European agricultural subsidies mainly reach the largest agricultural companies in Spain

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agricultural subsidies

Farmers protests have dominated the news in Spain recently. Spanish farmers also continue to ask for less bureaucracy and fairer pay for their work. An important part of the political debate has been the distribution of EU agricultural subsidies.

An important fact in this respect that has been constantly repeated is that 80% of the direct Common Agricultural Policy (CAP) payments go to 20% of the recipients of European aid. According to the Spanish Minister of Agriculture, Luis Planas, that figure is incorrect. He said this in an interview on Onda Cero’s Más de Uno. “It is a general statistic of the European Union and it does not seem to me to be updated,” he said. However, the European Commission itself recognised in several reports that this is the ratio.

Building up land ownership in Spain

Experts from the website believe that the mentioned ratio will not change due to the structure of land ownership in Spain. That’s why they looked for answers to the following questions:

  • What criteria are followed to distribute this agricultural aid?
  • What amounts are paid out and to whom?
  • Is the CAP as set up today fair?

The fact that small owners receive a lower percentage of direct payments is mainly due to the concentration of the land. The aid itself is largely based on the surface area that farmers own.

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Medium and large operations

Who represent the 20% of the recipients of 80% of the aid? The majority are medium and large operations of between 20 and 200 hectares. This is evident from 2019 data from the Commission’s agricultural development department.

The smallest operations, those of less than 5 hectares, received 5.8% of direct payments. This is despite the fact that they make up 48.9% of the total number of recipients of this aid. On the other hand, the largest (of 250 hectares or more), held 22.1% of these subsidies (1.1% of beneficiaries). The rest, the other half of the recipients, “could be considered family or commercial operations,” according to the European body and without specifying more data.

The more land, the more subsidy

So the bottom line is that payments are linked to the number of hectares. The more a farmer owns, the more money he or she receives. According to the latest INE Agricultural Census, more than 51% of operations have less than 5 hectares. Only slightly more than 6% have operations of more than 100 hectares, but these account for 58% of the surface area used. This is in line with what is also happening elsewhere in the European Union. This means that the CAP “continues to concentrate the greatest support on the largest producers”.

The beneficiaries of the distribution of CAP aid

And why do multinationals such as Telefónica or companies linked to the House of the Dukes of Alba appear as beneficiaries? To receive CAP aid, you must have land. However, the regulations do not assess who the owner is. “Over time, criteria have been introduced to attempt to remove entities not linked to the sector as CAP recipients. This mainly concerned real estate companies, golf courses or airports that owned land and were involved in buying and selling rights to it. One measure, for example, is that a company must demonstrate that it has a minimum income from agricultural activities. To return to the House of the Dukes of Alba: they are large landowners. Their main activity is related to the sector. Therefore, they receive very high volumes of CAP.

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