Spanish government prepares measures to ease the country’s farming crisis

The crisis in Spain’s agricultural sector has become one of the biggest political headaches for the Spanish government. Madrid is concerned that ongoing protests by farmers could spawn something similar to France’s gilets jaunes or yellow vests – a movement in support of economic justice that has been staging mass demonstrations in the country’s northern neighbor since late 2018.

A combination of low prices, the threat of fewer subsidies from the European Union’s Common Agricultural Policy (CAP), and the announced minimum-wage hike, among other issues, have all put a great strain on the industry, with many Spanish farmers struggling to stay afloat.

In an effort to address these problems, the Spanish Cabinet will on Tuesday approve a raft of measures aimed at making “farmers and ranchers more profitable and economically sustainable, so that they have a present and a future,” said Agriculture Minister Luis Planas in Congress on Monday.

Farmers and ranchers are adults that can be advised, but nothing can be imposed on them

Agricultural Minister Luis Planas

The plans come after weeks of meetings and negotiations, with street protests across the country putting pressure on the coalition government made up of the Socialist Party (PSOE) and the leftist alliance Unidas Podemos.

The reform to the Food Chain Law to be approved on Tuesday is the government’s first measure aimed at easing the crisis. The initiative aims to raise the farm gate price of products, or at least to make sure that prices cover costs so that products are not sold at a loss. “The reform will allow agricultural and livestock producers to have a stronger negotiating position, and create greater balance in the food chain,” said Planas.

But the government is facing a difficult task: it cannot regulate prices by law, nor can it force distributors and big supermarket chains to pay a minimum price for products. To make prices fairer for producers, the government wants the cost of production to be included in contracts, and says it could publish the names of companies that don’t respect these terms as a deterrent measure, according to a draft of the reform advanced by Spanish news agency EFE. Pallas, however, did not confirm these details, saying that new changes had been made to the draft.

In January, the sales price of agricultural products was four times what was paid to farmers

In January, the sales price of agricultural products was four times what was paid to farmers, according to news agency Europa Press. To make the pricing process more transparent, the government will look for mechanisms to pressure large conglomerates, which are largely responsible for underpaying producers who have little power to impose their conditions.

Planas refused to provide more details about the reform in Congress, despite the insistence of Spain’s opposition parties, except to say that the measures will try to find ways to control what distributors and the big food chains pay for products. “I don’t believe in top-down measures,” he said. “Farmers and ranchers are adults that can be advised, but nothing can be imposed on them.”

The executive and the relevant ministries are aware that changing the market will take time, and that it will be years before producers improve their own position by modernizing and grouping themselves into cooperatives. For now, Madrid wants to provide a political response to the crisis; the government will later get to work on new legislation based on the current Food Chain Law, according to the minister.

Planas also noted that the recent scenes of politicians – some from his own government – joining the street protests “does not solve anything.”

CAP vs Cohesion

Bernardo de Miguel / Claudi Pérez, Brussels

At a European summit held last weekend, Spain fought against a slated 14% cut to the funds it receives from the Common Agricultural Policy (CAP). European leaders were there to negotiate the EU’s 2021-2027 budget, but walked away on Friday without a consensus.

Prime Minister Pedro Sánchez arrived in Brussels on Thursday ready to sacrifice some of the regional subsidies that Spain receives through the Cohesion Fund, in exchange for leaving agricultural subsidies intact, according to European sources consulted by EL PAÍS.

But any cuts to the cohesion funds could create significant strain between Madrid and the regional governments, which sustained most of the budget cuts during the protracted economic crisis.

English version by Melissa Kitson and Susana Urra.