Agriculture occupies half of Spain’s land area and its contribution to value added is above the OECD average. Agro-food production has experienced important growth in recent decades and exports have quadrupled since 2000. This chapter examines trends in agro-food production, consumption, and trade, as well as the policies that most affect this sector. The main drivers and outcomes are presented, with a focus on the evolutions in productivity, input use, and emissions. The challenges facing this sector at present include the significant pressure on Spain’s water resources and on the country’s rich biodiversity in a context of increasing climate vulnerability, as well as social issues such as the ageing of farmers and the relatively low participation of women.
Policies for the Future of Farming and Food in Spain
1. Context, drivers and outcomes
Abstract
Key messages
Agriculture occupies half of Spain’s land area. The sector’s contribution to value added is above the OECD average, and its share of employment has remained constant in the last decade.
Agro-food exports have more than quadrupled since 2000, widening the trade surplus. Spain is the largest producer and exporter of fruits and vegetables in the European Union (EU).
In the last decade, pig meat emerged as the leading export product, surpassing more traditional export products such as wine and olive oil, and making Spain the world’s top exporter of pig meat. This production boom has made Spain’s pig herd the largest in the European Union.
The sector’s evolution has contributed to structural changes in the last decade. The total number of farms and the agricultural workforce declined. For profitability reasons, many smaller farms disappeared, while the number of larger farms and the average farm size increased.
Spain has taken a proactive approach to improve the gender balance of agriculture and is one of few EU Member States that included measures supporting women in the new strategic plan for the 2023-27 Common Agricultural Policy. Female participation has increased in the last decade, but the sector remains predominantly male.
Productivity growth has been the main driver of Spain’s agricultural output growth in the last five decades. However, after 2010 the total factor productivity growth decelerated, and the use of labour and variable inputs picked up pace as contributors to growth. Agricultural greenhouse gas (GHG) emissions also began rising. Spain is very vulnerable to climate change, which will have an uneven impact on different agricultural activities and regions.
The average use of water and energy in agriculture fell in the last decade, but the OECD Agri-Environmental Indicators database shows worrying trends in some indicators associated to input use and agricultural emissions, particularly in the most recent years.
Spain has a highly decentralised government system with competences that are sometimes shared between the levels. The Autonomous Communities have competences on agriculture and are very diverse in terms of their economic indicators and the importance of the sector.
The CAP Strategic Plan for 2023-27 (CSP) emphasises preserving basic income support as a safety net for farmers, with measures to redistribute funds from larger to smaller and medium-sized farms.
The CSP incorporates specific environmental aspects through mandatory conditions for direct payments, rural development measures applied at the national and Autonomous Community level, and voluntary eco-schemes, which Spain has defined as the implementation in a given plot of a farm of at least one of a “menu” of seven soil conservation or biodiversity practices.
1.1. The Spanish agro-food sector
With a land area of 504 745 km2 and 47.4 million inhabitants (2020), Spain is the second largest country in the European Union, and the fourth in terms of population. Along with the mainland in the Iberian Peninsula, its territory includes the Canary Islands in the Atlantic Ocean, the Balearic Islands in the Mediterranean, and the cities of Ceuta and Melilla in North Africa. The country is organised in 17 self-governing autonomous communities, two autonomous cities, 50 provinces and 8 131 municipalities. Eighty-four per cent of Spain’s territory is classified as rural,1 and 16% of its population live in rural areas (MAPA, 2022[1]). The population density of 94 persons per square kilometre (2019) is relatively low in comparison with European peers such as Germany, France, Italy, and Portugal (Eurostat, 2021[2]).
Due to its geographical position, extension and orography, Spain has a large climatic diversity, with sharp contrasts in average temperatures and precipitation levels: while in the north and northwest areas, known as the “humid Spain”, annual precipitation can reach up to 2 000 mm, the southeast area is semi-arid and has precipitation levels below 300 mm (Gobierno de España, n.d.[3]). Spain is also one of the world’s biodiversity hotspots and one of the most biodiverse countries in the European Union (Convention on Biological Diversity, n.d.[4]).
Before the onset of the COVID-19 pandemic, the Spanish economy had been experiencing a robust recovery after the global financial crisis. However, the pandemic caused an unprecedented GDP contraction of 11% and accentuated the country’s structural vulnerabilities (OECD, 2021[5]). While growth recovered in 2021, it is set to slow down again in 2022 and 2023, due to heightened uncertainty, high inflation, and slower external demand (OECD, 2022[6]).
1.1.1. The role of the agro-food sector in the Spanish economy
Half of Spain’s territory is agricultural land; the sector’s contribution to value added is above the OECD average and has remained constant in the last decade
More than half of Spain’s total land area is used for agriculture, in line with countries such as France, Germany and Australia, and considerably above the OECD average (Table 1.1). Agriculture, forestry and fishing activities contributed almost 3% of Spain’s total value added in 2020, above the average share of the European Union and OECD. Within the primary agricultural sector, crop and animal production are the most important activities, while fishing, aquaculture and forestry play a relatively minor role in aggregate. The contribution of the food and beverage industry to value added was only slightly lower than that of primary agricultural activities. Together, primary and manufacturing activities add up to 5.1%. A larger share (almost 7%) of the Spanish workforce was working in the agro-food sector (including primary and manufacturing activities) in 2020, in line with the EU average but above some European peers. The sector also represented 18% of Spain’s goods exports and 10% of its total goods imports; the agro-food share in Spanish exports is twice the EU average and higher than in most peer economies. The weight of agriculture and agro-food activities in Spain’s value added and employment has remained relatively unchanged between 2010 and 2020.
Table 1.1. The share of the agro-food sector in Spain’s value added is above the OECD average
Share of the sector in the economy (%), 20201
Notes: ...: not available.
1. Or latest available year.
2. Share of total land area.
3. Share of total gross value added.
4. Share of employed persons, aged 15 years and over, in total NACE activities. Except for Australia: ANZSIC Classification: 01 to crop and animal production and hunting, 03 to forestry and logging, and 02 and 04 to fishing and aquaculture (It also includes employment in hunting and is therefore misallocated); Canada: NAICS Classification: Agriculture [111-112, 1100, 1151-1152], Forestry and logging and support activities for forestry [113, 1153], Fishing, hunting and trapping [114] ; Colombia: ISIC 4 Classification [A].
5. Share of total exports (or imports). Agro-food definition does not include fish and fish products. Agro-food codes in H0: 01, 02, 04 to 24 (excluding 1504, 1603, 1604 and 1605), 3301, 3501 to 3505, 4101 to 4103, 4301, 5001 to 5003, 5101 to 5103, 5201 to 5203, 5301, 5302, 290543/44, 380910, 382360.
6. For EU27, imports and exports include only extra-EU trade.
7. For OECD, imports and exports include both intra- and extra-OECD trade.
Source: Authors’ calculations based on OECD (2022), System of National Accounts and Annual Labour Force Statistics (databases), http://stats.oecd.org/; UN (2022), UN Comtrade database, https://comtrade.un.org/; Eurostat (2021), [nama10_a10], [lfsa_egan22b], http://ec.europa.eu/eurostat/data; FAO (2022), FAOSTAT, Land use (database), http://www.fao.org/faostat/en/; Australian Bureau of Statistics (2022), https://www.abs.gov.au/statistics/labour/labour-accounts/labour-account-australia [Industry Summary table]; Statistics Canada (2022), https://www150.statcan.gc.ca [Labour force characteristics by industry]; DANE (2022), https://www.dane.gov.co/index.php/estadisticas-por-tema/mercado-laboral/mercado-laboral-por-departamentos [Mercado laboral-Anexo].
1.1.2. Evolution of Spain’s agro-food trade
In the last two decades, Spain has grown into an agricultural export powerhouse
Spain is a net exporter of agro-food products, and its exports have grown significantly over time. Between 2000 and 2021, agro-food exports more than quadrupled, reaching USD 64.6 billion (Figure 1.1, Panel A), with an average yearly growth rate of 7%. The Spanish agro-food trade balance has been positive since the late 1990s, and the trade surplus has widened from about USD 2 billion to over USD 20 billion in the same period. Processed products for consumption and industry represent almost 60% of exports and 56% of imports (Figure 1.1, Panel B).
Figure 1.1. Spain’s exports of agro-food products have more than quadrupled since 2000
Note: Agro-food definition does not include fish and fish products. Agro-food codes in H0: 01, 02, 04 to 24 (excluding 1504, 1603, 1604 and 1605), 3301, 3501 to 3505, 4101 to 4103, 4301, 5001 to 5003, 5101 to 5103, 5201 to 5203, 5301, 5302, 290543/44, 380910, 382360.
Source: Authors’ calculations based on UN Comtrade (database), http://comtrade.un.org/ [accessed July 2022].
