Poland promises remedy as Ukraine’s grain market floods and prices plummet

Poland’s agriculture minister pledged financial support from the government and the European Union and simpler rules for building grain storage facilities as he met with farmers angered by falling grain prices on Wednesday.

Farmers in Poland blame the price drop on the market glut caused by the influx of huge volumes of Ukrainian produce that should go to Africa and the Middle East. Bulgarian farmers also staged a border protest on the issue on Wednesday.

Poland and other countries in the region have offered to help transit Ukrainian grain to third-country markets after Russia blocked traditional routes when it invaded Ukraine 13 months ago. The European Union, which borders Ukraine, has waived tariffs and import quotas to facilitate transport – including through Romania and Bulgaria – to markets that had been counting on the supplies.


But farmers in transit countries say the promised drains aren’t working as planned. As a result, they argue, the grain stays, flooding their own markets and depressing prices—at their great loss—while fertilizer and energy costs soar.

After a round of talks with farmers’ unions, Poland’s Agriculture Minister Henryk Kowalczyk said they had agreed on more than PLN 1.2 billion ($277 million) in compensation for farmers and traders who suffered financial losses, as well as subsidies for businesses , which transport the grain to ports shipped from Poland.

The ministry also agreed to waive permit requirements for the construction of small grain storage facilities in order to broaden the base. But farmers expect more talks and more support.

In Bulgaria, hundreds of farmers on Wednesday began a three-day blockade of key checkpoints on the border with Romania to protest duty-free imports of Ukrainian grain. They say about 40% of their harvest from last year remains unsold amid a huge supply and there is no storage space just months before the upcoming harvest.

They displayed banners that read: “Stop the farming genocide” and “We want to be competitive farmers”.

A combine harvester drives across a wheat field during a harvest for agricultural company ZAT Nibulon in Nikolaev, Ukraine, Monday, July 8, 2013. A spate of Ukrainian grain exports has saturated the world market, prompting unrest among European farmers and promises of economic relief from nearby Poland. (Vincent Mundy/Bloomberg via Getty Images)

Last week, Brussels offered affected farmers a total of 56.3 million euros ($61 million) in compensation, of which Bulgaria would receive 16.7 million euros and Poland nearly 30 million euros – amounts protesters and some governments say are insufficient .

Daniela Dimitrova, regional head of the Bulgarian Grain Producers’ Union, said Ukrainian imports do not make Bulgarian farmers competitive.

“We are in solidarity with Europe and its support for Ukraine, but the European Commission should look at each individual member state and make farmers competitive,” she said.

In Poland, some peasant leaders like Michal Kolodziejczak, head of the AGROUnia group, are calling for Kowalczyk’s resignation amid an early campaign ahead of the parliamentary elections in the autumn. AGROUnia has staged protests, including spilling grain at the door of Kowalczyk’s Ministry.

Kolodziejczak said Wednesday that at least 8 billion zlotys ($1.8 billion) is needed to compensate farmers and improve infrastructure leading to transit ports while Ukrainian grain is sent directly to its destinations and the EU -Customs duties should be charged again.


Prime Minister Mateusz Morawiecki said grain from Ukraine “is destabilizing our market” and steps should be taken to export it urgently while reducing imports from Ukraine. He said the European Commission, the EU’s executive arm, has regulations in place to bring the situation under control as it is also having a negative impact on other countries in the region.

“We do not agree that this grain enters the markets of Poland and Romania in large quantities and destabilizes our markets,” Morawiecki said at a press conference, stressing that “the transit is very welcome”.

At the beginning of the talks with farmers and grain exporters, Agriculture Minister Kowalczyk blamed a global trend for falling grain prices. He said that while more compensation money could be expected from Brussels, the main goal is to increase grain exports and free space in silos ahead of Poland’s harvest this summer. He acknowledged that the original plan to ship grain through Poland did not go quite as expected.


“We should remember that we have to help Ukraine, everyone agrees, because Ukraine is fighting for our freedom,” Kowalczyk said, adding that the war was having “all kinds of repercussions.”

Source : www.foxnews.com

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