EU considers EUR 600 million plan for Ukrainian grain exports

Subsidies aimed at diplomatic resolution and transport support

{reg}The European Commissioner for agriculture, Janusz Wojciechowski, is advocating for a EUR 600 million (USD 652 million) plan to subsidize Ukrainian grain exporters for one year. These subsidies would cover transportation expenses for shipping 20 million tonnes of grain to Baltic Sea seaports, Germany, and Poland, alleviating diplomatic tensions due to excessive grain exports to neighboring EU states.

Previously, nearly half of Ukraine's grain exports used the Black Sea route, but Russia's exit from a UN-brokered agreement in July disrupted this route, raising safety concerns. Mr. Wojciechowski sees these subsidies as the best solution. Rising Ukrainian grain exports have affected EU countries like Poland, Bulgaria, Romania, Hungary, and Slovakia, leading to lower local produce prices. Romania, in particular, saw a surge in imports from Ukraine, rising from nearly zero to one billion euros worth of agrifood products.

To address this, the European Commission temporarily banned Ukrainian exports of wheat, maize, rapeseed, and sunflower seeds to these EU nations. Mr. Wojciechowski supports extending this ban, pending Commission discussion, with backing from Ukraine and the five EU countries.

The subsidy cost depends on Ukraine's estimated transportation expenses, ranging from 20 to 40 euros per tonne of grain. The EU would provide these subsidies to the Ukrainian government, which would decide eligible recipient companies. This plan will be discussed with the EU's 27 agriculture ministers in Spain next week, with the Commission expected to announce its position before the current ban expires in two weeks.

The aim is to help Ukraine access global grain markets while managing extra costs, as Russia seeks to replace Ukraine in former export markets, posing competitive challenges.[/reg]