Farmer protests spell trouble for Ukraine’s EU hopes
A grain dispute shows the pitfalls of accession to the bloc
A dispute over Ukrainian agricultural products flooding markets in the east of the EU escalated over the weekend, with Poland and Hungary announcing import bans on Ukrainian grain and other produce until at least the end of June.
Despite being one of Ukraine’s strongest supporters, the Polish government acted unilaterally to alleviate pressure on local farmers caused by a glut of Ukrainian imports. With one eye on the importance of the conservative rural vote to his re-election chances in the autumn, Prime Minister Mateusz Morawiecki declared, “we will never leave farmers without help.”
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Hungary meanwhile called on the EU to take action, with Agriculture Minister István Nagy expressing hope that the import bans will create “enough time to take meaningful and lasting EU measures” to make the bloc’s “solidarity corridors” for the import of Ukrainian produce more sustainable.
The EU in turn slammed the moves made by Poland and Hungary, saying “unilateral actions” were unacceptable and a potential breach of the bloc’s trade policy. Ukraine’s agriculture ministry also responded to the bans critically, adding “unilateral drastic actions will not accelerate a positive resolution.” Kyiv seems to have been caught off guard, after a previous agreement with Poland had promised to halt imports of grain intended for the domestic market while allowing transit to other countries.
The dispute is unlikely to make a significant impact on Eastern Europe’s support for Ukraine’s war effort, although it may boost resentment among some sections of the public that are already sceptical. It is already, however, raising fresh concerns about Ukraine’s ambitions for accelerated EU entry. With much Ukrainian produce that is normally exported via the Black Sea now making its way overland into Europe, the EU may be getting a foretaste of the kind of economic disruption it could expect from rapid Ukrainian EU accession.
Most tariffs on Ukrainian goods have been removed under the EU’s free trade agreement with the country, but the current crisis is, at least in part, being caused by the emergency removal of remaining price controls, tariff quotas and anti-dumping duties last year. While the current situation is extreme, it appears likely that farmers in the EU would struggle to compete over the long term with the economies of scale open to Ukrainian farming: the average Ukrainian farm covers 1000 hectares compared to just 16 hectares within the EU.
This leads to another looming issue — the adaptation of the EU’s Common Agricultural Policy (CAP) to Ukrainian EU membership. The Ukrainian agricultural sector is dominated by giant conglomerates, some of which are accused of avoiding paying their fair share in taxes. These agricultural mega-firms would stand to gain an enormous portion of EU farming subsidies with a majority of CAP payments being allocated on the basis of land ownership.
Whether the recipients of EU subsidies are small or large farming operations, the sheer size of Ukraine’s agricultural sector would put an unprecedented strain on the current system. But EU citizens would be doubly unhappy if Ukrainian EU entry led to a lion’s share of farming subsidies going to conglomerates capable of undercutting competitors elsewhere.
Ukraine’s effect on the EU’s agricultural framework was always going to be a major hurdle in its attempt to join the bloc, and the new dispute with allies in Eastern Europe is bringing this problem to the fore. The EU’s ability to find a successful resolution will be crucial not only for pacifying concerned farmers, but also for the development of Ukraine’s wider European aspirations.
Weren’t we being told last year that the war would lead to a catastrophic reduction in global wheat production and a resultant hiking of prices? Or did I just imagine that?
Well we’ve had the price rises, at least on the supermarket shelves and the animal feed stores. I seriously doubt, though, that the apparent glut will affect the price the consumer pays. It’s good to know that Ukrainians are able to shift their produce at last, and if it forces an overhaul of the Common Agricultural Policy then so much the better, but there will be much resistance to change in the tiny agricultural holdings in France. If the French don’t like it then it won’t happen.
You were told that that was Putin’s plan.
Once he took Kyiv, his goal was to control Europe via his gas pipelines, and control the rest of the world through cornering much of the world’s grain supply.
An ingenious plan.
But, like most ingenious plans, it failed in its execution. (March on Moscow, anyone?)
The lesson is: don’t try to carry out ingenious plans.
Meanwhile, the Zelenskyy govt recently allowed foreign purchase of (up to 44% of) Ukrainian Farmland, with a queue of Arabian interests looking to take sovereignty (and China already lossessing 10% of the total acreage), in very real terms, of the land. Got to love the old “rules-based order” and its unquestionable correctness – laws can never be wrong, apparently!
This is common across Eastern Europe – foreign investors buying agricultural land. And not necessarily a bad thing – large modern farms require capital for equipment. Foreign owners may also provide better management and slowly help to erode the historic corruption in these countries (partly a legacy of the Soviet empire, partly cultural).
Many British farmers have diversified into Eastern Europe.
On the whole, this is a good thing.
I dont think corruption was endemic in CEE before the war, outside Romania. It was endemic in Sovietland as the empire’s control through terror began to fail. It was also the only way to survive, theft at all levels, stealing major resources in the outposts of empire, eg Central Asia, the Caucasus.
Of course Ukrainian large farms are an inheritance from Soviet farming methods, ironically
It’s also the efficient way to farm. Not really something to criticise.
Efficiency can be addictive. That doesn’t mean there are no grounds for criticism whatsoever. Concentrated operations work great until they don’t. When they fail, the harm can be apocalyptic. America only started concentrating its farms 40 years ago along with everything else. We don’t know how this will work out for civilization. I’m only just now learning from this article how the farms in Ukraine mirror those in Kansas. I imagine it has to do with the nature of wheat farming on the steppes and plains, something which lends itself to standardized mechanization. Or maybe the global corporatists simply spread the gospel of Earl Butz and the Kochs there in the 90s. Most likely a bit of both.
Though Soviet large farms produced only about. 8% of its food, the rest coming from small peasant plots.
Polish farmers can vote in Polish elections. Zelensky can’t. Law and Justice Party might hate Russia but they need the farmer votes more than they need Ukraine
I might be unpopular for saying this but these Polish ministers are right to prioritize their own country’s needs. Why should Polish farmers have to destroy thier grain because of imported Ukrainian grain? It takes quite a gall to stand up for national interests in the face of fierce EU opposition.
Anything which finishes off the ludicrous CAP is progress.
More of an unfree Trade Association, really. The Commission broke its own rules , oddly.
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