`Only One Percent of Olive Growers Expected to Lose Funding Under Spain’s New CAP - Olive Oil Times
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Only One Percent of Olive Growers Expected to Lose Funding Under Spain’s New CAP

By Daniel Dawson
Jul. 29, 2021 07:13 UTC

Olive grow­ers and oil pro­duc­ers are expected to be among the pri­mary ben­e­fi­cia­ries of the new Common Agricultural Policy (CAP) in Spain.

The new pol­icy pro­vides fund­ing to the agri­cul­tural sec­tors of all 27 mem­ber states of the European Union from 2023 to 2027.

(The new CAP) is really well thought out because it helps the most dis­ad­van­taged. It helps the small­est farm­ers. It helps those who are very con­sci­en­tious about the envi­ron­ment. It helps women farm­ers, and it helps the youngest.- Juan Vilar, strate­gic con­sul­tant

Unlike pre­vi­ous iter­a­tions of the CAP, this one has been designed to allow each mem­ber state to cre­ate a national strate­gic plan for imple­ment­ing the CAP. These must be for­mal­ized by the end of 2021.

The European Commission will then vet each national strate­gic plan before releas­ing the fund­ing, pay­ing par­tic­u­lar atten­tion to the scheme’s focus on sus­tain­abil­ity, small farm­ers and young farm­ers.

See Also:New E.U. Ag Policy Could Benefit Greek Olive Growers If Requirements Are Met

Overall, Spain is set to receive €47.7 bil­lion divided over the seven years cov­ered by the CAP (about €6.8 bil­lion each year). Seventy-five per­cent of this fund­ing will come in the form of direct pay­ments to the country’s 695,000 farm­ers. The other 25 per­cent is ear­marked for rural devel­op­ment.

According to Juan Vilar, a strate­gic con­sul­tant to the olive sec­tor, olive grow­ers in Andalusia – who are respon­si­ble for more than three-quar­ters of the country’s annual olive oil pro­duc­tion – will receive an esti­mated €8.1 bil­lion over the seven years.

While Spain’s agri­cul­tural sec­tor has seen its fund­ing cut by 10 per­cent in the new CAP, these cuts will not be applied equally. Large farm­ers and ranch­ers may have their direct pay­ments cut by up to 25 per­cent, with small farm­ers expe­ri­enc­ing much smaller reduc­tions.

“With the bud­get drop of that 10 per­cent, it is believed that only one per­cent of olive grow­ers will see their CAP income reduced,” Vilar told Olive Oil Times.

One of the main nov­el­ties of the newest CAP is a process known as con­ver­gence, which the European Commission has designed to redis­trib­ute pay­ments, cap­ping them at €60,000 per farm or €100,000 per com­pany (with mul­ti­ple farms).

“For exam­ple, already speak­ing of olive groves in Spain, in Andalusia, the aver­age amount of money received is €571 per hectare,” Vilar said. ​“However, Jaén receives €690 per hectare, and Huelva receives €270. That is, Jaén receives three times more money than Huelva. Convergence means that lit­tle by lit­tle Jaén will receive less, and Huelva will receive more.”

However, Vilar said that con­ver­gence will lead to a more equi­table redis­tri­b­u­tion of funds to small farm­ers, which is one of the three main goals of the new CAP set out by the European Commission.

See Also:New CAP Provides Plenty of Opportunities for Italian Olive Growers

“It will be bad for olive grow­ers who cur­rently receive more than €60,000 per farm or jointly more than €100,000,” Vilar said. ​“In other words, it is good for medium and small farm­ers, and it is not so good for large olive grow­ers.”

According to Vilar, the new CAP will pro­vide the most ben­e­fits to ​“tra­di­tional olive grow­ers, organic olive grow­ers, young olive grow­ers and olive grow­ers who make a liv­ing from olive grow­ing.”

Part of the rea­son many of these olive grow­ers will ben­e­fit from the agree­ment is the strict envi­ron­men­tal poli­cies that are now being tied to aid pay­ments. To be eli­gi­ble for direct pay­ments, farm­ers will now be required to ded­i­cate three per­cent of their land to bio­di­ver­sity.

Further funds will be made avail­able to farm­ers who opt to tran­si­tion to organic farm­ing, imple­ment agroe­co­log­i­cal prac­tices and inte­grated pest man­age­ment pro­to­cols.

“Olive grow­ers who do things con­sci­en­tiously with the envi­ron­ment will receive much more money than those who are not con­sci­en­tious about the envi­ron­ment,” Vilar said.

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Another change to the CAP that will ben­e­fit small farm­ers is chang­ing the def­i­n­i­tion of what con­sti­tutes a farmer, which will elim­i­nate hobby grow­ers and some part-time farm­ers from the equa­tion.

“A gen­uine farmer is one who receives 25 per­cent of their income from olive grow­ing,” Vilar said. ​“So these farm­ers are treated dif­fer­ently. They are given more money and, in turn, are treated bet­ter from a fis­cal point of view.”

The next step in rat­i­fy­ing Spain’s national strate­gic plan for the CAP is for the fed­eral gov­ern­ment and the 17 gov­ern­ments of the autonomous com­mu­ni­ties to come to an agree­ment.

Thus far, an ini­tial strate­gic plan from the Ministry of Agriculture, Fisheries and Food was rejected by the Council of Autonomous Communities. They dis­agree with the cur­rent def­i­n­i­tion of an active farmer, the redis­trib­u­tive pay­ment scheme, the aid asso­ci­ated with pro­duc­tion, the def­i­n­i­tion of sec­toral pro­grams, aid for rural devel­op­ment and gov­er­nance.

Many observers in Spain believe the process of cre­at­ing the strate­gic plan will be long and fraught, with many sep­a­rate agri­cul­tural unions lob­by­ing for the best inter­ests of their spe­cific pro­duc­ers. However, Vilar said that he expects the plan to pass largely as it is.

“I don’t think there will be any changes to the new CAP,” he con­cluded. ​“It is really well thought out because it helps the most dis­ad­van­taged. It helps the small­est farm­ers. It helps those who are very con­sci­en­tious about the envi­ron­ment. It helps women farm­ers, and it helps the youngest.”

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