EU approves €1bn Polish state support for farmers affected by Russia’s war in Ukraine

The European Commission has approved a Polish government programme to provide around €1 billion (4.7 billion zloty) of state aid to support farmers who have suffered as a result of Russia’s war against Ukraine.

The support will consist of direct grants of up to €250,000 per beneficiary to help agricultural producers weather increases in fertiliser prices and the lack of stability on the market.

“The Commission concluded that the Polish scheme is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State,” said the EU’s executive. The bloc’s rules generally prohibit state aid apart from in certain justified cases.

The aid will be allocated to Polish agricultural producers affected by the war or by the subsequent sanctions and countersanctions. It has to be granted no later than 31 December 2023.

The scheme was approved under the State Aid Temporary Crisis and Transition Framework, adopted by the commission in March and which is an extension to an earlier programme conceived shortly after the beginning of Russia’s aggression on Ukraine.

The framework’s aim is to support key sectors in the transition to a net-zero economy by introducing measures to reduce energy consumption and facilitate decarbonisation, while also shielding certain sectors from the adverse effects of the current crisis.

When the war first broke out, fertiliser prices were already at a record high due to post-pandemic bottlenecks. The invasion, however, and the resultant sanctions on the world’s biggest exporter, Russia, pushed prices even higher, which in the case of potassium chloride rose by 50% to over $1,200 per metric ton within the first two months.

Today's decision is yet another green light from the European Commission for the Polish government to introduce support measures for farmers. Last week, it approved a programme worth €1.3 billion providing insurance subsidies for agricultural producers.

Both decisions came after recent protests by farmers in Poland - as well as other eastern EU member states - over the effects of Ukrainian grain transports, which have increased during the war and which farmers say have lowered prices on the market.

Those complaints led Poland to introduce a unilateral ban on Ukrainian grain imports and transit - something not permitted under EU trade rules but which eventually led to an agreement with Brussels that banned imports in five member states but allowed transit through them to continue.

As part of the deal, the European Commission has also pledged €100 million to support farmers in those five states, including €40 million for Poland.

Main photo credit: Chris Ensminger / Unsplash 

Alicja Ptak

Alicja Ptak is senior editor at Notes from Poland and a multimedia journalist. She previously worked for Reuters.