The EU is set to implement increased tariffs on Russian fertilisers and agricultural products to diminish its economic ties with Russia. This move aims to lower Russian revenue, but there are concerns about potential impacts on EU food prices, which are causing apprehension among farmers.
Currently importing 25% of its nitrogen fertilisers from Russia, valued at €1.3 billion annually, the EU will impose tariffs starting at 6.5% as of July 1, potentially escalating to almost 100% by 2028. Belarus, supportive of Russian military actions in Ukraine, will also face similar rates. Agri-food imports like meat, dairy, and produce will incur 50% tariffs.
According to Euronews reporter Gerardo Fortuna, "There is a strong moral and strategic justification. Russia imposes a 23.5% export tax on fertilisers, which means that by buying these products, the EU is indirectly financing the war in Ukraine." He further noted an environmental perspective, as EU fertiliser production has lower carbon emissions compared to that of Russia.
These changes have relieved EU producers who anticipate increased market share after struggling with heightened energy costs and competition from affordable Russian exports post-2022 invasion of Ukraine.
Meanwhile, farm operations are concerned about rising fertiliser costs. Fortuna highlights that despite the European Commission's proposed relief efforts, "farmers don't consider them adequate to deal with the expected price increase."
To mitigate price volatility, the EU might eliminate tariffs from alternative suppliers like the U.S., Canada, Oman, Morocco, and Algeria. MEP Inese Vaidere mentioned, "Since the beginning of the war in Ukraine, around €500 billion has been spent to help farmers." Nonetheless, tariffs won't apply to Russian exports to certain developing nations, vital to their economies.
Russia, a major fertiliser exporter, primarily serves Brazil, India, the U.S., China, and Indonesia, with gas as a critical component in production. The tariffs aim to pressure Russian economic resources amid the ongoing conflict.
Source: Euro News
