Brussels faces long battle with its farmers as agricultural powerhouse Ukraine seeks EU membership

Open this photo in gallery:

The Ukraine-Poland border is a mess. Approach any of the six crossings from the Ukrainian side and you will see trucks lined up for kilometres to get into the European Union. Recent reports say that about 7,000 trucks, their engines idling round the clock to keep the drivers’ cabins warm, will spend between two weeks and two months waiting to cross.

Blame irate Polish farmers for the massive traffic jam. As they did in late 2023, the farmers have blocked the border crossings to protest the flood of Ukrainian food and animal-feed exports, which they claim are creating a price-cutting grain glut in Poland. With many of Ukraine’s Black Sea shipping ports bombed or occupied by Russian forces, much of Ukraine’s grain exports are being delivered to Poland by truck and rail. Poland’s farmers want restrictions placed on those exports.

While the blockade may end soon – Ukrainian President Volodymyr Zelensky says the border congestion is impeding the flow of weapons into his country just as Russian forces are gaining ground on the eastern front – the foul mood of the Polish and other EU farmers will not. Farmers and their tractors have taken to streets in Madrid, Rome, Athens and elsewhere to protest low prices, high costs, climate-related restrictions and cheap imports. These demonstrations are set to intensify in the next few years, to the point where they may dominate the economic and political agenda as Ukraine’s invitation to join the EU is fulfilled.

Granted, the Ukrainian exports are not the only issue – but they are the most pressing.

Ukraine’s agricultural products have been allowed to enter the EU free of tariffs since mid-2022. In order to prevent the collapse of Ukraine’s crucial agriculture industry, the EU lifted those restrictions a few months after Russia launched its full-scale invasion. But in doing so, the EU set in motion a process that could turn the European agriculture industry upside down, creating more victims than winners as Ukraine’s vast and formidable agriculture businesses gain permanent and uninhibited access to a market that feeds about 450 million people.

If you exclude Russia (whose land mass is mostly in Asia), Ukraine is Europe’s biggest country by area – double the size of Italy. Ukraine, which is largely flat, is essentially one big farm. Two-thirds of its arable land is loaded with the famously rich, black soil known as chernozem. No wonder that agriculture represented 11 per cent of Ukraine’s preinvasion GDP, almost eight times the level in the EU.

The high yields and the relatively low cost of production, partly due to inexpensive labour and fewer environmental restrictions, such as pesticide use, have delivered silo-loads of fear to EU’s farmers. Joachim Rukwied, president of the German Farmers’ Association, recently said Ukraine’s accession to the EU, expected by 2030 (assuming it does not lose the war), would “lead to the demise of family farming in Europe.”

In an autumn report on Ukraine’s bid for EU membership, the Vienna Institute for International Economic Studies, said that, “Especially in agriculture, the problem is not going to be that [Ukraine’s various industries] will be a burden for the EU, but rather that they could be too competitive.”

Money – specifically subsidies – is at the heart of the farmers’ fear. The EU’s Common Agriculture Policy is one of the world’s richest giveaway programs. Its roots go back to the early 1960s, when the founders of what would become the EU decided that German industry would get access to the French market in exchange for propping up French farmers. The subsidies have turned into a monster over time. The current seven-year CAP program, to 2027, is worth €378.5-billion and eats up 31 per cent of the budget.

Generally speaking, the subsidies paid to farmers are based on the number of hectares they have under cultivation. Given the enormous size of the Ukrainian agriculture industry and its individual farms (some cover more than 100,000 hectares), Ukrainian farmers are in for lottery-style winnings. The Financial Times reported last year that, based on the current CAP model, Ukrainian farmers would be eligible for €96.5-billion in funds. That means Ukraine’s accession to the European Union would cut the subsidies to current EU farmers by almost 20 per cent.

You can see where this is going. Imagine the rage of the EU farmers who may soon see an onslaught of cheap Ukrainian agriculture exports – wheat, corn, sugar, sunflower oil, barley, rapeseed – and a reduction in their subsidies at the same time. In other words, the EU would be paying Ukrainian farmers to wipe out family farms in the current member states. Even the biggest farms could struggle. Herein lies political hell for EU presidents, prime ministers and agriculture ministers, as well as the European Commission, the executive arm of the EU.

The big numbers behind the CAP are a measure of the farmers’ outsized political influence in the EU, even though they represent only about 5 per cent its population. Does Brussels have the skills and resources to fight this battle?

The CAP will have to be entirely rewritten, no doubt, to protect small farms as Ukraine gains entry. But where would the money come from to prevent farmers from paralyzing every European capital with mass protests? It may have to come from the EU’s other budgets, spreading the pain. The consequences of this inevitable battle to keep both EU and Ukrainian farmers happy is bound to be long, ugly and costly – and perhaps politically fatal to a few leaders.