The accounts of the Spanish countryside sank again in 2019, and two are followed by a cut in national agricultural income. According to official estimates of Department of agriculture, agricultural income – which represents the value generated by the production activity – was 2.4 billion euros lower in 2019 than in 2018. And, according to national accounting data, the agricultural sector lost last year the equivalent of 15,000 full-time jobs.
These records delve into the worrying context that this sector is going through, which is still on a war footing, mobilized to demand solutions to the critical situation which particularly hits small and medium producers.
Agricultural income is the main indicator of how the accounts of Spanish agriculture and livestock are going. Since the agrarian organizations warn, however, that they do not accurately reflect the reality that occurs at the foot of the field, because after the set figure hide multiple and disparate situations. Often, they say, in years when the value of agricultural income increases on paper, producer accounts have collapsed: One thing is the large overall figure and another is that of the basic producer, they point out from the agrarian organizations. That being so, there is no doubt that when agricultural income as a whole falls, the situation of the small and medium producer worsens much more sharply.
“Two thousand four hundred million euros less is a lot of money, it shows tremendously in the sector,” explains the president of Asaja, Cheap Pedro. States that the collapse of agricultural income During the last year it has been due, fundamentally, to two great circumstances: «a sharp fall in prices in several branches of the agricultural sector and production costs that have skyrocketed».
«The year 2019 has been a disaster, very important sectors such as the olive oil or that of fruits and vegetables, while the farmers have been losing purchasing power for at least ten or twelve years, ”complains the general secretary of the Union of Small Farmers (UPA), Lorenzo Ramos.
«We are tied hand and foot, because those who sell us the products we use for our activity set prices for us, which rise when raw materials become more expensive, but then we cannot set the price of our productions, which are fixed to us by those who buy them from us, ”the UPA secretary general tells ABC.
In 2018, Spanish agricultural income fell by 500 million euros, to which the 2,400 million that vanished in 2019 have been added. Drastic drop in yield, but not in costs, which have continued to increase. Intermediate consumption – such as seeds, fertilizers, energy or feed – has increased by more than 2.3 billion euros in the last biennium. They have become more expensive 10.6%, while in 2019 the value of Spanish agricultural production depreciated a 3% on average.
Interestingly, despite the fact that the yield of the field is cut, the Administration increasingly collects more in direct taxes on agricultural and livestock activity. That tax collection has gone from just 248 million in 2009, to more than 440 million in 2019. The case of the last year is exemplifying: although the income of the field fell by 2,400 million, the Administration collected 13 million euros for taxes more than in 2018.
And all that without counting the rebound in wage costs, derived from the strong impact that the escalation of the Minimum Interprofessional Salary has had since last year. It not only entails an increase in the payroll, but also in the Social Security contribution that it has been associated with. The salary costs of the Spanish countryside are around 5,300 million euros per year.
«Since 1990, the price of fertilizers has skyrocketed between 80% and 100%; that of the seeds, 110%; however, many of our agricultural productions are paid at prices of twenty or twenty-five years ago, ”criticizes the president of Asaja.
The consequence is a gradual loss of small and medium farmers and ranchers – which fully affects the depopulation of the rural environment – and a growing weight of this sector in the country’s economy. Twenty years ago, agricultural income accounted for more than 4% of Spanish GDP; in 2019 it was 2.7%. That is, in twenty years the weight of agricultural income in the Spanish GDP 37% has collapsed.
«The potato is being paid by consumers at 1.25 euros per kilo, when the farmer charges 15 or 17 cents», The UPA secretary general points out as an example to highlight the situation in the sector and the need to control the commercial chain. “In Germany you can’t find a kilo of Spanish tomato at less than six euros, and here the most that the producer can get is 60 or 70 cents a kilo,” he says.
Lorenzo Ramos also tells how a truck loaded with strawberries that left Huelva towards Europe saw its merchandise getting more expensive 60% on the road, before reaching its destination: while they were on the road, those strawberries changed hands several times, as an intermediary . “There cannot be so much speculator applying abusive margins and that the producer is the last to know how much he is going to charge,” says Lorenzo Ramos, who insists that the price chain must be acted to safeguard the producer.