Farmers protesting in the country demand closing the borders against imports from Ukraine. The government is of the opinion that it cannot do this due to the geopolitical situation. The impasse continues. The Polish Association of Cereal Producers proposes a solution.
The Polish Association of Grain Producers requested the Ministry of Agriculture to establish a reference price for grain imports from Ukraine. What exactly is this about?
– As farmers associated with PZPRZ, we are closely observing the events currently taking place in Poland and Europe regarding the grain market. We are very concerned about the situation we all find ourselves in. There are many aspects that cause this situation, but we would like to focus on the problem of importing grain from Ukraine and its direct impact on the Polish market and propose a solution that could significantly reduce it – admits Przemysław Bochat, president of PZPRZ.
Reference price in grain imports
As the head of the PZPRZ notes, due to the above-mentioned inflow of grain from Ukraine, which unfortunately takes place at prices much lower than the prices applicable on the domestic market, entities purchasing grain in our country have reduced prices to levels unacceptable to the hosts.
– Due to this situation, we want to propose the introduction of a mechanism imposing a public levy paid by entities trading in grain. The mechanism would be based on the reference price of grain and possibly other agricultural products applicable on the Polish market. The reference price could be the average price of cereals from the last year, according to the Central Statistical Office calculations, the average price of the Matif exchange or another price adopted by the Ministry of Agriculture and Rural Development – explains Przemysław Bochat.
And adds:
– We propose that an entity that imports an agricultural product from Ukraine or another non-EU country to Poland below the reference price and puts it on the domestic market will be obliged to pay the difference between the purchase price and the reference price to the “Settlement Manager”, which could be one of the existing institutions working for agriculture – KOWR or ARIMR.
The funds collected in this way on the “Settlement Manager” account should be distributed back to the farmer as support (subsidy) resulting from sales below production costs, e.g. for each tonne produced/sold, after presenting the appropriate invoice.
This is a general idea, as President Bochat emphasizes, but in the opinion of the PZPRZ, it will make it unprofitable to buy grain below the reference price, and thus the trade in grain from Ukraine will be stopped.
– Additionally, to exclude abuse and avoidance of payments, high penalties for fraud in the proposed system should be established – he adds.
Following the example of energy market law
The association mentions in a letter to the Minister of Agriculture, Czesław Siekierski, that a similar mechanism has been effectively in force in Poland since 2022 and applies to the electricity market. This is regulated by the Act of October 27, 2022 on emergency measures aimed at limiting electricity prices and supporting certain consumers in 2023 and 2024.
– In the opinion of PZPRZ, the introduction of a similar mechanism regarding the extraordinary situation on the grain market could effectively stop the problems of Polish farmers and be an example for other EU countries that are also struggling with market instability caused by excessive imports from Ukraine – emphasizes Przemysław Bochat.
Tax on excess profits
In his opinion, another effective solution could be the introduction of a high income tax on grain trade and high profits achieved by grain trading companies.
– However, we are aware that this solution will be much more difficult to implement, but we also propose to address this issue and maybe in the next year we will also be able to introduce this systemic solution – writes the president of the PZPRZ in a letter to the minister.
Farmers protesting in the country demand closing the borders against imports from Ukraine. The government is of the opinion that it cannot do this due to the geopolitical situation. The impasse continues. The question is whether the solution proposed by the Polish Association of Cereal Producers, in this or a modified form, will find acceptance among decision-makers.
– .
