The Cajamar Group and the Ivie presented this morning the
'Observatory on the Spanish agri-food sector in the European context. Report 2021', which shows a growth of 0.5% in the added value of the sector, reaching a figure of 99,792 million euros, 9.2% of the total GDP of the Spanish economy. Although the weight of the sector in the economy has fallen four tenths in 2021, it is four tenths higher than it was before the pandemic in 2019 (8.8%).
While in 2021 the sector grew less than the total economy (0.5% vs. 5.1%), in 2020 it withstood the impact of the pandemic crisis (-3.1% vs. -10.8% ), which was due to the strategic nature of the primary sector, which saw its added value increase by 4.3%.
In 2021, on the other hand, the agriculture, livestock and fishing sector has seen
reduce its added value by -5.6% (according to Eurostat which is the source used in the European comparison and differs from the -3.7% of the INE), which contrasts with the 4% increase in the transformation industry and 3.8% in the distribution of agri-food products.
Despite this lower growth in 2021, Spain remains the fourth largest economy in the agri-food sector in the EU-27, since it represents the
12% of community GDP of the sector, as explained this morning by Joaquín Maudos, deputy director of the Ivie and author of the report, together with the Ivie's economist, Jimena Salamanca.
The act has also had the presence and participation of Eduardo Baamonde, president of Cajamar, who has valued the constant growth of agri-food exports,
«in 2021 a new record has been broken, which highlights the extraordinary competitiveness of the sector in foreign markets»; the increase in investment in R+D+i, "although we are still below the community average", and the growing awareness of the sector towards environmental management "with a growing trend in the area used for organic agriculture and livestock and a
reduction of greenhouse gas emissions'.
Spain is the main European producer of pigs, fresh vegetables, fresh fruits, olive oil and citrus fruits, with a market share of 24.7%, 20.9%, 21%, 51.7% and 55.9%. , respectively. In addition, Spain is also the sixth economy that contributes the most employment to the European agri-food sector, with 10.4% of the total. However, although the recovery of the economy after the year of the pandemic is beginning to be felt, it has not been able to prevent total employment in the sector in Spain from falling by -0.4% in 2021.
The primary sector has increased the number of workers 1.9% (which contrasts with the fall in its GVA), while in industry and distribution it has fallen -2.3% and -1.1%, respectively. In total, 8,300 fewer jobs, leaving the number of workers in the sector at 2,999,142 people, which represents 11.5% of employed people in the total Spanish economy.
The aging of the workforce in the agri-food sector is a characteristic feature both from the EU-27 and from Spain, since more than 30% of the people employed in this activity are over 50 years old (40% in the EU-27 and 33.8% in Spain). Women represent a minority in the labor market in the agri-food sector in both cases, but it is more accentuated in Spain, where only 29% of all workers are women, compared to 36.3% in the EU.
Inflation in the agri-food sector
Already at the end of 2021, the combined effect of the difficulty in transport due to the shortage of containers, the growing demand for cereals, the increase in the prices of vegetable oils and energy, added to job losses due to the
COVID-19 and the increase in VAT on sugary drinks in Spain, it led to an inflationary process of food and alcoholic beverages that placed its growth rate at 4.9% in Spain and 4.3% in the EU-27.
In any case, the producers did not transfer to the consumer the entire increase in prices registered in the production of food and beverages, since the cost of production increased in 2021 by 8.2% in Spain and 7.1% in the EU-27, well above 1% and -0.2%, respectively, of the inflation registered at the end of 2020 in producer prices.
Importance of food and beverages in the shopping basket
Although in 2021 the weight of food and beverages in the shopping basket of Spaniards has fallen (after the intense increase in 2020 during the pandemic), they continue to weigh more than in the shopping basket of Europeans (23.3 %, compared to 19.6%).
In addition, its weight exceeds what it had before the pandemic (23.3% in 2021, compared to 19.7% in 2019).
Per capita spending on food and beverages in Spain reached 2,300 euros in 2020 (latest year available), 8.4% below that of the EU (2,510 euros). Both in Spain and in the EU-27, this spending increased by 7% and 4.6%, respectively.
Productivity and competitiveness of the sector
In the presentation, Maudos highlighted that the productivity of the agri-food sector (added value per employee) is 29.1% higher than that of the EU-27, and that it is much more competitive than the European one because its labor costs per product unit (CLU) are 29% lower. Compared to the European average, the high competitiveness of the primary sector stands out above all (its ULCs are 70% lower).
The transformation industry is also more competitive (with a ULC 11% lower than the EU-27). In contrast, the food and beverage distribution sector in Spain is 3% less competitive than the European average.
New high in exports
Regarding exports, in 2021 the growing trend was maintained, with a new historical maximum that reached
61,646 million euros, that is, 11.6% more than the previous year. Spain is the fourth largest exporting economy in the agri-food sector in the EU-27 and contributes 10.5% of the total.
