The Government convened a historic meeting on Wednesday with key stakeholders in the food industry to discuss the challenges faced by the agricultural sector. This gathering marked the first meeting of the legislature of the Food Chain Observatory, amidst ongoing protests by farmers demanding fair prices for their products. Agriculture Minister, Luis Planas, acknowledged the need to strengthen the application of the food chain law and encouraged agricultural organizations to report any irregularities they come across.

Minister Planas highlighted the positive impact of the reformed food chain law, which has led to increased prices for farmers and ranchers. However, he also recognized the existence of diverse commercial situations where implementing the law has been challenging. In response, Planas urged agricultural organizations and other stakeholders to inform the authorities of any irregularities observed, and stressed the importance of increased control and processing of complaints by regional officials.

During the meeting, two studies were presented that analyzed the evolution of food prices and consumption. According to one report, food prices experienced a significant inflation rate of 11.7% in 2023. Another study revealed a growing preference for private labels among households. Additionally, the Ministry of Agriculture introduced a new tool, Ecrea 2.0, designed to analyze the costs and income of agricultural holdings.

In anticipation of a meeting between the Minister of Agriculture and agricultural organizations, stakeholders are hopeful that concrete measures to strengthen the food chain law and streamline bureaucracy related to CAP aid will be established.

Collective bargaining agreements establish the rules of the labor game for the majority of workers and employers. Within these agreements, essential aspects of the working life, such as basic salaries, working hours, and vacations, are defined. However, the exact number of people covered by these agreements has been unclear until now. To address this, the Ministry of Labor recently released a statistic revealing that 92% of workers with the right to collective bargaining are already covered by an agreement.

This amounts to 14,069,031 “employment relationships” – a term that is not entirely synonymous with workers, as it includes a small percentage of moonlighting. The figures published by the Ministry of Labor only represent the proportion of employees with an agreement compared to those who are eligible for one. As a result, self-employed individuals, civil servants, statutory staff, senior officials, members of cooperatives, and those in the social economy (about three million people in total) are excluded from this analysis.

The remaining 8% who are not covered by any agreement, despite having the right to one, consist mainly of domestic employees. The challenge they face in reaching agreements is due to the absence of an employer association that represents the families who employ them. Consequently, they are effectively excluded from collective bargaining, with the provisions of the Workers’ Statute being directly applied to them.

At the sector level, coverage of collective bargaining agreements exceeds 85% in almost all industries. The only exceptions are public administration and defense (with a coverage rate of 62.4%) and activities related to households employing domestic staff and producing goods and services for personal use (with a coverage rate of 5.8%). The latter category, which includes domestic workers, has a coverage rate of only 0.2% for women and around 48% for men. This discrepancy is due to the inclusion of doormen, maintenance staff, and surveillance personnel in neighboring communities within this category. Conversely, sectors with the highest coverage rates include hospitality (98.7%), construction (98.4%), and financial activities (98.3%).

The coverage of collective bargaining agreements also reveals a significant gender gap. While 95% of men are covered by such agreements, the percentage drops to 88.25% for women. This disparity is most pronounced in the services sector, where coverage among men is six percentage points higher than that among women.

At the regional level, the picture remains quite similar. The communities with the highest coverage percentages are Murcia (95.5%), Catalonia (94%), Valencian Community (93.4%), Castilla y León (93.1%), Aragón (92.9%), La Rioja (91.9%), and Madrid (91.9%). The following regions also have high coverage rates: Andalusia (91.8%), Asturias (91.6%), Castilla-La Mancha (91.3%), the Canary Islands (91.1%), Galicia (89.6%), Cantabria (89.2%), and the Balearic Islands (88.7%).

The three autonomous communities with the lowest protection rates in terms of collective bargaining coverage are Extremadura (87.4%), the Basque Country (85.7%), and Navarra (82.7%). In the case of the Basque Country and Navarra, the abundance of unions and employer ecosystems may play a role. In these regions, workers and companies often negotiate agreements outside the scope of traditional collective bargaining.

The electricity companies send a clear warning to the Government in the process of updating the electricity distribution networks: it will not be possible to increase capacity if they are not allowed to invest beyond the legal limit that currently exists and to do so they must also be guaranteed a “reasonable” profitability, which is not diminished by the turbulence of recent years, from covid to inflation, through the war in Ukraine and the rise in interest rates. The consumer would see these measures affected by the electricity bill, but the sector affirms that without them it will not be possible to achieve the objectives of electrification and deployment of renewables that the Government itself has set in the update of the energy and climate plan for 2030.

