Copa and Cogeca criticize proposed EU sanctions on Russian fertilizer over food security risks

Copa and Cogeca have warned that the European Commission’s (EC) adoption of a proposal to impose sanctions on nitrogen-based fertilizers from Russia and Belarus could result in extensive economic harm to EU agriculture. The farmer and agri-cooperatives say that no prior impact assessment was conducted to gauge the proposal’s effects on the region’s food security and the economy. Moreover, they warn the current proposal leaves farmers with no viable alternatives.

The agricultural products affected by the new tariffs comprised 15% of agricultural imports from Russia in 2023, which had not yet been sanctioned. Once the European Parliament and the Council adopt the proposal, all Russian agricultural imports would face EU sanctions.

The EC notes that the proposal aims to reduce EU dependency on Russian and Belarussian imports, particularly fertilizers. Such reliance makes the region vulnerable to potential Russian coercive measures, posing threats to food security, the Commission observes.

“These tariffs are carefully calibrated to serve multiple goals. We aim to weaken further Russia’s war economy while reducing EU dependencies, supporting our industry, and preserving global food security. We will take every step necessary to protect our fertilizers industry and farmers,” says Maroš Šefčovič, commissioner for Trade and Economic Security; Interinstitutional Relations and Transparency.

Some stakeholders, such as Fertilizers Europe, lauded the potential regulation as a “clear recognition of the need to level the playing field.”

“For too long, the European fertilizer industry has been exposed to artificially low-priced imports from Russia and Belarus, seriously distorting the market and undermining fair competition. Consequently, the Russian share of EU nitrogenous fertilizer imports reached a five-year high, while urea imports volumes from Russia reached a ten-year high,” says Leo Alders, president of Fertilizers Europe.

While Copa and Cogeca have acknowledged the need to reduce strategic dependencies, the organizations highlight the need to diversify fertilizer suppliers, boost domestic production, and develop more eco-friendly sourcing alternatives.

The unions says there’s no guarantee Russian fertilizer shortages won’t lead to a deficit for farmers.

Potential economic costs for EU farmers

The farming lobby maintains that tariffs alone will not increase the competitiveness of the European fertilizer industry, calling for support toward ensuring companies have access to affordable energy and raw materials.

Otherwise, the organizations note that Russia and Belarus could potentially overcome EU import tariffs by rerouting exports through third countries.

The unions call the lack of an impact assessment “unacceptable.” They point out that European farmers have no guarantees that the changes in the supply of Russian fertilizers will not cause a deficit and that the shortfall will be offset by enhanced EU production at a competitive price.

This shortfall, they say, will pose unfair economic costs to farmers as European farming has become increasingly dependent on fertilizer imported from Russia over the past three years due to factory closures and decreased domestic output.

According to the organizations, a complete halt in Russian agri imports will force EU farmers to turn to third countries, where supply is limited and logistics complicated.

Recommendations on diversification and price monitoring

Instead, Copa and Cogeca call for a greater emphasis on the role of the circular economy, including on-farm solutions like manure and digestates. They believe that such measures will help reduce immediate shocks to the EU market.

The organizations urge the EU to boost its fertilizer industry, noting that Finland mines clean phosphate on a small scale while Germany, the Netherlands, Spain, and Poland produce some potash-containing fertilizers. However, some member states do not produce nitrogen fertilizer and are completely dependent on imports.

In a position paper, the cooperatives call on the EC to revoke import duties on fertilizers from third countries other than Russia and Belarus to enable stable trade ties.

They also recommend that EU policymakers postpone the entry into force of the proposed modifications to the tariffs on Russian and Belarussian agri products by one year to allow the market to adapt.

Copa and Cogeca advocate for a consistent price monitoring system that can trigger safeguarding measures when fertilizer prices exceed reference levels.

Lastly, the unions underscore the need for an effective impact assessment of the proposed regulations to avoid the “deadly games” the EU “cannot afford to play” with the agriculture sector.