Under the Kyoto Protocol, rich countries do not have to include agriculture in their national emission targets.
Plants, including trees and grasses, suck the greenhouse gas carbon dioxide out of the air as they grow, in a "carbon sink" effect which helps to balance man-made emissions from burning fossil fuels.
But European farms also add to climate change as a result of greenhouse gas emissions from livestock and fertilisers.
Farming emissions wiped out the region's entire carbon sink benefit from trees and plants, the study showed.
"We were surprised about the magnitude of the net effect," said Detlef Schulze, director of the Max Planck Institute for Biogeochemistry, and lead author of the study published in Nature Geoscience.
Under the Kyoto Protocol, countries can choose whether to include farming greenhouse gas emissions, and Germany, for example, has chosen to include forests - which absorb carbon - and ignore agriculture, he said.
Schulze recommended that farming was included in cap and trade schemes.
"We should do greenhouse gas trade. He who emits must pay, and he who sequesters [carbon] should earn something."
The study found that European Union forests, grasses and soil sucked 125-million tonnes of carbon out of the air annually from 2000 to 2005. That offset some 12% of just over one billion tonnes of carbon emissions from fossil fuels.
But when farming was added, the net effect was the emission of 34-million tonnes of carbon equivalent into the atmosphere.
shrott