Drought suffocates the countryside: “We have never had such a catastrophic year”

In the field they are used to having a bad year, but 2023 is on track to break records. “I’ve been doing this all my life and we’ve never had such a catastrophic situation,” remarks Javier Fatás, a cereal producer in the municipality of Cadrete (Zaragoza). “It’s an exceptional year,” he insists. The drought has suffocated their lands: they have barely managed to harvest 25% of the usual area. “It is a tough situation, due to the lack of water and the heat waves, but also the costs continue to skyrocket and the prices of cereals, which are set by the international market, are going down,” explains the farmer, who also He is responsible for Water and Environment of the agricultural organization COAG.

The panorama is complicated. The drought has been a hard blow to the countryside and the recent rains have not helped much. To the impact of the lack of water, which has translated into a reduction in harvests, we must add the sharp increase in costs faced by farmers and ranchers, with average increases of 30%, especially due to the prices of diesel and fuel. fertilizers. In this loop of negative factors for the agricultural sector, a third element must be taken into account: if in 2021 and 2022, prices on international markets, which determine a large part of crop prices, generally went up due to the effects of the war in Ukraine, now the trend has changed and they do not compensate for the lower income that the field has due to the drop in production.

In this scenario, cereals take the most negative part. The harvest will reach 10.2 million tons this year, 42.36% less than last season, according to the latest estimate from Cooperativas Agroalimentarias de España. The usual average production is 17 million. Added to this situation is the drop in prices since last autumn due to the evolution of foreign trade and good production in other areas of the European Union, the United States and Brazil. The interests of the multinational groups in the sector, which in recent months have invested in the production of cereals attracted by past returns, have increased the supply and pushed prices down even more.

For the Spanish cereal producer, the campaign has been a ruin due to this confluence of elements: short harvest, low prices and increased costs. “Import prices mark those here,” Javier Fatás points out. This situation is repeated in sunflower cultivation, with low production and falling prices due to imports, especially from Eastern Europe.

Harvesting of grapes at the Bodega las Moradas de San Martín, in the Madrid town of San Martín de Valdeiglesias, where the drought and high temperatures once again bring the harvest forward. ZIPI (EFE)

The list of decimated crops is long. The vineyard suffers a harvest reduction of between 20% and 40% over what is considered a normal average production, according to COAG estimates. The southern part of the country is the most affected. “All the crops are going to be affected, not only by the cuts this year, but by the deficit they carry over from the previous season,” says Fatás. In nuts, in the case of almonds, the agricultural organization expects the harvest to be between 30% and 50% lower than the forecasts made in June.

fewer bees

Even beekeepers are raising the alarm. In many regions there has not been a complete flowering due to the scarcity of water. Without it, bees have a harder time feeding. Juan José González, a 37-year-old beekeeper from Ohanes (Almería), knows this well. “This is desperate. Between the drought and a mite, varroa, the bees barely produce ”, he explains by phone. It has about 600 hives and production has gone from 12,000 kilos in 2022 to about 3,000 this year. “It’s not just individual consumption, honey is sold a lot for cosmetics or to make nougat, and a lot of it is imported from other countries,” he explains. Among the main importing countries are Portugal, Uruguay, Germany, China and Poland.

There is one case that stands out above the rest: the olive grove. Last season, the harvest plummeted by 55% compared to the previous one. And that trend continues. But prices have not moderated as in the case of cereals, quite the opposite: there are record prices at origin, above eight euros per kilo. In the case of extra virgin, it can be found for over 10 euros in supermarkets. What is the reason for this exception? Spain is the first producing country, so its situation and market are the world reference. That is, in oil, Spain sets the price. “Since I analyzed the sector, in 1978, I have never seen two bad harvests in a row,” says Tomás García Azcárate, agronomist at the CSIC and expert in European agricultural policy.

The drought has also negatively affected the livestock sector, mainly extensive cattle and sheep herds. Also in the pastures in the Iberian pig, mainly in the southern half of the peninsula, due to lack of pasture and water transportation to the countryside.

