Brussels closes a pact with Poland and Hungary to resolve the Ukrainian grain crisis

The European Commission has reached this Friday an agreement with Poland, Hungary, Slovakia, Romania and Bulgaria to resolve the crisis caused in these countries by the avalanche of cereals from the Ukraine, which is plunging prices for local farmers. The pact provides for the withdrawal of the unilateral measures that Warsaw and Budapest had adopted to ban the entry of Ukrainian agricultural products.

In exchange, Brussels will allow them to adopt “exceptional safeguard measures” but limited to only four products from Ukraine: wheat, corn, rapeseed and sunflower seeds. The entry of these cereals to Poland, Hungary, Slovakia, Romania and Bulgaria is temporarily banned, except those shipments in transit to other countries of the European Union or the rest of the world.

For the rest of the agricultural products affected by the avalanche of Ukrainian imports (particularly sunflower oil), the Community Executive will launch normal investigative procedures to determine whether it is necessary to also adopt restrictive measures.

[Bruselas avisa a Polonia y Hungría de que su veto a los cereales ucranianos vulnera las reglas de la UE]

In addition, the Commission will approve a second package of 100 million euros to compensate the producers of these five countries affected by the collapse of prices. The Community Executive already approved in March a first aid of 56 million euros for farmers in Poland, Bulgaria and Romania.

The president Ursula von der Leyen has entered into this agreement considering that it “preserves both Ukraine’s export capacity so that it continues to feed the world and the livelihood of our farmers.”

In parallel, the ambassadors of the 27 in Brussels have agreed this Friday to extend for another year (until June 2024) the total elimination of tariffs on Ukrainian agricultural products. A measure taken at the beginning of the war to prop up the kyiv government.

Indeed, Poland and Hungary threatened to block the extension on the grounds that full trade liberalization is one of the reasons for the avalanche of Ukrainian cereals. The other determining factor is railway corridors enabled to help export Ukrainian grain, circumventing the Russian blockade of the Black Sea. Some runners starting in Poland.

The Community Executive warned both countries that his “unilateral measures” against Ukrainian grains were not “acceptable” because trade policy is an “exclusive competence of the EU”. In the end, a compromise solution has been reached that satisfies all parties.