Too little, too late: “Abandoned” EU farmers crushed by Ukrainian food imports

20 Mar 2023 --- Farmers in Ukraine’s bordering nations like Poland, Bulgaria and Romania are being severely damaged by an influx of cheap grain imports from the war torn country that are flooding markets and pushing down prices.

In a bid to help Ukraine, the EU is spearheading an initiative to move as much grain as possible out of the Ukraine and into EU countries via trains dubbed “solidarity lanes.”

However, farmers in eastern European countries can’t compete with this tariff-free grain arriving in their markets.

“Not enough, not coherent”
On top of this, these farmers have been promised EU aid – the amount of which has not been revealed. But this aid is not expected until September and it will not reach all the affected countries, according to agri cooperative and farming organization, Copa-Cogeca.

“In effect, prices in local/regional markets have dropped causing a significant impact on farmers’ income,” Paulo Gouveia, chief policy advisor at Copa-Cogeca, tells FoodIngredientsFirst. 

“The Commission is not reacting swiftly enough. Our members had already flagged the concerns about market disruptions last year; Agricultural ministers had raised this in January during the Agricultural Council meeting, and, only now, the Commission comes up with a proposal,” flags Gouveia. 

Copa-Cogeca stresses that the EC must support Ukrainian farmers without neglecting farmers from neighboring countries.“But, more importantly, payments will only be disbursed by the end of September 2023. This is definitely not fast enough,” he highlights. 

Nonetheless, a last-second extension on the Black Sea Grain Initiative will provide a bit of relief for European farmers, as food that would have gone to Europe by trains, had the deal not been extended, will go toward global markets through sea routes.

The deal has been extended for 60 more days and is set to expire on May 18.

Abandoned farmers
Copa-Cogeca stresses that the European Commission must support Ukrainian farmers without neglecting farmers from neighboring countries. 

Farmers are already suffering from the cumulative impacts of the COVID-19 crisis, rising energy and input prices and from the severe droughts of 2022. The agri cooperative fears that some affected countries will not even receive any funding.  

“According to our information, the proposed Commission support targets Bulgaria, Poland and Romania. Other countries (e.g., Czech Republic, Hungary and Slovakia) had requested support during the January Agricultural Council meeting. The proposal doesn’t seem proportionate nor sufficient regarding the support for impacted farmers,” explains Gouveia. 

“Besides the continued market disruptions, farmers will continue to see their economic situation severely impacted. Furthermore, while some farmers will be supported, others will not and, therefore, a differentiated treatment to EU farmers will occur – this is unacceptable,” he underscores.

Copa-Cogeca also notes that the one-off payment the European Commission is proposing is inadequate as farmers should not only be compensated for the losses already incurred but will need further help as the situation – the war and its consequences – will not disappear anytime soon.

Black Sea Grain Initiative extended
As the deadline for renewing the Black Sea Grain Initiative loomed, all parties involved agreed to a second extension for the deal. 

However, in letters sent to the Turkish and Ukrainian authorities, Russia warns that they will not agree to further extensions until the implementation of the Memorandum of Understanding of the Russian Federation and the UN. 

Russia has issued similar threats over the last months – threatening to walk away from the deal more than once and even engaging in artificial blocks to the corridor via delayed ship inspections – but, so far, has always agreed to keep the food sea corridors going. The Black Sea Grain Initiative has mostly helped rich nations.

The Russian demands are reestablishing the SWIFT banking system of the Russian agricultural bank, resumption of supplies to Russia of agricultural machinery and spare parts and lifting restrictions on insurance and access to ports for Russian ships and cargo.

Furthermore, Russia wants to reestablish the ammonia pipeline Togliatti-Odessa and the unblocking of accounts and financial activities of the country’s fertilizer companies. 

While Ukraine’s VP for the Restoration of the country and minister for Communities and Territories Development and Infrastructure, Oleksandr Kubrakov, affirmed at the weekend  that the deal is extended for 120 days , Russian officials  said the same day that “any claim that it’s prolonged for more than 60 days is either wishful thinking or deliberate manipulation.”

Abandoned Africa

The deal has allowed the transport of 25 million metric tons of grains and foodstuffs to 45 countries since July 2022, according to the UN. Most of the food has gone toward food-secure rich countries.

This month four ships have sailed to Africa, carrying 27,000 metric tons of corn, 15,500 metric tons of barley and 2,700 metric tons of sunflower meal to Libya. One ship has been outbound to Kenya with 49,550 metric tons of wheat and another to Tunisia with 30,050 metric tons of corn – all totaling 124,800 metric tons of foodstuffs.

In comparison, some countries alone have received more food than all the African continent countries combined. China has racked up 1.05 million metric tons of foodstuffs this month, Spain 523,712 metric tons and Turkey 193,350 metric tons.

By Marc Cervera