Farmers in EU raise alarm over Mercosur, Ukraine trade deals

By Sybille de La Hamaide and Inti Landauro

PARIS/MADRID (Reuters) -French and Spanish farmers warned on Wednesday that a flood of imports under planned European Union trade agreements with South American bloc Mercosur and Ukraine risked severely undermining European agriculture.

The concerns come ahead of Brazilian President Luiz Inacio Lula da Silva's official visit to France and the expiry on Thursday of a free trade deal with Ukraine, which is expected to shift to import quotas this summer.

Lula said on Tuesday he would discuss the EU-Mercosur deal with President Emmanuel Macron, a strong critic of the agreement in its current form, which was finalised in December but still needs approval from member states.

In a meeting with members of parliament, French farmers' groups urged Macron to rally enough partners to form a blocking minority against the Mercosur deal, which they say would be devastating for the beef, poultry and sugar industries and compromise the EU's ambitions in terms of food sovereignty.

"It would be a real tragedy for our industry," Alain Carre, head of French sugar industry group AIBS said. "We're sounding the alarm."

French farmers held nationwide protests last year over low incomes, rising costs, and competition from cheap imports, particularly from Ukraine and Mercosur countries, demanding fairer trade terms and lighter regulation.

"Our demands (for an EU-Mercosur agreement) are simple: reciprocity of rules, traceability abroad and much clearer labelling," Jean-Michel Schaeffer, head of French poultry industry group Anvol, said.

Meanwhile, a few hundred farmers protested in Madrid against cheap grain imports from Ukraine and other countries, saying prices have fallen below production costs.

Spanish farmers are likely to lose 1 billion euros ($1.1 billion) this year, said Javier Fatas, a leader of farmers union COAG from the Aragon region in northeastern Spain.

"This happens because of trade deals signed by Spain and the EU as part of geopolitics, bringing us prices too low to sustain our farms," Fatas said.

He warned that genetically modified grains from Mercosur also created unfair competition, echoing French farmers' concerns.

Wednesday's protest was peaceful, but only the beginning, he added. "Bad times are coming."  

Here are the main EU import quotas for Mercosur products in the agreement:

Product Quota Volume Tariff / Note

Beef 99,000 t 7.5% tariff

Poultry 180,000 t 0%, phased in over 5 years

Pork 25,000 t 83 euros/tonne

Sugar 190,000 t 0%

Corn (Maize) 1,000,000 t 0%, phased in

Industrial 450,000 t 0%

Ethanol

Fuel Ethanol 200,000 t One-third of MFN tariff

Rice 60,000 t 0%

Honey 45,000 t 0%

($1 = 0.8770 euros)

(Reporting by Sybille de La Hamaide in Paris and Inti Landauro and Susana Vera in Madrid. Editing by Mark Potter)