EU-Mercosur Agreement: Impact on agriculture and the organic market in Europe

The EU-Mercosur Agreement is one of the largest trade agreements planned by the European Union. Negotiations have been ongoing for over 25 years, and the agreement was signed politically in 2026. The most sensitive point of the agreement lies in the agricultural sector.

The Mercado Común del Sur is a common market in South America. Its member states are Argentina, Brazil, Paraguay, and Uruguay. With an area of more than 12 million km², the Mercosur internal market is larger than China, Canada, or the US. Together with the EU, this would create one of the largest free trade areas in the world.

The purpose of the agreement is:

• to reduce customs duties,

• To reduce trade barriers,

• Facilitating market access for industrial and agricultural products.

While industrial sectors are hoping for new sales markets, there is intense debate in the agricultural sector in particular. This is because very different production systems, cost structures, and sustainability standards come together here.

A reduction in tariffs could make European industrial products (such as machinery or vehicles) significantly more competitive. In return, agricultural products from South America would gain easier access to the European market, including:

• Soybeans and soybean meal

• beef

• poultry meat

• Sugar and ethanol

The EU already imports millions of tons of soybeans (mainly from Brazil and Argentina) every year to supply European livestock farming. Around 85–90% of the soy used in the EU comes from imports (source: European Commission, EU Protein Strategy). Much of this is used as feed in conventional animal husbandry. If trade barriers continue to fall, this dependency could deepen.

Prices for meat are already very low:
According to AMA market data and price surveys in the Austrian food retail sector, 1 kg of conventional chicken meat is regularly offered at promotional prices below €5 (source: AMA market reports on poultry, trade observations 2024/2025).

Such prices are possible thanks to:

• intensive livestock farming

• global commodity flows

• imported feed

• significant economies of scale

• enormous cost pressure along the entire value chain

A market in which 1 kg of chicken costs less than 1 kg of seasonal organic vegetables shows how strongly the conventional food industry is already oriented toward global commodity flows.

The central question is therefore:
Should competition be decided primarily on the basis of the lowest feed price—or on the basis of quality, transparency, and sustainable production systems?

In the short term, no immediate structural changes are expected for the European organic sector:

• EU organic standards remain binding

• Imported products must continue to comply with EU requirements.

• Certification systems ensure clear production criteria

In the long term, however, the impact of the EU-Mercosur agreement on organic farming in Europe will depend on the political framework.

The decisive factor is:

• Are ecological and social standards designed in such a way that they can be verified and sanctions imposed?

• Will fair competition conditions for European organic farms remain secure?

• Will regional value creation and resilient structures continue to be strengthened politically?

A stabilizing factor for the organic market, especially in the DACH region, remains its strong regional character. It is precisely this rootedness in established structures, long-term partnerships, and clearly defined quality standards that makes the sector more resilient to global price pressure.

The globalization of markets, and thus also of agriculture, is a reality. From a purely economic perspective, it makes sense to manufacture products where production costs are lowest, while knowledge-intensive services are provided in high-wage countries. However, a closer look at the reasons why certain locations are supposedly "cheaper" reveals that cost advantages are often based on weaker labor rights and lower standards of protection for nature, animals, and the environment.

These differences are particularly evident in the meat market. Austrian cattle farmers are watching with concern as cheap beef from South America reaches the European market. Originally, grazing animals on the fertile grasslands of the Pampa Húmeda stood for extensive, natural production. But with growing global demand, the structure has changed there too: a significant proportion of the animals are now kept on huge farms and fattened with concentrated feed.

The organic sector is therefore structurally more stable than the conventional market, but it is not completely decoupled from overall economic price movements. If the gap between cheap and high-quality products continues to widen, there will be a growing need to explain this to consumers.

The future of the European organic market will not be decided at customs borders, but rather by the consistency with which quality, transparency, and sustainability are implemented.

Our core value of authentic regionality means:

• closed cycles

• regional feed

• transparent supply chains

• Measurable sustainability along the entire value chain

Trade agreements must not lead to indirect pressure on environmental standards. Markets should only be opened up where sustainability standards are subject to binding checks and fair competition conditions are guaranteed.

Leave the $5 chicken on the shelf and go for high-quality products. If you reduce your meat consumption at the same time, it won't cost you any more.