350 million euro drought aid approved

The Ministry of Agriculture, Fisheries and Food establishes the criteria for granting 357.7 million euro in extraordinary direct aid to the agricultural sectors most affected by the consequences of the second year of drought and by the increase in production costs due to the war in Ukraine.

The ministerial order published in the Official State Gazette, once the consultation procedure with the autonomous communities and the sector has been completed, sets the conditions, as well as the amounts of the aid depending on the areas and the level of affectation of the drought in them.

Of these 357.7 million euro, 268.7 million euro will be allocated to mitigate the situation of farmers with areas of dryland arable crops and certain industrial crops (industrial tomato and rice). Another 8 million euro will go to cherry producers in Valle del Jerte (Cáceres). While the 81 million euro from the agricultural reserve – granted to Spain by the European Commission – will go to the producers of certain woody crops (pome, stone, tropical, citrus and shell fruit).

For dryland arable crops, the unit amount of the aid is differentiated by area. Thus, in the largest area, in which the reductions in harvest have been most pronounced, farmers will receive the full unit amount per hectare of aid. This zone includes the autonomous communities of Andalusia, Aragon, Castilla-La Mancha, Catalonia, Extremadura, Madrid, Murcia, Navarra, La Rioja and the Valencian Community, as well as the provinces of Ávila, Salamanca and Segovia, in Castilla y León, and the province of Álava, in the Basque Country. Farmers in the northern provinces of Castilla y León, Zamora, León, Palencia, Valladolid, Burgos and Soria, where the effects of the drought have been less severe, as well as those in the Balearic and Canary Islands, will receive the 50% of the unit amount per hectare of the aid.

For industrial crops, industrial tomato and rice, aid is provided for producers who, exceptionally, have not been able to sow the land they allocate to tomato or rice.

These aids will be paid directly to the owners of farms who are beneficiaries of the direct aid of the Common Agricultural Policy (CAP) corresponding to the year 2023, whose submission period ended on June 30, without the beneficiaries having to make no additional management.

The aid will be granted from a minimum of 200 euro and will be limited to 300 hectares per beneficiary in the case of rainfed farmland and will be paid by direct transfer from the Spanish Agrarian Guarantee Fund.

Likewise, 8 million euro will be transferred to Extremadura, so that it grants compensatory payments to the cherry producers of Valle del Jerte who have been affected by an unusual occurrence of climatic phenomena. Payments will be granted to cherry farmers, up to a maximum of 20 hectares, with a full unit amount for those who have subscribed agricultural insurance and 50% of the amount for farmers who have not subscribed, to promote among farmers this form of coverage against weather risks.

Charged to the budget of 81 million euro from the agricultural reserve, aid will be granted to producers of certain woody crops (pome fruit, stone fruit, tropical fruits, citrus fruits and shell fruits), since they have been affected to a greater extent in the critical phases of cultivation.

In this case, two zones will be established with differentiated aid amounts per hectare. Producers from the provinces of Almería, Granada and Málaga, in Andalusia, will receive the full unit amount per hectare; as well as producers from Aragon, Catalonia, Navarra, La Rioja and the province of Álava, in the Basque Country. Producers from the rest of the provinces of Andalusia, Castilla-La Mancha, Extremadura, Murcia and the Valencian Community will receive 50% of the unit amount of the aid.

These aids will also be paid in the form of a direct subsidy by the Spanish Agrarian Guarantee Fund, based on the eligible areas of the 2023 PAC applications, with a limit of 70 hectares per beneficiary, without producers having to carry out No additional management.

The autonomous communities may make complementary payments to the 81 million euro from the agricultural reserve, to the sectors and farms they consider, up to the limit of 200% of what is granted within the framework of the provisions of the ministerial order that is published, in accordance with the conditions established therein.

In total, since the production cost crisis began due to the Russian invasion of Ukraine, the Government has mobilised more than 1,3 billion euro in extraordinary direct aid for the agricultural sector. In this way, the Government has enabled aid for 169 million euro for the dairy farming sectors; 193.5 million euro for the meat and livestock sectors and the citrus sector; 300 million destined to alleviate the effects of the increase in the cost of fertilizers; 355 million euro for the livestock sectors; 5 million euro for the beekeeping sector; to which are added the 357.7 million euro of the ministerial order published this week.

These aids are added to the direct payments of the Common Agricultural Policy that amount to 4,8 billion euro per year.

In addition, they are additional to other tax measures, such as the general reduction of 25% of the net yield of Personal Income Tax for farmers and ranchers covered by the objective estimation regime by modules; the reduction of the tax applicable to agricultural diesel or liquidity measures through loans guaranteed by Sociedad Anónima Estatal de Caución Agraria at reduced interest and with a subsidy for part of the capital; as well as increases in the budget earmarked for agricultural insurance subsidies and drought insurance policies.

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