European Commission may activate emergency aid for farmers across the EU

UkrAgroConsult

Next week, the European Commission may activate a mechanism to provide direct assistance to European farmers “affected” by excessive grain imports from Ukraine to counter the crisis provoked by Russia’s war and to respond to a potential drought. This was announced on June 13 in Stockholm following an informal meeting of EU agriculture and fisheries ministers by European Commissioner for Agriculture Janusz Wojciechowski.

“The activation of these payments requires a green light from the President of the European Commission. We need some additional information from the member states. There were some problems on the border between Poland and Ukraine, but now, according to my information, they have been resolved, and there are no problems in the transit of goods between Poland and Ukraine. We need information from 22 member states with justification of their requests. I hope this decision will be made next week. The main reason for using the crisis reserve is that we are in a crisis,” the European Commissioner said.

He reminded that the European Commission had done everything necessary to make it possible to use the EU’s emergency agricultural reserve. From the beginning, this fund amounted to 450 million euros per year, and has already been partially used. The first payments of €44 million were made to Poland and Italy to respond to the effects of the bird flu outbreak, and another €56 million were allocated to Romania, Bulgaria and Poland as the EC’s first response to the grain import crisis from Ukraine. Later, the European Commission proposed to pay another 100 million euros to help five neighboring countries whose farmers have been “affected” by excessive agricultural imports from Ukraine.

Based on the current situation, the EU has decided to increase the reserve fund to 530 million euros per year and make direct payments to farmers in the remaining 22 EU countries, which are also experiencing the consequences of Russia’s aggression against Ukraine, including higher energy and fertilizer prices and increased production costs, along with the impact of climate factors, in anticipation of a large-scale drought this year.

“We need some additional information from the member states. We are currently waiting for the formal adoption of this package, but everything is already prepared for such a decision. We need to support our farmers, among other things, in response to the symptoms of the approaching drought. This assistance will be proportionally distributed among the member states,” added Janusz Wojciechowski.

As reported, on May 25, the EU Council approved a regulation extending the duty-free trade regime between the EU and Ukraine, which extends the suspension of all customs duties, quotas and trade remedies on Ukrainian exports to the EU for another year, until June 2024. These regulatory rules came into force on June 6 this year.

At the same time, the blockade of the Black Sea ports by the Russian Federation led to a sharp increase in the volume of transportation of Ukrainian grain and other agricultural goods by land, through “solidarity corridors” on the borders with neighboring countries, which significantly affected the domestic market of these countries and caused protests from local farmers.

On April 28, the European Commission agreed with four of Ukraine’s neighboring countries – Bulgaria, Hungary, Poland, and Slovakia – on a package of measures to be implemented after the countries canceled their unilateral actions against agricultural imports from Ukraine. This package restricts imports of four key products from Ukraine – wheat, corn, rapeseed and sunflower seeds – into the territory of these countries, as well as Romania, although it retains the possibility of transit of such goods to other EU countries and the world market.

These restrictions have been extended under the already updated duty-free trade regime between the EU and Ukraine, which provides for the application of such measures in exceptional circumstances, and will remain in force until September 15, 2023.

Tags: Ukraine, subsidies, grain, EU