Brussels, 29/04/2011 (Agence Europe) - A report by the Commission's Joint Research Centre, seen by EUROPE, concludes that any EU-Mercosur free-trade agreement would have a negative effect on agriculture in the Union, with revenues falling, depending on the scenario, by between 0.5% (€1 billion lost) and 3.2% (a loss of almost €7 billion). It is the meat sector which would be worst affected, with a fall in production of 150,000 tonnes and an 8% fall in producer prices. The countries hardest hit would be Ireland (with a fall of up to 5+% in agriculture income), the United Kingdom, Luxembourg, Italy, France, Finland and Austria. This impact assessment, presented to member states' experts on 27 April, is based on four possible scenarios.
1. The market access offer made by the EU in 2004 with import tariff quotas from Mercosur of: 100,000 tonnes (t) of beef and veal, 75,000t of poultry meat, 700,000t of maize, 200,000t of wheat, 40,000t of rice and 1,000,000t of ethanol.
2. The requests made by Mercosur in 2006, including quotas of beef and veal (300,000t), poultry meat (200,000t), wheat (1,000,000t), maize (3,500,000t), rice (150,000t), sugar (200,000t) and ethanol (1,000,000t).
3. The EU's 2004 offer combined with the Doha Round, which would deliver the following import quotas: 60,000t for beef and veal, 45,000t for poultry meat, 120,000t for wheat and 600,000t for ethanol.
4. The Mercosur requests plus the Doha Round (the EU would pay twice).
Taking 2020 as the reference, the effect of each of the four scenarios would be to reduce European agricultural income by 0.5%, 1.1%, 2.3% and 3.2% respectively.
The impact on Community beef and veal production would be bring about reductions of the order of 10,000t, 150,000t, 100,000t and 170,000 respectively. Beef and veal prices to producers will drop by 1%, 8%, 4% and 9% respectively. The loss is estimated at €3 billion in the worst case scenario (the fourth). EU poultry meat production would experience a fall of between 80,000t and 280,000t, and pig meat production could fall by as much as 140,000t. At worst, European dairy production could fall by 60,000t. European butter prices would be most affected, dropping by 7%. Cereal production in the EU could tumble by 3.5 million tonnes in the worst scenario, and prices by up to 1.5%. The prices of citrus fruits in the EU could fall by between 2% and 5.5%. Rice prices could plummet by as much as 11.8% and olive oil by 6%. A fall of a little over 3% in European sugar prices is also forecast, with production tumbling by 16%, resulting in a loss of €1.8 billion. (L.C./transl.rt)