FT: The EU will introduce a tax on cereals from Russia and Belarus for the first time
March 19, 2024
The European Union is preparing to introduce taxes on cereals from Russia and Belarus worth 95 euros per tonne, “to appease farmers and some EU member states”, writes the Financial Times. on Tuesday, March 19, citing sources. It should be noted that such a measure will be the first restriction on the import of food products after the start of the Russian Federation’s large-scale invasion of Ukraine.
The publication indicates that the introduction of duties of 95 euros per ton on cereals from the Russian Federation and Belarus will lead to an increase in prices by at least 50% and will drastically reduce demand. Taxes of 50% will also be established on oilseeds and their processed products, said the newspaper’s interlocutors. The European Commission may take a decision in this regard in the coming days.
Possible impact on the global food market
The FT recalls that Brussels hesitated for a long time to take such a measure, despite pressure from Poland and the Baltic countries due to fears that such measures could harm the global food market and affect developing countries.
In 2023, the volume of imports to the EU from Russia of grains, oilseeds and their processed products amounted to 4 million tons. This is a record level, corresponding to 1% of the volume of consumption of these goods in the European Union, writes the newspaper. “The EU now imports more cereals from Russia than before the invasion of Ukraine,” says the FT.
In February, Latvia imposed a unilateral ban on imports of many food products from Russia and Belarus, and Lithuania announced strict cargo controls. Meanwhile, EU Agriculture Commissioner Janusz Wojciechowski, who had previously argued that Russia’s cereal exports to Poland were “insignificant”, changed his mind after visiting his homeland in early March, where farmers are protesting actively, and said: “If Russia uses food as a weapon, we need to react.”
Polish farmers’ protests
Polish farmers have been protesting for several weeks against the import of agricultural products from Ukraine. They claim, in particular, that they are suffering heavy losses due to Brussels’ decision to suspend all import duties and quotas on agricultural products from Ukraine, whose economy has been weakened by Russian aggression.
Since November last year, Polish farmers have been blocking several checkpoints on the border between Poland and Ukraine because of this. Thus, on March 17, their tractors stopped traffic on the road bridge between the village of Świecko and the German city of Frankfurt an der Oder, and the agricultural equipment also blocked the Gubinek border post, located in southern Poland. According to local police, the blockade will last until the night of March 20.
On March 15, in a conversation with Polish Prime Minister Donald Tusk, the head of the European Commission, Ursula von der Leyen, indicated that she was “considering the possibility of introducing restrictions on the import of agricultural products from Russia”.
Grain import taxes or sanctions?
As the FT notes, EU Trade Commissioner Valdis Dombrovskis is also likely to choose higher tariffs over sanctions, as imposing sanctions would require the approval of all EU Member States. Furthermore, in the absence of sanctions, it will be possible to maintain the transit of Russian cereals to Africa and Asia through the EU.
“The EU produces more than 300 million tons of grains and oilseeds per year and is a net exporter of the former (i.e. the volume of product exports exceeds the volume of imports). -Ed.)therefore there is no need for Russian and Belarusian imports,” the FT said.
Source: DW
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