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Supply Chain

EU Offers Farmers Aid, More Land To Grow Due To Ukraine War

The European Union is set to distribute €500 million to help farmers and allow them to grow crops on fallow land as part of measures to mitigate food price spikes and potential shortages resulting from the conflict in Ukraine.

The European Commission proposals, published on Wednesday, also include assistance to Ukraine to help its farmers sow corn and sunflower seeds and tend to wheat.

Ukraine is a top global player in sunflower oil, with over 50% of world trade, and holds significant shares for wheat, barley and maize, which has already led to surges in prices and concerns about shortages.

'No Immediate Threat'

The EU executive stressed on Wednesday that there was no immediate threat to EU food security, given the bloc is a net exporter of cereals.

However, recognising farmers will face higher fuel and feed prices, the EU will distribute 500 million euros to the 27 EU members to aid farmers hardest hit by the crisis, particularly if they are engaged in more environmentally friendly production.

EU members can add a further €1 billion to the aid budget.

Temporary Solution

The EU executive will also let farmers temporarily grow crops on the almost 6% of EU agricultural land that is set aside to boost biodiversity.

The Commission believes this, along with record Indian exports, will help cover some of the 20 million tonnes of wheat which Ukraine normally exports.

The EU executive has proposed an emergency support programme of €330 million to Ukraine, some of which is designed to help farmers.

Ukraine's Agriculture Minister Roman Leshchenko told EU counterparts on Monday that his country wanted to remain in production, although he said the spring crop sowing area may more than halve this year.

The EU executive said its efforts would concentrate on ensuring availability of seeds and diesel, much of the latter requisitioned by the military, with Poland for example freeing up some of its strategic reserves.

News by Reuters, edited by Donna Ahern, Checkout. For more supply chain stories, click here. Click subscribe to sign up for the Checkout print edition.

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