EU-Mercosur: Whose Mercosur?
In all the previous pieces in this series, European farmers were in focus: their story, their hardships, their frustration in a competition they feel is rigged against them. Throughout those analyses I treated Mercosur as a homogeneous bloc. In reality it is anything but — a complex, varied web of actors living completely different realities around this same trade deal. In this piece I try to do justice to the smallholder on the other side of the agreement, and to understand why some of them have feelings eerily similar to their European counterparts.
A note on scope. Mercosur is five countries, but this piece works mostly through Brazilian examples — the Brazilian census, the Brazilian ministries, the Brazilian peasant movement. Brazil is the bloc's largest member, produces most of its agricultural output, and has the clearest institutional and statistical record. The structural patterns I identify have analogues in Argentina, Paraguay and Uruguay, but the Brazil case is where they show up sharpest. The smaller members deserve their own treatment and I owe them one in a follow-up piece.
The claim about shared feeling is not a rhetorical flourish. In November 2024, as European farmers prepared to march on Brussels against the deal, the organisation coordinating them sent a delegation to Rio de Janeiro to protest alongside peasant organisations from Brazil, Argentina, Paraguay and Uruguay. The same banner on both shores, against the same agreement, in two languages.
This piece is not arguing that the deal is bad for Brazil. The Brazilian government's own modelling says it is modestly good for the country in aggregate, and I take that as given. This is about a single premise buried in the European conversation — that "Mercosur" names a unit with one interest — and what falls out, structurally and emotionally, when you take the premise apart.
Two ministries
For most of the past twenty-five years Brazil has run agriculture through two ministries, not one. The Ministry of Agriculture handles the export-commodity economy — soy, beef, sugar, the part of Brazilian farming the world knows. A separate Ministry of Agrarian Development handles family farming, agrarian reform, and a third area that needs unpacking for a European reader, because it has no clean equivalent in our own institutional landscape: the formal titling of land for traditional rural communities.
In Brazil this means, principally, two groups. Indigenous peoples, whose territories the 1988 Constitution recognised as theirs by historical right and required the state to demarcate; and quilombolas, the descendants of communities founded by people who escaped enslavement during the slavery period (Brazil abolished slavery in 1888). Many quilombos established themselves in remote interior regions and remained there for generations, farming and living on land they had occupied for centuries but to which they held no formal title. The 1988 Constitution recognised their property right too.
The problem, for both groups, has always been the distance between constitutional recognition and an actual legal title a community can use to defend its land in court. Issuing those titles falls to the Ministry of Agrarian Development. So does the work of agrarian reform — redistributing under-used large estates to landless rural families, which is the legal mechanism that Brazil's Landless Workers' Movement (Movimento dos Trabalhadores Rurais Sem Terra, known by the initials MST) has spent four decades pressing the state to actually enforce. The MST is the largest social movement in Latin America, with more than a million members; its method is the peaceful occupation of large under-used estates, after which it presses the federal land agency to formally expropriate the land and settle the occupiers on it. The Brazilian Constitution provides the legal basis: it requires land to fulfil a "social function" and allows the state to expropriate estates that do not. The MST's politics are on the Brazilian left; agribusiness regards it as radical; its sympathisers see it as a rural-justice movement.
This matters for the piece because all three of the ministry's portfolios — family farming, traditional-community land titling, agrarian reform — sit at points of friction with the agribusiness frontier. Where titling is incomplete, the frontier advances. Where agrarian reform settlements abut large estates, conflict is structural. The ministry is not just an advocate for small farmers; it is the state's interface with everyone whose claim to rural land is older, weaker, or more contested than the deeds held by the soy and cattle complex. The other ministry, the one that handles export agriculture, is the state's interface with that complex. The two ministries are pointed at each other.
The point for this piece is structural: the same ministry that supports family farming is also the state body through which the MST's settlements actually get legalised. That is not a coincidence of bureaucratic organisation. It is the same fight under three names.
Two ministries, frequently two opposed interests, sometimes openly at war over the same budget. The arrangement has a name among the people who study it: institutional dualism.
