Ukraine says Poland's farmer subsidies not in line with WTO rules

The Polish government approved 10 billion zlotys ($2.4 billion) in aid for Polish agriculture earlier this year to help its farmers compete with a glut of grains from Ukraine that had built up in Poland and other eastern European countries.

"These subsidies go far beyond what is allowed by WTO rules. (They) may be a minor development but can be a source of (trade) disturbances around the globe," Kachka told an International Grains Council (IGC) conference in London.

Poland has been one of the strongest supporters of Kyiv following Russia's February 2022 invasion, however the grains issue has caused tension for the Polish government, which relies on support from rural constituencies.

Poland, Bulgaria, Hungary, Romania and Slovakia became alternative transit routes for Ukrainian grain to help offset slowed exports via the country's Black Sea ports after the invasion.

Bottlenecks then trapped millions of tons of grains in the countries, pushing down prices for local farmers and prompting their respective governments to unilaterally introduce import bans on Ukrainian food products.

The European Union (EU) on May 2 reached a deal allowing the five countries to ban domestic sales of Ukrainian wheat, maize, rapeseed and sunflower seeds, while allowing transit for export elsewhere, including to other EU countries.

The European Commission, which oversees EU trade policy, says the bans will be phased out by mid-September, by which time it expects improvements in getting grain out of Ukraine and through the transit countries.

"We see no actual negative impact on the domestic markets of these states and we are working intensively with the EU on how to ensure the smooth operation of all trade routes," said Kachka.

He added that the trade disturbances caused by the war "lead to assumptions, speculations and unjust trading practices (when) in reality trade is a key factor that can stabilize markets".

The EU liberalised all imports from Ukraine for an initial 12 months from June 2022 to help Kyiv's efforts to fend off Russia's invasion. Last month it agreed to extend the tariff suspension for a further year.