The Council of Ministers has approved this Tuesday a total aid of up to 300 million euros for the owners of agricultural exploitations. The reason is the rise in the price of fertilizers. Specifically, this measure appears in Royal Decree-Law 20/2022 that the Council of Ministers succeeded on December 27, on response measures to the economic and social consequences of the war in Ukraine. In this way, the Minister of Agriculture, Fisheries and Food, Luis Planas, defended the importance of this aid package.
“This is a government committed to the primary sector, with farmers, ranchers and fishermen. Since the start of the war in Ukraine, a year ago, there have been very notable increases in costs and the government has adopted aid and support measures very significant for the sector.At a global level, aid amounting to 1,800 million euros has been given for the entire primary sector”, stressed the minister in his last press conference after the Council.
Planas has underlined the price increase that has occurred in fertilizers, which is a “fundamental and strategic” product for farmers due to the impact of the war, and has shown his confidence that this new support measure will reduce their costs and that it also has “a reflection on the final consumer of the food chain”.
The aid is intended for individuals or legal entities that own farms that have permanent crops and areas of farmland. They will be granted per hectare to the surfaces of permanent crops and arable land (except fallows and temporary pastures) that have been eligible for the collection of direct aid from the Common Agrarian Policy (CAP) in the 2022 campaign, up to a maximum of 300 hectares.
A measure that is estimated to benefit some 250,000 farmers, who will be able to improve the planning of planting and fertilizing crops for the coming seasons. “We hope to be able to pay these aids before or during the spring to be able to help the sector”, has advanced the head of Agriculture. Thus, the maximum amount of these aids will be 22 euros per hectare in the case of drying areas and 55 euros per hectare for irrigated areas.
In the case of the Canary Islands, the beneficiaries will be the natural or legal persons who own agricultural holdings that have these types of surface and that are included in the Register of Agricultural Holdings (Regepa) as of May 31, 2022 and on the surface. I calculate it will be the collection in this.
The instrumentation of the FEGA
The Spanish Agrarian Guarantee Fund (FEGA), in charge of instructing the aid, will pay it directly into the accounts of the beneficiaries, who will not have to do any additional paperwork to request it. Planas has specified that it is the same method that was already used for the payment of aid to milk producers for 169 million euros included in the first package of measures to deal with the consequences of the war in Ukraine that the Government I approved last March.
The royal decree that includes these aids also stipulates a deduction of 15% in corporation tax for spending on the purchase of fertilizers for use in agricultural activity. In addition, the fertilizer price index in 2022 reached historic figures, mainly in the case of nitrogenous products, the manufacture of which depends on natural gas coming mostly from Russia.
“This government is going to continue supporting the primary sector in its struggle to reduce production costs”
The latest report from the European Commission estimated, at the end of 2022, that this key input to ensure stable production and a sufficient supply of food had increased by 150% for nitrogenous fertilizers between September 2021 and 2022. In the In recent months, the price of nitrogenous and phosphate fertilizers has been reduced from the maximums reached in April 2022 and, in some cases, they are below what they were a year ago, they are still at abnormally high levels. “Today the market is supplied, but at high prices,” recalled Planas, who is confident that the trend will change as the price of gas falls.
