Most businesses in Ukraine are feeling the effects of the blockade at the Polish border. Local farmers have been protesting for over four months now. During this time, Ukrainian companies have seen a significant increase in transportation costs for their products. Some have even lost orders, as shown by the results of a survey conducted by the European Business Association.
According to the 36 survey participants, the total losses since the start of the strikes have reached €24,8 million. When calculated per company, this amounts to an average loss of nearly €700 thousand. These figures do not include the loss of future contracts, damage to business reputation, disruptions in the supply chain, and the looming threat of business closures.
Meanwhile, the European Union is taken aback by the extent of Ukraine’s agricultural sector. Despite not being an EU member, Ukraine is already a prominent player in the European market.
“In the early stages of negotiations for Poland’s EU accession, there was stringent regulation of milk and sugar production. Moreover, Poland received fewer subsidies for ten years compared to others. Similarly, for a decade after its EU accession, Spain was denied access to the internal market at France’s insistence. On the flip side, there is Ukraine, deeply entrenched in European markets. Hence, there will be those who seek to apply maximum pressure on us, as it’s a more comfortable approach to initiating negotiations,” explains Ukraine’s trade representative Taras Kachka during the Adapting the Ukrainian Agricultural Sector to the EU discussion, organised by the Centre for Economic Strategy.
To address the challenge of exporting Ukrainian agricultural goods to European markets, the EU has proposed the creation of an “agricultural Ramstein,” inspired by the model of the International Contact Group for Defence Assistance to Ukraine. European Parliament member Anna Fotyha highlighted this in an interview with the Voice of America.
She pointed out that the transportation issues with Ukrainian grain stem from Russia’s war against Ukraine. Simultaneously, the Kremlin aims to undermine Western nations by destabilising global agricultural markets. Russia sought to create a similar energy crisis at the onset of its full-scale invasion of Ukraine. Through collaborative efforts, European countries successfully reduced their reliance on Russian gas.
Incidentally, Russia can still freely sell its own agricultural products in European markets. Recently, the Ukrainian government has indicated its willingness to accept trade restrictions with the EU to ease political tensions between Ukraine and Poland. Instead, it is relying on Europe to enforce bans on the import of Russian agricultural products.
In Brussels, this matter is currently being discussed. For example, Andrzej Halicki, a representative of the European People’s Party, has proposed banning the export of such agricultural products, as reported by DW.
“Russia is flooding Europe with cheap food, turning it into a weapon. Presently, we’re observing a surge in the import of food and grains from Russia and Belarus at artificially low prices. This trend is deeply concerning,” he emphasises.
According to Viola von Cramon-Taubadel, a Member of the European Parliament, Italy has increased its import of Russian wheat exponentially within a year, Spain by 900%, and Belgium by 400%. This poses unfair competition for farmers in the European market.
Under these circumstances, the profits end up benefiting the aggressor. Russia is pouring funds into a conflict not just against Ukraine but against the entire civilised world.