Spain’s top export products include pig meat, olive oil, wine, citrus fruits, and fresh fruits and vegetables such as peppers, strawberries, and stone fruits (Table 1.2). While citrus fruits, wine and olive oil have headed Spanish exports for decades, pig meat only appeared among the top 10 export products after 2010, and the sector has expanded considerably since then (Box 1.1).
Spain’s trade in fruits and vegetables has increased steadily over the last two decades. Between 2000 and 2021, exports and imports of fresh fruit and vegetables2 more than tripled, with a trade balance that was consistently positive and expanded considerably. While exports increased in absolute terms, the share of fruits and vegetables in total agro-food exports declined from 41% to 33% (UN Comtrade, 2022[7]).
High sectoral growth rates have underpinned Spain’s position as the largest producer and exporter of fruits and vegetables in the European Union. Spain accounted for 21% of the value produced by the European Union in 2020. Citrus fruits, peppers, tomatoes, and berries are among the most important export products, with 81% of total fruit and vegetable exports going to other EU countries. In 2016, over 200 000 jobs were associated with the production of fruits and vegetables, or 25% of total agricultural employment. Another 100 000 jobs in handling and conditioning centres were indirectly associated with the sector (MAPA, 2021[8]).
Greenhouse agriculture is an important part of Spain’s fruit and vegetable production. Some of the top export fruits and vegetables have a high share of cultivation area under cover, including strawberries, cucumbers, zucchini squash, eggplants, peppers, tomatoes, and watermelons. In the farming year 2021/22, vegetable production under cover accounted for 60% of the value of vegetable exports (MAPA, 2022[9]). Over 80% of greenhouse vegetable exports go to other EU Member States.
The greenhouse UAA in 2020 was of 64 925 hectares (0.3% of Spain’s UAA). Seventy-two per cent of this area is in Andalusia, followed by the Canary Islands and Murcia (10% and 9%). Based on the five main crops for which statistics are available,3 Spain has the largest area under cover in the European Union (Eurostat, 2022[10]).
The most important agro-food import products of Spain are maize and soya beans for animal feed (which together represented 10% of agro-food imports in 2021), followed by vegetable oil cakes and residues, cigarettes, and spelt wheat (UN Comtrade, 2022[7]).
Table 1.2. Spain is a net exporter of most of its top export products
Agro-food imports and exports, 2021
Note: Agro-food definition does not include fish and fish products. Agro-food codes in H0: 01, 02, 04 to 24 (excluding 1504, 1603, 1604 and 1605), 3301, 3501 to 3505, 4101 to 4103, 4301, 5001 to 5003, 5101 to 5103, 5201 to 5203, 5301, 5302, 290543/44, 380910, 382360.
Source: Authors’ calculations based on UN Comtrade (database), http://comtrade.un.org/ [accessed July 2022].
The European Union is Spain’s main agro-food trading partner. In 2021, it was the destination of 62% of Spain’s agro-food exports and the source of 57% of its imports. For decades, Germany and France have been the main EU trading partners of Spain, both as destinations of its exports and as sources of its imports (Figure 1.2). Outside of the European Union, the main export destinations in 2021 were the United Kingdom, the People’s Republic of China (hereafter “China”) and the United States, while the top non-EU import sources were Brazil, Indonesia and the United States. In recent years, China has grown in importance as a destination market for Spanish agro-food products, in particular pig meat (Box 1.1).
Figure 1.2. Most of Spain’s agro-food trade is with other EU countries
Note: Agro-food definition does not include fish and fish products. Agro-food codes in H0: 01, 02, 04 to 24 (excluding 1504, 1603, 1604 and 1605), 3301, 3501 to 3505, 4101 to 4103, 4301, 5001 to 5003, 5101 to 5103, 5201 to 5203, 5301, 5302, 290543/44, 380910, 382360.
Source: Authors’ calculations based on UN Comtrade (database), http://comtrade.un.org/ [accessed July 2022].
Box 1.1. Evolution of the Spanish pork sector
The sector has experienced a considerable expansion and is associated with environmental concerns
The growth experienced by the Spanish pork sector in recent years has been largely export-driven (Giménez García et al., 2021[11]; Álvarez Ondina, 2021[12]). The eradication of African Swine Fever in 1995 allowed Spanish pork to access foreign markets and opened the door for the development of a competitive pork industry, capable of taking advantage of new market opportunities. Technological developments and a vertical integration model that allows for better planning and sharing of operational risks, have contributed to the sector growth.
Since 2020, Spain has positioned itself as the top world exporter of pig meat, and the second most important exporter of edible pig offal. The sector’s international trade profile has changed radically: up to 1995, exports of pig meat were practically inexistent, and the trade balance was negative. After 2000, exports have grown at an average yearly rate of 14% (UN Comtrade, 2022[7]).
The top export product is frozen meat, which in 2021 accounted for 50% of the sector’s exports, followed by fresh and chilled meat (22%), frozen edible offal (11%) and frozen hams (9%). 2021 frozen meat exports were over five times higher than in 2010 and almost 30 times than in 2000 (Figure 1.3). Before 2010, most exports of this product went to other European countries, but more recently Asia has gained importance as a destination market. In 2021, 45% of exports went to China and 17% to Japan.
Spanish supply to the Chinese market – the world’s largest for pig meat (Frezal, Gay and Nenert, 2021[13]) – became particularly important after 2018, with the outbreak of African swine fever (ASF) and the subsequent decimation of Chinese domestic production. Between 2019 and 2021, Spain was the main supplier of China’s pig meat imports and one of the two most important suppliers of frozen offal (UN Comtrade, 2022[7]).
Figure 1.3. Spain’s exports of frozen pig meat grew by 436% between 2010 and 2021
Note: “Frozen pig meat” refers to the HS code 020329.
Source: Authors’ calculations based on UN Comtrade (database), http://comtrade.un.org/ (accessed July 2022).
With over 34 million animals (2021), Spain has the largest pig population in the European Union, having surpassed Germany in 2015 (Eurostat, 2022[14]). Spain and Germany are the two largest EU pig producers. While the herd size and meat production in Germany have declined, the opposite has happened in Spain (Eurostat, 2021[15]). Domestic consumption is also decreasing, with declines of 11.8% in consumption of fresh pig meat, and of 6.5% in processed pig meat in 2021 with respect to 2020, and a general downward trend (MAPA, 2021[16]).
Between 2010 and 2021, the pig population grew by 8 million heads or 34%, while the number of farms decreased by 14%, resulting in an increase of 1.5 times in the average pigs per farm (Figure 1.4). The strongest reductions have occurred in smaller-sized farms; the number of larger farms actually increased between 2013 and 2021 (MAPA, 2021[16]).
Figure 1.4. While the number of pig farms declined, the pig population had a sustained increase
Source: Eurostat (2022), Pig population [APRO_MT_LSPIG]; MAPA (2021), Pig sector indicators.
Already in 2003, an OECD study noted a larger risk of negative environmental effects – particularly water and air pollution – in regions with a high concentration of pig production, and an increasing risk in Spain (OECD, 2003[17]). The Spanish pork sector has made efforts to reduce its carbon footprint, and its share in the total GHG emissions is around 2.6% (Financial Food, 2022[18]). However, pig production can be associated with ammonia (NH3) emissions to the atmosphere (Philippe, Cabaraux and Nicks, 2011[19]), and the sector is a major contributor to total ammonia emissions in Spain (Section 2.4.1).
1.1.3. Evolution of the organic farming sector
Spain is a key producer and exporter of organic products at the EU and global level. Its domestic market, while growing, is still relatively small
Organic agriculture in Spain has grown and diversified significantly, in line with the worldwide expansion of this market and the increase in consumer demand for organic foods (Willer et al., 2022[20]).4 In 1991, there were only 346 organic farms covering 4 235 hectares (De Marcos Sanz, n.d.[21]). By 2020, the agricultural census recorded 42 312 farms, more than twice the number found in 2009 (Instituto Nacional de Estadística, 2022[22]). Spain’s organic area expanded by almost 1 million hectares and grew at an average yearly rate of 5% between 2010 and 2021. The utilised agricultural area (UAA) dedicated to organic crops reached 2.6 million hectares in 2021.
As of 2020, Spain is sixth in the world in terms of total organic area, and second in Europe after France (Willer et al., 2022[20]). The organic share in the total agricultural area experienced important growth, surpassing the OECD and EU shares and those of most peer countries (Figure 1.5). Andalusia alone concentrates almost 50% of Spain’s organic land, followed by Castile-La Mancha (15%) and Catalonia (10%) (MAPA, 2022[23]).
During the process of preparation of the CSP, Spain highlighted the role of the CAP in promoting organic production, particularly through Pillar 2, because this allows each AC to tailor support to its characteristics, sectors, and operators. The EU Farm to Fork strategy set a target of 25% of agricultural land under organic farming by 2030. As the organic UAA in Spain is currently approaching 11%, the Spanish authorities have indicated that achieving the target will require an extraordinary effort and support (MAPA (Ed.), 2021[24]). A Roadmap for promoting organic production and consumption is in preparation (MAPA, 2022[25]).
