Poland promises relief as Ukrainian grain floods market, sinks prices

Poland’s agriculture minister promised financial support from the government and the European Union and easier rules for building grain storages as he met with farmers angry at falling grain prices on Wednesday.

Farmers in Poland attributed the fall in prices to the influx of large quantities of Ukrainian products into the market, which were destined for Africa and the Middle East. Bulgarian farmers also protested on the border on this issue on Wednesday.

Poland and other countries in the region have offered to help ship Ukraine’s grain to third-country markets after Russia blocked traditional routes after Russia invaded Ukraine 13 months ago. The European Union, which borders Ukraine, has waived customs duties and import quotas to facilitate transport – also via Romania and Bulgaria – to markets it had counted on for deliveries.

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But farmers in transit countries say the promised out-channels are not working as planned. As a result, they argue, grain remains, flooding its own markets and driving down prices – to their enormous loss – while fertilizer and energy costs skyrocket.

After a round of talks with farmers’ organisations, Poland’s Agriculture Minister Henryk Kowalczyk said they had agreed on compensation of more than 1.2 billion zlotys ($277 million) for farmers and traders who suffered financial losses and grain. There is also a subsidy for the companies that deliver to the ports. Shipped out of Poland.

To broaden the base, the ministry also agreed to waive permission requirements for construction of small-sized grain storage facilities. But the farmers are expecting more talks and more support.

In Bulgaria, hundreds of farmers began a three-day blockade of main checkpoints on the border with Romania on Wednesday to protest duty-free imports of Ukrainian grain. He says about 40% of his crop from last year remains unsold amid heavy supplies, and no storage rooms for months before the coming harvest.

They displayed banners such as “Stop the genocide of agriculture” and “We want to be competitive farmers”.

A combine harvester drives in a wheat field for the ZAT Nibulon agricultural company in Nikolaev, Ukraine, Monday, July 8, 2013. Ukraine’s flood of grain exports has saturated the global market, causing unrest among European farmers and promises. Economic relief came from neighboring Poland. (Vincent Mundy/Bloomberg via Getty Images)

Last week, Brussels offered a total of 56.3 million euros ($61 million) in compensation to affected farmers, of which Bulgaria will receive 16.7 million and Poland about 30 million – protesters and some governments say it is Amount is insufficient.

Daniela Dimitrova, regional leader of the Federation of Grain Producers of Bulgaria, said Ukrainian imports make Bulgarian farmers uncompetitive.

“We stand in solidarity with Europe and support Ukraine, but the European Commission must look at each member state and make farmers competitive,” she said.

In Poland, amid early campaigning ahead of parliamentary elections, some farmer leaders, such as Michal Kolodziejek, head of the Agronia group, are calling for Kowalczyk to resign. AGROUnia is protesting, including spreading grain at the door of Kowalczyk’s ministry.

Kolodziejczak said on Wednesday that at least 8 billion zlotys ($1.8 billion) were needed to compensate farmers and improve the infrastructure leading to transit ports, while Ukrainian grain should be sent directly to its destinations And EU customs should be re-implemented.

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Prime Minister Mateusz Morawiecki said that grain from Ukraine was “destabilizing our market” and that steps should be taken to export it urgently while reducing imports from Ukraine. He said that the European Commission, the executive branch of the European Union, has rules in place to keep the situation under control, as it is also having a negative impact on other countries in the region.

“We do not agree to large quantities of this grain coming to the markets of Poland and Romania and destabilizing our markets,” Morawiecki said at a press conference.

At the start of talks with farmers and grain exporters, Agriculture Minister Kowalski blamed a drop in grain prices around the world. He said that while more compensation money could be expected from Brussels, the main goal was to increase grain exports and free up space in silos ahead of this summer’s Polish harvest. He acknowledged that the original plan to move the grain through Poland did not go as well as expected.

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“We must remember that we need to help Ukraine, everyone agrees, because Ukraine is fighting for our freedom,” Kowalczyk said, adding that the war produces “all kinds of effects”.