August 12, 2010
Spain grapples with crop farming difficulties
Many Spanish farmers may give up growing altogether after EU farm aid within the Common Agriculture Policy (CAP) is reformed in 2013, as the country's cereal farming is heavily dependent on EU support, reports said.
Spanish farmers in 2010 will harvest an estimated average of 2.83 tonnes of winter cereals - mainly wheat and barley - for every hectare they planted.
Compared to neighbouring countries and despite improvements in recent years, these yield are still very low, mainly due to the dry climate, poor soils and lack of arable land. In France, for example, this year harvests of seven tonnes per hectare are expected.
Spanish corn yields are far higher at 10 tonnes per hectare but rely on costly irrigation, which is not feasible for wheat and barley.
To break even farmers have to sell wheat at EUR136 (US$175)/tonne in Spain's northerly Castilla-Leon grain belt. Although wheat prices have rocketed in the last few weeks, prices were below this level until mid-July.
This profit losing scenario has resulted in a planting decline of 11% since 2001/02.
Total cereal harvests in Spain, including corn, have varied in recent years between 14 million and 24.7 million tonnes, depending on late spring weather. Farmers and traders expect to harvest 16.9-17.6 million tonnes in 2010.
Spain also grows about 800,000 tonnes of oilseeds a year, mainly sunflower seeds.
Farmers estimate demand for cereals in the 2010/11 market year at some 26 million tonnes, 18 million of which goes to make animal feed.
Even in bumper years, Spain cannot grow enough cereal to meet its needs. After allowing for stocks, the structural shortfall in 2010/11 will be some 10 million tonnes, according to farmers' estimates.
In the past decade, Spain has imported up to 15 million tonnes of cereals a year, which came from long-distance market such as Argentina and Kazakhstan.
Spain also imports up to four million tonnes a year of oilseeds, mainly soybeans.