Figure 1.5. Spain is a leader in organic farming
Note: “Organic area” refers to the agriculture area under organic agriculture.
Source: FAO (2022) [Land use indicators].
While the production of organic crops is well established in Spain, organic livestock lags behind. The share of organic farms per type of livestock is low: 3% for cattle, around 2% for sheep and goats, 1% for poultry and 0.5% for pigs (Instituto Nacional de Estadística, 2022[22]). Growth in the number of organic livestock farms has also been modest, with 0.5% between 2015 and 2020, although the number of organic farms that mix crop and livestock activities grew by 6% in the same period (MAPA (Ed.), 2021[24]). Nevertheless, animal products represented 22% of the value of Spain’s organic production in 2020.
Spain’s organic production and exports have grown robustly. Between 2012 and 2020, the volume of organic production more than doubled (from 1.3 to 3 million tonnes), while the value of production grew by 97%, from EUR 1.4 million to EUR 2.7 million. The most important organic products of plant origin are fresh vegetables and potatoes, citrus fruits and wine grapes. Milk is the most important organic product of animal origin. The fact that both the volume and the value of production increased by respectively 17% and 16% in 2020 despite the COVID-19 pandemic is an indicator of the sector’s resilience (MAPA (Ed.), 2021[24]). A network of processors and distributors of organic products has developed rapidly (Box 1.2).
Box 1.2. Development of the organic value chain in Spain
Manufacturers, processors and distributors have grown along with the organic primary production
The rapid expansion of the organic primary sector in Spain paved the road for the development of an organic value chain encompassing manufacturers, wholesalers, retailers and distributors. In 2021 there were 9 291 operators1 accounting for 15% of agents in the organic value chain. Five ACs concentrate two-thirds of Spain’s organic operators other than producers: Catalonia (26%), Andalusia (15%), Valencia (13%), Castile-La Mancha (7%), and Murcia (6%) (MAPA, 2022[23]). Employment in organic-related activities had a share of 7% in total agro-food employment in Spain (MAPA (Ed.), 2021[24]).
Figure 1.6. The number of organic processors and transformers more than doubled since 2010
Source: MAPA (2022), Producción ecológica estadísticas 2021.
The value chain development has also responded to policy initiatives at the regional or local level. An example is the city of Barcelona, which has become an important promoter of organic products as part of its 2030 Sustainable Food Strategy.2 In 2020, it opened one of the largest organic wholesale markets in Europe (Barcelona BIOMARKET). The city has also launched programmes such as Comerç Verd (Green Commerce), to promote the local supply of organic products (Ajuntament de Barcelona, n.d.[26]).
1. This includes agents other than producers, dedicated to the processing, distribution and sale of organic products, including manufacturers, transformers, importers, exporters, wholesalers and retailers.
2. This strategy is a roadmap for food policy that aims to connect all the stakeholders involved in the transformation of the city’s food system.
As of 2020, Spain became once again a net exporter of organic products, after two years of negative trade balances (Figure 1.7). While this reflects the general growth trend of Spanish agro-food trade, organic exports grew even more rapidly than conventional exports (17% versus 5%). 44% of the Spanish organic production was exported in 2020, down from 60% ten years before. While imports of organic products decreased by 5% between 2019 and 2020 (in line with total agro-food imports), before 2019 they had been growing strongly, accounting for a large part of the increase in organic consumption in Spain (MAPA (Ed.), 2021[24]).
Figure 1.7. In 2020, Spain became a net exporter of organic products again
Note: Data compiled from national sources (statistical offices, governments, private sector), certifiers, and Eurostat.
Source: Research Institute of Organic Agriculture FiBL (2022), [Data table organic markets and trade], statistics.fibl.org.
Organic retail sales in the Spanish market reached EUR 2.5 million in 2020, continuing a trend of sustained growth and almost tripling since 2010. Per capita consumption has also increased significantly, from EUR 19.5 in 2010 to EUR 53.4. Despite this, the Spanish market is still relatively small and per capita consumption is only about a third that of France and Germany (Willer et al., 2022[20]).
1.1.4. Food consumption and trends
Spanish household expenditure in food is close to the EU average, although the COVID-19 pandemic drove an increase in food purchases
In 2020, Spanish households dedicated 16% of their expenditure to food and non-alcoholic beverages, slightly above the EU-27 average of 15%. However, this share was lower in 2019 and in the years before, when it remained around 12-13% and closer to the EU average (Eurostat, 2022[27]). In fact, per capita food expenditure increased by 14% in 2020 with respect to 2019, thanks to a sharp increase in purchases for consumption at home, given that food consumption outside of the home decreased because of the COVID-19 pandemic (MAPA, 2021[28]).
Cereals and their derivatives are the largest sources of energy in the Spanish diet (Figure 1.8). The Spanish Nutrition Institute considers that the energy intake profile is unbalanced in terms of the types of fats consumed, and that protein intake is above the recommended limits (FEN ANIBES, n.d.[29]). In general, Spanish dietary patterns are moving away from the traditional Mediterranean diet (Ruiz et al., 2015[30]; Partearroyo et al., 2019[31]; Serra-Majem, Castro-Quezada and Ruano-Rodríguez, 2014[32]), with a higher intake of foods of animal origin and a lower consumption of legumes, nuts, fruits and vegetables.5
Figure 1.8. Cereals and meats are the main food groups in the Spanish diet
Notes: Food intakes in terms of energy (calories). The category “Others” includes appetizers, sauces and condiments, and alcoholic and non-alcoholic beverages.
Source: ANIBES study, Spanish Nutrition Institute (FEN), 2016.
1.2. Policy setting of the agro-food sector
1.2.1. Spain’s decentralised system of government
According to the Spanish Constitution, regions have considerable autonomy, but competences are often shared between administrations
The Spanish Constitution of 1978 marked the start of a process through which Spain evolved from a centralised to a highly decentralised system with three levels of government: national, regional (Autonomous Communities) and local (provinces and municipalities). Since 1983, the country is organised in 17 Autonomous Communities (AC).6 The Constitution establishes the framework for the distribution of competences; some are exclusive to the central government, but most are shared between the central and regional governments (Box 1.3).
The OECD conducted a survey to collect information at the AC level from the regional authorities. The survey covered aspects related to environmental sustainability and innovation in agriculture, including regional policy priorities, challenges, strategies, policies, and regulations. Results and regional examples are presented in specific sections of Chapters 2 and 3. The questions are included in Annex 1.A.
Box 1.3. Spain’s Autonomous Communities (ACs) and their competences
The ACs are very diverse. They differ in terms of GDP, population, and employment (Table 1.3) and in the predominance of rural areas: while in four communities (Castile and León, Aragón, Castile-La Mancha and Navarra) over 90% of the land is rural, this share is below 50% in the Balearic Islands, Madrid and Murcia. The percentage of the total population living in rural areas also shows large differences, ranging from 2% in Madrid to 49% in Extremadura (MAPA, 2022[1]).
Table 1.3. Population, unemployment, and GDP by autonomous community
Note: Unemployment data for Ceuta and Melilla may be affected by sampling errors.
Source: INE (2022), "Monthly statistical bulletin", July 2022 and “Spanish Regional Accounts”, INEbase (database).
The Spanish system distinguishes between exclusive competences of the State or the ACs (competencias exclusivas), shared competences (competencias compartidas with different faculties for the State and the ACs) and concurrent competences (competencias concurrentes on which both the State and the ACs can concur). The Constitution explicitly (albeit generically) lists the exclusive competences of the state. The exclusive competences of each AC are listed in their Statutes of Autonomy.
In the case of agriculture and livestock, according to the Constitution, ACs may assume competences “in accordance with the general organization of the economy”. All ACs have included competences in this area in their Statutes of Autonomy. As agriculture is one of the common policies of the European Union, with the bulk of policy design and funding decided at the EU level, the State administration represents Spain and co-ordinates the Spanish position in these discussions (MAPA, n.d.[33]).
In general, ACs provide major public services in such areas as education, health and environment (OECD, 2015[34]). As of 2020, decentralised expenditure at the level of regional and local government in Spain represented almost 42% of the general government expenditure (OECD, n.d.[35]).
1.2.2. Spain’s new CAP Strategic Plan
New elements of the 2023-27 CAP Strategic Plan include the consolidation of the rural development pillar in a single national plan and the definition of seven agricultural practices as voluntary eco-schemes
The European Union’s Common Agricultural Policy (CAP) is the main agricultural policy instrument in Spain. After France, Spain is the second beneficiary of CAP expenditure; the sum of its Pillar 1 (direct payments and market measures) and Pillar 2 (rural development) expenditures in 2019 represented EUR 6.8 billion or 12.4% of the EU total (European Parliament, 2022[36]). The rules of the 2014-20 CAP remained in force until 31 December 2022 as a transitional period for the post-2020 CAP reform.
