Spain: Two billion euros’ aid to fight against drought

With an agricultural sector subject to a complex situation, following the invasion of Ukraine and the current climatic circumstances, the Spanish government considered the urgent need to adopt measures that would guarantee the maintenance and sustainability of farms, reaffirming food security and allowing the country's growth path to be reinforced.

At the moment, 2023 is the fifth year with the least water stored in reservoirs since records have been kept. In terms of rainfall, the first four months of the year were the driest in Spain as a whole since 1961, worsening the long-term meteorological drought in which the country has been immersed since the end of 2022.

Aid to farmers

The 2.2 billion plan adopted by the government includes direct aid to farmers totaling just over 636 million euros stands out. 355 million euros are allocated to the meat and dairy livestock sectors to compensate them for the increase in production costs, such as feed and other inputs. The shortage of rainfall has reduced the availability of pasture and forced them to look for more expensive alternatives for animal feed, considering that the farms had already suffered from the consequences of the war. Direct aid to the livestock sectors is complemented by 5 million for the beekeeping sector, already announced at the end of March.

276.7 million will be available for the agricultural sectors. The ministry of Agriculture will determine which crops, areas and amounts will receive this aid according to those most affected by the drought.

In addition, the so-called Drought Law includes measures to support financing, fiscal measures, and to make the implementation of the CAP more flexible, such as easing the requirements for forced cross-compliance, eco-regimes and coupled support.

Also to consider are subsidies of up to 70% of the cost of policies for drought insurance for the crops most affected by the lack of rainfall and high temperatures. This subsidy will be applied to policies already taken out that include drought risk cover for rainfed crops of extensive arable crops, olive groves, wine grapes, almond trees, hazelnut trees, kiwi, blackthorn, alfalfa, sugar beet and fodder maize.

Previous measures for farmers

Last year, the government took measures to support the agricultural sector to cope with the drought, with fiscal, labor, social and financial support worth 450 million euros. In recent months, the government has given other aid to the livestock and citrus sectors, as well as to alleviate the rising cost of fertilizers, worth 650 million euros.

New water infrastructures

As part of the government financial aid plan, the Ministry for Ecological Transition will provide 1.4 billion euros for the construction of new infrastructures, such as desalination plants, doubling the reuse of urban wastewater. It also envisages the execution of a new water transfer to reduce pressure on the aquifers that feed the Doñana National Park.

Part of this amount will be allocated to immediate actions to guarantee water supply this year. These include speeding up the construction of infrastructures for the basins affected by the drought, such as emergency pumping or adapting water intakes. The ministry will also take on the construction of desalination plants powered by photovoltaic solar energy in Alicante, Cataluña, Málaga and Almería.

In addition and in order to help farmers who suffer a reduction in their water endowment in 2023, the same ministry will apply an exemption to the regulation water tax and the water use fee. The ministry is expected to set a fixed price for desalinated water so that farmers can access it at an affordable cost.

Aid did not prevent rallies

The government's announcement of a plan worth more than two billion euros did not prevent the protest planned for 13 May to criticize "the suffocation of the countryside". The suffocating situation is being caused by bad policies and government support for large investment funds that devalue rural areas to favor their economic interests under the guise of "false environmentalism". SOS Rural, the organizing platform is against the extremist approaches of the Minister for Ecological Transition, which condemn thousands of farmers to inactivity, to sell their land and depend on public subsidies to survive.  In the opinion of SOS Rural, the announced aid is "ineffective, insufficient, arrives late and will be implemented many months from now when it will be too late".

Although the participation was much lower than expected, as the most relevant national farmers' organizations were not present, SOS Rural reported that it does not rule out becoming a political force in the future, inspired by what has happened in the Netherlands with BBB.

For Javier Santacruz, "the problem of the drought is not money, it is the lack of a state vision". This economist argues that it is essential to establish a more serious analysis of the huge agri-food and water problem that exists in Spain. The package of drought palliative measures approved by the government may be criticized as "insufficient or a measure aimed at the regional/local elections at the end of this month", but what the country needs is a clear vision and the drawing up of a National Water Pact.

"Partially tackling the economic consequences of drought without first making the necessary reforms to integrate food markets and without putting in place the necessary water infrastructure, stocks and distribution will most likely lead to an unsatisfactory outcome".

