Spanish Rural Economy: Challenges and CAP Impact
The Spanish economy has relied heavily on the primary sector for years. Changes and progress have not affected all Spanish rural areas equally. Modernization and tradition coexist, leading to a “rural crisis” addressed through planning policies. This manifests in several indicators:
Demographics
A shrinking and aging population due to emigration of young and low-skilled individuals.
Economic Issues
- Little economic diversification in rural areas, leading to unemployment.
- Need to adapt to new food demands.
- Growing dependence on the industrial market for supplies and sales.
- The CAP requires modernization, production restrictions, and price controls.
- Decreased relative contribution to GDP, but increased yields and essential role as a raw material supplier to the agri-food industry.
- Reduced agricultural participation in foreign trade.
Environmental Issues
Overuse and contamination of soil and water, and vegetation degradation.
Currently, land issues are addressed globally through planning policies for rural areas within spatial planning. Key components include the EU, Agricultural Committees, and municipalities. Spain’s entry into the EU and adoption of the CAP marked a turning point.
CAP Phases
Agricultural Policy Pre-CAP
Attempts to modify property ownership through seizures, agrarian reform during the Second Republic, and under Franco. Farm legislation and land consolidation policies also governed ownership.
The CAP
Aims to protect the European agricultural sector from foreign competition, increase productivity, stabilize the market, ensure supply, set reasonable prices, and improve farmers’ living standards. The CAP has shaped Spain’s agricultural policy since 1986.
CAP Reform Post-1991
New programs fostered agricultural development in areas affected by sector conversion with strong subsidies. Favored imports from other countries. In Spain, Valencia, Murcia, La Rioja, and Andalusia benefited most, while Asturias, Galicia, and Cantabria were disadvantaged.
Impact of CAP on Spanish Agriculture
The impact has been both positive and negative:
Positive Impacts
- Increased productivity and marketing of horticultural products.
- Reduced cost of feeding livestock.
- Increased number of consumers for Spanish products.
- Improved purchasing power in rural areas.
- Secured trade against external competitors.
Negative Impacts
- Persistence of traditional agricultural structures and smallholdings.
- Fierce competition with European farmers.
- Territorial imbalance due to uneven grant distribution.
- Oversupply of agricultural products.
- Environmental degradation due to production intensification.