Under the 2014-20 CAP, EU Member States had flexibility to choose among several alternatives for implementing the rules at the national level. The choices included whether to transfer funds between the two pillars, the use of a redistributive payment for the first hectares of the farm, the share of funds dedicated to a payment for young farmers, and the use of payments coupled to production, among others. Spain dedicated 56% of its funding allocation to the basic payment and chose to use 12% of its funding allocation for coupled payments. It also allocated the maximum possible (2%) for the payment to young farmers, but chose not to grant the redistributive payment. Spain did not make use of the flexibility to transfer funds between pillars. The second pillar was implemented through 18 rural development plans: one at the national level and one for each Autonomous Community.
In the context of the 2023-27 CAP, EU Member States have more space to adjust the common policy to the national needs, for which they must submit a national CAP Strategic Plan (CSP) indicating their specific needs and the interventions. This is based on an analysis of the strengths, weaknesses, opportunities, and threats (SWOT) of their agro-food sector. The rest of this section focusses on Spain’s new plan, which was approved by the European Commission at the end of August 2022.
Spain’s total CAP budget for 2021-27 is EUR 47.7 billion. Of this, EUR 32.5 billion is destined to the measures envisaged in the CSP, and the remainder corresponds to funding for the transitional period of the previous CAP 2021-22 (EUR 13.7 billion) and to specific programmes not covered by the CSP (among others, programmes for the distribution of dairy products, fruits and vegetables in schools).
A significant change in the new Spanish CSP is the consolidation of the AC rural development plans for Pillar 2 into a single national plan for both pillars for the period 2023-27. The formulation of a single plan required an intensive process of co-ordination and consultation with the ACs (MAPA, 2021[37]), which remain responsible for establishing and implementing the rural development measures for their territories according to their needs and priorities, within the framework of the national plan.
In August 2022, the Spanish Government launched the process of public consultations for a draft Royal Decree establishing the new governance of the CSP and the management of funds from the European agricultural guarantee fund (EAGF) and the European agricultural fund for rural development (EAFRD) (MAPA, 2022[38]). The Ministry of Agriculture, Fisheries and Food (MAPA) will be the authority responsible for the management of the CSP and for ensuring an adequate co-ordination with the Regional Management Authorities to be designated by each AC. The decree also establishes several co-ordination structures involving the national and regional governments and other stakeholders.
Table 1.4. Direct payments make up over two-thirds of Spain’s 2023-27 CSP budget
Structure and budget of Spain’s CAP Strategic Plan
1. Approximate figures.
2. The amount for rural development programmes includes EUR 1 080 million from the European Agricultural Fund for Rural Development (EAFRD), as well as funds from the national and autonomous communities’ budgets.
Source: MAPA (2022), El plan estratégico de la PAC de España 2023-2027, https://www.mapa.gob.es/es/pac/post-2020/resumen-pac-es_tcm30-627662.pdf.
An objective of Spain’s CSP is to redistribute funds from larger to small and medium-sized farms. One of the ways through which it intends to achieve this is through a new definition of “active farmers” who may benefit from direct payments. Active farmers must be affiliated to the Social Security system as self-employed people in the agricultural sector or make at least 25% of their overall income from agricultural activities (5% in the Canary Islands). These requirements do not apply to farmers who receive direct payments for an amount of EUR 5 000 or less. In 2021, 68% of beneficiaries of direct payments were below the EUR 5 000 threshold, receiving just 14% of payments (MAPA, 2022[25]). Spain opted to include two additional redistributive measures: capping and degressivity.7 Payments may not exceed EUR 200 000 per beneficiary; and, starting from EUR 60 000, direct payments will be subject to a reduction of 25%, with higher amounts to be reduced at a higher rate.
The CSP aims to maintain, at the national level, the direct payment envelopes received by each region in previous CAP periods, as these payments are considered a basic safety net. Agricultural regions for CAP implementation purposes do not correspond to the territory delimitation of the ACs; rather, they are defined according to agronomic and socioeconomic criteria. The basic income support and the complementary redistributive payment – which is additional to the direct payment and focused on medium and small-sized farms – will be based on 20 new agricultural regions,8 defined as follows (MAPA, 2021[39]):
Rainfed croplands (five regions): Highly affected by annual climatic conditions and with very different labour needs due to their productive characteristics.
Irrigated croplands (five regions): Characterised by the availability of water and by crops that are more productive, dynamic and have more alternatives.
Permanent crops (four regions): Fewer crop alternatives, less flexibility and higher labour needs.
Permanent pastures (five regions): As defined in the EU regulation 2021/2115.
Balearic region: Characterised by socioeconomic conditions resulting from its insularity, which entails higher costs.
Direct payments will be subject to a process of convergence to reduce the differences within the same agricultural region that were created by past entitlements based on historic production or activities. Thus, entitlements above the agricultural region average will be reduced and entitlements below it will be increased. The objective is that all entitlements reach at least 85% of the regional average by 2026, and full convergence by 2029.
In Pillar 1 of the new CAP, sustainability aspects are incorporated chiefly through enhanced conditionality for direct payments and through the voluntary eco-schemes. Enhanced conditionality requires beneficiaries of direct payments and some rural development payments to fulfil environmental and animal welfare regulations and good practices (Statutory Management Requirements ‒ SMR and Good Agricultural and Environmental Conditions ‒ GAEC). The eco-schemes are payments per hectare to farmers that, on a voluntary basis, implement in a given plot of their farm some determined management practices. In the case of Spain, at least one of a “menu” of seven agricultural practices must be implemented to receive the payment. The practices selected (Table 1.5) are deemed beneficial for climate and the environment, and should have a higher level of environmental ambition than the one arising from the enhanced conditionality (which constitutes the baseline), such that the payment rewards the additional effort. The payment is granted for the implementation of one practice per plot of land, even though farmers can choose to apply more than one practice on the same plot.
Table 1.5. Practices included in the Spanish eco-schemes
Source: MAPA (2022), El plan estratégico de la PAC de España 2023-2027, https://www.mapa.gob.es/es/pac/post-2020/resumen-pac-es_tcm30-627662.pdf.
In the rural development pillar, several policy interventions address sustainability considerations, including agri-environmental measures, investments with environmental contributions (Section 2.1.2) and support to organic farming. These interventions are co-financed, with over 67% of the funds coming from the EAFRD and the rest from Spain. The agri-environmental interventions target a variety of environmental and climate-related goals through practices that, among others, seek to improve soils and biodiversity, with a total public budget of EUR 763 million for 2023-27. The budget for the investment interventions with environmental contributions is of EUR 1.6 billion, including EUR 317 million for irrigation infrastructure investments.9 In the case of organic agriculture, the total funding envelope is EUR 819 million; payments will be granted for the conversion and maintenance of organic farming areas.
Spain has not included CAP interventions for climate risk management. The main tool for climate risk management is the agricultural insurance system (Box 1.4), which is financed with national funds. The Spanish authorities consider that this system is providing a satisfactory response to the weather variability affecting agriculture, even in the context of climate change (MAPA, 2022[25]).
Box 1.4. Insurance of agricultural risks in Spain
Climate change is a major challenge for the agricultural insurance system
The Agricultural Insurance System has its roots in a period in which new democratic institutions were emerging in Spain. It was one of the pillars of a 1977 pact signed by the main democratic parties and trade unions, which included the commitment to prepare an Agricultural Insurance Law to “protect farmers from the consequences of catastrophic events”. The first law enacted under the 1978 democratic Constitution, it has remained in place through Spain’s EU accession and successive CAP reforms and has been defended by all Spanish governments and main political parties.
Each year the government approves a new Agricultural Insurance Plan with the list of insurance lines available, specifying the opening dates and the level of subsidies to be granted. Initially the insurance was applicable only to certain crops (mainly cereals) and risks (hail and fire), but it has expanded to cover 45 different insurance lines for crops, livestock, forestry and aquaculture.
Agricultural insurance is voluntary for farmers. The subsidised policies cover losses caused by natural factors, including adverse climatic events, animal diseases, removal and destruction of fallen stock, and damage caused by protected animals. Private insurance companies operate within a pool that shares the risk in a co-insurance regime. They offer the same products, guarantees and premium rates, but compete in the management costs charged and customer service provided. Insurers cannot deny coverage to producers who fulfil the minimum system requirements.
The subsidies by the central administration are applicable in the whole territory; each AC establishes the rules for its own subsidies. For most insurance lines, there is a basic subsidy (applicable to all farmers) and additional subsidies (e.g. for young farmers). Subsidies are applied as direct deductions from the insurance premium, up to 65% of its cost. AC subsidies may complement those paid by the central government, but the aggregate must not exceed the 65% threshold. In 2022, the national budget for agricultural insurance subsidies was EUR 276 million and the system covered an insured capital of EUR 16.3 billion with about 390 000 insurance policies. Claims amounted to EUR 769 million. There are no supplemental disaster relief payments from the national budget for losses caused by risks that are insurable.
