EU plans tariffs to prevent Russian grain sales boosting its war effort

Fear of Moscow deliberately flooding the European market prompts tariffs on Russian wheat and oilseed

Farmers sow barley in Starobesheve, in Russian-controlled eastern Ukraine. EU officials believe Russia's exports include pilfered Ukrainian grain. Reuters

The EU is planning an effective ban on Russian grain imports to prevent the Kremlin from using a boom in sales to its wartime advantage.

European officials fear Russia could turn to its hybrid warfare playbook by flooding the EU grain market, potentially adding to rural unrest on the continent.

Europe also wants to cut Moscow's revenues as a growing war economy boosts Russia's hopes of prevailing in the conflict with Ukraine.

Russian wheat is selling at competitive prices, especially to sub-Saharan Africa, and its exports are projected to rise to 51 million tonnes this year from 33 million in 2021/22.

EU officials believe Russia's sales include pilfered Ukrainian grain, but its domestic food production is also growing and some has found its way to Europe.

While much of Russia's economy is under sanctions, the West has been eager to say there are no sanctions on food to refute claims of a knock-on effect on Africa.

To maintain that position, the EU is proposing high tariffs on Russian grain that it hopes will “suppress such imports in practice” without technically banning them.

The tariff of 50 per cent on oilseed and €95 ($103) per tonne of wheat will apply to Russia and its close ally Belarus.

It will differ from sanctions in that there are no rules against EU companies handling, transporting, storing or financing Russian grain.

The tariffs “will reduce Russia’s capacity to exploit the EU for the benefit of its war machine”, said European Commission president Ursula von der Leyen. The plan will need approval by member states.

“We maintain our commitment to preserving global food security, especially for developing countries. We are striking the right balance between supporting our economy and farming communities,” she said.

Russia said it has “many alternative export markets”. Consumers in Europe “would definitely suffer”, Kremlin spokesman Dmitry Peskov said.

Polish farmers have blockaded roads to protest against cheap Ukrainian goods flooding their market. AFP

Russia and Ukraine are two of the world's top agricultural exporters and the war has been blamed for spiralling prices in the Middle East and Africa.

A UN-brokered deal to guarantee safe passage in the Black Sea was scrapped by Moscow last year. Since then, Ukrainian forces have opened up a new sea lane to boost exports.

The EU has previously moved to restrict imports from Ukraine after an influx of cheap goods caused a rural revolt in countries such as Poland.

In one incident, 160 tonnes of Ukrainian corn was deliberately spilt from railway wagons in Poland in a protest against unfair competition.

With farmers taking to the streets in several EU countries, officials say Russia's “willingness to use food exports as a geopolitical tool” means it could try to meddle in the market.

“Significant volumes of Russian supplies could be quickly and easily reoriented to the EU market,” a senior EU official said. “There is thus a risk of destabilisation of the EU market.”

The EU says there will be no impact on global food security because the tariff does not affect Russia's trade with the rest of the world.

“On the contrary, the increase of EU tariffs is expected to substantially reduce the flows to the EU, thus increasing the availability for third countries,” the official said.

Officials have rejected calls to buy up the Russian grain to give to Ukraine, saying it would be too expensive and that much of it is feedstock with little humanitarian value.