Spanish dairy farmers have been producing below the cost price for several years. This is evident from data from the Spanish Ministry of Agriculture. Since 2018, the cost of producing one liter of milk has been €0.35, while dairy farmers received an off-farm price of 32 cents per liter. Farmers in the southern province of Andalusia have announced demonstrations to highlight the situation.
The ministry also warned that the difference between the price paid to the farmer and the retail price in stores ranges from €1.77 to €2.38. According to the farmers' association UPA, the rise in raw material prices is mainly causing losses of half a million euros per day.
At the same time, more and more agricultural businesses are closing: between 2018 and 2020, 2,270 farms disappeared. In April, there were 11,910 farms remaining, compared to 25,000 five years ago.
In contrast, the Spanish agri-food sector and pork exports have been performing well in recent years. In 2020, a year marked by the coronavirus pandemic, the value of Spanish agri-food exports nearly reached 55 billion euros. Spain was the fourth largest exporter of agri-food products in the EU.
The complex national negotiations regarding the distribution of the European CAP agricultural subsidies remain a major problem for the Spanish government. The Minister of Agriculture and the 17 autonomous regions have yet to reach an agreement on the National Strategic Plan, the roadmap Spain must submit to Brussels by the end of this year as part of the new CAP.
Reconciling conflicting interests is difficult, partly due to the different political parties governing the autonomous regions, but also because of the great diversity of production within the country.
For the Spanish agricultural sectors, the CAP agricultural subsidies are even more important than the amounts coming from the EU’s coronavirus recovery fund. For the period 2023-2027, Spain will receive nearly €48 billion in CAP subsidies, which approximately 700,000 farmers are eligible for.