Climate change is the main challenge facing the agricultural sector, and therefore agricultural insurance programmes. Although the system already covers the risks associated to climate change, it is now facing increased uncertainty and a higher frequency and intensity of damage. The system is seeing a growing number of claims for losses by farmers: the five years with the highest loss ratio were all during the period 2012-22. In response, the Spanish government has taken measures to avoid increases in the cost of insurance for farmers while recovering the subsidy levels, which had suffered severe cuts as a consequence of the economic crisis. The public insurance subsidy budget approved for September 2022 represents an increase of EUR 60 million or 23% with respect to the previous year and is over 50% higher than the budgets approved for each year between 2013 and 2020.
These challenges mean that the insurance programme and the farmers will have to adapt in the context of climate change to guarantee the insurance system’s solvency and contribute to the sustainability of the sector. In its CSP, Spain acknowledged the need to adjust the system’s coverage, guaranteed risks and thresholds, actuarial calculations, and formulas for reinsurance to this new reality. Seeking the technical-actuarial balance for each insurance line, adjusting premiums and other corrective measures are currently given priority attention in Spanish insurance.
Studies have found that insurance – and particularly subsidised programmes that do not accurately reflect the farmers’ risk profile – can be counterproductive for resilience purposes. These programmes can crowd out on-farm risk management strategies and private insurance options, drive the emergence of problems of adverse selection and moral hazard, incentivise maladaptive outcomes (allowing producers to remain viable even if avoiding long-term risk management practices), or disincentive additional risk reduction. For this reason, the premiums should reflect the actual risk faced, so that actors have an incentive to take other risk-reducing measures. In general, insurance can be useful to enhance resilience, but only if it is treated as a tool in a wider overall resilience strategy rather than as an alternative to adaptation.
Source: Based on Antón and Kimura (2011[40]), MAPA (2022[25]), (2022[41]), (2022[42]), Glauber et al. (2021[43]) and OECD (2020[44]).
Data and digital technologies will be essential to monitor the implementation of the enhanced conditionality, the eco-schemes and other CAP measures. In the case of Spain, many of the necessary data collection and monitoring tools are at their early stages of implementation or are not yet in force. As a result, the availability of data is still limited.
As of mid-2022, several national regulations aiming to improve data collection and monitoring were in process of approval or starting implementation. They include decrees on sustainable soil fertilisation, use of phytosanitary products and use of antibiotics in livestock farming. A farm information system (Sistema de Información de Explotaciones Agrícolas y Ganaderas y de la Producción Agraria ‒ SIEX) will also be implemented. SIEX will integrate all agricultural information that farmers must provide to the competent authorities. It will include a new Digital Farm Notebook (Cuaderno Digital de Explotación Agrícola) for crops and a General Registry of Best Available Techniques in Livestock Farms (ECOGAN). The Digital Notebook will collect and provide quantitative farm-level information on the use of phytosanitary products, fertilisers and antibiotics (MAPA, n.d.[45]). ECOGAN represents the consolidation and digitalisation of the existing livestock registries, which were initially established for sanitary reasons but are increasingly being used for environmental monitoring. ECOGAN will record the Best Available Techniques (BAT) applied and estimate pollutant and greenhouse gas emissions at the farm level. Its implementation in the pig farming sector has been prioritised in order to address the ammonia emission problems associated with this activity.
In November 2022, the MAPA signed a collaboration agreement with the Spanish National Research Council (CSIC) for monitoring and evaluating the economic, social and environmental dimensions of the CSP based on science and indicators. The agreement will be implemented through an interdisciplinary platform (AGRIAMBIO), with the participation of different research centres and collaborations with universities and NGOs. Among other activities, CSIC will design indicators to determine the status of soil organic matter content, birds linked to agricultural habitats, pollinators, and other indicators of biodiversity and ecosystem services. The collaboration has an initial duration of three years, but an extension beyond this time limit to cover the full CAP implementation period is foreseen. The budget until end-2025 is of EUR 1.8 million, to be financed in equal parts by each of the institutions.
1.3. Drivers and outcomes of the agro-food sector performance
This section presents the essential drivers and outcomes of the performance of the Spanish agro-food sector, according to the OECD Food and Agriculture Productivity-Sustainability-Resilience (PSR) Framework. The PSR framework follows the main objectives of the 2016 Declaration of the OECD Meeting of Agriculture Ministers and seeks to advise countries on the policy mix that can best contribute to enhancing the productivity, sustainability and resilience of their food and agriculture sector.
1.3.1. Productivity changes
Agricultural output in Spain experienced remarkable growth in the last five decades. Growth was driven by total factor productivity increases, as the use of inputs declined. In the last decade, input use has picked up pace
Agricultural output in Spain has experienced sustained growth since 1960, with a particularly high growth rate in the first four decades. While output growth decelerated between 2001 and 2010, after 2011 it recovered and surpassed the EU average (2.15% vs 0.60% in 2011-19).
Growth in agricultural total factor productivity (TFP) reflects the ability of the sector to use inputs and land more efficiently, thus achieving a higher output per unit of inputs or per hectare of land. Since the 1970s and until 2010, productivity was the primary driver of Spanish output growth: TFP experienced increases above the EU average, which drove production up despite significant reductions in labour (Figure 1.9). TFP and overall output growth have slowed in the last two decades; between 2011 and 2019 TFP grew at an average rate of 0.87%, falling for the first time slightly below the EU average of 0.96%.
In the last decade, the use of agricultural inputs in Spain picked up again. In particular, labour use had a slight increase for the first time in five decades, after having experienced a fast and consistent decline, at rates above those observed at the EU level. The growth in variable input use remained consistently positive and large until 2001-10 when it declined. As production recovered in the most recent decade, use of variable inputs such as fertilisers increased again.
Even if the Spanish TFP average growth was below the EU rate between 2011 and 2019, the sector still performed better than in other European peers such as Italy, France and Germany (Figure 1.10).
Figure 1.9. Productivity improvements have driven Spain’s agricultural output growth
Note: TFP growth is calculated as a residual, equal to growth in outputs minus growth in inputs.
Source: Authors’ calculations based on USDA (2021), International Agricultural Productivity (database).
Figure 1.10. Despite having slowed down, Spain’s TFP grew at higher rates than in selected peer countries
Note: TFP growth is calculated as a residual, equal to growth in outputs minus growth in inputs.
Source: Authors’ calculations based on USDA (2021), International Agricultural Productivity (database).
1.3.2. Natural resources and climate change
Spain’s agricultural area grew slightly between 2009 and 2020. The area under greenhouse cover – concentrated in the Mediterranean coast and the Canary Islands – had the strongest increase
Agriculture is present in most of Spain’s territory (Figure 1.11). According to the latest Agricultural Census (Instituto Nacional de Estadística, 2022[46]), the total Utilized Agricultural Area (UAA) in 2020 was of 23.9 million hectares, 0.7% larger than in the previous census (2009). Spain’s large size, geographical position and climatic variability allow for a great diversity of agricultural activities. Arable land constituted almost half of the total UAA (49%), followed by permanent pastures (31.5%) and woody crops (19.5%). The remaining 0.3% corresponds to the area of greenhouse cultivation, which is mostly present in the Canary Islands and the mainland ACs of Murcia and Andalusia.
There was an expansion of the area with woody crops, including fruit trees (20%) and olives (14%). Arable land increased by 4%, while permanent pastures decreased by 10%. Spain’s total area under organic certification expanded from 2% to 8%.
As of 2020, 45% of Spain’s UAA was managed by high-input intensity farms, while low and medium-input farms had a share of 27.5% each. In 2015, these shares were 41%, 33% and 26% for high, medium and low-intensity farms. When the 2020 shares of high-intensity farms are compared across EU Member States, Spain is near the middle, below Portugal but slightly above Germany, France, Italy and the European Union as a whole. At the regional level, in 2019 the Balearic Islands, Madrid and Murcia had the highest UAA shares managed by low-input farms, while the Canary Islands, the Basque Country, Navarra and La Rioja all had over 70% of their UAA managed by high-input farms (Eurostat, 2021[47]).
Figure 1.11. Arable land represents half of Spain’s agricultural area
Note: “Predominant crop” is the one with the largest share of the UAA for each AC.
Source: Authors, based on Instituto Nacional de Estadística (2022), Censo Agrario 2020.
Spain’s agricultural output and productivity have grown in the last decade, but there are worrying trends in some input use indicators
The OECD Agri-Environmental Indicators database shows that the increase in Spain’s productivity between 2011 and 2019 was accompanied by decreases in the use of water and energy, while the farming land area expanded slightly. On the other hand, the balances of nitrogen (N) and phosphorus (P) grew above the EU averages (Figure 1.12). While they are essential inputs in agriculture, very high N or P surpluses can have adverse effects on the environment (OECD, 2019[48]): nutrient leaching that causes drinking water pollution and eutrophication, or releases of emissions that contribute to atmospheric pollution, soil acidification and water eutrophication. The management and storage of animal manures also generates ammonia emissions, which increased more than the EU average. The agricultural sector was responsible for nearly 97% of ammonia emissions in Spain in 2018 (European Comission, 2020[49]). Recent advanced data point to a decrease in ammonia emissions between 2020 and 2021 (MITERD, 2023[50]).