The updating of electricity transportation and distribution networks is currently the focus of the debate around energy that occurs between renewable producers, electricity distributors, and the third vice president and Minister of Ecological Transition, Teresa Ribera, on behalf of the Government central and autonomous communities and the demands to be able to make more investments that are profitable for those who make them was the next step that all the actors anticipated would be taken.

The launch took place this Tuesday at the Naturgy Foundation, where a report was presented on the effect of inflation on the electrification of the economy that includes these two requests as a way to overcome the macroeconomic “turbulence” of recent years, in which inflation or the rise in interest rates to combat it have increased the costs of the entire chain, reducing the profitability that was set in 2017 and that has not been updated since then. To complete the picture, the Government foresees an investment of 45,000 million euros in electricity transport and distribution networks by 2030 to make possible the electrification of the economy provided for in the new National Integrated Energy and Climate Plan (PNIEC) while maintaining a cap on investment that only allows 24,000 million to be injected.

The sector recognizes that this request to raise the investment ceiling and the profitability of investments has a direct impact on the electricity bill, which among its elements includes “tolls”, where the consumer pays for the cost of transporting electricity from the place where it is generated and distribute it to your home. The effect would be to “increase them”, stated Cristina Olivera, from ADL, who added that “it is something necessary”, although “marginal” in the bill.

Correct but distorted tool

The director of Electricity Networks Spain at Naturgy, Mónica Puente, has spoken on behalf of “the entire sector” to point out that the electricity distribution remuneration model – which is made up of unit values and guaranteed profitability – is a “tool correct” but it is not so correct in the current circumstances of inflation and rate increases after Covid and in the midst of the war in Ukraine. It has also stressed that the level of investments that the regulation allows right now is not enough to achieve the investment to update the electrical networks that the Government itself foresees for 2030.. He has asked that “the unit costs be reviewed with all the effects that the war in Ukraine, the chip crisis, and inflation have had.”. Naturgy asks that “a signal be given” and that the regulator “make an exception taking into account the abnormalities.”

This limit is 0.13% of Spanish GDP per year for investment in transmission networks – from the generator to the substation – and 0.065% for distribution networks – from the substation to the final consumer -, which is equivalent to an investment potential by the electricity companies to improve the distribution of electricity to their customers by 2,600 million euros per year, 24,000 until 2030, “compared to the 45,000 million of private investment” that the Government expects from the companies. This limit was set by the Government of Mariano Rajoy in the midst of the real estate boom, seeing that many developers demanded access to networks for projects that were later not carried out but in which the investment remained.. At a time when electrical networks have become a key element to allow the energy transition towards renewables, the sector considers it essential that it can be increased. What maintains the sector and is supported by the report prepared by the consulting firm Arthur D. Little (ADL) is that “the current average permitted investment volume should at least double.”

They add to this request another regarding the profitability of these investments. For companies to want to invest in networks, they must be guaranteed a “reasonable” return, which is not currently occurring due to inflation and rising costs, which it warns do not reflect either the unit values or the guaranteed profitability contemplated by the investment system. remuneration. “They have not been updated and may not be presenting sufficient signs of investment,” says the report on

“This situation is causing high uncertainty and could mean that the objectives set by the PNIEC are not achieved,” indicates the document, which warns that the remuneration for companies' investment that was set with macroeconomic data from 2012 to 2017 for The period between 2020 and 2025 does not take into account the real costs of distribution and would result in an annual deficit of 1% that would make the Financial Remuneration Rate (FRR) of 5.58% that was set eight years ago ” was not enough to continue guaranteeing the investment”.

To reverse this situation, the electricity distributors are asking for a “cost review or temporary updates in exceptional situations”, “corrections or profitability margins in the TRF in exceptional situations and” making the investment limit more flexible so that it reaches at least double what is allowed today.

Commission with France on interconnections

Puente has stated that “it seems” that the National Markets and Competition Commission (CNMC) is willing to introduce some exceptionality factor and sources from the sector indicate that there are also contacts with the Ministry of Ecological Transition, without currently knowing if will listen to your demands.

For his part, Ribera was in Paris this Tuesday, to attend a ministerial meeting of the International Energy Agency (IEA), before which he met with the new minister for the Ecological Transition, Christophe Béchu, and with the Minister of Economy, Bruno Le Maire, with whom he has agreed to create a bilateral commission to advance interconnections, both the two electrical ones that, in addition to the one in the Bay of Biscay, remain to be designed through the Pyrenees and to study at the level technical support from both Governments on the H2Med project and particularly the underwater hydrogen connection between Barcelona and Marseille (BarMar) on issues such as “cost distribution” and “the best design”.

