Czechs right to opt out of Ukraine farm ban – analysts

Agriculture Minister Zdenek Nekula is right when he says Czech farmers are overplaying the role of Ukrainian wheat on their current travails, according to analysts cited by Czech business daily Hospodarsk Noviny (HN).

In contrast to Poland, Slovakia, Bulgaria and Hungary, Czechia has rejected the idea of banning imports from Ukraine to protect local farmers, amid falls in the price of wheat and other products. Poland even doubled down, claiming that Ukrainian grain is of inadequate quality due to potential contamination.

However, Nekula has called the moves of Czechia’s regional neighbours “populist” and “unnecessary”.

Ukrainian grain volumes negligible

Since mid-May 2022, the price of one bushel, or around 35 litres, of wheat has halved from CZK 300 to CZK 148. Farmers in Czechia have joined their counterparts in other countries by protesting and calling for the restoration of tariffs and stricter controls on routes that were intended for transit.

However, HN notes, only 4,000 tons of wheat were imported into Czechia annually – equating to less than 0.1% of the country’s total domestic production.

Analysts weigh in on debate

According to numerous Czech analysts, local farmers are largely to blame for the current problems themselves, HN quoted Czech agriculture experts as saying.

“In the 12 months after Russia’s full-scale invasion of Ukraine on 24 February 2022, 3.5mn tonnes of Ukrainian wheat was brought to the whole of Europe, while Czechia alone produces almost 5mn tonnes annually,” Czech analyst Tomas Maier said.

Czech farmers enjoyed a record level of profits last year, as they doubled to CZK 22bn, HN reported. “Now, after a good year, a bad one comes. This is a business risk that must be taken into account,” Maier said. 

Czech analysts doubt farmer associations’ claims

According to a recent survey by the Agricultural Union, Czech farmers still have 2.6mn tonnes of grain in their warehouses, up 40% year-on-year. 

Czech Agrarian Chamber President Jan Dolezal said “CEE is literally flooded with Ukrainian production. Stocks are significantly higher year-on-year. High-quality and safe production remains in our warehouses, and something that does not belong on the EU market is brought here,” he added.

Agricultural Union Chairman Martin Pycha agreed, and warned that “if the situation is not resolved, Czech farmers will be forced to burn their crops.”

However, Maier remained unconvinced, saying “I don’t think farmers will have to liquidate part of their production: some may demonstratively, but otherwise it makes no sense.”

Agriculture analyst Petr Havel meanwhile said last year’s speculations on price developments had got farmers into trouble. If Czech farmers “had started selling the grain right after the harvest last year, there wouldn’t be a problem,” according to Havel. 

“Instead, at the end of the year, they adopted a strategy of holding grain in storage and waiting for a better price – it didn’t pay off,” he commented.