Ukraine Welcomes Lifting of Ban on Grain Shipments to Neighbors
The Polish ban on Ukrainian agricultural products last month sent a shock wave across Ukraine, which lost $143 million in a month, Deputy Minister of Economy Taras Kachka told an audience at the Brussels Economic Forum on Friday.
Shortly after Ukrainian President Volodymyr Zelenskyy’s early April visit to Poland, Polish officials, under pressure from local producers, suspended the import of grain and other agricultural products from Ukraine. Hungary, Slovakia, Bulgaria and Romania followed suit because of concerns about a flood of Ukrainian grain that, before the war, would have been shipped farther afield through Black Sea ports.
The Ukrainian minister of agriculture, who is traveling for negotiations through neighboring states, told VOA that the decision of the Polish government was unexpected. Ukrainians were informed about it a day before, and the restriction hit almost all Ukrainian agricultural production.
“We learned about the decision on Friday night, and it was imposed on Saturday morning,” said Ukrainian Minister of Agrarian Policy and Food Mykola Solskyi of Poland’s April 15 ban. The EU had earlier liberalized all imports from Ukraine to help the country maintain its economy in the face of the Russian invasion.
Ukrainian agricultural businesses were shocked, said Oleksyi Mushak, a former Ukrainian MP and co-founder of ReGenerative Agro, an agriculture company.
“It’s like a missile hit you, but in this situation, it was a Polish ban — unexpected,” Mushak told VOA. “This brings us long-term problems. Now no one will have confidence, and no one will work on the long-term, only short-term contracts, making it difficult for Ukraine to access the money.”
After lengthy negotiations with the European Union, Poland agreed to cancel the unilateral restrictions. The European Commission agreed to allocate 100 million euros ($110.1 million USD) as compensation to farmers adversely affected by the glut of Ukrainian grain.
According to the agreement, Ukrainian wheat, maize, rapeseed and sunflower seed can be sold to any country in the EU except to the five countries that had complained that the cheaper Ukrainian agricultural product was making their domestic production unprofitable.
Ursula von der Leyen, president of the European Commission, welcomed the agreement as “a deal that preserves both Ukraine’s exports capacity, so it continues feeding the world and our farmers’ livelihoods.”
“We hope to continue to talk to our Polish partners. We hope that the transit routes will start working again and the relationship between Polish and Ukrainian businesses will continue, including the products that are not restricted,” Solskyi told VOA.
The European Commission has had to negotiate hard with the five so-called frontline states neighboring Ukraine to ensure grain can be exported from Ukraine. Brussels realized that new ways of exporting Ukrainian agricultural products must be found.
In the last 10 years, Ukraine has become an agricultural powerhouse. According to the European Commission, as reported by Deutsche Welle, Ukraine accounts for 10% of the world wheat market, 15% of the corn and 13% of the barley market. Ukraine is also a significant player in the sunflower oil market. The war on Ukrainian soil reduced the ability to produce and export. However, even in the current situation, Ukraine is creating market competition.
“We have been present in the European market for a long time. We have competed with different countries and local producers for 10 to 15 years,” said Solskyi. “The key is the war that created this situation. Ukrainian farmers and traders looked at the western borders because the sea routes were blocked, and the amount of product that went to the European direction rose. That is why solidarity lanes were created. So, it is good there is competition; healthy competition is a key for development.”
However, the latest crisis is a sign of possible future obstacles to Ukraine’s EU membership. Poland will assume the EU presidency in the first half of 2025. Ukrainian membership in the EU will be a priority for Poland, Polish President Andrzej Duda said this week. But experts and officials are pointing out that the agricultural talks, particularly, can become very difficult because of Ukraine’s huge agricultural potential.
“It is in the general interest of Poland that Ukraine will be a member of the EU. We have a common security issue,” said Mushak of ReGenerative Agro. “However, we have to separate security and economic issues. Unfortunately, now we mix these two things.”
But Solskyi offered a reassuring message.
“Even before this current situation, we understood — and Europeans understood, our partners understood, we all understood — that the negotiations could be the most difficult regarding agriculture,” the Ukrainian minister told VOA.
“But Ukraine is not unique. Most countries that joined the European Union had the most prolonged and difficult negotiations. However, I am confident there are solutions and ways that we can take that will work for Ukraine and be comfortable for EU countries.”