Ukraine’s tariff-free access to the EU has caused a grain glut in neighbouring countries, tanking the regional agricultural sector and leading to complaints that Brussels is paying farmers too little compensation.
After Russia invaded Ukraine last year, the EU scrapped customs duties and quotas on Ukrainian grain imports and rerouted some of the shipments Russia was blocking in Black Sea ports via Polish and Romanian roads and railway networks. But the cheap Ukrainian grain suddenly available in those markets has undercut local producers.
“Farmers in Romania are the most impacted by the transit of grain coming in from Ukraine,” said Alexandru Baciu, who farms about 2,200 hectares of grain in south-east Romania. “They have deposits of unsold wheat from last year’s harvest . . . We have three months left and we have not managed to sell last year’s harvest because of this transit issue.”
At a European Council meeting in Brussels last week, the European Commission proposed that affected EU farmers receive a total of €56.3mn to mitigate the fallout caused by an “excessive supply” of Ukrainian grain imports. Romania would receive the smallest amount at €10mn, while Poland was allocated €29.5mn and Bulgaria €16.7mn.
In late January, Romania, Bulgaria, the Czech Republic, Hungary, Poland and Slovakia wrote a joint letter to the EU, calling for an “urgent response” to curb the impact of a “significant increase” on Ukrainian grain on local markets.
Romanian president Klaus Iohannis has accused the commission of ignoring the “huge sacrifices” his country has made in facilitating Kyiv’s grain exports to world markets and asked Brussels to increase the €10mn offered as compensation.
Baciu said the EU money offer was “tiny, if not to say a mockery of the issue we face”.
Romanian trade groups echoed this sentiment, with the Forum of Professional Farmers and Processors threatening nationwide protests next month over what it called “derisory” compensation.
During a visit to Bucharest on Monday, European Council president Charles Michel acknowledged the role Romania had played in setting up alternative export routes for Ukraine, adding that the country had brought vital revenue to its war-torn neighbour.
“But I know this has adversely affected Romanian farmers,” he said. “We should look into increasing this amount.”
Poland’s prime minister Mateusz Morawiecki has also asked for a higher amount, describing the offer from Brussels as “inadequate”. “The European Commission must help us more in this regard,” he said on Tuesday while on a trip to Bucharest.
EU members are set to vote on the farmers’ aid package on Thursday.
In Poland, cheap Ukrainian grain imports have destabilised the local market, with the regions most affected located in the south-east, nearest to Ukraine.
“Neither the Polish government nor the European Union is aware of the seriousness of the situation,” said Michał Kołodziejczak, a farmer and leader of agricultural movement Agrounia. He said authorities should only permit Ukrainian grain that was transiting to a final destination outside Poland.
The Ukrainian imports had also driven down the price of local grain, he added. “While last year grain prices were around PLN 1,500 per tonne, today prices are well below PLN 1,000, they even reach up to PLN 750.”
The governor of Lublin region, which is on the border with Ukraine, has recently highlighted Poland’s issue with failing to re-export most of the Ukrainian grain. Lech Sprawka told TOK FM radio last week that about 800,000 tonnes of grain entered Poland this year, but only about 4,000 tonnes were re-exported outside the EU, including to African countries.
Angry farmers have recently thrown eggs at Poland’s minister of agriculture, Henryk Kowalczyk, calling him a traitor and accusing him of destroying their livelihoods. Opposition lawmakers have seized on the anger and called for his resignation. The ministry on Wednesday is scheduled to hold talks with farmers, including about the government’s plans to subsidise the delivery of corn and wheat to seaports in a bid to incentivise the re-exporting of Ukrainian imports.
Logistics also pose an issue in Romania, where ports have mainly focused on Ukrainian grain and are now “full of goods” they cannot handle, said Cezar Gheorghe, an adviser to Romania’s agriculture ministry.
Besides compensation, the EU needed to invest in infrastructure, such as roads and railways, increase the capacity of trucks, barges and border personnel, and separate Ukrainian grain flows, he added.
Drone footage, seen by the Financial Times, shot near Romania’s Black Sea city of Constanța shows huge lorry queues backed-up around the port, which is part of the EU’s so-called Solidarity Lanes offering alternative export routes to Ukraine.
“In my 20 years of career in agribusiness, I did not see [queues] like that,” said Gheorghe.
