January 17, 2012
Spain: Agriculture sector experiences downturn for 2011
The Spanish agriculture sector experiences a tumultuous season for 2011 as it faces cuts in state aid, decreasing income and rising debts, according to the Spanish Federation of Livestock Producers.
An immediate reaction is the drop in the number of farms.
Among the consequences is increasing unemployment. In Spain, more than 700,000 people live off livestock production.
The group says that another serious issue is the decline in pedigree breeding herds.
A dramatic rise in production costs sinks agricultural incomes by 3.4% in 2011. Fertiliser prices rose by 20%, energy by 17.7%, feed by 15.5% and diesel by 7.3%.
For farmers, the main concern has been the rise in the cost of raw materials for animal feed. Concentrates for beef have risen by 18.4% between September 2009 and September 2011.
The Federation of Livestock Producers says that the government has done little to support the agricultural sector.
The proposals for the reform of the Common Agricultural Policy will likely affect Spanish farmers.
Margins in the beef sector have reduced dramatically, putting the sector in a delicate position. An increase in meat exports and live animals has helped to balance the situation.
Dairy prices have improved for 2011. The dairy sector welcomes the EU milk package announced at the end of last year, which encourages milk contracts. Spanish producers have been active in campaigning for fair milk prices.
Increased costs and problems in the supply chain mark 2011 as a poor year for pig producers. High grain and soy prices cut into farm profitability, as feed accounts for 70% of production costs.
Many farms incur capital cost due to EU regulations banning sow stalls, which will come into play in 2013.
High prices have benefited poultry producers and offset some of the high input costs. However, new welfare implications, with the introduction of the ban on battery cages for laying hens, have caused some uncertainty in the industry.
