Spain’s government approved a tax cut totaling €1.807 billion on Tuesday. This will benefit Spain’s agricultural sector, which has had to write off a large part of its harvest due to the war in Ukraine and the drought.
In total, about 800,000 farmers and livestock farmers can benefit from these tax benefits. The government of Spain grants these benefits to help the sector due to the severe drought that continues to hit Spain and the effects of the war in Ukraine, which have increased production costs. The Ministry of Agriculture, Fisheries and Food says this is the most drastic tax cut in the past ten years.
Various tax benefits for the Spanish agricultural sector
These farmers and pastoralists could benefit from an overall reduction in net yield of at least 25%. The most vulnerable sectors within agriculture and livestock could even receive an additional discount of up to 50% in the case of olive groves, almond trees and beekeeping. The decision, which was published in Spain’s Official Gazette BOE on April 25, also provides for a tax credit of 35% for the purchase of agricultural diesel and 15% for the purchase of fertilisers.
Harvest of wheat and barley has already been almost completely written off
In recent weeks, the situation has not improved when it comes to the extreme drought in Spain. Also, the outlook and forecasts of the Aemet are far from optimistic. The agricultural organisation COAG has even indicated that it will largely write off the harvest of wheat and barley in Andalucia, Extremadura, Castile La Mancha and Murcia and in the driest areas of Aragon, Catalonia and Castile and León. The organisation estimates that the drought this year will cause an irreversible loss in an area of more than 3.5 million hectares.