The grain conflict demonstrates that support for Ukraine is limited to one's own farm. What Brussels and Kiev can learn from this.
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| Grain From Ukraine Initiative |
Ukraine should actually get unwavering political and military backing. Given this context, many observers -- who had previously thought that cooperation would be extended to every conceivable field -- were shocked to learn that several European governments had put an import embargo on Ukrainian grain. Even if the EU Commission has declared an agreement, it is important to remember that the issue has both political and economic roots and has the potential to become systemic.
In 2022, Kiev's capacity to economically resist Russian invasion depended on the sale of grain and other agricultural goods, which was also a significant geopolitical concern. Ukraine was compelled to switch its exports from the sea to land because the agreement on a maritime lane for Ukrainian grain deliveries dragged on for so long and because Russia later broke its own promises.
The order of the most significant consumer nations was also altered as a result. While just 30% of exports traveled to European nations in 2021, according to the Comtrade database maintained by the UNSeven of the top 10 consumer nations in 2022 will be European nations. Countries like Indonesia, Iran, Pakistan, Morocco and Tunisia dropped out of the top ten . The two largest customer countries to date, China and Egypt, also reduced their imports sharply.
This caused significant changes in the grain markets of Romania, Poland, Hungary, and Slovakia. Grain imports from Ukraine have expanded dramatically in all nations in this region. For example, in Romania, the volume increased from two million to over 1.3 billion US dollars. Poland (from 14 to 646 million US dollars), Hungary (from 8 to 401 million US dollars), and Slovakia (from 0 to 116 million US dollars) also experienced rapid development. When the granaries in these nations reached capacity, with local producers unable to use even their own granaries in certain regions owing to grain exports, they halted grain shipments from Ukraine as well as transit via their territory.
The agreement reached by the EU Commission now puts an end to these measures – in return, exceptional protective measures are being put in place for wheat, maize, rapeseed and sunflower seeds from these countries.
The fact that this crisis was precipitated by an unwillingness to redirect food supplies to more remote portions of Africa received considerably less attention in these governments' announcements. At the same time, it should not be overlooked that European nations continued to profit handsomely from Ukrainian supply. After all, these were massive volumes of low-cost, high-quality Ukrainian grain, which allowed these countries to maintain a positive foreign trade balance overall. This obviously demonstrates that the issue is not just with the economic components of bilateral cooperation and inter-bloc engagement, but that something is also wrong politically.
The Polish leadership and the ruling PiS party are once again choking on the issue of re-election. With parliamentary elections coming, it is critical for them to broaden their own constituency and link ordinary voters even more tightly to them. Farmers make up a sizable portion of the PiS electorate. So it seems to reason that their interests should be prioritized. This is happening despite the fact that the fundamental issue is not a lack of Ukrainian grain, but rather a lack of adequate channels for its allocation.
While the nations involved have formed a united front and issued coordinated warnings, each country obstructing Ukrainian food shipments is following its own interests and agenda. The Orban administration in Hungary, in particular, is adhering to its pessimism about Ukraine and, with the latest decision, is just pursuing the course it has long pursued in the sphere of international commerce.
The government of Slovakia is in a similar dilemma. Given that the coalition has set early elections on September 30, such quick statements and shifts in attitude by the government can only be regarded as hurried toying with voters. Protests by local farmers have heightened the tensions in Romania and Bulgaria. Grain imports from Ukraine were a profitable industry for the state, but small and medium-sized farms found it impossible to compete with Ukrainian farmers. Both administrations have managed to manipulate the issue to their political advantage.
What can be done to deal with the ensuing chaos? First, it is critical to establish advantageous transit framework circumstances, such as a clear regulatory system to ensure that agricultural goods from Ukraine do not "get stuck" in Europe and are instead transported, for example, to African markets. Unnecessary constraints on farmers and Central European infrastructure might be avoided in this manner. The first moves in this regard have already been taken: Ukraine intends to temporarily prohibit grain exports from enterprises who wish to offload grain in Poland.
Subsidies for local farmers are the second most important factor. The European Union is frequently referred to be a collective assistance mechanism for French farmers. It is long past time that the subsidy rules be put to the test, and that Central European nations be given greater weight. By banning imports from Ukraine, the governments of Poland, Slovakia, Hungary, Bulgaria, and Romania are not only raising the subject of greater financial assistance, but also igniting a much-needed debate as the EU accession process approaches.
This takes us to the third point: the crash test of agricultural policy. Ukrainian farmers have already been de facto included in the scope of the EU internal market as a result of the requirements agreed upon by the European Union for Ukrainian exports last spring. Without any constraint, Ukraine inundated Europe with grain. We have effectively created a situation similar to what would occur when Ukraine becomes a full member of the EU. Other countries in the area are already reacting in a similar manner. Now is the time to effectively plan for future occurrences of similar nature.
The fourth point, which might potentially be an opportunity for Ukraine, is institutional reconciliation with Brussels. If Central European governments impose their own limitations on Ukrainian products entering the EU internal market, they are breaking the Union's foreign and trade policy principles, because unilateral actions are inadmissible in this united system.
Overall, it is clear that the limitations on Ukrainian grain imports are motivated more by obtaining additional subsidies from Brussels ahead of the forthcoming elections than by defending farmers. The EU's leadership is prepared to compromise - the crisis fund established by Brussels to assist distressed farmers is an encouraging indication for Central European nations. However, political factors have taken precedence over international security and economic policy issues.
The trends in grain exports are a signal for the Ukrainian economy and foreign policy, as well as a stress test for coping with problems that come as a result of greater collaboration with the EU. Similar constraints and difficulties would certainly emerge during Ukraine's membership discussions to the EU. The Ukrainian government and diplomats would be well to start preparing for this immediately.
Ukraine's administration must realize that it must improve its foreign trade focus. Of course, security and foreign policy are priority for the country at the time, but Ukraine should be mindful that friends will defend their own interests first and foremost, particularly in the crucial agriculture sector. There is only one path for Ukraine to safeguard its markets and preserve regular ties with its partners: compromises and reciprocal concessions. Only in this way can chaos serve as the foundation for a new order.
The author Oleksandr Kraiev is Director of the North America Program at Ukraine's Prism Foreign Policy Council and Director of the Research Program on the Transatlantic Dialogue and NATO Relations at the Strategic and Security Studios Group . At the Institute of International Relations (IMO KNU) and the Kiev-Mohyla Academy (NaUKMA), he teaches courses in international politics.