Drought impact in the agriculture

The update as of 11 May of the report presented by the farmers’ organization COAG is summarized in the following points:

• Wheat and barley harvests in Andalucía, Extremadura, Castillla-La Mancha, Aragón, Madrid, Cataluña and Castilla y León are considered lost.
• Water restrictions for irrigation in Andalucía, Murcia, Valencia and Cataluña threaten the viability of fruit trees and many growers will be forced to grub up.
• Rice cultivation in Andalucía will not be possible. In the southern half of the region, olive trees and rainfed nuts will hardly exceed 20% of a normal harvest.
• The situation of extensive livestock farming is aggravated by the lack of pasture. Farmers have to resort to the purchase of feed and fodder, and their supply problems are expected in the coming months.
• The situation for beekeepers is tragic as the lack of vegetation and flowering prevents the bees from feeding. This would be the third season without a harvest for honey producers.

The full report in Spanish by region and crop: IMPACTO SEQUIA EN CAMPO ESPAÑOL (chil.me)

“The economic blow to agriculture could exceed 8,000 million euros. Those were the losses we had last year and this season is going to be worse. Obviously this will be reflected in consumption and will make the shopping basket more expensive”, sources from the farmers' organization Asaja warn.

Drought is threatening food prices

Although it is still too early to know exactly what the losses will be for all crops, farmers are already preparing for the worst. Not least because this year's rainfall is 18.8% below the normal values recorded between 1991 and 2020. The forecast is that this year will close with an "alarming" -25.6%.

"The drought will add pressure to the CPI, especially from the second part of the year onwards," says Emilio González, professor at the EASDE business school. "Around 2 or 3% of GDP could be lost due to this crisis," adds José M. Corrales, professor at the Universidad Europea. In the midst of the price crisis, the situation is very worrying. At a time when both farmers and the industry are beginning to notice a slowdown in the increase in costs, which is expected to be passed on to supermarkets in the coming weeks, the focus is on the impact that the lack of rain may have.

Although year-on-year food inflation declined in April, there is a risk that it will remain at high levels for quite some time. "Food prices remain under upward pressure, despite the recent moderation in commodity prices on international markets due to the effects of the drought," the Independent Authority for Fiscal Responsibility noted last week. Fresh food is expected to continue to rise in price month by month throughout the year. Processed food prices are expected to rise less than fresh food prices month on month. For Juan C. Higuera, "without water, the shopping basket could become around 10% more expensive in the summer". For the president of the Association of Engineers Agronomists, María Cruz Álvarez, "the cost of fruit could increase by 3 to 8% because of the drought, while vegetables by 3 to 5% and cereals could suffer an increase of 2 to 3%".

“This severe drought won’t be the last one”

Droughts are not a rare phenomenon in Spain; indeed, they are a recurrent feature of the Mediterranean climate. But the one the country is suffering now seems exceptionally intense: the low abundance of surface and ground water has been combined by a period of very low rainfall and high temperatures. The effect of the drought has been exacerbated by an increase in evapotranspiration.

There is no doubt that climate change is greatly accentuating heat waves and other anomalies, including extreme events such as this drought. And, because of its geographical characteristics, the Mediterranean is one of the most vulnerable regions to these changes. April 2023 was the driest and warmest April in half a century. “This severe drought won’t be the last one”, Dr Rafael Bachiller, director of the National Astronomical Observatory, emphasizes.

He warns that droughts will become more intense, longer lasting and more frequent. We are facing a challenge that we must face realistically but without panic or alarmism. We should adapt to this new reality calmly and from all possible levels of action. Apart from the individual level with voluntary impositions to control water consumption, at the collective level, Dr. Bachiller stresses that saving water is particularly important in agriculture, where around 70% of the total freshwater in Spain is consumed.

Irrigation should therefore be limited to essential quantities, which should be given at the optimum time. Spain is a leader in drip irrigation, although it is important to continue to monitor closely how the volume of water used in agriculture evolves each year, to modernize irrigation systems and, of course, to invest more in research to manage agriculture in an efficient and sustainable way. In the long term, the focus should be on crops that are well adapted to local conditions and less demanding in terms of irrigation. On the other hand, Spain needs to develop realistic and far-reaching water management plans. A long-term National Hydrological Plan must be seriously reconsidered and treated as a matter of state, examining the different options, making decisions based on purely technical arguments and solidarity between regions, investing in hydraulic infrastructures that favor the optimal and sustainable use of this resource.

Forest fires

During long periods without rain, evapotranspiration is accentuated and soils are exposed to extreme conditions. The forest stand is very dry, in optimal conditions for burning. In the first four months of the year, 53,000 hectares have already been burnt (many of them in the Asturias region), an area equivalent to that burnt in other years between January and the beginning of August. At the end of April, the government brought forward the forest fire campaign, which normally starts in June.

mad-lnv@minbuza.n