Photo: Atlantic Council
In April, a number of neighboring countries of Ukraine decided to temporarily ban the import of grain and dozens of other food products from Ukraine. These countries include Slovakia, Poland, Hungary and Bulgaria. Romania also actively discussed the possibility of introducing similar restrictions. The process of banning Ukrainian agricultural exports outlined the prospects for the destruction of the so-called "Solidarity Lanes" established to help the Ukrainian economy against the background of Russian aggression.
Before the full-scale Russian invasion, Ukraine exported most of its agricultural products through ports. Thanks to the implementation of the Black Sea grain initiative, it became possible to resume export by sea in wartime conditions. Both the Ukrainian economy and the final consumers of Ukrainian products benefited from this initiative. At the same time, the state still cannot ensure the transportation of all exports by sea at the pre-war level. The ports of Mykolaiv are still not included in the "Grain Initiative", in addition, Russia prevents freedom of navigation in the Black Sea. Because of this, a significant amount of agricultural products is transported by rail and trucks through neighboring countries. The main country for the transit of Ukrainian grain is Poland.
In June 2022, the EU abolished all tariffs and quotas on Ukrainian products for 12 months. However, contrary to the decision of the European Union, a number of member states, namely Poland, Slovakia and Bulgaria, have banned the import of Ukrainian agricultural products. Romania also expressed its intention to introduce restrictions on imports.
The claims of the partner countries were focused on the quality of Ukrainian food, as well as the protection of domestic producers, which was probably the main reason for the protests and the subsequent ban. In Poland, protests took place for weeks. Local farmers could not stand the competition with Ukrainian producers, whose grain is cheaper. Therefore, the Polish government intervened and settled the issue of competition in favor of Polish farmers. After that, other states introduced similar measures. Elections will soon be held in Slovakia and Poland. So, the governments of the countries introduced restrictions in order to preserve their own internal political positions, taking into account the role that farmers can play in the elections. For example, in Poland, according to Polish statistics, 17% of jobs depend on the agricultural sector, which is a significant share of the electorate.
Also, in a number of Ukrainian grain samples, Slovakia found the pesticide chlorpyrifos, to which the EU has zero tolerance. At the same time, Ukraine is still not a member of the EU, and the countries of Central Europe received significant subsidies before and after joining the bloc in order to achieve the level of grain quality that is currently considered a standard. That is why it is more difficult for Ukrainian agro-industrialists to compete in terms of product quality. However, this should not be an excuse for Ukrainian suppliers, who should approach the standards of the European Union.
However, the problem was not only grain, because countries also banned the import of honey, a number of meat products, cereals, etc. The protectionist measures of the EU states actually violated the Association Agreement, and also called into question the unity of the policy of the EU countries. The EU immediately reacted negatively to the actions of Poland and other states and made efforts to solve the problem at the bloc level, because EU member states do not have the right to make such decisions without the consent of all 27 member states. The European Commission asked for evidence in the form of statistical data to substantiate the countries' claims and allow the EC to consider them.
In the end, the European Commission allocated 100 million euros for the farmers of Slovakia, Poland, Hungary, Bulgaria and Romania to settle the situation and agreed to ban the import of wheat, corn, rape and sunflower from Ukraine. This is a small amount compared to the 10 billion zloty ($2.4 billion) aid program for farmers approved by the Polish government.
The ban on Ukrainian exports hits the Ukrainian economy, which is heavily dependent on the export of agricultural products in the conditions of the Russian war. At the same time, it is worth noting that Ukrainian exports not only created threats for neighboring states, but also economic prospects. Bulgaria, Hungary, Poland, Romania and Slovakia together imported 4 million tons of maize and 1.3 million tons of wheat from Ukraine in 2022, compared to just 23,000 tons and 3,000 tons respectively in 2021. In percentage terms, these increases are 17,000% and 40,000%. Imports of sunflower and rape seeds increased by 3,800% and 900% compared to last year. Ukrainian products gave impetus to the processing sector of these countries thanks to relatively low prices. This is how a modern economy based on fair competition works: each state develops using its relative advantages. Therefore, Ukraine and the Central European states must ultimately find a balance and make a decision that will meet the interests of all parties. If this model of behavior is common for Hungary and Viktor Orbán's government uses every favorable opportunity to blackmail the EU in order to obtain subsidies and internal political rating, then a consensus must be found with other neighboring states. All these countries have already supported Ukraine's future accession to the European Union, therefore the introduction of unilateral restrictive measures does not correspond to the level and spirit of bilateral relations. The decision to ban the export of Ukrainian agricultural products is important to consider in the context of the start of negotiations on Ukraine's accession to the EU. The Central European states will probably try to achieve such conditions that would best suit the interests of their domestic farmers.
On a practical level, the problem with the export and transit of Ukrainian grain through neighboring countries lies in the insufficiently developed relevant infrastructure in these states. Poland does not have such ports as Mykolaiv, where grain can be stored for a long period. Therefore, one of the possible options for action is the creation of a common infrastructure for storing Ukrainian food. Such projects can be financed from EU funds or the Three Seas Initiative. In addition, the problem of exports can be solved if the freedom of navigation in the Black Sea is restored. The first step should be the expansion of the "Grain Initiative" to the ports of the Mykolaiv region. The final settlement involves the defeat of Russia in its war against Ukraine and the restoration of Ukraine's ability to export by sea.
Sources:
1. Пестициди у зерні і «чорнобильське борошно». Європейці прискіпуються чи насправді все так погано з якістю зерна? 27.04.2023,
URL: https://latifundist.com/interview/678-pestitsidi-u-zerni-i-chornobilske-boroshno-yevropejtsi-priskipuyutsya-chi-naspravdi-vse-tak-pogano-z-yakistyu-zerna
2. Charting Ukraine’s soaring exports to the EU, 27.04.2023,
URL: https://www.economist.com/graphic-detail/2023/04/27/charting-ukraines-soaring-exports-to-the-eu