European Commission is hesitant about transport subsidies for Ukrainian grain

The European Commission is hesitant about new subsidy proposals from Agriculture Commissioner Janusz Wojciechowski for the transport costs of Ukrainian grain to EU ports on the Baltic and North Seas. He thinks of a few tens per ton, depending on the distance by road. 

In that case, the temporary import ban on Ukrainian agricultural products in five EU neighboring countries, which expires in two weeks, should be extended until at least the end of this year. Agriculture Commissioner Janusz Wojciechowski thus supports the request of the five countries involved (Poland, Bulgaria, Romania, Hungary and Slovakia), but his fellow EU Commissioners do not yet agree. 

Moreover, a Commission decision is needed to provide the necessary EUR 600 million for the transport subsidy. The other Commissioners want to replace the current temporary import ban with some kind of transit obligation, but cannot enforce or monitor this without the cooperation of those five countries.

If the EU no longer protects their local agricultural markets, Poland and Hungary will again threaten to block border crossings.

The core of the discussion revolves around the impact of excess Ukrainian grain exports on local markets. According to Wojciechowski, there is little demand for Ukrainian grain in international trade because the additional transport costs (by road to the Baltic Sea ports, or by barge on the Danube) make it too expensive. As a result, there is currently even more demand for Russian grain.

The proposed EU subsidy would help facilitate grain exports via so-called 'solidarity corridors' through neighboring EU countries to ports on the Baltic Sea, the North Sea and possibly the Croatian Adriatic coast.

Wojciechowski has proposed subsidizing Ukrainian grain exporters to make them competitive again in the world market. However, the proposal has divided the European Commission, as some members believe that extending the import ban could undermine Ukraine's economic position. 

Ukraine prefers to transport their grain via the extreme western shipping route across the Black Sea, through the coastal waters of NATO countries Romania and Bulgaria. However, the risk of Russian military threat has made EU countries reluctant to go this route. 

The European Commission is expected to announce its final position on this issue shortly, just before the current import ban expires on September 15.