This is a subscriber-only article
The pending Mercosur deal is now extremely likely, as member states are focusing on “a bigger picture” and potential economic gain, according to Koen Dillen, member of the global issues team at the European Commission’s Directorate General for Agriculture.
Speaking at the 16th agri benchmark beef and sheep conference in Galway on Monday, Dillen said that the Commission has tried to minimise the potential impact of a Mercosur deal, but it also “has to be realistic across all sectors and we have to strike a balance between this – we are waiting to see what the final amount (of beef) is yet to be, but, yes, Mercosur won’t bring a lot of benefit to the beef sector”.
He also admitted that “if everything such as production and consumptions stays the same, and European consumers are happy to buy South American beef, then yes, simple economics mean that there will probably be a price drop".
However, he furthered this comment by commending the Origin Green programme and Ireland's drive for sustainability, implying these were the best option of safeguarding the price for Irish farmers.
Negotiations
Dillen did not give a definite indication as to when he believed a Mercosur deal might be finalised, but he did suggest that, after the upcoming Brazilian elections, a conclusion to negotiations could be more visible.
However, this comment was challenged by IFA president Joe Healy, who suggested that a Mercosur deal was "imminent".
While not referencing Mercusor beef directly, Dillen also said that future trading of beef between the EU and non-EU countries will not just consist of manufacturing beef: “Imports will add high-value cuts as well as just hamburgers – this will mean high competitiveness on main value products for farmers.”
He said “remuneration of all cuts of beef” was a key issue, saying that middle cut of beef currently had a very low remuneration at present.
Brexit
Dillen said that “frictionless trade is impossible” when referring to the UK’s departure from the EU.
Joe Healy pointed out the issue of CAP cuts to Dilllen, saying that, just last week, the IFA estimated that the proposed cuts to the CAP budget would cost Irish farmers €1.781bn per year over the lifetime of the next CAP, when inflation is taken into account.
In return, Dillen admitted the CAP cuts might not be desirable, but they aren’t as bad as expected. He explained that there are two aspects of the budget cuts.
“The first reason is Brexit. If Britain is leaving the EU, there is obviously going to be a cut in funding to the CAP.”
The second factor is a shift in priorities he explained: “Member states are changing their priorities. They want to focus on things like defence and immigration.”
However, Dillen concluded that if the budget was to be cut in proportion to these other priorities, the budget could be facing a 10% to 13% cut – “a 5% cut is not as bad as it could potentially have been”.
Resilient beef sector
Despite the many challenges facing the Irish beef sector, Dillen strongly emphasised that the European Commission strongly recognises the need for a resilient beef sector.
A presentation to the audience identified public goods, the maintenance of permanent grasslands and territorial balance as the key benefits identified by the European Commission that the beef sector can contribute.
SHARING OPTIONS: