S America trade deal ‘will hit beef farmers’

A TRADE deal which might adversely impact on beef producers in the European Union has been strongly criticised by MEP George Lyon.

Speaking in a European parliamentary debate, Lyon described the European Commission’s new plans to compensate farmers affected by trade deals as a “poisoned chalice” and said it should be rejected.

The proposals will, according to Lyon, mean that farmers hit by falling prices due to trade deals would no longer be compensated by increasing direct payments or coupled payments through the CAP.

Instead they would be offered one-off assistance to help them restructure their business or to find another job. This proposal would, he claimed, mean they would also be competing for funding from the European Globalisation Fund with workers made redundant by factory closures.

The immediate concern arises from the on-going trade talks between the EU and the Mercosur group of South American countries. A previously prepared paper has shown that freeing up trade on agricultural produce could see a 7 per cent drop in income for EU beef farmers if a Mercosur deal was agreed.

Reflecting on the history of compensation for trade deals, Lyon said: “In 1992, under the McSharry CAP reforms, farmers were compensated for the fall in prices due to the opening of the EU market to imports. This was achieved by the introduction of headage payments for livestock and arable payments based on acreage. Both these help form the basis on which the current single farm payments operates.

“When the milk market was liberalised in 2003 and the phasing out of milk quotas was agreed in the Fischler reforms, milk producers were compensated through the direct payments.

“Now the commission is proposing that beef farmers hit by trade deals such as Mercosur would no longer be compensated through the CAP.

“Instead they will be offered access to the Globalisation Fund which will see them competing directly against redundant factory workers for funding for retraining and restructuring of their businesses.”

Lyon described the proposed funding which the agricultural commissioner Dacian Ciolos had claimed was part of agriculture spending as nothing more than a “political fig leaf” to cover up the fact that the CAP has borne the brunt of the cuts proposed by the commission.

He was also concerned that, if the proposal was agreed by the European Parliament, it would give the Trade Commission a blank cheque when trade deals were signed. “It will signal a tacit acceptance of any future trade deal no matter how bad it is for farmers,” he said.

He called on the agriculture committee of the parliament to reject the proposal and to insist that compensation for farmers hit by trade deals should continue to be compensated through the Common Agriculture Policy.