Ukraine is a major grain exporter, but due to the war in the country, this export was endangered. Normally, it passes through the Black Sea, but Russia occupies Ukrainian ports and impedes the passage of ships.
Therefore, at the beginning of the war, grain got stuck. The European Commission then temporarily removed import duties on Ukrainian grain and other agricultural products. From now on, grain could be imported tax-free overland into the EU, and transported from there to the rest of the world, especially to Africa and the Middle East.
In addition, many EU countries have joined the ‘Grain from Ukraine’initiative, which comes from the mouth of Ukrainian president Zelensky. Belgium was one of the first countries to join in november. The aim is to finance grain shipments from Ukrainian ports. By the Summer, 5 million tons of grain should have been shipped. Zelensky said earlier that he hoped that in the first half of 2023, about sixty ships will transport grain from Ukrainian ports. This is mainly in Africa.
The grain from Ukraine that goes by land arrives first of all on the market of neighboring countries. And that bumps into the sore leg of five surrounding countries. The European member states Poland, Hungary, Slovakia, Romania and Bulgaria complain that their farmers are in trouble because of imports from Ukraine.
Take Poland. The grain from Ukraine piled up in that country earlier this year due to logistical problems, so it was not transported. Traders in these countries then bought up the grain from Ukraine en masse, because it is cheap (the longer the grain is on the road, the more expensive it becomes). Grain that was actually intended for passage was immediately traded. That caused the local price of grain to plummet. Consequence: the Ukrainian grain became a competitor to that of farmers in their own country, they complained.
But at the beginning of the war, the same farmers profited greatly from the fact that Ukrainian grain was stuck in Ukraine, argues Tom Van Goey, a Flemish agricultural entrepreneur in Ukraine. “They then sold their grain for double the price. It is therefore a bit too easy to lie crying that Ukrainians dump grain with them. We are now back in a more realistic situation. Grain prices are falling worldwide, ” he said.
In March, the European Commission allocated more than 56 million euros to help the disadvantaged farmers, but that was not enough, first of All, Poland thought. The country threw the ass against the manger, blocking grain from Ukraine to protect its own market. Hungary and Slovakia also imposed an import ban. Brussels was angry, because trade policy is a European matter and individual countries cannot cheerfully impose a ban themselves. This puts the internal European market at risk.
Nevertheless, the European Commission again met the complaining countries. In april, she pledged another 100 million euros to grain-affected farmers. Condition: Ukrainian grain must be re-admitted so that it can be transported. That seemed to solve the problem.
Twelve European countries, including Belgium, are now asking for clarification on this second batch of compensation towards eastern European member states, Politico reports. The editors were able to see a letter to the European Commission in which ministers from these twelve countries expressed concern about the agreement with the five countries, which they said “undermines the integrity of the EU’s internal market”. The agreement was concluded without consultation with all member states.
“The twelve countries say that the playing field is no longer equal,” says Professor of European politics Hendrik Vos (UGent). “They have the idea that other farmers in the EU are now More Sponsored. These countries say: our farmers cannot claim that money, which means that Polish and Bulgarian farmers can now work in a cheaper way.”
Probably not. The European Commission will want to avoid too much arguing, says Hendrik Vos. “She will try to nip this incident in the bud, because squabbling could play into Russia’s hands.”The European logic will be that some money will now be sought to appease these twelve countries, he predicts.
If it continues, other files could be linked to it that could disrupt the unity in the EU towards Ukraine, fears Vos. “About the relationship with Ukraine, about the promised candidate membership, about arms supplies. The EU is in danger of falling apart.”
According to him, the message will continue to be that the EU takes a united position on Ukraine, that grain can come to Europe by land, and that there will be compensation for all farmers who suffer from it.