Spanish Lawmakers Approve €2B Aid for Agriculture Sector Hit by Drought

While most of the funds are earmarked for improvements to water infrastructure and ranchers, the amount available to olive farmers is significantly less.

Murcia, Spain (AP)
By Máté Pálfi
Jun. 13, 2023 21:19 UTC
Murcia, Spain (AP)

Spain’s lower house of con­gress, the Chamber of Deputies, has approved a Royal Decree-Law estab­lish­ing mea­sures to counter the effects of the pro­longed drought.

The law ear­marks almost €2.2 bil­lion for this pur­pose, of which €636 mil­lion will directly aid farm­ers and ranch­ers. The law also adds com­ple­men­tary sup­port mea­sures of €148 mil­lion for the Common Agricultural Policy (CAP).

Minister of Agriculture Luis Planas told the Chamber of Deputies that the funds were nec­es­sary to pro­tect the secu­rity of food sup­ply and the con­ti­nu­ity of pro­duc­tion activ­ity.”

See Also:Water Efficiency, Sustainability Must Go Hand in Hand in the Olive Grove

While the law passed with 58 votes in favor, none against and 11 absten­tions, there was plenty of crit­i­cism.

Deputies from Spain’s tra­di­tional con­ser­v­a­tive party, Partido Popular, and a right-wing party, Vox, accused the social­ist-led coali­tion gov­ern­ment of attempt­ing to buy votes and said the mea­sures would help a few farm­ers and ranch­ers with­out solv­ing the under­ly­ing issues.

You dis­trib­ute a few thou­sand euros that will be very use­ful for some live­stock farms but will not solve the prob­lems of the sec­tor,” said Vox deputy José María Figaredo.

Planas said the sup­port mea­sures for the agri­cul­tural sec­tors had been divided into three large blocks, includ­ing direct aid, tax cuts and increased flex­i­bil­ity in deploy­ing funds from the CAP.

Common Agricultural Policybriefs-business-europe-olive-oil-times

The Common Agricultural Policy (CAP) is a com­pre­hen­sive pol­icy frame­work estab­lished by the European Union to sup­port and reg­u­late the agri­cul­tural sec­tor. It aims to ensure a sta­ble sup­ply of high-qual­ity food, pro­mote rural devel­op­ment, and pro­vide fair income for farm­ers. CAP encom­passes var­i­ous mea­sures, includ­ing finan­cial sup­port, mar­ket inter­ven­tions and envi­ron­men­tal ini­tia­tives, with the goal of fos­ter­ing sus­tain­able agri­cul­ture and ensur­ing the well-being of both farm­ers and con­sumers.

The largest share of direct aid – €355 mil­lion – is des­tined for ranch­ers and dairy farm­ers, deemed the most severely eco­nom­i­cally affected by the drought. There is also €276.7 mil­lion for the rest of the agri­cul­tural sec­tor and €5 mil­lion for bee­keep­ing.

Meanwhile, an extra­or­di­nary increase in sub­si­dies to hold­ers of agri­cul­tural insur­ance has been approved for an esti­mated €40.5 mil­lion. The aid is raised to a max­i­mum of 70 per­cent of the cost of the already con­tracted poli­cies, which is the max­i­mum allowed by European reg­u­la­tions.

However, the ben­e­fits of the insur­ance sub­sidy are unlikely to help the country’s olive grow­ers, as a recent inves­ti­ga­tion from Agropopular found that only 4.5 per­cent of the country’s olive grove sur­face area is insured.

The fig­ures are clear, very clear: of 2.04 mil­lion hectares, just over 93,000 are insured,” wrote César Lumbreras, Agropopular’s direc­tor.

Along with insur­ance sub­si­dies, the new Royal Decree-Law also includes an exemp­tion of the real estate tax quota of the affected farms and the cor­po­rate tax.

Royal Decree-Lawbriefs-business-europe-olive-oil-times

In Spain, a Royal Decree-Law (Real Decreto-Ley in Spanish) is a legal instru­ment that allows the gov­ern­ment to issue leg­is­la­tion on urgent mat­ters that require imme­di­ate atten­tion. It is a type of leg­isla­tive act that bypasses the usual par­lia­men­tary pro­ce­dures and is used in sit­u­a­tions where the gov­ern­ment needs to take swift action with­out going through the reg­u­lar leg­isla­tive process.

The third com­po­nent focuses on enhanc­ing flex­i­bil­ity in imple­ment­ing the CAP by extend­ing the appli­ca­tion dead­line for aid until June 30 and reduc­ing the fre­quency of manda­tory infor­ma­tion sub­mis­sions from dig­i­tal farm log­books in 2023 and 2024.

Planas has expressed appre­ci­a­tion for the rul­ing, which involves post­pon­ing social secu­rity con­tri­bu­tions and extend­ing the excep­tional mea­sure until December 31 to reduce the min­i­mum days required to access agri­cul­tural sub­si­dies in Andalusia and Extremadura to just 10.

On the other hand, the min­is­ter pointed out that this Royal Decree-Law also includes a series of hydro­log­i­cal mea­sures to deal with the drought.

He said the gov­ern­ment had been grad­u­ally increas­ing the bud­get for water con­ser­va­tion and infra­struc­ture improve­ments, which, dur­ing the period of the CAP, 2023 to 2027, will have a bud­get of €22 bil­lion, of which €10 bil­lion are direct invest­ments by the state.

In addi­tion to the CAP bud­get, the min­is­ter pointed out that €1.4 bil­lion will be allo­cated from the Royal Decree-Law to finance four areas: amend­ing water leg­is­la­tion to pro­mote water reuse, intro­duc­ing mea­sures to sup­port irri­ga­tion efforts and encour­ag­ing the con­struc­tion of sig­nif­i­cant infra­struc­ture projects and pro­vide spe­cific relief for an Andalusian com­mu­nity.

Planas added that these changes would allow the General State Administration to man­age and carry out these efforts. The objec­tive is to address the drought and enhance water avail­abil­ity in the regions that require it most.

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