Why Eastern Europe wants tariffs on Ukrainian wheat back

Five Eastern European countries are asking Brussels to restore tariffs on Ukrainian wheat, or more aid to offset the increase in agricultural imports from Kiev. El Pais article

Ukrainian wheat, fruit of its fertile and coveted black soil, could open the first cracks in the common front of European solidarity with Kiev in the face of the Russian invasion. A few months after the Kremlin started a full-scale war, the EU suspended tariffs and import quotas on Ukrainian products (including wheat) as an economic lifeline for Kiev and as a way to fight the global food crisis caused by Russia's blockade of one of the world's granaries. Now, five of its Eastern European neighbors – Poland, Romania, Slovakia, Hungary and Bulgaria – have mobilized to ask the European Commission to provide funds and other tools to alleviate the "negative effects" of increased imports of agricultural products Ukrainians on their markets or to restore tariffs.

THE LETTER TO REINTRODUCE DUTIES ON UKRAINIAN WHEAT

In a letter to the EU executive, the heads of state and government of the five partners say that the absence of tariffs on grain imports from Kiev and the problems in getting grain out of the so-called corridors of solidarity – as an alternative to the blockade of Ukrainian ports – are causing a major bottleneck, flooding their markets and silos, driving down prices and harming their farmers. In the letter sent to the President of the European Commission Ursula von der Leyen, it is underlined that in the countries bordering Ukraine there has been an unprecedented increase in imports of cereals, eggs, poultry, sugar, apples, flour, honey and pasta.

Last week, Brussels released new aid from its crisis reserve fund, worth 56 million euros, to Polish, Bulgarian and Romanian farmers. According to a European Commission spokesman, it is considering launching a second aid package. In February, Brussels proposed extending the elimination of import duties on Ukrainian products until June 2024; the suspension of this scheme would require the approval of the member states, although some, such as the Polish commissioner for agriculture Janusz Wojciechowski, have already spoken out in favor of this option, which is not welcome in Brussels, as it does not believe that the interruption of the transfer market that Eastern countries are talking about concerns the entire EU club.

THE ANGRY OF EASTERN EUROPEAN FARMERS

Eastern European farmers are furious. In Poland, which is seen as one of Kiev's staunchest allies in the EU, protests by farmers in different parts of the country somewhat hampered Ukrainian President Volodymir Zelenski's visit to Warsaw on Wednesday. Shortly before the Ukrainian leader's arrival, Polish Agriculture Minister Henryk Kowalczyk resigned, citing the impossibility of reaching an agreement on a return to tariffs.

Imports of Ukrainian wheat have risen, in the case of Poland, from an average of about 100,000 tons per year to more than two million tons in 2022, according to data provided by Warsaw. Unions and farmers' unions say that unless the ultra-conservative Law and Justice (PiS) government announces new aid measures, there will be mass protests after the Easter holidays. Monika Piątkowska, chairwoman of the Polish Chamber of Grain and Feed, blames the government's inaction and the global situation, arguing that Ukrainian grain is not to blame. Some fear that solidarity with Ukraine, in an area that has stood out for its support in the early stages of the invasion, may be undermined.

IS SUPPORT FOR UKRAINE CRACKING?

There are already some signs that the situation is changing. Poland, which has welcomed 1.3 million people fleeing the Russian-led war, has halved its funding for aid programs and started charging for housing to some of those it welcomes.

In Poland, as in Slovakia, parliamentary elections will be held in the autumn. This, although both countries call themselves champions of support for Ukraine, also plays a role. “Let's support Ukraine, but let's do it wisely and, above all, put the interests of Poland and Polish farmers first,” Polish Prime Minister Mateusz Morawiecki said on Twitter these days.

In Bulgaria, where in recent days farmers have tried to block the customs border with Romania in a wave of protests, there has been a drop from 361 tons imported from Ukraine to over 16,700 tons. At the last European Council at the end of March, Romanian President Klaus Iohannis complained that the Commission did not take due account, in the calculations for the distribution of aid, of the country's "enormous sacrifices" to facilitate exports of cereals from State overrun. Ukrainian farmers have announced demonstrations for Saturday.

Exports of Ukrainian grains to Europe will be reduced this year. Farmers have sown much less, not only because of the lands occupied by Russia, but also because of the insecurity of working in a country that is under constant attack.

In addition to the recent problems with Ukraine's wheat, the grievances of its neighbors have brought to light the tensions that Ukraine's EU membership could bring. The Eastern European country, the largest in terms of area in Europe and with farmland covering a territory almost the size of Italy, would get a big chunk of the Common Agricultural Policy aid pie, which is divided among the states members based on cultivated area. Some countries are already talking about the need to reform the system in case of club enlargement.

(Excerpt from the press release of eprcommunication)

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/unione-europea-dazi-grano-ucraina/ on Sun, 09 Apr 2023 05:47:27 +0000.