Compensation and labor

The low harvests have triggered the compensation of agricultural insurance, which guarantees the farmer the collection of a certain amount. Thus, last July, the total amount amounted to 907 million euros, above all of 2022, when a historical record of 806.71 million was already achieved, according to data from Agroseguro, which manages agricultural insurance on behalf of the insurance entities. The main losses this year are linked to the drought in the first half of the year. In addition, the rains arrived, in the form of a storm, during the months of May, June and the first week of July, when it was already too late for dryland herbaceous crops (winter cereal, legumes…) and caused a lot of damage in other productions due to the effect of hail or floods. Overlapping harvests have also caused some labor problems this summer.

Insurance compensation—the premiums contracted by farmers are subsidized between 40% and 70% by the administrations—provide a small boost for the agricultural sector, although the majority of agricultural land is not insured. The recently fallen rains can also alleviate the situation slightly. “They are good for autumn vegetables, although it is getting hot again. I think they provide a breather, but they are not going to change the panorama”, warns García Azcárate. There may be at least a general moderation of food prices in supermarkets, although the uncertainty is very large. There is also the question of what consequences the passage restrictions in the Panama Canal will have due to the drought, and its impact on the availability of some foods, according to the expert.

Everything indicates that the era of cheap food has come to an end. “Price tensions are going to continue, and this is going to have an impact on food crises and intensify migration phenomena,” says Manuel Corrales, professor of Economics and Business at the European University. He believes that the situation will remain “at least up to 24%.” The CPI for food has moderated, from the annual increases of more than 15% that were recorded in 2022, but in July it was still at 10.8%. Furthermore, in international markets, although the trend has been downward for months, the price level remains historically high. That is to say, prices may moderate or decrease in some cases, but they remain very high all the same, in the opinion of the economist. “We are facing a very serious problem, which affects basic foods and especially harms the lowest incomes,” he concludes.

In the medium term, experts agree that the countryside will have to adapt to climate change. And, in the short term, the way is, according to García Azcárate, to reinforce public aid. Sources from the Ministry of Agriculture indicate that between March 2022 and May 2023, a volume of aid estimated at more than 4,000 million euros has been accumulated, both to face the drought and the difficulties that the sector is going through as consequence of the war in Ukraine. This support package includes extraordinary direct aid from the Government (1,380 million euros), as well as tax reductions (personal income tax modules and exemption from rural IBI for agricultural holdings); increase in the subsidy for contracting agricultural insurance; financing lines under advantageous conditions (ICO-MAPA-SAECA) and other labor and social measures.

A beekeeper during a concentration of agricultural professional organizations on March 3 in Madrid. Carlos Lujan (Europa Press)

Innovation as a response

In the face of drought, one of the most important responses in recent years has come from innovation. Companies integrated into the Anove employer association (National Association of Plant Breeders) work on gene editing of crops to strengthen plants so that they can better cope with situations such as drought or pests. This is a different system from transgenic action, prohibited in the EU, which is based on the introduction of foreign genes into crops. Thanks to this system, important productions have been achieved, especially in cereals or oilseeds, with minimal doses of water.

New systems have also been developed against drought, moving from blanket or flood irrigation to more localized ones for productions such as olive groves, vineyards, fruits and vegetables, and sprinkler irrigation in herbaceous crops. Progress is also being made in reducing water use in livestock production, following the example of semi-desert countries where genetics have made animals more resistant to drought. Along these lines is the community initiative on New Genomic Techniques analyzed last Tuesday at the meeting of EU Agriculture Ministers in Córdoba.

Follow all the information about Economy and Business on Facebook and Twitteror in our weekly newsletter

Five Days agenda

The most important economic quotes of the day, with the keys and context to understand their scope.

RECEIVE IT IN YOUR MAIL

Subscribe to continue reading

Read without limits

#Drought #suffocates #countryside #catastrophic #year