French brace for ‘massive’ imports of South American beef

SAINTE-CECILE, France: Cedric Mandin, who raises some 800 Charolais cows with his brother in France’s Vendee region, is the fourth generation of his family to own their farm, and he fears he will be the last. The source of his worry is a huge trade deal being negotiated by the European Union and the four Mercosur members Argentina, Brazil, Paraguay and Uruguay-an accord whose signature seems closer than ever.

If the treaty goes through, “we would be in an impossible situation, untenable”, said Mandin, 44, who inherited his 270-hectare farm 20 years ago.

“Today we’re paid between 3.60 and 3.70 euros per kilogram of meat, but our production costs are 4.50 euros a kilo,” he said while chain-smoking cigars. “We already have a deficit and face a difficult situation on our farms. If on top of that we add these massive imports of South American beef in Europe, we’re liable to see prices collapse.”

France’s cattle industry, the largest in Europe, has been facing a deep crisis of rising costs and lower prices-against a backdrop of falling meat consumption. Many ranchers are barely able to make a profit, while debt levels have been rising.

‘We’ve tried everything’

“We’ve been in a crisis for four years, four years that we’ve been trying to streamline everything, clamp down everywhere, cut our costs to the limit,” said Mandin, shrugging his shoulders.

“There comes a point where you can’t cut any more-in terms of competitiveness we’ve tried everything.” If the EU and the South American countries reach the agreement, at least 70,000 tons of Mercosur beef could enter Europe each year, free of custom charges. European negotiators consider this an enormous amount, while the South American side says it falls well short of what is necessary. The new imports would represent just one percent of Europe’s total beef production, and 4.5 percent of France’s output.

But ranchers say the current market structure could not absorb the increase, which would come on top of the 65,000 tons the EU has agreed to allow in from Canada as part of a trade deal.

That assessment is shared by Philippe Chotteau, chief economist at the French Livestock Institute, who said the lower-priced beef will “aggravate the crisis”.