Confagricoltura, green light for EU duties on grain imports from Russia

The EU Commission has submitted to the Council a proposal to introduce extraordinary tariffs on grains, oilseeds and products derived from Russia and Belarus. On this, EU Agriculture Commissioner Janusz Wojciechowski said, “The Russian Federation uses agricultural products as a weapon. Russian grain sales abroad now amount to 50 million tons, which corresponds to 25 percent of exports on a global scale. In light of these figures, decisions made in Moscow can have a highly destabilizing effect. Therefore, we need to protect ourselves.”

The performance and prospects of the global agricultural commodities market are also affected by geopolitical and economic competition between the United States and China. In early 2020, a bilateral agreement was signed in which China made a commitment to increase imports of U.S. agricultural products by $200 billion over two years. U.S. corn exports to the Chinese market rose to 17 million tons. The understanding was not renewed, and currently, based on the latest data released by the State Department of Agriculture (USDA), sales have shrunk to 1.7 million tons.

Authorities in Beijing have decided to divert purchases to Brazil, which is part of the BRICS, the group of emerging economies joined by the Russian Federation, India and South Africa, among others, as well as China itself. In detail, more than 30 percent of Brazil’s corn exports went to the Chinese market last year. A broadly similar situation was recorded for soybean purchases. The loss of the Chinese market was offset by a sharp increase-more than 30 percent-of U.S. exports to the European Union.

As a result of Russian aggression against Ukraine and tensions in the Middle East, the global order has deteriorated. Trends in international trade are increasingly influenced by geopolitical interests rather than economic expediency.

On March 26, the EU Agriculture Council will begin discussion on CAP reform proposals put forward by the Commission to provide a concrete response to farmers’ protests. The Executive’s draft legislation includes positive changes with a view to bureaucratic simplification, but the absolute inadequacy of the CAP in relation to the unstable conditions on the international scene remains in the background.

Issues related to market stability, increasing the agricultural budget, and protecting farmers’ production potential and income remain open. And again: the dissemination of technological innovations for greater environmental sustainability and risk management as a function of climate change.

What is needed, in short, and urgently, is the development of a new strategy for agriculture and the agrifood system. This is the priority to be addressed immediately after the elections to the European Parliament and the installation of the new Commission.

Weekly note by Confagricoltura