Debate: Ukrainian grain exports after Russia’s exit from the Black Sea Grain Initiative
Date: TUESDAY, 12 SEPTEMBER 2023
Speaker: Janusz Wojciechowski
Language: EN

The solidarity lanes play a vital role, and they have delivered. Between May 2022 and July 2023 the solidarity lanes have thus allowed Ukraine to export nearly 88 million tonnes of goods for a value of EUR 35 billion. 44 million tonnes of those goods were grain, oilseeds and related products. They also allowed Ukraine to import over 31 million tons of goods for a value of EUR 64 billion.  In spring concerns have been voiced on the impact of the local markets in the neighbouring Member States: Bulgaria, Hungary, Poland, Romania and Slovakia. The Commission reacted and put in place the exceptional and temporary preventive measures to stop the direct import for four grains: maize, wheat, rapeseed and sunflower. These preventive measures do not hurt transit through neighbouring countries.  I want to reassure that the Commission is closely monitoring the situation in collaboration with the neighbouring Member States Ukraine and Moldova. Financial support packages for farmers under the Agriculture Crisis Reserve have been adopted to help. And we have been working to ensure that the Ukrainian grains move to those places within the Union and in the world where it is needed.  Honourable Members, maybe a few additional pieces of information about the scale of the aid for the farmers in the countries affected by this crisis situation. The Commission decided to activate the Agricultural Crisis Reserve, especially for five Member States affected by this situation. The total amount was EUR 156 million, just above EUR 70 million for Poland, EUR 40 million for Romania, EUR 26 million for Bulgaria, EUR 16 million for Hungary and EUR 5 million for Slovakia. Agriculture was included - and it was my own initiative - to the system of State aid for the companies affected by the war situation. Agriculture was included into the system. Thanks to this decision, the scale of the support was just aover EUR 3 billion for Poland,, for the farmers affected in Poland, EUR 343 million in Bulgaria, EUR 305 million in Hungary, EUR 100 million in Slovakia, and EUR 44 million in Romania. The scale of the State aid in Poland was ten times the Commission approved State aid scheme for Polish farmers. This is a historic record. Never in the past has there been a country with higher support for the farmers affected by this situation caused by the import of grain from Ukraine.  To ensure fully functioning solidarity lanes, and to keep increasing their capacity, Commission President von der Leyen and President Zelenskyy of Ukraine set up a joint coordination platform. This platform has been working to remove operational obstacles and to increase the capacity along the Danube, the most economical transport corridor. To put this in perspective, from the beginning of May to the end of July 2023, during the implementation of the exceptional safeguard measures in the five countries, Ukraine exported a total of 9.6 million tonnes of grain, or about 3.2 million tonnes per month through the solidarity lanes. This is higher than the average export volume of solidarity lanes in the period May 2022 to April 2023. Not least because the Black Sea port ports stopped being available.  Ladies and gentlemen, maybe some additional figures, because this is very important. In the last 15 months we have the last available data from July this year. Between May 2022 and July 2023 Ukraine exported via solidarity lanes only, which means by the border of the five frontline Member States and by the territory of these countries. The total export of grain, cereals and oilseeds was 44.4 million tonnes of grain. And in the period before establishing these preventive measures, from May 2022 to April 2023, the amount was 34.8 million tons, which means, statistically, 2.9 million tons per month. In this period after the introduction of these preventive measures, May, June and July 2023, as I said, the volume of export was 9.6 million tons, which means 3.2 million tons per month. These preventive measures were effective, efficient and stabilised the markets in these five frontline Member States and also increased support to increase Ukrainian export via solidarity lanes. This is the main argument for prolongation of the these preventive measures, which is my strong position which I presented also during the debate in the Agriculture Committee two weeks ago in the European Parliament. Let me give you an overview of recent developments. We have put a lot of efforts around the Danube corridor, which led to reducing the logistic costs, which, according to some stakeholders, have decreased by almost 50 % between July 2022 and March 2023 on the Danube Road. We trust that these efforts will also lead to a stable capacity of 3 million tons per month in September and 4 million tons per month by the end of the year. Neighbouring Member States, especially Romania, but also Moldova, have put a lot of efforts into putting in place investments and measures to ensure smooth trade and increase export road capacities. For instance, we welcome the work to create a green lane for road transit between Ukraine and Romania in both directions through Moldova. We have been working on reducing waiting times at the borders, promoting that checks are done further away and that theses are well managed. Customs missions have taken place and staffing has been reinforced. The European Bank for Reconstruction and Development works on war insurance, pilot schemes for inland transit activities protecting imports and exports along the solidarity lines, as well as river and seaborne shipping vessels.  Moreover, we have been looking at boosting the role of the alternative roads and corridors leading to the Baltic and Adriatic Seas. The capacity is more limited, but given the security situation, good harvest alternatives to the Danube Road are needed.  Honourable Members, the problem is that the transit, for example, via Poland is not the question of infrastructure is the question of the cost. Because this is not the closest road that to the traditional Ukrainian markets. The road is not to Indonesia, for example, to Egypt. The route is not via Poland. It can be, but it requires additional costs. I presented the proposal which will be discussed tomorrow on the coordination platform that is necessary to financially support this additional cost of transit. According to the Ukrainian calculation, it requires between EUR 20 and EUR 40 per tonne to support the currency to compensate the additional cost of transit. This is very important for diversification of this transit direction, because now the main road is Romania, but there is a chance also to use the Baltic ports to use Adriatic ports, but it requires additional financial costs.  From a more mid-term perspective, we have also been looking at infrastructure investment to improve land connections to Ukraine. Road and rail and border crossings along the solidarity lanes have received considerable funding, exceeding the initial pledge of EUR 1 billion made in November 2022 by the Commission, the European Investment Bank, the European Bank for Reconstruction and Development and the World Bank. An additional EUR 890 million are available from different funding streams, including the Connecting Europe Facility Programme and the European Union’s cohesion policy. The objective of all the ongoing work is to ensure that the transit of Ukrainian grain does not create challenges in the Union. To ensure that transit of Ukrainian grain does not create challenges in the Union. It is extremely important to note that there is no evidence to suggest the contrary.  To conclude, we have been investing significant efforts and resources ensuring that Ukrainian grain can be exported and moved where it is needed most. We have ensured support to European Union farmers. The introduction of the temporary preventive measures have structured and stabilised the market in border countries. It has not restricted export of Ukrainian grains through solidarity lanes. There is also evidence at our disposal that suggests that, provided there is a good will and continued efforts, there is sufficient logistical capacity to transport the upcoming harvest in Ukraine. It is against this background that we will decide on the appropriate measures to further ensure the transit of Ukrainian grains through the neighbouring Member States while avoiding logistical bottlenecks. I look forward to hearing your views today.