The temporary bans on tariff-free Ukrainian cereals should be prolonged until the end of the year, Janusz Wojciechowski, European Commissioner for agriculture, has said in comments that contradict the executive’s line.
The prohibitions have been in place since 2 May and apply to five members of the European Union located in Ukraine’s periphery – Poland, Hungary, Slovakia, Romania and Bulgaria –, who complain the grain glut has depressed prices for local farmers.
Under the bans, four products coming from Ukraine – wheat, maize, rapeseed and sunflower – can transit through the five Eastern European countries but cannot stay inside their markets for domestic consumption or storage purposes.
The measures are extraordinary in nature and have been vigorously criticised by the Kyiv authorities, including by President Volodymyr Zelenskyy, who has called them “absolutely unacceptable.” Other EU countries, such as Germany and France, have raised serious concerns about the impact of the restrictions on the integrity of the single market.
The European Commission, which negotiated the deal in a bid to prevent uncoordinated retaliatory action from Eastern Europe member states, has insisted the bans would be definitively phased out by 15 September and efforts would then focus on improving shipping capacity, infrastructure and storage.
But on Thursday morning, Wojciechowski, who is Polish, broke ranks with the executive’s main line and explicitly endorsed the extension of the trade prohibitions until the end of the year, a timeline set to unleash Kyiv’s fury.
“My observation is this local ban is functioning well, the direct imports to these five countries stopped, but we found negative consequences, generally, for the EU market, because the imports continued to other countries which need Ukraine grain, (like) Spain, the Netherlands, Italy,” Wojciechowski told Members of the European Parliament during a hearing of the committee on agriculture and rural development.
“We can expect – this is my observation – that if this ban is not prolonged, we will have the same problem (as) before with the frontline member states.”
Wojciechowski said opening up the market in full or closing it down in its entirety were “different extremes” and suggested instead a third possible option in which the temporary bans would stay in place but with extra financial aid to boost transport.
According to the Commissioner, only 2% to 3% of Ukrainian grain is being shipped out to non-EU countries, including low-income nations in Africa, because the costs of transit are too high, rendering the operation “not economically viable.” Consequently, the majority of the cargo is staying within the European market.
“This is the main barrier: the transit is not functioning well,” Wojciechowski said.
As a solution, the Commissioner floated a new programme of subsidies to help Ukrainian companies bring their cargo to EU ports and sell them around the world. He said the subsidies should be worth between €20 and €30 per tonne of grain, depending on the final destination. This will result in a €600 million programme – paid by the EU budget – to facilitate the shipping of 20 million tonnes until the end of the year.
“The only solution is to support transit and continue the ban (until) the end of the year because after 15 September there will be huge problems, the same problem – even bigger than we had before,” Wojciechowski told MEPs.
The Commissioner underlined the plan was his “personal proposal” but said he had already discussed it internally with his colleagues in the executive and with representatives of Poland, Hungary, Slovakia, Romania and Bulgaria, as well as Ukraine.
“I do think it’s the best solution and I hope the whole Commission will look into it and give its go-ahead,” he said, switching to Polish. “The problem is tough and we need to act in a spirit of solidarity with farmers, with the member states that have suffered with the situation, but also with Ukraine.”
His personal opinion
Shortly after the parliamentary hearing came to an end, the European Commission distanced itself from the Commissioner’s comments and stressed the 15 September phase-out would go ahead as originally planned.
“First of all, underline that, as the Commissioner said this morning during the hearing with the European Parliament, he expressed his opinion. He clearly said that his views didn’t represent the Commission’s position,” said a spokesperson.
The spokesperson added work was “ongoing” to increase transport capacity through alternative routes, like the Danube river, and address the bottlenecks that fuelled last year’s surge in Ukrainian exports after the introduction of the tariff-free regime.
“All this work is done ahead of the 15th of September to be able to have a very good preparation and make sure that we can address all the issues that were raised a few months ago,” the official said.
Despite the Commission’s swift reply to Wojciechowski’s unexpected proposal, his words exposed an internal disagreement within the executive that could further muddle the explosive debate about the future of the bans.
Poland, Hungary, Slovakia, Romania and Bulgaria have already asked Brussels to extend the prohibitions until the end of the year, arguing the collapse of the Black Sea Grain initiative would inevitably increase Ukrainian exports through land routes. The five frontline countries also said the list of blacklisted products should “remain open” and possibly cover goods “other than cereals and oilseeds.” On Thursday, Wojciechowski named poultry, eggs and raspberries as goods that deserved additional scrutiny.
For Poland, the topic is particularly sensitive due to the forthcoming general election: rural voters are considered a must-have demographic for Law and Justice (PiS), the hard-right ruling party. Wojciechowski has been affiliated with PiS since 2010.
But for Ukraine, any talk of an extension beyond 15 September is a non-starter.
“This move will violate the Ukraine-EU association agreement. Most importantly, this step will go against the principle of solidarity on which the European Union is based,” Dmytro Kuleba, Ukraine’s foreign affairs minister, said earlier this week while on a visit to Prague, in response to the demands of the five member states.
“If they behave like this, they will leave us with no chance but to fiercely defend our rights and the rights of Ukrainian farmers.”