European Commission, five EU members agree to permit members to ban domestic sale of some Ukrainian agricultural products

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Over the past week, four European Union (EU) member states announced temporary bans on agricultural imports from Ukraine to protect domestic producers. After Russia invaded Ukraine last February, the EU removed import duties and quotas on these products to open alternative trade routes through its territory. EU single market principles state trade policy is decided only by the EU itself, not individual member states.

The governments of Poland and Hungary announced bans on Saturday, Slovakia on Monday, then Bulgaria yesterday - the former three share common borders with Ukraine.

Bulgaria is in solidarity with Ukraine, but a local glut is being created on the agricultural market, because instead of export corridors our countries are becoming warehouses.

—Yavor Gechev, Minister of Agriculture, Bulgaria

The Bulgarian Council of Ministers set the ban to last between next Monday and June 30. The resolution affects wheat, wheat flour, rye, barley, soy, corn, milk, and raw meat, among others, but allows the transit of these goods in sealed containers and vehicles. Minister of Agriculture, Yavor Gechev, noted "we have produce worth several billion [leva] that we believe we will have a hard time selling and we will incur losses, unless we take measures", the Bulgarian News Agency reported.

Kitack Lim of the IMO inspects Ukrainian grain after the Black Sea Grain Initiative in Odesa, Ukraine, 2022.
Image: IMO.

The Polish ban went into effect Saturday evening, and is planned to last until June 30. Agriculture minister Robert Telus reasoned it was required to "open the eyes of the EU to the fact that further decisions are needed that will allow products from Ukraine to go deep into Europe, and not stay in Poland." Initially, transit through Poland was forbidden, but with two days of talk, by Tuesday, the two countries negotiated a deal to allow passing traffic.

In Hungary, Minister of Agriculture István Nagy announced the ban Saturday late night, arguing it is necessary "in the absence of meaningful EU measures" ((hu))Hungarian language: ‍érdemi uniós intézkedések hiányában. The official gazette, Magyar Közlöny, published the corresponding government resolution No. 130/2023 on Tuesday, which entered into force yesterday. Importing wheat, wheat flour, rye, barley, corn, sugar, and raw meat, among others, is forbidden until June 30. Hungary allows transit, but compartments must be sealed at the border, and requires the electronic registration of all shipments in select product categories, even if they originate from other countries. Upon publishing the resolution, Nagy noted that "the duty-free regime for Ukrainian agricultural products cannot be maintained, because [Ukrainian producers] have a competitive advantage which cannot be compensated for, as they work with significantly lower costs than that of the EU, thanks to the gigantic plant and farm sizes, and cultivation and plant protection practices that are no longer permitted in the European Union" ((hu))Hungarian language: ‍Nem tartható fenn az ukrán mezőgazdasági áruk teljes körű vámmentessége sem, hiszen nem behozható versenyelőnnyel termelnek az európainál jelentősen alacsonyabb önköltséggel, köszönhetően a hatalmas üzemméreteknek, valamint az Európai Unióban már nem megengedett termesztési és növényvédelmi gyakorlatoknak is.

Talking to news portal parameter.sk, Ilona Patasi, president of the Slovak Agriculture and Food Chamber said Ukrainian producers offer a metric ton of wheat for 50 euros, while the price before was 350 euros per metric ton.

Ukraine's agriculture minister Mykola Solskyi said he indicated to Nagy the ban was not acceptable, and they agreed on future dialogue. Solskyi's ministry also claimed Poland's ban violated export agreements.

A statement from the European Commission's (EC) Arianna Podestà read: "We are aware of Poland and Hungary's announcements regarding the ban on imports of grain and other agricultural products from Ukraine […] In this context, it is important to underline that trade policy is of EU exclusive competence and, therefore, unilateral actions are not acceptable."

The EU lifted import restrictions on Ukrainian agricultural products last June for a year to open alternative trade routes in place of contested Black Sea ports. Ukrainian exports began to flow through Central European countries, but logistical costs hindered re-exports. Products began to pile up in warehouses, driving down local prices and prompting farmer protests. On April 4, the EC adopted regulation No. 2023/739, a 56 million euro strong "emergency support measure", to help affected farmers in Poland, Romania and Bulgaria, but acknowledged that this only partially covers losses.

On February 23, the EC proposed to lift duties and quotas on Ukrainian agricultural products for another year, until June 2024. This prospect prompted then Polish Minister of Agriculture, Henryk Kowalczyk, to resign on April 5, facing demand from local farmers to impose duties.

Shipments by sea continue under the Black Sea Grain Initiative, but volumes remained far lower than before the war. The United Nations reported no ship had passed through inspection last Tuesday, increasing a backlog of ships waiting. The agreement is in place until May 18, and Russia threatened to pull out of it if its demands on easing embargoes are not met.


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