1 Sep 2023 09:56

EU's compensation to facilitate Ukrainian grain transit to Baltic ports might reach 600 mln euros - European commissioner

MOSCOW. Sept 1 (Interfax) - The European Commission still has no clear decision as to whether to extend a temporary ban on imports of certain agricultural products from Ukraine to five neighboring EU countries, which is set to expire on September 15, after which the EU's borders would be fully opened in its agricultural trade with Ukraine, European Commissioner for Agriculture Janusz Wojciechowski said.

"If this ban is not prolonged, we will have the same problem [as] before," Wojciechowski said at a European Parliament session on Thursday, pointing out that this was his personal position.

To prevent a new possible crisis on the EU's agricultural market in the context of trade with Ukraine, especially in the five countries neighboring it, Wojciechowski proposed subsidizing Ukrainian grain transit via EU countries to Baltic ports at a rate of 30 euros per tonne.

This will result in a 600-million-euro program financed from the EU's budget, on the condition that Ukraine would be obliged to find buyers for its produce in third countries, he said.

Wojciechowski suggested that Ukrainian grain might otherwise be stuck in Europe as the cost of its exports via Baltic ports to third countries is too high, prompting them to buy cheaper grain from Russia. Therefore, he insisted the EU's aid to Ukraine through subsidizing transport costs would be the best solution now and is supported by both Ukraine and its five EU neighbors.

"Buyers from countries outside of Europe would start paying for grain from Ukraine. This proposal also makes sense only if the temporary ban on imports to the five countries is extended," while the transit of Ukrainian grain via the EU is supported, Wojciechowski said.

If these proposals are not implemented, Ukrainian grain would flood the markets of the five countries again, with only part of it exported to third countries, he said.

Some European Parliament members asked Wojciechowski whether buying Ukrainian grain to donate it to countries experiencing food shortages would be a better solution for the EU, as this would guarantee that this grain does not end up in EU countries, he replied that this scheme would be too expensive for the EU's budget.

Members of the European Parliament's Committee on Agriculture and Rural Development argued that, since the restrictions on Ukrainian agrifood exports have been imposed, little has been done to improve the functioning of the so-called Solidarity Lanes and develop port infrastructure.

On June 5, the European Commission extended restrictions on wheat, corn, rapeseed, and sunflower seeds exports from Ukraine to Bulgaria, Hungary, Poland, Romania, and Slovakia until September 15, while their transit via these countries is allowed.

Ukraine has exported most of its grain and other agricultural produce via its Black Sea ports for years. However, the special military operation in Ukraine has drastically restricted the work of the ports, and Ukraine reoriented its export flows toward Europe. Large amounts of Ukrainian agricultural produce started flooding EU countries neighboring Ukraine, which triggered discontent of local farmers. The situation particularly affected the agricultural sector in Poland, Bulgaria, Hungary, Slovakia, and Romania.

Lithuania has championed the idea of exporting Ukrainian agrifood via Klaipeda and other Baltic ports. However, the downside of this route is the high cost of transporting these products to the ports.