The second ministry is not permanent, and its fate tracks the politics exactly. Created in 1999, it was hollowed out under Temer in 2016, folded into social development, then downgraded again under Bolsonaro to the point of effective abolition. Lula recreated it in January 2023, on his first working day in office, as the Ministry of Agrarian Development and Family Farming. The pattern tells you something the rhetoric cannot. Governments that wanted to strengthen family farming and traditional land rights built and rebuilt the ministry; governments aligned with agribusiness took it apart. Creating a ministry is hard. Removing one is hard. Brazilian governments have done both, repeatedly, around exactly this distinction — which means the distinction is real. The split is worth fighting over from both sides.
So when a European says "Mercosur producers," the first question is the one this whole series keeps returning to. Compared to what? Which producers? The country on the other side of the deal has built and dismantled and rebuilt entire arms of government around the answer.
Who farms what
Two numbers circulate for Brazilian family farming, and they appear to disagree. One, repeated for over a decade by Brazilian ministries and most international coverage, says family farming produces 70% of the food on Brazilian tables. The other, from the most recent (2017) agricultural census, says it produces 23% of the value of Brazilian agricultural output. The 70% figure is the weaker of the two: it originated in a 2011 press statement by Brazil's family-farming ministry, was never sourced to a published calculation, and has been challenged for years by Brazilian agricultural economists who point out — correctly — that no single percentage can describe "the food on the table," because family farming dominates some staples and barely appears in others. The 23% figure is a hard number from a national census. What survives the critique, and matters for this piece, is the specific shape underneath both: family farming dominates the crops that feed Brazilians day to day, and is marginal in the crops that earn the country foreign currency. Which number you reach for is, in the end, a choice about which of those two facts you want to foreground.
The rest of the 2017 census fills in the picture. Family farms are 77% of all agricultural establishments in Brazil. They work 23% of the farmland — the land share and the value share are identical to the percentage point, which is not a coincidence but a measure of how closely land and capital track each other in this economy. And they employ 67% of everyone working in Brazilian agriculture. Roughly a quarter of the value, two-thirds of the jobs. That ratio is the argument in miniature. The export complex is where the money is. Family farming is where the people are.
The crops divide along the same line. Family farming produces the overwhelming majority of cassava, most of the country's milk, and significant shares of other staples that feed Brazilians day to day — the domestic plate. It produces a small minority of the soy. It raises cattle in great numbers, but the herd that becomes export beef is overwhelmingly the industrial one. The one significant export crop in which family farming holds a near-majority share — close to half of national coffee production — is the same one Europeans drink, and the same one whose tariff the deal will eliminate.
When Europeans picture the Mercosur competitor — the feedlot, the soy frontier, the container of frozen beef bound for Rotterdam — they are picturing, with reasonable accuracy, the part of Brazilian agriculture in which family farmers are least present.
What the deal actually moves
Beef is the headline: a new quota of 99,000 tonnes at a reduced 7.5% duty. That gain accrues to the export herd — the industrial complex, not the smallholder with a few head for the local market. Soy is the fear that animates the European farmer's imagination, and it is the clearest case of all: soy already enters the EU tariff-free, and the deal does not change that. There is no reduction schedule for soybeans in the agreement, because there is no tariff left to reduce. The commodity Europeans fear most is the one the deal touches least. Sugar, ethanol — again, the agribusiness core. The gains of the deal concentrate, with some precision, in exactly the parts of Brazilian agriculture where family farming is thinnest.
At first glance, then, the deal rewards Brazilian agribusiness and bypasses the Brazilian small farmer, just as it pressures the European one. But that summary is too clean — and the next section is the crop that complicates it.
The crop that complicates it
Coffee is, in Brazil, substantially a smallholder crop — most Brazilian coffee farmers are small producers, served patchily by public extension, dependent on cooperatives. And coffee gains, unambiguously, from the deal: coffee enters tariff-free. Fruit follows: table grapes, melons, avocados, products in which smaller growers have a real presence, all see tariffs fall. So the claim that the deal does nothing for the Brazilian small farmer is false. On its face, this deal is an opportunity. And the Brazilian state is selling it to the small farmers as exactly that.
