MADRID – Spanish farmers are sounding the alarm and warning that the brutal increase in agricultural production costs is anticipating severe production restrictions in the Spanish countryside.
The global rise in the cost of raw materials and energy, the collapse of international ports, and the rising costs of maritime transport are taking their toll on the agricultural sector. According to COAG (Coordinadora de Organizaciones de Agricultores y Ganaderos), the trend deteriorated in the last quarter. And the prices increased of fertilisers by (+100%), diesel (+40% to 60%), energy (+300%), plastics (+ 50%), water (+30%) and animal feed (+25%).
Furthermore, Spanish farmers have reported that agricultural production costs are skyrocketing. They want “urgent” help from national and regional governments to prevent producers from being crushed by buyers trying to keep supermarket prices down.
This urgent need for aid stems from concerns in rural areas at the inability to pass on this staggering increase in costs to the prices of agricultural outputs.
Not again at the expense of the farmers
Moreover, COAG requires the main distribution chains to adjust their margins. And, consequently, pass on the higher costs to the prices paid to farmers and ranchers. “Consumer price control and inflation control cannot get back on the already punished backs of rural men and women.”
The farmers’ organisation continues: “The first price increases that take place at the point of sale, especially in meat products, are not reflected in the prices that producers receive. It is strategically important to keep our local productive fabric alive. What would have happened if at this point, with the collapse of international maritime transport, we would fill the shelves of our supermarkets from the outside?” said Miguel Padilla, Secretary General of COAG.
Food Chain Act must be complied with
In this sense, the COAG requires the Ministry of Agriculture to strengthen controls and inspections. They must do this to ensure compliance with the Food Chain Act. “We have a regulation that requires farmers to receive a price that at least covers costs.” The organisation encourages all producers to report infringement so that a complaint can be filed with the Agency for Food Information and Control (AICA). This organisation also demands an urgent shock plan for the agricultural sector from the government. This should include support measures through tax cuts and direct aid.
COAG fears that the “relentless” price increase will lead to “significant production cuts in the Spanish countryside”. They estimate the cost of bringing a truck with fertiliser into a field has risen from €4,000 last year to €8,000 – €10,000.
“In the case of olive irrigation, the electricity bill has increased by €160 per hectare. This means that an average company (25 hectares) expects an increase of €4,000 compared to last year.”
Food price indexes worldwide at highest level
Global food price indices rose in September to their highest level since 2011. This included a particularly significant rise in the price of vegetable oils. Annual headline inflation in Spain rose to 5.5% in October, its highest level in 29 years.
The question now is how long will it take for these price increases to reach Spanish supermarkets? And how will farmers struggle to keep their heads above water in the meantime?