Trade talks could cost Europe’s farmers €7.7bn

Farmers across Europe could face losses of up €7.75bn if the European Union finally agrees a trade deal with South America.

A report by the Joint Research Council says easing trade rules between the EU and the so-called Mercosur group of Latin-American countries could leave farmers facing significant income losses in 2020.

And it says European beef farmers would be most severely hit thanks to rising imports from Mercosur countries.

The report, which analyses a range of scenarios based on offers made by the EU during previous talks, suggests imports of beef be about 5,000t if a deal was made during the Doha round of trade talks.

But that figure could rise to as much as 524,000t if a Mercosur deal was made after the Doha talks, leaving beef farmers facing losses of up to €4.6bn.

Total losses to the meat sector could reach €5.8bn, of which €0.8bn would fall to the poultry sector.

Other food sectors, including processing, could lose up to €3.23bn in the worst-case scenario under a Mercosur deal, the report adds.

Despite the losses to agriculture, officials say the gains to the EU’s manufacturing sector outweigh losses to agriculture.

The next round of negotiations is set for March 2012.