The European Commission, according to a press release, has approved an €836 million plan to help farmers amid trade restrictions that have been enacted because of Russia’s invasion of Ukraine, and the West’s response to the invasion.
The plan is mainly aimed at helping farmers afford drastically rising costs of crop fertilizers as prices are expected to rise sharply in 2022. The sharp price hikes are due to Russia no longer exporting fertilizer to the West.
According to The Fertilizer Institute, Russia is the largest fertilizer exporter in the world, accounting for 23% of ammonia, 21% of potash, 14% of urea, and 10% of processed phosphate exports globally.
Higher fertilizer prices make crop production much more expensive, adding to an already-rising cost of food in Europe.
According to the Commission’s press release, Poland’s plan to use EU state aid states that each eligible farmer will be entitled to receive up to €107 (PLN 500) per hectare of agricultural land and €53.5 (PLN 250) per hectare of grassland and pasture, capping out at 50 hectares.
“In order to cover part of the fertilizers costs increase, the eligible beneficiaries will be entitled to receive aid up to €107 (PLN 500)* per hectare of agricultural land and up to €53.5 (PLN 250)* per hectare of grassland and pasture. The aid will be capped at the amount corresponding to 50 hectares,” the press release reads.
In addition to helping farmers continue producing at least the same amount of food, the aim of the scheme is to help protect the EU’s Single Market, keep a level playing field, and insulate regular people from the unintended consequences of the West’s sanctions against Russia.
“This €836 million scheme will enable Poland to support the farmers affected by the input costs increase caused by Russia’s invasion of Ukraine and the related sanctions. We continue to stand with Ukraine and its people. At the same time, we continue working closely with Member States to ensure that national support measures can be put in place in a timely, coordinated and effective way, while protecting the level playing field in the Single Market,” said Executive Vice President Margrethe Vestager.
Although speculative, another goal of the aid could be to help farmers produce more than usual, as Russia has stopped supplying all products to Europe, to include wheat.
Russian wheat accounts for nearly one-third (33%) of grain bought, sold, and eaten in Europe, meaning that food shortages could be a reality in Europe in 2022 and beyond.