EU offers farmers extra funds to quell anger over Mercosur trade deal

The European Commission (EC) offered a concession on Tuesday to farmers outraged by a trade deal with South America's Mercosur bloc and plans to overhaul the European Union's (EU's) agricultural subsidies, pledging additional funds for the sector.

The Commission plans to adjust its 2028–2034 budget proposal to allow farmers to receive around 45 billion euros, among other reforms to support Europe's agricultural industry, EU chief Ursula von der Leyen wrote in a letter.

The MERCOSUR agreement has been fiercely opposed by farmers, particularly in France and Italy.

This agreement should help the EU to export more vehicles, machinery, wines and spirits to South America. The agreement also facilitates access to the European market for South American meat, sugar, rice, honey and soya beans.

Some EU countries, such as Germany and Spain, welcome the agreement, which could help boost exports at a time when global trade tensions are running high.

But the agreement has raised concerns among farmers, who fear they will be outcompeted by a flood of cheaper goods from agricultural giant Brazil and its neighbours.