Poland’s government approved on April 21 an aid package worth PLN10bn (€2.17bn) to help farmers struggling with the influx of Ukrainian grain following botched efforts to help Ukrainian exports during the war.
Much of the Ukrainian grain was not exported from Poland. Reports say that an estimated 4mn tonnes of Ukrainian grain and other agricultural produce are still in Poland, affecting the local market. Poland has only recently designed a system to monitor the transit of grain to ports or other countries.
“The current situation with the surplus of grain is a problem that Poland has not yet experienced,” Prime Minister Mateusz Morawiecki told a news conference.
“That is why the [government] has made a series of decisions to support the agricultural sector. I am convinced that these particular regulations and laws will determine the profitability of agricultural production for many farms,” Morawiecki added.
The aid package includes an increase in the amount of excise duty on diesel that farmers can have refunded to PLN1.46 per litre from the previous rate of PLN1.2. Pending approval of the European Commission, the refund could go up further to PLN2 per litre.
The government will also set a minimum price of PLN1,400 – that is just over €300 - per tonne of wheat, Morawiecki said. Current wheat prices in Europe are around €245 per tonne of milling wheat and below €200 for feed wheat.
The government will also partially reimburse farmers for the costs they incurred while buying fertilisers when their prices skyrocketed last year.
There will also be subsidies for other crops like corn, rapeseed, barley, triticale, rye, and oat.
Poland also said that “foreign contracts are being readied” to sell Ukrainian grain still sitting in Polish silos since September when imports began their rapid growth.
“We need to remove the [Ukraine-originated] surplus from the market to prepare a place for [Polish] grain after the harvest, Agriculture Minister Robert Telus told the Super Express newspaper on April 24.
The inflow of grain from Ukraine has become a political problem for the ruling Law and Justice (PiS) party. Six months before the election, PiS needs the support of the rural electorate in order to win the vote and secure a third consecutive term in office.
Farmers’ protests forced PiS to block imports of Ukrainian agricultural products, which elicited angry noises from Brussels, as the EU’s trade policy is an exclusive competence of the European Commission.
However, bans from Bulgaria, Hungary, Romania, and Slovakia forced the Commission to sit down with the five countries to negotiate solutions.
The talks are set to continue in the coming days after failing to achieve an agreement last week.
The Commission has proposed a ban covered wheat, corn, rapeseed, and sunflower seeds but, the Polish broadcaster RMF FM reported, the Commission is “prepared” to extend the list to include eggs or poultry, as per the request of the five countries made last week.
Meanwhile, it remains unclear if Poland’s infrastructure is able to handle millions of tonnes of grain, as transit includes the changeover of trains from Ukraine’s broad-gauge tracks to Poland’s standard gauge, the use of storage capacity and the capacity to reload grain from trains onto ships at ports.