The farmers' protests in Spain express the profound change in model that the countryside is experiencing and that part of the sector is unable to follow. The increase in production costs, drought and competition from non-EU countries with much lower wages have been added to a new common agricultural policy (CAP) with reinforced conditionality and new management and environmental requirements. Consequently, access to direct aid is more complicated and requires a structure and knowledge within the reach of the most professional farms and difficult for the rest. It is the medium and small farmers who are leading the mobilizations because their position in the market is increasingly weaker.
The Government assumes that the problem of prices in the countryside and the inconveniences in the application of the Food Chain Law are found in small and medium-sized farms. During 2023, agricultural income grew by 11.1% compared to 2022, up to 31,931 million, despite the drought. But this improvement in the average income of the countryside did not reach all farmers and ranchers, explains a senior official from the Ministry of Agriculture, but it did reach the largest ones.
The Observatory of Business Margins of the Bank of Spain shows how the profitability of agriculture is increasing and chaining two quarters of strong increases, of almost 13% at the end of 2023. But these data do not include information on the self-employed, with a high presence in the sector , highlights the latest analysis of the Observatory. It refers to companies of a certain size.
The CAP represents 30% of the entire community budget and in Spain alone the budget for the period 2021-2027 reaches 47,724 million euros. The country is, after France, the largest recipient of these funds –see graph–. The Government has also introduced limitations on aid payments that affect large farms that do not require as significant support as small and medium-sized ones, due to their economy of scale. It is, therefore, a great collective economic effort and the European Commission considers that it must serve, not only to sustain a basic activity such as food production, but also to transform its ecosystem.
“We are facing a transformation of agricultural activity with two major drivers of change: economies of scale and digitalization to improve the efficiency of farms,” details José Luis Miguel, technical director at the agricultural organization COAG. Farms increasingly need a larger size to achieve competitive costs, hence the only ones that increase in number are the large ones, as stated in the latest INE agricultural census, from 2020. Regarding digitalization and data collection , one of the advances promoted by the new PAC and that the Government has lowered to try to quell the protests – the digital field notebook becomes voluntary instead of mandatory – requires time and knowledge that not all professionals in the sector have. . “The farmer becomes a super business manager and this, for small farms, is a burden that ends up expelling them from the market,” adds Miguel.
More than half of the 900,000 agricultural holdings in Spain barely exceed 5 hectares. It is, therefore, a very fragmented sector where economies of scale still have little presence. It is also an aging activity, where 41% of farm managers are over 65 years old, 28% more than in 2009. Those under 35 years of age, on the other hand, represent only 3.9% of the total farm managers, a 32% less than 25 years ago. And technical reconversion in the older age groups is complicated.
“Moving from the traditional system to one that is more respectful of the environment requires spending, a powerful investment and technical training, and in the sector there is a training deficit, only 25% of farmers have specific training,” emphasizes Ernest Reig, professor of Applied Economics and IVIE researcher.
The CAP represents 30% of the entire community budget and in Spain alone the budget for the period 2021-2027 reaches 47,724 million euros. The country is, after France, the largest recipient of these funds –see graph–. The Government has also introduced limitations on aid payments that affect large farms that do not require as significant support as small and medium-sized ones, due to their economy of scale. It is, therefore, a great collective economic effort and the European Commission considers that it must serve, not only to sustain a basic activity such as food production, but also to transform its ecosystem.
“A CAP would be necessary to support the agrarian middle class, which is the one that has the greatest difficulties, so that it can participate in these economies of scale and make a qualitative leap,” highlights Tomás García Azcárate, an expert in agrarian policy at the CSIC. The great challenge thus lies in how to combine crop productivity per hectare with new environmental requirements. A process that is neither easy nor quick and that keeps alive the mobilizations that will continue next week.
