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

Summary

Spain’s Chamber of Deputies approved a Royal Decree-Law allo­cat­ing almost €2.2 bil­lion to counter the effects of a pro­longed drought, with €636 mil­lion directly aid­ing farm­ers and ranch­ers. While the law passed with 58 votes in favor, crit­i­cism was voiced by con­ser­v­a­tive par­ties accus­ing the gov­ern­ment of attempt­ing to buy votes and not address­ing under­ly­ing issues in the agri­cul­tural sec­tor.

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.”

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.

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.

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.

• EFE Agro
• Agropopular