The year that closes was a particularly intense period for the agricultural sector. From the point of view of agricultural policy, 2022 was a key year as during it a long negotiation on the Strategic Plan was concluded through which to apply the Common Agricultural Policy in the next five years. For its part, in what affects the dynamics of the daily activity of agricultural and livestock companies, 2022 was the year of prices, for better or for worse – indeed for the worse – if we consider that Like the Ministry of Agriculture same recently surveyed, agricultural income in current currency as a whole decreased by 5.5%; and 8.7% when inflation is taken into account. If we consider, however, how much each active farmer of that total would correspond in current currency, the decrease would be only 1.2% to arrive at around 32,000 euros, as there is less to distribute due to an official decrease of professionals in the field by just over 4% due to lack of prominence.
With the invasion of Ukraine in the background, prices have been the main protagonists. On the one hand, production costs have skyrocketed for the sector, essentially due to the increase in prices of key elements such as fertilisers, electricity, feed or diesel; and, on the other hand, the prices of agricultural products have also increased.
In the case of farms, feed prices have increased by an average of 50%, which has resulted in a forced adjustment of intensive farming due to lack of profitability. This led to a reduction in censuses which was reflected in an increase in the prices of the original products. This phenomenon manifested itself in a very significant way in milk, which went from average prices of 0.36 euro per liter to closing the year at around 0.60 euro; and also in pigs, which have also reached record numbers.
As far as agricultural production is concerned, there has been a general reduction in harvests. It was particularly pronounced in cereals, with an average decline of almost 30%; but this situation was repeated in other productions such as fruit and vegetables, wine (which remained at 36 million hectoliters) and olive groves (which this year will reach only around 800,000 quintals, 40% less than in the previous campaign ).
In all cases the main causes were the weather conditions: drought and lack of water in the reservoirs, torrential rains in some areas, hailstones, low temperatures already in spring or the June aura in the cereal . As in the case of livestock, all this has led to a sharp increase in source prices, from cereals to fruit, income largely devoured by higher production costs, above all fertilizers and energy (electricity and diesel).
Overall, a record figure in the value of production, around 63,000 million euros, but also a record figure in costs that exceed 35,000 million, which has made the benefits of farmers and breeders disappear to a large extent.
These climatic phenomena have increased the rate of injuries on the field and in the accounts of insurance companies, which until October had had to pay compensation for 714 million euros, a figure that could reach levels never seen before compared to premiums of 800 million euros. Agriculture has increased the funds to subsidize premiums by 60 million to 317 million euros, another record figure.
The year was the scene of the latest negotiations for the drafting of the Strategic Plan with which to apply the Common Agricultural Policy 2023-2027, thanks to which Spain will receive approximately 7,700 million euros annually in direct revenues through various channels and aid for rural development. This new reform was characterized by a green policy with strong environmental objectives, a redistributive policy and is aimed at professional farmers and ranchers. The beneficiaries of aid, on the other hand, must compulsorily comply with the new rules on cross-compliance and the possibility of greater aid opens up with respect for eco-schemes
With the new Supply Chain Law approved in December 2021, producers are required to receive prices that cover their costs, but a challenge remains to be overcome, as non-compliances continue to be reported by different sectors.
The invasion of Ukraine – and its consequences on international markets – gave rise to a policy of aid for some of the affected sectors with payments of 166 million for the milk sector and another 190 million for all the meat and animal livestock sectors for citrus fruits.
Land prices in this economic context and with CAP funds practically frozen, with the data for 2021, have remained stabilized – with an increase of only 0.5% – at an average of 10,180 euros per hectare. The range is between an arid land at 4,000 euros and a citrus land at more than 40,000, with an arid land for cereals at an average of around 7,000 euros.
The Ministry’s budgets, with a volume of 8,970 million, recorded an increase of only 0.4% compared to the gender departments. It should also be noted that the majority of this amount continues to come from Brussels.
It was a positive year for foreign agri-food trade, with a turnover of approximately 60,000 million euros, 11% more than the previous year. Among the most exported products, meat occupies a prominent place, with pork in the lead, and fruit and vegetables, a secure value in Spanish sales abroad.
Agricultural debt has remained between 21,000 and 22,000 million euros in recent months. And doubtful loans remained stabilized at around 1,000 million, 5%.
Among other aspects, it is worth noting the lack of information and advice to farms in the field, a matter in which the Autonomous Communities have the expertise, which they do not consider it a priority. And the possibility of establishing a system for measuring representativeness in the field at the state level seems definitively buried, an issue in which the Union of Farmers and Breeders’ Unions aspires to be one more entity, which encompasses important territorial organizations such as the Union of farmers in Castilla y León, the Union of Llauradors in the Valencian Community or the Union of Pagesos in Catalonia.
The year was also the scene of a massive demonstration in Madrid, a historic stage in which some 500,000 people united in defense of the sector and the rural world.
And sprinklers begin the year with the possibility of contracting a double power with electric ones, even if they do not see the new regulations for its application very clearly.
