ROME (Reuters) - The home of Parma ham, trumpeting the benefits of a traditional Mediterranean diet, is urging consumers not to get into a prosciutto panic after a warning that processed meat can cause cancer.

Italian food and farming groups responded indignantly to the World Health Organization (WHO) report that put cured meats, such as ham, sausage and salami, together with asbestos and tobacco on a list of carcinogens.

"No to meat terrorism, the Italian stuff is the healthiest," agricultural association Coldiretti said in a statement, crediting the country's diet for one of the highest life expectancies in the world - 80 years for men and 85 for women.

The WHO said each 50-gram (1.76 oz) portion of processed meat - usually beef or pork which has been transformed through processes like salting and smoking - increased the risk of colorectal cancer by 18 percent.

Italians on average eat a lot less than that, according to the National Meat and Charcuterie Association, which estimates consumption at 25 grams of processed meat a day.

Coldiretti also underlines the non-health aspects of issue, noting the meat industry in Italy generates 32 billion euros ($35 billion) a year in sales and provides work for 180,000 people.

Health Ministry Beatrice Lorenzin said the government was looking into the WHO report, but said people shouldn't be afraid of the findings, which also pointed to "limited evidence" that unprocessed beef, lamb and pork caused cancer.

"We have always known that eating too much red meat is bad for you. The secret is the Mediterranean diet ... we should eat a little of everything," she said at the nutrition-themed Expo World's Fair in Milan.

The much-touted Mediterranean diet calls for a balance of healthy fats such as olive oil, non-starchy vegetables such as broccoli, carbohydrates such as pasta, and proteins such as cheese.

ANTIPASTO

The WHO report was splashed across the front pages of Italian newspapers on Tuesday - as elsewhere in the world - and alarmed producers of Italian prosciutto, a thinly-sliced, dry-cured raw ham considered such a delicacy it is often served alone and unseasoned as an "antipasto" before a main meal.

"We might suffer an economic hit," Nicola Levoni, whose family company has been producing ham, salami and mortadella sausage in northern Italy for four generations, told La Repubblica newspaper.

"At the moment there's a risk that someone standing in front of a greengrocer and a butcher's shop will only go into the former, but they should be shopping in both, because our meat is good," Levoni said.

Some reports suggested fear had already spread among consumers. The head of FIESA Confesercenti, an association of nutrition specialists, was quoted on Tuesday as saying that red meat sales had already started to fall at traditional butchers'.

"Confusion reigns. People are bewildered and are going straight to the sellers to ask them to explain," FIESA Confesercenti head Gian Paolo Angelotti told AGI news agency.

The health ministry has asked the national Commission for Food Safety to look into the matter.

(Editing by Jeremy Gaunt)