Mercosur Deal - EU Beef Sector Will Be Hit Hard

As the EU Commission’s Agriculture Department publishes its impact assessment report on a possible Free Trade Agreement between the EU and Mercosur countries (Brazil, Argentina, Uruguay, Chile), it shows that the deal may cause a decline in farm income, especially in the beef sector.

1 December 2011

3 minute read

Ulster Farmers’ Union (UFU) Deputy President Harry Sinclair, who was in Brussels this week, said: “The latest figures published in the DG Agri impact assessment paint a bleak picture for the EU beef industry. It is being estimated that beef prices could drop almost five per cent, while overall beef production would drop 2.8 per cent."

"It also predicts that Member States who are more dependent on meat production, such as Northern Ireland, can expect farm incomes to drop by two to three per cent and there would be a distinct impact on employment rates.”

A recent study, carried out by the EU’s Joint Research Centre (JRC), has further added to the UFU’s concerns around the Mercosur deal.

Mr Sinclair continued: “The JRC’s report highlights that if the Mercosur deal was to go ahead the EU agriculture sector would lose between £3.9 and £6.65 billion and the beef industry is likely to be the most severely affected due to a sharp rise in Mercosur imports. The JRC’s figures combined with the impact assessment figures are extremely worrying and the UFU believes it would be totally unacceptable for this deal to go ahead as it threatens EU jobs and farm incomes."

“What is baffling to me is that the EU Commission talk about the importance of food security and how Europe needs to be able to produce enough food to feed its growing population, and yet it is working to agree a deal that will put the EU’s agriculture industry in serious jeopardy."

"In particular, the Mercosur deal poses a very real and serious threat not only to Northern Ireland’s beef Industry but to the EU’s beef industry as a whole. I am urging the EU Commission to rethink this deal and to ensure that any deal agreed does not disadvantage EU farmers or threaten one of the EU’s key industries.”

National Farmers Union Scotland Livestock Policy Manager, Penny Johnston, also commented: “Grassland-based beef production, which is the cornerstone of Scottish agriculture, must not be the pawn that is sacrificed to secure a bilateral trade deal with the Mercosur bloc in 2012. This impact assessment confirms what NFUS already suspected. Food producers in the EU would suffer a fall in returns because of the deal and beef would bear the brunt as a consequence of a significant uplift in beef imports from that area."

“Not only could we see production hit but revenues from beef production could also fall. If that were to happen it would be a travesty and risk undermining the current fragile stability we see in our beef herd and the improved returns we are enjoying from the marketplace for Scotch beef. We appreciate that there is growing political desire across Europe to see a trading deal struck with Mercosur. But the reality is that such a deal would jeopardise Scotland and the EU’s ability to produce food, as well as undermine our hard-earned food security. The Commission must appreciate that is too high a price to pay.”