Ukrainian grain import restrictions to prevent EU agriculture market disturbances: WFO official

Safeguard measures on imports of grains and other food items from Ukraine in the extended EU-Ukraine free-trade agreement are likely to prove beneficial to EU farmers by preventing disturbances in the EU agriculture market, World Farmers' Organization board member Kati Partanen told S&P Global Commodity Insights in an interview April 26.

Rising production costs for EU farmers in 2024 have led to lower profitability, fueling protests against Ukrainian imports and raising concerns about increasing prices and unfair competition.

The EU Parliament April 23 approved the extension of its autonomous trade measures for Ukraine with safeguard measures. Under the new regulation, the European Commission can take swift action and impose any measures it deems necessary should there be a significant disruption in the EU market or the markets of one or more EU nations due to Ukrainian imports.

"Farmers are happy that there are sensitive products defined, but now there is a need for follow up on what will be the market impact," Partanen said.

The list of sensitive products is defined not only on the basis of prices and volumes entering the EU market but also considering the quality, which is leading to competition among EU farmers, Partanen said.

As part of reinforced safeguard measures to protect EU farmers, the EC can apply an emergency brake if imports of sensitive agricultural products such as poultry, eggs, sugar, oats, groats, corn and honey exceed volumes from the second half of 2021, and all of 2022 and 2023.

"The European Commission should ensure that this agreement will provide the guarantee on how to preserve the EU producers and manufacturers' economic liability," Partanen said.

In marketing year 2022-23, the EU imported 26.09 million mt of corn, with 57% of the volume (nearly 15 million mt) bought from Ukraine, according to EC data. In MY 2023-24 (until February), the EU imported 8 million mt of corn from Ukraine.

Farmers of eastern European countries including Poland have argued that cheap Ukrainian grain entering their markets does not follow the EU's standards and therefore results in unfair competition in the market.

Tariffs on Russian imports

Rising Russian agricultural imports have also been a growing concern for some EU nations such as Latvia, Lithuania and Estonia.

About 360,000 mt of Russian cereals and 370,000 mt of oilseeds crossed the Latvian border in 2023, compared with 102,000 mt and 80,000 mt, respectively, a year earlier, according to EC data.

The EU is planning to impose tariffs on imports of cereals, oilseeds, and derived products -- including corn, wheat and sunflower meal -- from Russia and Belarus, the EC said March 22.

Partanen said that the EC's decision to impose tariffs on imports of Russian and Belarusian grains could be helpful for the EU agriculture industry and farmers, especially in Eastern Europe. "This kind of decision [import tariffs on Russian grains] would help them a lot."

Revisions in CAP

The EC's proposal of a targeted review of the EU's Common Agricultural Policy, or CAP, to keep environmental conditions healthy and cause less to no harm because of farming practices has been seen as a step in the right direction for European farmers.

CAP 2023-27 entered into force on Jan. 1, 2023, and focused on protecting the environment from certain farming practices. But farmers protested as they were not fully satisfied with the policy, resulting in a revised version being approved by the European Parliament on April 24 offering some relief.

The revised CAP plans to eliminate the allocation of "a minimum proportion of arable land to non-productive areas" under standard 8 of its good agricultural and environmental conditions, or GAEC, "while maintaining the protection of existing landscape elements."

The Commission had proposed to retain GAEC 7 for crop rotation but allow EU nations to "add the possibility of meeting this requirement through crop diversification". The revision also allow member nations to provide "specific exemptions" from the rules under GEAC standards 5, 6, and 7 (tillage management, ground cover, and fallow land) in the case of specific soil and subsoil conditions. The revision exempts small farms of under 10 hectares from controls and penalties related to compliance with policy standards.

EU farmers have been happy with this positive change in the EU agricultural policy, but majority of them, especially from France and the Netherlands, who were protesting the farming and climate policies, think of it as "not enough", Partanen said.