To support it , the EU abolished import duties for mid-2022. Now Ukrainian farmers receive a concession for agricultural products that says much about the power of the agricultural lobby. The German poultry industry also notes that much of the income ends up with an oligarch. Wolfgang Schleicher wants no misunderstandings to arise. “It was right to open trade with Ukraine as a first step,” notes the Chief Executive Officer of the Central Association of the German Poultry Industry (ZDG). This refers to the abolition of customs duties on the supply of agricultural products from Ukraine to the European Union (EU), such as wheat and maize, sugar and honey or eggs and poultry. With this step, the EU wanted to help Ukraine and especially the economy there after Russia’s Russian attack. “After about a year and a half, however, it is clear that the existing, fully liberalised trade regime must be adjusted,” Slyher told Welt. Meanwhile, visible market distortions have occurred in its industry, resulting in competitive disadvantages for the German and European poultry industry. In fact, the deliveries of poultry meat from Ukraine to the EU have recently developed very dynamically – from 100. 000 tonnes in the pre-war year 2021 to 163. 000 tonnes next year and finally over 230. 000 tonnes in 2023, as shown by the figures of Europe’s largest turkey meat merchant, Hydemark from Lower Saxony. “This puts considerable pressure on the market,” says Slyher, an industrial representative. This is because products from Ukraine are much cheaper than those from EU producers. According to the expert, the reasons for this price difference are lower standards for animal husbandry with, for example, higher livestock density in stables or easier use of drugs and antibiotics. In addition, the cost of feed is significantly lower due to the large harvests of wheat and maize in Ukraine. And feed accounts for about 70% of the cost of poultry production, according to industry. Associations and companies therefore seek help from politicians. Only recently, they wrote a letter to Federal Finance Minister Robert Habeck (Green) requesting the adaptation of trade relations between the EU and Ukraine. ‘ Producers as well as slaughterhouses and processing plants in Germany cannot compete with Ukrainian products, which are mainly exported to the European market by a single, very large poultry producer in Ukraine’, says a letter from the German Federal Association of Poultry Slaughters, which is available to Welt. ‘In the context of highly distorted competition, it seems appropriate to make an effort to restore the initial situation in the medium term’. This refers to the restriction of duty-free imports up to a certain free quota. The affected farmers, on the other hand, protested loudly on the streets, in some places even with border blockades. The five countries Poland, Hungary, Slovakia, Romania and Bulgaria have temporarily restricted the import of certain agricultural products from Ukraine independently – although the European Commission is in fact responsible for the international community’s trade policy. New rules for eggs, poultry, sugar, corn, oats and honey Brussels has, however, so far seen no reason for changing import rules. Just in September, Trade Commissioner Valdis Dombrovskis said he does not see “market distortions” and that farmers will not be harmed. Now, however, the Commission is making a turn. The negotiators from the EU Member States and the European Parliament agreed to reintroduce customs duties in large quantities of certain food products from Ukraine. In particular, this includes eggs, poultry and sugar, as well as corn, oats, oatmeal and honey. A quota has now been fixed for these goods, which can continue to be delivered free of charge, based on the average import volume in 2022 and 2023. Once this quantity is completed, customs duties will be collected for all further deliveries. The new regulation is to apply until June 2025, but before that the Member States and Parliament still have to formally agree. There was never an intention for agricultural products to flood the European market and create problems in domestic agriculture, Daniel Caspary, the chairman of the CDU/CSU Group in the European Parliament, justifies. However, the review of the EU is also likely to have something to do with the protests of farmers who recently took place in Brussels itself. In late February, hundreds of tractors passed before the commission, many breaking police barriers. Farmers set fire to tires and threw fertilizer on the streets. In addition, major EU states such as France and Poland have put pressure on the background, he says. According to reports, the two also fought in the night negotiations to set quotas for the import of wheat, but did not find enough companions for it. However, the Prime Minister of Ukraine, Dennis Smugal (Denys Shmyhal) welcomed the interim agreement. Producers from his country will continue to be supported, he said during a visit to Brussels. Above all, Polish farmers, who have been protesting for days and hindering crossing the border to Germany to stop truck transport, are unhappy. They would prefer to use the year 2021 as a starting point for the ceilings, i.e. the current situation before the Russian offensive war. However, there was already a lot of nagging in the poultry industry. At 90,000 tonnes, the exemption quota for imports from Ukraine then in force was more than twice the original. The background is the so-called Batman cut. A small bone is left in the breast fillet. “The original quota of 40,000 tonnes was only referring to breast fillets, the remaining quantities could be exported from Ukraine duty free to the EU. Due to small bone residues, the export volume could then increase over the actual quota. In a company in the Netherlands, imported meat was eventually released from the residual bone and sold mainly to the feed industry and meat processing businesses, the expert describes. Following this fraud by cutting Batman, at some point the European Commission granted the quota from 40,000 to 90,000 tonnes. “Ukraine’s only consideration was to renounce this questionable method in the future,” Slyher says. Mainly chicken fillet and chicken breast, both fresh and frozen, are delivered by Ukraine. The main supplier is Myronivsky Hliboproduction, or MHP for short. The group is one of the largest poultry producers in Europe, with factories in both Ukraine and other countries. MHP is listed on the London Stock Exchange, the majority of the shares belong to MHP Management Limited, which is supported by MHP founder Yuriy Kosyuk. The oligarch is considered one of the richest Ukrainians, according to Welt.
The reasons behind the re-establishment of European customs duties on Ukrainian agricultural products
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