The EU is also the main destination for its exports. Specifically, France, Germany, Italy and Portugal account for 45.9% of foreign sales of Spanish agri-food products.
Our country has chained two uninterrupted decades of trade surplus in the agri-food sector, which in 2021 grew by 2.2%, reaching 18,831 million euros, the second highest surplus in the EU-27, behind only the Netherlands.
In 2021, fruit and edible fruits are the main agri-food products that Spain has exported and account for 17.1% of total exports, while fish, crustaceans and molluscs are the main product that it imports (15.5% of total exports). total agri-food imports).
Trade flows with Russia and Ukraine
The report also analyzes the implications of the Russia-Ukraine war conflict on the international agri-food market. While the percentage of Spanish agri-food exports to both countries is similar (0.3% to Ukraine and 0.4% to Russia), imports are low in the case of the Russian market, but are more important in the case of purchases from Ukraine (2.4% of total imports).
The two main products imported from that country are cereals (53.1%)
and fats, animal or vegetable oil (41.2%). 27.4% of the corn and 62% of the sunflower oil that Spain imports come from the Ukraine.
The impact of the COVID-19 crisis caused a drop of -1.8% in the number of companies in the Spanish agri-food industry in 2020 (latest year available), due to the destruction of companies in the food sector (-0, 6%), but mainly from those dedicated to the production of beverages (-7.7%).
Despite this, Spain continues to be the third most important country in the EU-27 agri-food industry by number of companies, only behind France and Italy, concentrating 10.1% of all companies.
The business fabric of the Spanish agri-food industry is mostly made up of micro-enterprises and companies without employees (78.5% of the total), while only 0.8% are companies considered large. Companies in the Spanish agri-food industry account for 17.4% of all manufacturing companies in the country.
Investment effort in R&D
With regard to business investment in R&D in the agri-food sector, the Observatory puts it at 373 million euros in 2020 (latest data available), which represents a growth of 2.1% compared to the previous year and is already chained five year increase.
This slight increase in the last year does not allow reducing the gap with the EU-27 in investment effort in R&D that has been maintained for more than a decade, since while in Spain investment in innovation in the sector represents 0.63% of the sector's GDP, in the EU it stands at 0.75%. Among the EU-27 countries, the Spanish investment effort is only higher than that of Italy.
Sustainability and environment
The 2021 report of the 'Observatory on the Spanish agri-food sector in the European context' extends the analysis of the progress made in the sustainability of the sector and its role in protecting the environment that began in the previous Cajamar report.
In this sense, the study highlights that Spain has completely converted 8.5% of the total agricultural area to organic farming in 2020, compared to 5.8% in 2012. In addition, Spain is the third largest European producer of organic meat, since which contributes 12.2% of the total in the EU-27.
In terms of greenhouse gas emissions from the sector, Spain has managed to reduce them by 2.2% in 2020, almost double that of the EU-27 (-1.3%). Agriculture and fishing accounted for 89.7% of the sector's emissions, which represent 25.6% of the total emissions of the Spanish economy.
Finally, the study presented today recalls the two challenges facing the Spanish agri-food sector: increasing the degree of digitization and improving sustainability.
In addition, it points out as threats that affect the competitiveness of the sector: the reduced level of capitalization of companies,
its deficit in investment in R+D+i, the delay in the incorporation of digital technologies and their exposure to the risks of climate change.
To respond to these challenges, the authors highlight the importance of the investments to be financed through PERTE (Strategic Projects for Economic Recovery and Transformation) of the sector, with an initial amount of
1,051 million euros, which has just been increased to 1,800 million.
"It is a unique opportunity that the sector must take advantage of to improve its competitiveness and continue to be one of the main pillars of the Spanish economy", they have highlighted.
To end the act of presentation of the publication, the Secretary General of Agriculture and Food, Fernando Miranda, thanked Cajamar for the effort to collect and analyze economic data from the sector and valued that, as confirmed by the Ministry of Agriculture, Fishing and Food, are indicative of the recovery and growth of the sector at levels similar to those before the health crisis.
Miranda has also highlighted
the reading that the report makes of the next challenges facing the agri-food sector Spanish, highlighting the challenge of digitization.
In this regard, the Secretary General recalled that, within the framework of the Recovery, Transformation and Resilience Plan, the C3I5 investment contains two actions integrated into the
II Action Plan 2021-2023 of the Digitalization Strategy of the Agrifood Sector and the Rural Environment, adopted by the Government of Spain in March 2019.
The general secretary closed the presentation of the report by highlighting that the data provided confirms the strategic nature of the agri-food sector in
Spain for its contribution in terms of GDP, employment, international trade and territorial balance, to which must be added its important role in protecting the environment and in the fight against climate change and against depopulation.