Spanish farmers say new CAP should provide dignity

Spanish farmers: "The CAP "should contribute to efforts to equalise the profitability of farming with the European Union's other productive sectors". [Phillip Capper/Flickr]

This article is part of our special report Farmers under pressure.

Agri-food producers recognise the need to become competitive and sustainable. But they also need to deal with market volatility, price imbalances in the value chain, uncertainty generated by free trade agreements and Russia’s ban on EU imports. EURACTIV’s partner EFEAgro reports.

The first effect of this precarious situation is a loss of profitability for farmers, who require support from regional, national and European administrations in order to keep alive rural enterprises, which are the main drivers of employment.

Agricultural cooperatives and organisations told EFEAgro what they want from the Common Agricultural Policy (CAP) and what should be prioritised during the next stage of reform.

Industria Agraria boss Fernando Burgaz said that “the CAP should keep in mind its role and what involvement it has. In particular when it comes to farms needing to be economically sustainable, so they can provide a decent livelihood and maintain rural life with an adequate level of employment.”

He added that the CAP “should contribute to efforts to equalise the profitability of farming with the European Union’s other productive sectors”.

Short food chains seen as answer to farmers' pay and product quality

Local markets, where farmers and producers sell directly to the consumer, have prospered across the EU in both rural and urban areas in recent years.

Burgaz highlighted a number of objectives, including “strengthening the bargaining power of producers by encouraging supply integration; promoting sector coordination; giving inter-branch organisations more capabilities; guaranteeing the smooth functioning of commercial ties between chain operators; and controlling unfair practices”.

He added that efforts have to be made “towards a framework of fair competition, as well as implementing effective instruments that will allow the management of market volatility.”

Cooperativas Agro-alimentarias’ international relations head Gabriel Trenzado said, “the imbalance of power in the value chain is to the detriment of a fragmented agricultural sector that is facing concentrated clients and providers”. Market volatility is one of the most significant factors contributing to “lack of profitability and difficulty in securing future investments”.

As a solution, Trenzado advocates “encouraging cooperative integration” so that they can be more relevant on the market.

José Ramón Díaz, from the association of young farmers (ASAJA), acknowledged that the scenario outlined above “affects the volatility of products in a very noticeable way but we also have to consider other factors, like the effects of climate change”.

Farmers under pressure

EU farmers’ income has come under rising pressure from a number of factors, ranging from climate change, high input costs, the Russia embargo and sluggish demand from China.

Díaz also highlighted that “successive CAP reforms have eliminated or reduced the minimum level of market regulation mechanisms” in order to address “fluctuations and product availability, as well as increased demand”. He added that “in this regard, there is still work to be done”.

COAG Secretary-General Miguel Blanco warned that “faced with policies aimed at generalised deregulation, it is necessary to strengthen the regulation of the food market’s backbone, as well as the agri-food chain, in order to be profitable and sustainable across the board”.

Blanco added that producers have to be granted “necessary exceptions regarding competition” and that mandatory EU-wide regulation is needed to prevent abusive practices. He suggested this could be a common element of all commercial operations but that member states should be given enough wiggle-room to adapt it to their own particularities.

The farmers’ association chief added that a balance must be struck “between competition rules, their application and sector regulation”.

Weak cooperatives and high input costs hike Greek food prices

In Greece, cooperatives play a limited role in the food supply chain. Combined with rising overhead costs, this has contributed to the erosion of local farmers’ incomes, while emptying the wallets of consumers.

For the union of small farmers (UPA), “The volatility of prices and loss of bargaining power on the part of farmers in a totally imbalanced chain are two of the main reasons behind the sector’s loss of profitability. That is why it is one of the main priorities that have to be solved in the next CAP reform.”

That is why the UPA backs the inclusion of  collective bargaining in order to strengthen the position of the primary sector, as well as “establishing clear exceptions to competition law, by allowing those negotiations to be held by producer and inter-branch organisations” and introducing new management mechanisms.

“These mechanisms should take into account not just market price but also basic production costs,” the UPA added, so as to have a positive impact on agreements with third countries, which do not lead to loss of competitiveness for domestic producers.

Supermarket group Asedas said that, in terms of distribution, establishing “stable long-term relations” with the rest of the supply chain is “key to maintaining price balance. It’s a win-win.”

“Spain’s agri-food chain is one of the most efficient in the world and it allows the consumer to pay much lower than the European average. 6% lower according to Eurobarometer,” the group added.

Fellow group ACES, which represents, among others, Carrefour Express and Lidl, insisted that “market logic” is the best way to ensure that each link in the chain receives fair payment for work carried out.

But its president, Aurelio del Pino, said that political intervention is necessary when imbalances related to the inherent traits of agriculture occur. He added that the next CAP must bet on “better modernisation of facilities and professionalisation of the sector”.

It is quite a challenge for a sector that is all-important to the Spanish economy.

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