Housing prices and rents evolve at very different rates. While the cost of acquiring a second-hand home stabilized in the second half of 2023, rental income continued its particular climb with an increase of 5.45%. This is clear from a report on the housing market prepared by Tecnocasa and the Pompeu Fabra University (UPF), which confirms that renting is reaffirmed as the most expensive option both in the short and long term, despite its initial attractiveness in a context like the current one of high interest rates.

Regarding the second half of 2022, the price of used housing grew in Spain between July and December of last year by 1.69%, a slight growth that was far from the average annual inflation. The average square meter was paid in Spain in the second half of 2023 at 2,564 euros, an amount 36 euros higher than that recorded a year before. Despite the general trend, in some cities there were still significant increases in the price of second-hand housing. This is the case of Málaga, Seville, Valencia or Getafe, with increases in prices above 4%, compared to the decreases of between 0.5% and 0.72% registered in cities such as Madrid, Zaragoza and Valladolid.

In parallel, the average mortgage decreased by 2.01% in the final stretch of last year, falling to 117,788 euros. Specifically, the average monthly payment stood at 663 euros for variable rate loans and 551 euros for fixed mortgages, which have lost ground in recent semesters in favor especially of mixed mortgages.. This last option already represents 51% of firms, compared to 36% of loans at a fixed rate and 13% at a variable rate.

Faced with the stabilization in the price of second-hand homes, rents suffered a much more pronounced increase last year. They rose on average in the country as a whole by 5.45% in the second half of 2023, with significant increases in large cities such as Barcelona (9.7%), Madrid (7.82%), Seville (8.04%). and Valencia (7.84%). At the national level, the square meter was rented for 12.58 euros on average.

According to the report published this Tuesday, the delicate situation of the rental market is not only evident in the tension in rental levels, but also in the fact that supply has been reduced in recent years.. In fact, Tecnocasa data indicates that 21% of current sales correspond to homes that were previously rented. The rental offer of this real estate group has been reduced by 57% in the last three years. In 2015, houses looking for a tenant represented 14% of the portfolio, while in 2023 they barely reached 7.6%. “No matter what indicators you look at, the rental market is not doing well. The perspective is that the tension on rental prices will continue to increase. It is a pressure hole, where there is not enough supply,” says José García-Montalvo, director of the study and professor at UPF.

The most profitable option

Tecnocasa has accompanied the latest edition of its semiannual report with a study that compares the economic implications of renting or buying a home, both in the long and short term.. According to the results, paying a mortgage is always the most profitable option. “In the long term, buying a home is more interesting than renting in all of the populations studied,” explains the Director of Analysis of the Tecnocasa Group, Lázaro Cubero. Calculations indicate that, after 25 years paying the mortgage or rent, the purchase saves between 100,000 and 150,000 euros in more than 45% of the 670 municipalities analyzed.

“The purchase allows us to generate an asset value that grows each year, a fact that does not happen with the rental, since at the end of the period analyzed, the expense remains month after month,” adds Cubero.. The positive balance in favor of the buyer is even greater in Madrid and Barcelona, where it is between 200,000 euros and 250,000 euros.. In Bilbao, the savings when purchasing reaches between 250,000 and 300,000 euros, while in Valencia or Seville it is between 150,000 and 200,000 euros.

In the short term, the comparison is more variable, largely due to the current context of high interest rates, although the study once again opts for the purchase side. “We can highlight that, in the first year of purchase, the rental income is higher than the amount paid in interest in all towns,” notes Cubero, despite the increase in rates – which are currently close to 4% – has reduced the distance between mortgage payments and rents.

In fact, if the entire monthly payment is considered and not only what is paid in interest, only in 17.7% of the municipalities analyzed the mortgage payment was lower than the rental income in 2023, compared to 72.2%. % in which it was in 2021, when financial conditions were optimal and the average interest rate was around 1.5%. It must be taken into account that at the beginning of the life of the loan is when the most interest is paid.

However, the purchase option is not viable for everyone, since it requires a certain level of solvency. According to the Tecnocasa report, the main risk indicators remained stable in the second half of 2023, in line with the credit standards that banks have been applying in recent years.. Thus, mortgage loans covered on average 69% of the value of the home and the monthly payment was equivalent to 32% of the mortgagee's income on average. 83% of those newly mortgaged in the second half of 2023 had an indefinite employment contract and on average the repayment period did not exceed 28 years.