The volume of agricultural freshwater abstractions experienced a decrease, which was slightly lower than the decline observed in the European Union as a whole. Yet, Spain’s water resources remain under significant pressure: the share of abstractions as a percentage of renewable resources is one of the highest in the OECD. Agriculture – and in particular irrigation – is the largest water user; the sector accounts for over 80% of water demand.
Improving the efficiency of irrigation systems is an important policy objective for Spain. For over twenty years, the Ministry of Agriculture, Fisheries and Food has led substantial efforts to modernise irrigation infrastructure with the aim of using water more efficiently (Box 1.6). Spain is currently starting a new irrigation modernisation plan, with public investments of over EUR 800 million, including initiatives in the framework of the Spanish Recovery, Transformation and Resilience Plan10 and CAP Pillar 2 payments for investments for the modernisation of irrigation infrastructure which are acceptable under the condition that they do not lead to an increase in irrigated area (Section 2.3.3).
Figure 1.12. Spain’s agricultural production is growing, as is its use of some inputs
Source: Authors' calculations based on OECD (2022), Agri-environmental Indicators (database) and USDA (2021), International Agricultural Productivity (database).
Habitat deterioration, pressures on water resources and agricultural pollution threaten Spain’s rich biodiversity. Soil degradation poses a risk for the future of agricultural activities
Spain has one of the highest biodiversity levels in the European Union. At 28%, its total share of protected terrestrial areas is well above the Aichi target of 17%. Natura 2000 terrestrial sites cover over 138 000 km2 and correspond to 17% of the total Natura 2000 land area in the European Union. About one-quarter of Spain’s Natura 2000 area is agricultural, such as natural grasslands and pastures. However, this rich biodiversity is under pressure: the conservation status of agricultural habitats has worsened in recent years, and the common farmland bird population has decreased, in line with the decline observed in the European Union. Forty-two per cent of the known species of freshwater fish are threatened, with water abstraction, droughts and agricultural pollution among the factors associated with their decline.
Spanish agriculture is also threatened by soil deterioration, while at the same time contributing to it. Ten per cent of the UAA is at risk of severe erosion, which particularly affects arable and permanent crops. The depletion of soil organic matter is also an important concern, as is the increasing salinisation. Three-quarters of Spain’s tillable land was subject to conventional tilling practices as of 2016, in line with the EU average. Land degradation processes are associated with desertification,11 which will also be aggravated by climate change.
Agricultural energy consumption has decreased after its 2004 peak, but the sector could still optimise its energy use
The direct energy consumption of Spanish agriculture in 2019 was of 2.6 million tonnes of oil equivalent (toe). The sector’s average energy consumption decreased between 2011 and 2019 and it is below its peak of 3.3 million toe in 2004, but the most recent trend is of an increase. The analysis made for the CSP notes the sector’s high dependency on fossil fuels, a low implementation of renewable energies, and the existence of numerous facilities not optimised for energy savings. The highest energy consumption in 2016 was for agricultural machinery, followed by consumption by farms and consumption for irrigation (MAPA, 2021[51]).
GHG emissions are on the rise again after declining in the previous decade
Emissions of greenhouse gases (GHG) from agriculture in Spain began rising again in 2011-19 after decreasing in 2001-10. This growth in emissions was mainly driven by agricultural output growth. Until 2010, Spain’s robust TFP growth partially mitigated the growth in total emissions. However, in 2011‑19, agricultural output grew at annual rates of 2% while TFP growth decelerated to 0.9%, so that productivity gains were unable to offset output growth, leading to an increase in emissions (Figure 1.13). The emission intensity per output unit has been decreasing in the last two decades more rapidly than the OECD average, but the pace of reduction has recently fallen. This underlines the importance of efforts to mitigate agricultural GHG emissions.
Figure 1.13. Productivity gains have helped mitigate GHG emission growth
Note: Growth in output (blue) and in the emission factor of input use (emissions per unit of inputs) (grey) contribute positively to the growth in GHG emissions (the diamond marker). Productivity (TFP) improvements (light blue) contribute negatively; thus, they are shown as negative values.
Source: Authors’ calculations based on USDA (2021), International Agricultural Productivity (database).
The impacts of climate change on Spanish agriculture will be numerous and uneven
Spain is already experiencing the impact of climate change. In the last 50 years, the average temperature has risen by 1.5°C (above the global and European averages). The overall volume of precipitation is changing, as is its annual distribution. The average flow of most Spanish rivers has decreased, and the frequency and intensity of extreme events such as heat waves and droughts are increasing (MITERD, 2020[52]). Between 1980 and 2020, the Spanish economy incurred losses amounting to EUR 60 billion as a result of weather and climate-related extreme events, the fourth highest amount among the 32 members of the European Environmental Agency (European Environmental Agency, 2022[53]). The OECD has identified Spain as the EU Member State facing the highest proportion of severe future water risks, and the sixth among OECD members (OECD, 2017[54]).
The specific impact on the agricultural sector is expected to vary depending on the geographical location and the activity. In general, production will be altered by the temperature increase, the reduced availability of water resources, and by extreme weather events. This effect will be uneven: the higher temperatures and frost reduction may increase production of some crops or turn some Mediterranean areas into optimal land for growing tropical fruits, but other areas (especially in the southeast) may be unable to continue growing crops as they have done so far due to the increase in temperatures, salinisation, or lack of water. The northern area would see positive changes in yields across the board but may experience a decrease in the production of native crops such as vineyards. Lastly, the decrease in rainfall for pastures could result in a change in land use from permanent towards herbaceous crops. In some areas, a loss of pasture productivity could have a negative impact on livestock.12
1.3.3. Structural changes
The Spanish agricultural sector is experiencing a transformation toward fewer farms of a larger average size
As of 2020, there were over 914 000 farms in Spain. More than half of them were small or very small (5 hectares or less), mainly run as family businesses; only 6% had an area of 100 hectares or more. The total number of farms has been on a downward trend: between the agricultural censuses of 2009 and 2020, it decreased by 75 000, a relative decline of 8%.13 This affected farms of all sizes with the exception of the largest ones (of 100 hectares or more), which increased by 9% (Figure 1.14). This evidences a shift away from traditional small family farms towards larger commercial enterprises (PWC and Aepla, 2019[55]).
Figure 1.14. Larger farms are growing in area and number
Source: Instituto Nacional de Estadística (2022), Agricultural Census 2020.
In parallel with the decline in the number of farms, the share of the UAA held by larger farms rose from 55% in 2009 to 58% in 2020. This means that the largest 6% of farms take up more than half of the agricultural area. This situation is not unique to Spain: in the European Union the largest farms (3% of the total) cover over half of the UAA (Eurostat, 2022[56]). In line with the decrease in their numbers, smaller farms’ share of the UAA also became smaller. This resulted in an increase in the average farm size from 24.6 hectares to 26.4 hectares between 2009 and 2020.
Several reasons explain this structural trend. They include the low profitability of farming and the general perception of poor persectives for the sector, which makes farming less atractive compared to other activities. In addition, increased productivity and mechanisation – which often requires a larger scale to be efficient – also play a role in the reduction of the total agricultural workforce (Garrido and Chuliá, 2020[57]), (European Commission, 2022[58]).
The number of farmers is declining, and their average age is increasing
Another characteristic of the structural transformation of the sector is a continuous decrease in the working population. In 2009, the sector’s total workforce amounted to 922 026 Annual Work Units (AWU);14 by 2020 it had declined by 8%, to 851 405. Particularly remarkable was the loss of family workers, which fell by 50%, while farm owners’ work decreased by 4%. Conversely, contracted and subcontracted labour increased by 16% and 14% (Figure 1.15); their share in the farm workforce increased to 49% in 2020 compared to 39% in 2009 (Instituto Nacional de Estadística, 2022[46]). This development also evidences a shift away from family farms toward commercial operations, which rely more on contracted workers. In this context, it is also important to highlight the role of foreign agricultural workers: with a share of 26% in agricultural employment – compared with 18% in the overall Spanish workforce – they constitute the backbone of the Spanish farming sector (Garrido and Chuliá, 2020[57]).
Figure 1.15. Contracted labour is gaining importance in farming
Source: Instituto Nacional de Estadística (2022), Agricultural Census 2020.
The rural population in Spain is ageing. Over two-thirds of farm managers were 55 or older in 2020, while only 4% was under the age of 35. Older farmers tend to concentrate on smaller farms: the larger the farm, the larger the share of younger managers (Figure 1.16).
Figure 1.16. Younger farm managers tend to work in larger farms
Source: Instituto Nacional de Estadística (2022), Agricultural Census 2020.
