The crisis in the European countryside is far from over, despite the progress made in Brussels in recent months. And without a doubt, one of the most affected sectors is the Spanish primary sector. A fact that graphically reflects the complicated situation in which our countryside finds itself is that Inflation in the agri-food sector in Spain during 2023 was 6.7%well above that of the EU, which stands at 4.1%.
That is, with this data it can be calculated that Agricultural prices have increased in Spain by 63% more than in Europe in just one yearaccording to data from the ‘Observatory on the Spanish agri-food sector in the European context. Report 2023’prepared annually by Cajamar in collaboration with Plataforma Tierra.
If we look at the accumulated inflation Since 2019, it has been clear that the difference in price increases between Spain and the European average has been around for a long time, although it has been particularly pronounced this past year.
According to this study, which analyses in depth the situation of the Spanish countryside in relation to the European one, the prices of the Spanish agri-food sector show an accumulated growth of 23.2% between 2019 and 2023. For its part, the average inflation in Europe since that year remains at a 19%22% more than the increase in Spain. This implies a clear “loss of price competitiveness”.
The authors of the report have also analysed the reasons for the greater increase in Spain than in the rest of the ‘old continent’. “The difference between Spain and the EU-27 is due to a Highest inflation in the three Spanish agri-food subsectorsbeing more pronounced in the manufacturing industry, which has accumulated an increase of 19.3%, compared to 13.1% in the EU-27,” the report says.
In addition, they highlight that the rebound this year 2023 is also explained by the 10.9% growth in prices of the Spanish agriculture and fishingwhich is three times higher than the EU’s 3.5%. “In fact, the lower inflation in the processing industry in Spain (5.9% vs. 7.1%) and a similar increase in prices in marketing (4.8% vs. 4.4%) is not enough to offset the higher increase in prices in the primary sector,” they add.
Farm prices are increasing more than the rest of the economy
In addition to the fact that Spanish field prices have increased significantly more than those of the rest of the European field, at a continental level, Primary sector inflation in Spain is much higher than inflation in the entire economy.
In this case, we are talking about inflation in agricultural prices showing an accumulated increase of 23.2% between 2019 and 2023, which is significantly higher than the 14.8% of the total economy. If we focus on the year 2023, the inflation rate of the Spanish agri-food sector (6.7%) is also higher than that of the total economy in 2023, which stands, according to the aforementioned report, at 5.7%.
This increase in prices is added to other negative data for the sector, such as that inflation, drought and international tension have sunk food production by 2.6%, that in Spain there are 2.3 million hectares of unused arable land, that imports of fruits and vegetables have skyrocketed by almost 60% in the last decade or that investment funds have ‘killed’ the countryside and 6,200 livestock farms have already closed since 2020. Information that reveals the ‘black road’ that the European countryside, but above all, the Spanish one, has been going through for years.
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