Drought already costing farmers $10 billion and further straining prices

25.04.2023

Tuesday, April 25, 2023 Press Review

The drought already costs 10,000 million to farmers and further strains prices (Expansion)
In fact, agricultural organizations warn that the drought already costs 10,000 million to the Spanish countryside, although losses could multiply in the coming days due to the strong heat forecast for the whole week, which could make many farmers not even compensate them to collect their crops.

  • Cereals, devastated (Expansion)
    Winter cereals (wheat, barley, oats) are one of the productions most affected by the lack of rainfall. Especially affected are the fields in Andalusia, Castilla-La Mancha, Extremadura, Aragon or Navarra, where the growing season is more advanced and where, therefore, there is no margin for recovery with the possible rains in the coming weeks. These areas will suffer a drop in production of around 50%-60%.
  • Olive groves and vineyards, in tension (Expansion)
    The situation of olive groves and vineyards is becoming critical, both due to the lack of water and to the increase in temperatures and frost damage. In Andalusia, the current water level is not enough to ensure the complete irrigation cycle of woody crops. The problem is that, although woody crops have a better resistance to drought, they are already at this time very affected by several years of low rainfall, which puts at risk the youngest trees.
  • Concern in vegetables (Expansion)
    Vegetables will hold up well in those places that do not have problems with water supply, but the irrigated area with restrictions continues to increase in recent weeks, while the level of water reservoirs falls, which raises uncertainty in the sector. Especially among summer crops such as tomatoes, whose campaign is being complicated by the adverse conditions that the plants have been enduring in recent weeks.
  • Irrigation restrictions (Expansion)
    Although irrigated crops have not been particularly affected by the drought, for the time being, the areas with restrictions continue to increase. This is the case of rice and corn production in Andalusia and Extremadura. One of the big problems in this area is that the heat has caused many crops in Andalusia to need water before the irrigation campaign begins in the Guadalquivir basin on May 1.
  • Fruit trees, under threat (Expansion)
    Fruit trees usually present a certain resistance to droughts, but the problem is that many areas chain several consecutive years with lack of water, which puts much of the crops under threat. In particular, the youngest trees and those that do not have irrigation support may not survive this year, which would cause a drop in production. Especially in those fruit trees with higher water consumption, such as avocados or mangoes.
  • Livestock in a critical situation (Expansion)
    Livestock farming is in a critical situation due to the fact that it does not have enough pasture, the price of feed is skyrocketing and the lack of water means that water has to be carried by tankers, which is pushing up prices. This could lead to the slaughter of a large part of the livestock herds, which will put downward pressure on the price of meat this year, but at the cost of skyrocketing the price of milk and dairy products both now and in the future, and of meat in the coming years.
  • Most crops, without insurance for lack of water (Expansion)
    According to a recent report by the Union of Small Farmers (UPA), "insurance in the most important rainfed crops (olive groves, nuts, wine grapes and arable crops) is very limited, since none comes to have covered the risk of drought or half of the area". Specifically, drought coverage reaches 4.56% of the area in the case of olive groves, 11.4% for nuts, 46.8% for arable crops (wheat, barley, oats...) and 47.05% for grapes.

Brussels insists: Doñana is in danger with irrigation (El Mundo)
The draft Law on irrigation of Doñana proposed by the Government of Andalusia does not pass the cut in Brussels. The European Commission, usually restrained, and more in politically sensitive times as the eve of elections, is completely against what the team of Juanma Moreno is shuffling and is not having any demure when communicating it.

  • Brussels disavows the Andalusian law of Doñana irrigation (Expansion)
    The European Commission yesterday warned the Andalusian government, and Spain, that the proposal of the regional government to regularize new irrigation in Doñana can "deteriorate" the wetland. According to the Commission, the rule "seems to go in the opposite direction" to the ruling of the High Court of Justice that requires protection.
  • Brussels criticizes the Doñana law without providing an alternative (La Razón)
    Warns the Junta de Andalucía that the increase in irrigation will have "disastrous effects" on ecosystems and recalls the condemnation of the Spanish government for not respecting environmental regulations.
  • The plan of the Junta for Doñana does not convince the EU and the Government either (ABC)
    The Commission maintains its concern about the Andalusian irrigation law, but reproaches the Executive of Sanchez for not implementing the ruling of the ECJ on the area.
  • Brussels receives Andalusia with a serious warning about Doñana (El País)
    The European Commission reiterates to the Junta that the regulation on irrigation will create a "negative impact on the protection" of the park.

Unfair competition and drought damage cotton (Cinco Días)
Cotton is the most widely used natural textile fiber in the world. The world's largest producers are India, China and the United States, while the European Union accounts for approximately 1.2% of global production. Spain and Greece are the main producers within the EU, with Andalusia being the region where Spanish cultivation is concentrated. In 2019, Greece and Spain formed the European Cotton Alliance (ECA) and launched their own brand, Eucotton, to distinguish European as a seal of quality and sustainability.

