
"We've been talking about it since June, it's been two months since farmers riled up, and they still didn't do anything right (to make up for it),” Bricout said.
Ukraine produced about 54 million metric tons of grain in 2022, a drop of 37% compared to 2021, according to the Ukrainian Agribusiness Club's data.
The country exported roughly 38 million tons of grain, 24% less than the previous year, but these huge quantities affected neighboring countries.
Poland imported 2.45 million tons of grain from Ukraine, or the equivalent of three-quarters of its total imports from Ukraine between February-November 2022, according to the Polish Agriculture Ministry data cited by Reuters.
Despite heat waves that hit Poland in the summer, triggering fears of drought, Poland produced nearly 36 million metric tons of grain in 2022.
Poland needs to sell its own grain, yet can't due to higher costs of production compared to that of Kyiv and low shipping capabilities. It also can't store the grain due to a low number of storage facilities now also filled with Ukrainian and Polish grain.
As of November 2022, around 450,000 metric tons of Ukrainian grain were being transported via Poland monthly, over 50% more than in July, according to Andrzej Adamczyk, Poland's Minister of Infrastructure.
There's simply too much grain for Poland's storage capacity, Gerard de la Salle, the CEO of agriculture company Alfagro, told the Kyiv Independent.
"Poland doesn't have a lot of storage because they're not used to exporting a lot," according to De la Salle.
"They have 4 million tons per year in capacity; it's not even a month of Ukrainian export."
Ukrainian ports can export 5 million per month, while Poland can only export 500,000 tons, Bricout added. In January, Polish ports only exported 150,000 tons.
Slaton also said the Ukrainians couldn't control which grain volumes leave Poland and which stay there.
The grain is unloaded on the Polish border because the railway width between the EU and Ukraine is different, which means everything has to be unloaded in new trains.
"We don't know the exact figures of their imports or the transit, and they don't want to give it to us," Slaton said.
Poland's former Agriculture Minister Henryk Kowalczyk, who resigned recently over farmers' protests, said in March that the government and farmers' association agreed on more than $277 million in compensation for the losses.
But it won't be enough to cover the damages done, Bricout said.
"Some farmers lost 1,000 euros per hectare since August, it's huge," he said. "There's no way the government has enough to help everyone."
For Bricout, the solution is for Ukrainians to stop sending cereals for two months until Poland sells enough grain to free up its capacity.
Yet, Slaton still believes the ban won't influence the geostrategic relations between Ukraine and Poland, one of the staunchest supporters of Ukraine against Russia.
Ukraine had to resort to exporting its grain by land instead of ports, mainly due to Russia's invasion.
After starting its full-scale invasion of Ukraine, Russia blocked Ukrainian ports on the Black Sea, hindering Ukraine from exporting its grain and forcing Kyiv to start exporting overland through neighboring countries, including Poland.
Warsaw has been one of the first EU state members to pledge military aid to Ukraine while taking up to 4 million Ukrainian refugees since the beginning of the invasion.
Ukraine exported 95% of its grain through the Black Sea before Russia's invasion.
When the Kremlin's Black Sea fleet started blocking grain exports through Ukraine's southern seaports, threatening to destabilize the global market and creating famines in the Global South, the EU had to find a solution.
The European Union launched the "Solidarity Lanes" initiative in May 2022 while suspending import duties on Ukraine's agricultural goods to facilitate exports, a policy renewed for 2023.
As a result, 15 billion tons of grain have left the country overland since August 2022, according to the EU Commission's data.
When European Union foreign policy chief Josep Borrell said on April 17 that the "solidarity lanes" had brought 25 billion tons of grain, he included the grain exported through the Black Sea Grain deal.
The UN and Turkey-brokered deal, first signed in July 2022, allowing grain exports to leave the country via the Black Sea has been paramount in stopping global food prices from soaring.
However, Borrell pointed out a recurring problem, Russia's reluctance to fulfill its commitments.
Russia has "once again" blocked 50 ships carrying "urgently needed" Ukrainian grain in the Black Sea, Borrell said on April 17.
The Russian side also hinders inspections of Ukrainian boats, creating bottlenecks and spoiling the grain in boats that stay put for weeks, if not months, in Turkey's water, Slaton said.
Russian inspectors try to set up new rules to block the boats, he said. "There was no inspection these past few days," he said.
The timing of the ban couldn't be worse for Ukrainian farmers.
"It happens now as we have issues with the grain initiative, and farmers just started the seeding campaign," he said. "They don't understand if they should even seed at all."
De la Salle echoed Slaton's views, adding a grim foreboding.
"If the war lasts three or four more years, we're gonna ruin Ukraine's agriculture and their neighbors', too," he said.
Trade policy at stake
The European Commission tried to appease farmers in Poland, Hungary, Slovakia, Romania, and Bulgaria with 100 million euros in compensation as an immediate solution, Reuters reported on April 19.
The financial help comes atop a 56 million euros package provided in March.
The total package of 156 million euros is still far from covering everything, as the Commission has estimated farmers from Poland, Romania, Hungary, Bulgaria, and Slovakia have lost 417 million euros overall from the flow of cheaper Ukrainian grains into their markets.
The Commission also said it would take emergency "preventive measures," only allowing the grains to enter the five countries from Ukraine if they were set for export to other EU members or the rest of the world.
European Trade Commissioner Valdis Dombrovskis discussed the plans with all the parties concerned on April 19, reportedly asking them to drop the bans in exchange for a general ban on Ukrainian grain and oilseeds until June.
Poland, Hungary, Bulgaria, and Slovakia's unilateral decisions first provoked anger in Brussels because they overstepped the countries' capacity for trade policy, which is supposed to be the prerogative of the EU Commission.
"In this context, it is important to underline that trade policy is of EU exclusive competence and, therefore, unilateral actions are not acceptable," a spokesperson for the European Commission said on April 16.
According to De la Salle, such issues are only the beginning of an economic headache. The standoff shed light on underlying issues over Ukraine's integration into the EU.
If Ukraine became a member of the EU tomorrow, it would get the lion's share of the 386 billion euros of the Common Agricultural Policy, which rewards countries according to their agricultural area to subsidize farmers, according to Politico.
Ukraine's farmlands cover an area larger than all of Italy, and neighboring countries farmers are less than eager to compete against such a giant.
Ukraine's massive agricultural powerhouse could threaten the livelihood of European farmers if not properly regulated.
"The real question is, do we want Ukraine in the European Union?" he asked. Ukrainian farmers also have to understand that there won't be any integration without proper regulation and production quotas, he said.
Ukraine's free market goes against the EU's normative policy, he said. "And sometimes Ukraine is not ready to compromise."
Slaton nuanced De La Salle's statement. "We're aware of these concerns," he said.
"We don't blame anybody, we just try to work and survive," he said.
"There was some misunderstanding over the ban, we should just keep our emotions down, sit around a table, discuss the problems, and stop blaming each other," Slaton said.
Meanwhile, Polish farmers grow wary over a potential integration of Ukraine, Bricout said.
"They don't want it at all," he said, because they fear losing their livelihood.
"But it's too easy to blame Ukraine."
Note from the author:
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