Box 1.5. Women in Spanish agriculture
While the number of female farm managers has increased, there is still a long way to go to make agriculture attractive to young women and improve the gender balance
Against the backdrop of the continuously diminishing labour force and the problem of generational renewal in the Spanish agricultural sector, the role of women is increasingly in focus. The sector, however, is traditionally dominated by men. In 2016, women accounted for only 30% of the total agricultural workforce. Official statistics tend to underestimate the participation of women, as female work often remains invisible. Compared to men, women carry out the majority of unpaid and informal activities, such as taking care of the household and the family; they also often support male farm holders as unregistered family labour. In addition, many women have temporary or part-time contracts that might understate their roles and responsibilities.
The presence of women in agriculture has become more visible in recent years. While the total number of farm managers in Spain decreased by 8% since 2009, the number of female managers actually rose by 22% (in contrast to male managers, which decreased by 16%). Nevertheless, only 29% of all farm managers were female in 2020. In addition, farms managed by women have less land at their disposal and account for lower economic outputs.
Ensuring accessibility and opportunity for women in the agricultural sector is indispensable to counter the demographic imbalances and assure a viable future for the sector. However, the data show that few young women have a recognised role in farms: only 3% of female farm managers were younger than 35, compared with 5% of men. This can indicate that agricultural careers are not attractive for women.
Spain has taken steps to acknowledge women’s work in agriculture, including through Law 35/2011 on Shared Ownership of Agricultural Enterprises. The law aims to give legal and economic recognition to female work, and to remedy the gender imbalance between holders of farms’ property titles. It allows couples to manage a farm jointly, sharing the work but also the farm’s profits and entitlements (such as the CAP payments). However, a 2015 assessment showed that very few farms had registered as jointly owned. Some factors explaining this low uptake include lack of knowledge of the law, unequal implementation at the regional level, and difficulties to comply with the requirement for both co-owners to pay into the social security system (although at a reduced rate under certain conditions). To remedy this, the Spanish authorities carried out information and awareness-raising actions and, since 2021 grant specific direct payments to shared-ownership farms.
Currently, 1 031 farms operate under shared ownership, 44% of them in Castile and León. While progress has been made, this still represents a very small proportion of Spanish farms. As of 2020, 70% of the Spanish farm managers that also own their farms were male, similar to when the law was enacted. This shows that work still needs to be done to improve the gender balance in agriculture.
Spain is one of only two EU Member States that address in their new CAP Strategic Plan the objective of improving participation of women in farming (the other one is Ireland). The Spanish CSP increases by 15% the complementary direct payment for young farmers (of 40 years or less) if the beneficiary is female and owns or co-owns the farm. Together with other four EU Member States, Spain also proposes measures supporting rural women in the new CSP. Rural development interventions include in some cases positive discrimination measures in favour of women. For example, women are prioritised in grants for investments in the processing, commercialisation, and development of agricultural products. Furthermore, farms owned by women or under shared ownership are prioritised in support programmes such as the 2019-2023 National Support Program for vineyard restructuring and reconversion.
Source: Based on Boletín Oficial del Estado (2011[59]), European Commission (2022[58]), European Institute for Gender Equality (2016[60]), (Gimeno Pérez, 2018[61]), Giner, Hobeika and Fischetti (2022[62]), Instituto Nacional de Estadística (2022[46]), and MAPA (2022[63]), (2021[64]).
Facing these social and structural challenges is an important policy priority in Spain. Agricultural and rural development policies seek to make the activity more profitable and sustainable, revitalise rural areas and fight against their abandonment, improve female participation, and make farming more attractive to young people. Relevant policy interventions include the CAP income support and complementary payments, as well as investments to support farm infrastructure improvement, such as irrigation modernisation programmes (Box 1.6).
Box 1.6. Socio-economic effects of irrigation modernisation
Following a period of intense droughts, Spain embarked in a process of modernisation of irrigation infrastructure that is considered to be one of the largest in the world in recent decades (Berbel et al., 2019[65]). The first and second modernisation plans, implemented between 2002 and 2015, improved about 1.8 million hectares of irrigated land. Between 2000 and 2021, the total investments by the MAPA and the AC administrations for transforming irrigation systems amounted to EUR 3.8 billion (MAPA, 2022[66]). As a result of these efforts, over half of Spain’s irrigated surface now uses localised methods such as drip irrigation. More recently, an important amount of funding has been destined for new modernisation programmes subject to environmental requirements (Section 2.3.3).
Beyond the objective of achieving a more efficient use of water resources (covered in Section 2.3), the irrigation modernisation policy also aims at improving the socio-economic situation of farmers: by enhancing the competitiveness of agriculture, it seeks to promote development and employment in rural areas and improve the quality of life of farmers, thus helping combat the problem of rural abandonment (Gutiérrez-Martín and Montilla-López, 2018[67]).
Irrigation policies have contributed to dynamise agricultural production and raise productivity, but their social effects have been less studied at the country level. The evidence available comes from case studies or surveys for specific communities. The State Agricultural Infrastructure Company (SEIASA) compared the situation before and after modernisation for individual irrigation communities (associations of users) and crops. It found that beneficiaries produced more per cubic metre of water used, used less fertilisers, and faced lower fertiliser costs due to the use of fertigation. The higher production and income result in improved quality of life and working conditions for farmers (SEIASA, 2017[68]). Another effect identified in case studies is the use of more high-skilled labour due to the implementation of more innovative technologies (del Campo García, 2017[69]). A 2014 survey (Castillo, Borrego-Marín and Berbel, 2017[70]) found that the crop changes driven by the modernisation process are positively correlated with the younger and more entrepreneurial farmers in the sample, and that the automation and remote control of irrigation have improved the quality of life of agricultural workers. The authors of the survey called for the development of socio-economic analyses of the impact of modernisation to complement the work done in the agronomic and hydrological fields.
Farm income has increased, but there are large differences depending on the farm output and activities
Between 2007 and 2020, the annual average farm income in Spain – expressed as average farm net value added (FNVA) per AWU15 – increased by 34%, to EUR 31 913. While this clearly surpasses the EU average of EUR 23 649 for 2020 (FADN, 2022[71]), wide discrepancies in farm income exist depending on the level of standard output and the type of farm. Income generally rises with farm output, leading to differences of more than EUR 40 000 between low and high output farms. There are also divergences depending on the activity of the farm: for example, granivore livestock farms (pigs and poultry) earned over twice the average, while wine farms had a particularly low income (FADN, 2022[71]).
Income from agricultural activities only provides a partial picture of the situation of rural households in Spain: many farmers do not dedicate their working time exclusively to farming, but have additional gainful activities (PWC and Aepla, 2019[55]). Unfortunately, neither the EU farm accountancy data network (FADN) database nor Spanish national statistics collect information about off-farm income to analyse the income situation of farm households. The 2020 census reported that 7% of all farms that were managed by their owner had lucrative activities unrelated to the farm (Instituto Nacional de Estadística, 2022[46]).
1.4. Conclusions
Spain has developed an agriculture that is competitive and successful in international markets. The sector is productive, and farmers in export-oriented sectors have been able to adapt and respond to the trends in external demand, both in Spain’s traditional export markets and beyond. This is evidenced by the important growth of conventional and organic fruit and vegetables, which are mostly sold to other European Union Member States, and by the expansion of pig meat exports that go mainly to Asian markets. The development of agricultural production has in many cases driven support industries and services that are important motors of growth and employment in the regions where they are active.
At the same time, the sector is moving toward a more commercial farming model. While the number of large farms and their share of the agricultural area are increasing, the number of farms of less than 100 hectares – which are more often managed by older farmers – fell by 65 000 between 2009 and 2020. The participation of women has increased: the number of female managers grew by 22% in the same period. Yet, they represent less than one-third of farm managers. The share of farms that operate under the model promoted through the 2011 shared ownership law is still small.
Following a deceleration between 2001 and 2010, agro-food production picked up again after 2011, surpassing the average output growth of the European Union and returning to the trend of sustained growth observed between 1960 and 2000. While productivity has historically been the main driver of output growth, agricultural total factor productivity (TFP) has slowed down in recent years.
Between 2011 and 2019 the farming area grew slightly, and the use of water and energy by the sector decreased. At the same time, the balances of nitrogen (N) and phosphorus (P) and ammonia emissions grew above the EU average. While agricultural freshwater abstractions declined, Spain’s share of abstractions remains one of the highest in the OECD, and agriculture represents over 80% of water demand. Agricultural GHG emissions also began rising again after experiencing a decrease, and Spain faces climate change threats that include water scarcity and more extreme weather events
Spain has destined substantial public investments to the modernisation of irrigation infrastructure. Through the irrigation policy, the Spanish administration seeks to simultaneously address environmental and socio-economic objectives. Thus, the policy aims to save water and increase the efficiency in its use (the effects on water resources are discussed in Chapter 2), and also to promote agricultural productivity and improve the income of rural populations.