Spain prepares unevenly to face the heat (ABC)
Experts say that cities must carry out deeper transformations to adapt to climate change: more trees, water and vegetation, and less asphalt.

Spain has lost 5.4% of GDP since 1980 due to extreme weather (Cinco Días)
The ECB forecasts an annual expenditure of 1.4% of GDP in the EU for a global rise of 3°C.

Five years of labor mediation under the greenhouse in Huelva El País)
The incorporation of consultants to assist seasonal workers helps to alleviate the situation of a vulnerable group.

Spain sees in the Mercosur agreement a brake on China in Latin America (El Economista)
The strong entry of China in the Latin American market is causing the machinery to accelerate so that the free trade agreement between the European Union and Mercosur can go ahead. The President of the Government, Pedro Sánchez, will meet tomorrow with the President of Brazil, Luiz Inácio Lula da Silva, in a meeting in which they are expected to make progress on this issue, as well as to discuss their positions regarding the peace negotiations in Ukraine.

  • Sánchez and Lula seek to revitalize economic relations between Spain and Brazil (Expansión)
    Coming from Portugal, where the Portuguese Prime Minister, the Socialist António Costa, offered himself yesterday to Lula as a "spearhead" to accelerate the EU-Mercosur agreement, the Brazilian President will participate today in Madrid in an economic forum in which the Vice-President for Economic Affairs, Nadia Calviño, and the Minister of Industry, Trade and Tourism, Héctor Gómez, will be present (at that time, Pedro Sánchez will appear in the Senate); his meeting with Lula will take place tomorrow, Wednesday).

Mercadona slows down the purchase of premises and focuses on renting (Cinco Días)
Mercadona consolidates the change of model in its growth strategy in Spain. The supermarket company, with 1,637 stores in the country, has put the brakes on the acquisition of real estate assets, in this case premises and land, and at the same time has expanded its options for growth through renting.

The basic basket rises 3% and eats the VAT rebate (El Mundo)
Far from easing the economic burden for families, the VAT rebate on some foods approved by the Government in January has had the opposite effect, as the basic shopping basket has become 3% more expensive since then. Specifically, 3.05%. This is what the prices of staple foods with VAT reduced from 4% to 0% (bread, flour, milk, cheese, eggs, fruit, vegetables, legumes...) and from 10% to 5% (oils and pastas) have risen overall.

DIA, the only supermarket cheaper (El Mundo)
The analysis prepared by Asufin shows that Dia is the only supermarket chain where basic food shopping is cheaper today than on January 30. Specifically, the ticket of products with reduced VAT has fallen by 2.99% in this period, to 29.81 euros.

Extremadura, the Canary Islands and Andalusia, the Autonomous Regions with the highest risk of poverty (Expansión)
Spain has gradually reduced its poverty or social exclusion risk rates in recent years, but it has done so with ups and downs, at the pace set by successive economic crises, and not in the proportion or at the speed that would be desirable in a country in the euro zone and whose government has increased social spending.

  • Two Spains for poverty: the north-south gap remains despite improvement (El Mundo)
    11.9% of Canary Islanders cannot afford to eat meat, chicken or fish at least every other day; 23% of Extremadurians cannot keep their house warm, and 45.2% of Andalusians cannot go on vacation even one week a year.

Cinven relaunches the sale of Planasa and shakes up the private equity market (Expansión)
The improvement in the conditions of the debt favors the divestment of the British fund in the largest Spanish producer of strawberries and other types of red fruits.

The judge puts the UDEF in the Mediator case and claims to Seprona the list of inspections (ABC)
The head of the Court of Instruction number 4 of Santa Cruz de Tenerife, Ángeles Lorenzo-Cáceres, has agreed a battery of diligences to promote the canary plot of the Mediator case. Specifically, she has released an order by which she claims to the direction of the Seprona in Las Palmas all the documentation relating to the inspections carried out by theirs both in Gran Canaria and Fuerteventura since 2019. The suspicion, built on the basis of several audios intercepted from the plot's procurer, Antonio Navarro Tacoronte, is that "he would have used the figure of General Francisco Espinosa and other components of the Civil Guard for the alleged use of the Seprona in order to influence those livestock farms of entrepreneurs in the sector from which they intended to obtain commissions and/or considerations of different nature".

Something Extraordinary (ABC)
Luis Planas Minister of Agriculture and Food
He has made prudence one of his hallmarks, and in a field fertilized by the conflict, in which he has been able to move with a left hand, but as the elections approach he does not hesitate to assume the argumentation and demagogy of Pedro Sánchez; also his manners. The head of Agriculture does not rule out the application of Article 155 in Andalusia to stop the project of the Board on Doñana and load the inks on the alleged threat to the environment represented by the right.

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