The clamor from the countryside: costs have risen 41% since the pandemic and imports are growing at twice the rate of exports

ECONOMY / By Luis Moreno

Farmers' protests resonate throughout Spain. The countryside has stood up to denounce the difficult situation it is going through, suffocated by the bureaucracy to access aid from the Common Agricultural Policy and the rise in production costs, which have increased by 41% in the last three years. The crisis caused by the pandemic was followed by the war in Ukraine, which has disrupted the rules of foreign trade in the European Union. Farmers disapprove of cheap imports from third countries, with which they say they cannot compete. The value of foreign purchases of agri-food products grows at twice the rate of sales, a scenario that fuels the demands of an essential sector that cries out for its survival.

The path for a lettuce and a tomato to end up in any lunch salad begins in the soil, with a production process that has become significantly more expensive in recent years.. Since 2020, according to Eurostat data, agricultural production costs have risen on average in Spain by 41.08%, despite the fact that in 2023 the relief of the energy crisis triggered by the war in Ukraine marked a reduction of 6.75%. % in the price of agricultural inputs with respect to 2022 levels. Energy and fuels for agricultural machinery became cheaper on average by 27.05% last year, although, even so, they are still 54.44% more expensive than in 2020 and 25.95% more than in 2019.

Added to the rise in the price of energy is the increase in the price of other products needed in the field such as seeds, fertilizers or pesticides, for which farmers paid respectively 15.53%, 80.65% and 26% in 2023. .27% more than in 2020, before inflation began to take its toll on pockets. Fuels, energy, fertilizers and raw materials account for approximately 70% of the production costs in the field, to which are added others such as labor costs or land rental.

At the same time, prices at origin – those that farmers and ranchers receive directly for their products – have also grown, reaching an average of 52.35% above 2020 levels in 2023 in Spain, according to Eurostat data.. The increase has been especially pronounced in products such as olives, which have doubled their price at origin in the last three years, while potatoes, cereals, fruits and vegetables have respectively become more expensive by 61.66%, 47. 51%, 39.42% and 38.13% at origin. In the last year alone, the prices received by farmers rose on average by 12.23% compared to 2022. The increases were generalized, with the exception of cereal, which became cheaper by 20.28%.

Differences in prices

Even so, farmers report that the price they charge for their products sometimes does not exceed production costs, so they are forced to sell at a loss.. The Food Chain Law, reformed at the end of 2021, prohibits this practice, which means farmers and ranchers lose money once they have done their work.. “In order to avoid the destruction of value in the food chain, each operator must pay the immediately preceding operator a price equal to or higher than the cost of production of such product,” establishes the rule, which the President of the Government, Pedro Sánchez, has committed to strengthening.

“We have always defended and will continue to defend the Food Chain Law, but since we have such an important instrument that they are copying at the European level, we have to make it work. There are no reasons why in Spain certain products are being paid at a totally ridiculous rate, which is not because they do not reach the production costs, but rather that they do not even reach the harvesting costs and, nevertheless, we have prices on the shelves tremendously abusive for the consumer,” recently lamented Miguel Padilla, general secretary of the Coordinator of Farmers and Livestock Organizations (COAG), after meeting with the Minister of Agriculture, Luis Planas, on the occasion of the protests. The agricultural sector complains of that the law is not always complied with and requires guarantees, such as greater transparency or the creation of price indices below which it cannot be sold.

In this sense, Facua proposes to implement a double labeling model that offers consumers, along with the retail price, information about the price at origin of farm products, thus allowing them to know under what conditions and how much they are paying. the producers. From the moment the farmer grows a food until it reaches the supermarket, it goes through several stages that increase its price.. Once collected, the products are transformed – through a process to wash, pearl or cut them, for example – or they are directly distributed to stores and supermarkets, with the transportation, storage and handling costs that this implies.

According to the data collected in the Food Price Index at Origin and Destination (IPOD) prepared by COAG, during this period the price of some foods becomes 880% more expensive.. This is the case of lemons. According to the latest data from January 2024, farmers sell a kilo of this citrus for 20 cents and in the supermarket the final consumer pays around 1.96 euros, almost ten times more.. Similarly, the price increase from origin to destination is 733% for bananas and 472% for potatoes.. Extra virgin olive oil represents an exception: its increase is only 17%.

More imports

Another of the demands of the agricultural sector is to equalize the conditions under which products are imported from outside the European Union, to prevent the laxity of the existing requirements outside the community club from allowing prices to be set that are too low with which the Spanish countryside cannot. compete. Spain is a country that is a clear exporter of agricultural products.. According to the latest data on the agri-food trade balance published by the Ministry of Economy, in 2022 food worth 67,275 million euros was sold abroad, compared to the 53,851 million that were purchased, which represents a positive balance of 13,424 million.

However, in recent years imports have grown twice as fast as exports.. In 2022, the value of foreign purchases of agri-food products increased by 30.47% compared to the previous year, while the increase was 13.45% in sales. Compared to an increase of 25.57% in exports, the volume of imports in value terms has increased by 51.64% since 2020. More than half of the imports already come from outside the EU, even with trade agreements such as the treaty with Mercosur still pending, which aims to liberalize the entry of agri-food products from Latin America.

“We are defenders of trade, where would we go if not; but of fair trade, in which we all have the same rules, that products that come from outside meet the exhaustive requirements that we have within the EU,” defended the secretary general. of COAG after the meeting with the minister. These more lax conditions allow significantly lower prices, which worries the sector, especially after Brussels eliminated tariffs on imports from Ukraine in 2022 in response to the war, thus triggering the purchase, especially of Ukrainian cereal.. In Spain, imports from kyiv grew by 84.1% in 2022.

Dependency on foreign products increases as the Spanish countryside suffers. According to the Active Population Survey (EPA), the agricultural sector closed 2023 with 770,700 employees. Despite the volume of workers growing by 2.32% compared to the previous year, this is the second lowest figure in nine years – only ahead of that of 2022 -, which shows how the difficulties that the sector is going through are passing It counts the countryside as a means of life, despite its essential nature.