Spain’s autonomous communities are very diverse in size, in their share of rural areas and predominant agro-food activities. The State and AC administrations have competences in agriculture, which at the same time is a common policy area at the EU level. This makes co-ordination and dialogue between State and regional authorities essential. The effort made for developing a single national plan for the 2023-27 CAP is a remarkable example.
Spain’s new CAP plan emphasises the importance of income support to ensure a safety net to farmers, and on redistributing these payments to small and medium-sized farms. Focus is given to ensuring the continuity of farming and to the role of income support in addressing challenges such as the abandonment of rural land and the lack of generational renewal. Coupled payments represent around 14% of the Pillar 1 budget. Preserving this support is considered vital for certain activities and regions that are economically and socially vulnerable, and efforts have been made to increasingly subject these payments to environmental conditions.
The new CAP seeks to give an increasingly central role to agri-environmental objectives, with strengthened conditionality requirements for the direct payments and voluntary eco-schemes as the main instruments. In the Spanish eco-schemes, farmers receive a payment for implementing in a given land plot at least one of seven agricultural practices. The payment aims to reward additional efforts done beyond the minimum CAP conditionality requirements.
In order to monitor the implementation and effectiveness of the new CAP environmental requirements and the voluntary eco-schemes, Spain has embarked in the development of a new regulatory framework and a farm information system (SIEX) to collect and provide quantitative information on the use of phytosanitary products, fertilisers and antibiotics and the application of Best Available Techniques at the farm level. A recent agreement between the Ministry of Agriculture, Fisheries and Food and the Spanish National Research Council provides the basis for developing indicators and research to evaluate the implementation of the CSP from the economic, social and environmental perspective.
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Annex 1.A. Survey for the Autonomous Communities
The following questions were used by the OECD to gather information from the Autonomous Communities in preparation of this report. The survey was distributed in July 2022. As of October 2022, responses from eight ACs had been received: Aragón, Asturias, Basque Country, Cantabria, Catalonia, Castile and León, Galicia, Madrid.
Support from the MAPA and the Spanish Delegation to the OECD to distribute the survey to the regional authorities is gratefully acknowledged.
Part I: Innovation
1. Innovation: Institutions and long-term strategies
Q1. What are the main agency/agencies implementing agro-food innovation initiatives in your Community? (Please select one answer)
Q2. Please provide the following information about the agro-food research institution from your Community that is part of the INIA system:
Q3. What are the main activities of your Community’s agro-food research institution (please select up to 2 options):
Q4. Please indicate the three main products or thematic areas of focus of the work of your Community’s agro-food research institution:
Q5. Is there a long-term strategy for agro-food innovation in your Community?
Q6. What are the key priorities of the agro-food innovation strategy in your Community? (Please select up to 3 answers)
Q7. Are there specific policies for agro-food innovation in your Community?
Q8. What are the main focus areas of the agro-food innovation policy in your Community? (Please select up to 3 answers)
2. Investment in agro-food R&D&I (research, development and innovation)
Q9. What public policy incentives for private investment in agro-food research and innovation exist in your Community? (Please select up to 3 answers)
Q10. Is the effectiveness of these research funding mechanisms evaluated? (Please select one answer)
Q11. Which alternative sources of funding for agro-food research and innovation exist in your Community? (Please select up to 2 answers)
3. Farm advisory services
Q12. Which of the following types of farm advisory services are present in your Community and what is their importance? Please note that there might be two dominating types of farm advisory services, when two types coexist almost equally. (Please select one answer for each row)
Q13. What are the main subjects covered by the farm advisory services offered in your Community? (Please select up to 3 answers)
Q14. Is the performance of public farm advisory services evaluated? (Please select one answer)
4. Digital: Information and communications technology (ICT)
Q15. Are there any policies promoting access to and adoption of digital technologies and tools in general/for rural areas/for agriculture/for sustainable agriculture in your Community? (Please select one answer in each row)
Q16. How do you evaluate the availability and performance of the digital infrastructure (broadband) in general / for agriculture in your Community? (Please rate on the scale from 1 to 5)
5. Education and skills
Q17. Are there any programmes/initiatives promoting education in agriculture in your Community?
Q18. What long-term skills / knowledge gaps have been identified in the food and agriculture sector in your Community? (Please select up to 3 answers)
Q19. What is the approximate annual share of farmers (Please provide approximate figures)
Q20. How do you evaluate the current average status of digital skills among farmers in your Community? (Please rate on the scale from 1 to 5)
Q21. Are there any policies supporting digital skills among farmers in your Community?
6. Statistics on agricultural R&D&I
Q22. Does your Community collect data on agricultural/agro-food R&D&I? (Please select one answer)
Part II: Environmental aspects
7. Environmental challenges and regulations
Q23. Which are the main environmental challenges related to agricultural activities in your Community? (Please select the main 3 options)
Q24. Has your Community developed any strategies to deal with these challenges?
Q25. Is there an agency in the Community specialised in designing best practices or monitoring agri-environmental performance?
Q26. Please name and rank the five most important environmental regulations related to agriculture that are currently in force in your Community (beyond regulations by the European Union or the Government of Spain)
8. Environmental policies
Q27. Please indicate if your Community has implemented specific policies or programmes in the following areas (specific for this Autonomous Community):
Q28. Is the effectiveness of these policies evaluated? (Please select one answer)
9. Final remarks
Thank you very much for your co-operation in filling out the survey. If you have any additional remarks or comments, please use this space. If possible, please provide the contact details of a person or persons responsible for the areas covered by the survey, who might provide additional information or clarifications if required: [ ]
Notes
← 1. Law 45/2007 defines a rural area as the geographic space formed by the aggregation of municipalities or smaller local entities with a population of less than 30 000 inhabitants and a density of less than 100 inhabitants per km2.
← 2. Trade data for “Fresh fruits and vegetables” cover chapters 06, 07 and 08 of the Harmonised System.
← 3. Data on harvested areas under glass or high accessible cover are available for lettuces, tomatoes, cucumbers, peppers (capsicum), and strawberries.
← 4. Spanish official publications and data refer to “ecological production” used as a synonym of “organic” or “biologic”. This report uses the term “organic”, understood as a system that produces food using natural substances and processes and aims to have a limited environmental impact, and as covered by the relevant EU rules and regulation. For a discussion of approaches and practices to produce food in an environmentally friendly way, including organic agriculture, see Box 1.2 of OECD (forthcoming[73]).
← 5. The Mediterranean diet – inscribed since 2013 in the Representative List of the Intangible Cultural Heritage of Humanity – is characterised by a nutritional model consisting mainly of olive oil, cereals, fresh or dried fruit and vegetables, a moderate amount of fish, dairy and meat, and many condiments and spices, all accompanied by wine or infusions. This concept expands beyond food consumption to include a set of skills, knowledge, practices and traditions associated with the preparation and consumption of food (UNESCO, 2010[72]).
← 6. This was completed in 1995 with the approval of the Statutes of Autonomy of the cities of Ceuta and Melilla. The Statutes of Autonomy establish the basic institutional rules of each AC, including their institutions of self-government and the competences that they have assumed within the constitutional framework.
← 7. “Degressivity” refers to the reduction of payments above a certain level with the objective of improving the distribution of support.
← 8. This represents a simplification from the previous CAP period, when there were 50 agricultural regions.
← 9. These investments are subject to a number of conditions, including the existence of a river basin district management plan for the area in which the investment is made and the installation of a water meter. Investments that improve the irrigation installation or infrastructure shall be subject to a technical assessment in advance to ensure that they will result in potential water savings. Investments affecting bodies of surface or groundwater in less than good quantitative status must guarantee an effective reduction of water consumption of at least 50% of the potential water savings.
← 10. The Spanish Recovery, Transformation and Resilience Plan (RTRP) is financed by the EU Recovery and Resilience Facility, the key funding instrument of the Next Generation EU plan to mitigate the social and economic impact of the coronavirus pandemic. The Spanish RTRP has eleven strategic projects (known by their Spanish acronym as PERTEs). Of them, the PERTE Agroalimentario is specifically dedicated to the development of the agro-food chain, including through digitalisation, knowledge and innovation. Another PERTE is dedicated to the digitalisation of the water cycle, including irrigation.
← 11. Desertification refers to the degradation of land in arid, semi-arid and dry sub-humid areas. It is a complex process with multiple causes, including climatic variations and human activities.
← 12. Information provided by MAPA in response to an OECD questionnaire.
← 13. When comparing the figures of both censuses, it should be noted that the minimum surface thresholds in the 2020 census were lower than those of the 2009 census.
← 14. AWU is the measure used to describe the work carried out by one person who is working full-time in a farm. It is equivalent to the total hours worked divided by the average hours worked in full-time jobs in the country.
← 15. Average farm net value added (FNVA) per AWU is equal to gross farm income minus the depreciation costs. It takes into account agricultural support and income taxes. Measuring farm income per AWU allows to account for the different farm scales and provides a better measurement of agricultural labour productivity.