Eastern countries of the European Union have introduced a temporary ban on imports of agricultural products from Ukraine in an attempt to protect their own agricultural sector. Poland, Hungary and Slovakia claim that local farmers cannot compete with increased imports of cheap agricultural products from Ukraine. Another country that has joined the countries imposing the ban is Bulgaria. Initial information says that the restriction should last until the end of June. There have also been protests by local farmers in Romania, but the country has not yet announced any restrictions on imports from Ukraine. Brussels, however, does not agree with the ban. According to a statement by the European Commission, the EU’s trade policy is solely in the hands of the bloc, and such individual actions by individual countries are unacceptable. But at the same time, the Commission has promised to take emergency measures and to redistribute EUR 100 million to farmers in the affected countries as compensation.
For some time already, the EU has been trying to help Ukraine facilitate its grain exports, for instance, by abolishing tariffs and quotas, in order to help its eastern neighbour keep its agricultural sector alive. However, this does not sit well with farmers from Central and Eastern European countries, who complain that they are losing their livelihoods. It should be noted that it is not just grain but also other foodstuffs such as eggs, poultry, sugar and apples. Farmers do not deny that support for Ukraine is particularly important in times of war, but the EU must do everything it can to ensure fair trading conditions for its own businesses too. Bulgaria’s agriculture minister pointed out that “a local surplus is being created on the agricultural market because countries are becoming warehouses instead of export corridors.” In the case of Hungary, there is particular talk of the opportunistic policy of Viktor Orbán, who often opposes the unanimous decisions of the European Union. Slovakia argues that pesticides have been detected in Ukrainian grain, which is not allowed in the EU.
The main problem, however, is that the countries of Eastern Europe were originally intended to serve only as transit routes for transporting agricultural food from Ukraine to the rest of the world after the invasion of Ukraine began. Russian side blocked the Black Sea port’s sea routes. Exports from Ukraine then came to a complete halt for several months. The agreement between Russia and Ukraine on the export of grain from Ukrainian ports was only concluded in July last year. Back in May 2022, therefore, the European Commission came up with a plan for alternative routes to export Ukrainian grain to the world by land – via Poland, Slovakia, Hungary, Romania, Moldova and Bulgaria. However, due to various problems and obstacles, a lot of Ukrainian grain, despite the original plan, remained in these countries.
Food exports from Ukraine are crucial, especially for poor third-world countries most affected by the food crisis. Ukraine is one of the world’s largest exporters of wheat, maize and sunflower products. However, since the war began, Ukraine’s food exports have fallen by 30% because of the fighting. Russia’s blockade of Ukrainian ports has also caused food prices on the world market to soar, and shortages of some staple foods have adversely affected poor countries in Africa, Asia and the Middle East that depend on imports. The UN has confirmed that the resumption of grain exports from Ukraine has helped to calm international food markets and bring rising prices under control.
Nevertheless, according to UN data, only about a quarter of Ukraine’s exports go to the poorest parts of the world. Data from last year suggest that 47% of exports were destined for European markets in Spain, Italy and the Netherlands. 26% went to China and Turkey. 27% went to poorer African countries such as Egypt, Kenya and Sudan. The war has caused Ukrainian agriculture to suffer considerably, especially in the eastern regions where fighting is intense. Although the situation has been brought under control by the resumption of Ukrainian food exports, including through a Russian-Ukrainian agreement allowing grain exports to world markets via the Black Sea, the situation remains precarious, where there are fears that the Russian side may change its position at any time. Moreover, the outlook for 2023 seems even more pessimistic, with the prospect of a significant reduction in Ukrainian agricultural production as a result of the war. The wheat exported to the world market last year was planted before the Russian invasion began. Likewise, all the necessary preparations, seeds and fertilizers were on the farms before the war, and their logistics in the current situation may be difficult. All these factors have a huge impact on the functioning of the agricultural sector in Ukraine. It is, therefore, crucial that long-term alternative solutions to the whole situation are adopted to avoid the negative impact of the expected decline in Ukrainian production on the situation in the world.
Photo credit: Canva.com