The European Commission has proposed a significant increase in tariffs on Russian grain entering the EU market as a preventive measure against potential market disruption by Russia. The proposed tariffs would apply to cereals, oilseeds, and derived products originating in Russia and Belarus, one of Vladimir Putin’s allies. The EU plans to impose a €95-per-tonne tariff on Russian maize and wheat and a 50% ad valorem duty on other products. The aim is to discourage purchases of Russian grain, which last year amounted to 4.2 million tonnes worth €1.3 billion. The proposal still needs approval from member states through a qualified majority vote.
The measures are designed to prevent Russia, one of the world’s largest agricultural producers, from dumping low-cost cereals on the European market, potentially causing market turmoil. The proposal aims to deprive Moscow of revenue from grain exports and prevent stolen Ukrainian grain from entering the EU. Despite the steep tariffs, European companies would still be able to buy, sell, and store Russian and Belarusian grain, although it would no longer be economically viable. Certain exemptions would apply, such as cereals transiting through the EU to reach other countries like those in Northern Africa.
The proposal was unveiled following a meeting of EU leaders in Brussels, where concerns were raised about Russian access to the European agricultural market and the unfair competition faced by Ukrainian exporters. The first shockwaves in the agriculture sector occurred when Russian troops blocked Ukraine’s traditional trade route towards low-income nations by blockading the Black Sea. As a response, the EU introduced “solidarity lanes” for Ukrainian goods, exempting them from tariffs and quotas, but this led to tensions with some member states complaining about the impact on local farmers.
While efforts have been made to address the agricultural dispute between the EU and Ukraine, a lasting solution has proven elusive. Member states recently reached a deal to extend the free-trade regime until 2025, with additional safeguards for certain food products. However, some member states requested more time to analyze the text, raising doubts about the process. The proposal to increase tariffs on Russian grain is seen as a way to safeguard the EU market from potential disruptions and prevent the exploitation of stolen Ukrainian grain by Russian exporters.
During the EU leaders’ summit, calls were made for a complete ban on Russian grain, which would have required the imposition of sanctions. The proposal for increased tariffs aims to protect the EU market from destabilization, prevent Russia from using revenues from grain exports, and stop the entry of illegally obtained Ukrainian grain. Despite the small share of Russian and Belarusian grain in EU imports, the Commission believes that Russia has the capacity to cause disruptions if needed. The proposal must be approved by member states, and concerns remain about the ongoing agricultural dispute between the EU and Ukraine.