Here is where the Mercosur smallholder stops being a single figure. At the very same moment that Brazil's Ministry of Agrarian Development was publicly framing the deal as an opportunity for family farmers — pointing to coffee, fruit, even Minas Gerais cheese reaching French tables — peasant organisations representing other Brazilian small farmers were in the streets against it, under the same banner that marched in Brussels. One arm of the small-farm world hears opportunity; another hears threat. Both, in Brazilian law, are "family farming" — a legal category defined in 2006, covering farms worked mainly by family labour, under a certain size. But the category is a roof over an enormous range of people. Under it sits the coffee grower in Minas with twenty hectares, a cooperative, an export buyer, and a tariff about to fall to zero. Under it also sits the settler with the MST, working a few hectares of recently occupied land while waiting for title. For him, the binding constraint is not the tariff on coffee but the price of land and the political weight of agribusiness in Brasília. The first reads the agreement and sees an opening. The second reads the same agreement and sees a sales pitch for the model that has been concentrating land and pushing people like him off it for fifty years. Both are, legally, the same kind of farmer.
The deal delivers real, narrow gains to a few smallholder crops while accelerating a structural transformation — the consolidation of land and capital around the export frontier — that has run against small farming in Brazil for decades and will keep running. The deal does not simply help or harm the Brazilian small farmer. It sorts them.
The feeling on the other shore
Read what the Brazilian and Argentine peasant movements actually say about the deal, and the echo of the European argument is uncanny — but the echo is not just a coincidence of mood. It comes from a coincidence of mechanism.
Unfair competition, in the small farmer's mouth, has a specific structure. A trade deal that expands the market for the largest producers intensifies the production model that sets the global price for the crop. The smallholder sells into the same world price as the agribusiness farm — but pays for seed, fertiliser, fuel, credit and machinery at retail rates that do not scale down for her size. The squeeze is that her cost base is set by a global market that increasingly rewards the scale she cannot reach. This is the European dairy farmer's complaint about Mercosur beef; it is also the Brazilian family dairy farmer's complaint about European cheese, which the deal will bring into her market at tariffs falling toward zero.
Land prices behave the same way. When export markets open for the crops agribusiness produces, the land in the production regions becomes more valuable. Smallholders renting land see their rents rise; smallholders without secure title see the pressure to displace them sharpen.
And the decisions are taken, in both cases, far away. The Brazilian small farmer reading about a Brussels vote and the French one reading about a Mercosur summit are reading about the same thing: a deal negotiated for twenty-five years by people they did not elect, on behalf of sectors that do not employ them, sold to each domestic audience as a contest with the other. The Dutch farmer who told a reporter in Brussels that the deal made her future "less and less clear" and the Brazilian smallholder watching the soy frontier advance on the next valley are describing the same machine from two ends of it.
This is why a single transnational peasant movement could organise both protests under one name. The European and Mercosur small farmers are not, in the way the trade debate assumes, each other's threat. They have looked across the ocean and recognised, in the other, not a competitor but a mirror. The European and Mercosur small farmers are not, in the way the trade debate assumes, each other's threat. They have looked across the ocean and recognised, in the other, not a competitor but a mirror. The thing pressing on the European farmer and the thing pressing on the Brazilian one is, at bottom, the same logic of scale — and they have figured this out faster than the governments negotiating on their behalf.
The line and where it runs
The European debate is built on a map: Europe's farmers on one shore, Mercosur's on the other, competing. While there is real competition, it hides the more important line, which does not run between the continents. It runs between two models of agriculture, and it runs inside both blocs at once.
Seen properly, the deal is less a transaction between two continents than a transaction between two export complexes, conducted over the heads of the smaller farmers on both shores.
When a European says "Mercosur producers," then, the honest correction is not a smaller number or a footnote. It is a different map. The competitor she was taught to picture across the water — soy on cleared land, banned chemicals, cheap labour — is real, but it is not Mercosur. It is one half of Mercosur, the half that also won the argument at home. The other half lost the same argument she is losing — they simply lost it in Portuguese.
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