The two main consequences of the Iran War in the primary sector have been the increase in the cost of fertilizers and agricultural diesel.
Therefore, after the meeting last Monday with the ministries of Agriculture and Economy of the main primary sector collectives (fishing, food industry, manufacturers and marketers of fertilizers, agricultural organizations and cooperatives), all of them are expectant of the lines of aid that the State provides to alleviate the losses generated since beginnings and March.
Despite not having many clues about where the announced supports will go, sources from the consulted agrarian organizations assure that “they will not be like those given for the invasion of Ukraine by Russia”. (Then seven lines of aid were enabled with a budget of 1,382 million euros, from which 659,490 farmers and ranchers benefited).
Currently, despite the undefined nature of the measures, diesel subsidies are foreseen, aid for consumed fertilizers, and the almost traditional ICO-MAPA-SAECA lines that have been approved in other times of crisis such as DANA or drought.
The fertilizers, unsustainable
The increase in the price of fertilizers is the most specific repercussion that the primary sector is suffering, since its manufacture consumes a lot of energy (natural gas) which leads to the Middle East being a large producer of fertilizers.
However, according to a COAG report, "foreign trade data place Morocco, Algeria, Egypt, and Russia as the main suppliers of fertilizers for the Spanish countryside", which is why the agricultural organization emphasizes that Spain does not depend on the trade that transits the Strait of Hormuz, paralyzed as a result of the war.
Agri-food Cooperatives, in addition to direct aid to fertilizer producer-consumers, demands the elimination of the decarbonization tax and the tariffs applied by the European Union, since these measures collapse the community fertilizer market.
The situation of fertilizers in the European Union, complicated for some months, has been aggravated by the war in Iran. At the beginning of the year, the European Commission announced the presentation for the second quarter of an Action Plan for Fertilizers which is already being demanded by the organization that groups European farmers and ranchers, COPA-Cogeca. In this regard, the statements made in January by the Commissioner for Trade, Maroš Šefčovič, are noteworthy, recognizing that "the costs of fertilizers remain around 60% higher than in 2020. This is simply not sustainable."
In this regard, the European Commission already suspended at the end of February the LFN (Less Favored Nation) tariffs and is studying paralyzing for fertilizers the Carbon Border Adjustment Mechanism (CBAM), whose objective is to limit imports of carbon-intensive products from third countries that do not comply with the climate regulations set by the European Union.
Agricultural diesel
On the other hand, the price of agricultural diesel or diesel B is another of the big ones, as has also happened in other sectors. According to an analysis by the agrarian organization COAG, the price shot up by 41% during the first days after the attack on Iran.
Both UPA and Agri-food Cooperatives denounced possible speculative practices by oil operators that must be controlled, since the increase in prices has not corresponded to the real market situation, because only 5% consumed by Spain comes from the conflict zone.
Complications in the alfalfa
By productive sectors, one of the most affected is that of alfalfa. 40% of Spanish exports of this crop are destined for Saudi Arabia and the Arab Emirates, countries where trade has been paralyzed by the closure of the Strait of Hormuz.
Both the Arabian thoroughbred horses from the racetracks of Dubai and Abu Dhabi and the camels participating in the races are fed on Spanish alfalfa.
Alfalfa is a highly proteinaceous crop produced mainly in the Ebro Valley and used for animal feed. For decades, one of the most common destinations for Spanish dehydrated alfalfa has been the Persian Gulf countries, as it has superior digestibility and is preferred by veterinarians and elite stable managers throughout the Arabian Peninsula. Thus, both the Arabian thoroughbred horses from the racetracks of Dubai and Abu Dhabi and the camels participating in races are fed with Spanish alfalfa.
In fact, for years the multinational Al Dahra from the United Arab Emirates has had several companies in the Ebro Valley focused on the production and marketing of alfalfa.
The opportunity for the Spanish pistachio
On the contrary, the crop that has an opportunity to boast with the war in Iran is pistachio, since Iran, one of the world's largest producers with 33% of the production, has paralyzed its exports with the blockade in the Strait of Hormuz. According to sources from the agrarian organization COAG, Europe loses its largest pistachio supplier, but Spain has an opportunity to fill that gap in the community market.
"The opportunity is real, but it doesn't come alone. We need the Administration to act now: funding for new plantations, with priority for professional farmers who want to diversify their crops (not for speculative investment funds), decisive support for improving commercialization and urgent measures to contain the rise in production costs," demand from the agricultural organization COAG.
Its head of nuts, Javier Fatás, emphasizes: "pistachio is not a fad: it is the structural response of Spanish agriculture to climate change. While rainfed cereal loses profitability in thousands of hectares in Castilla-La Mancha, Extremadura or inland Andalusia or Aragon, the pistachio tree withstands five years of drought without dying, produces for more than a century and generates higher incomes on the same lands. With 62% of the crop already rainfed, more than 70% under ecological practices, we are facing a crop that can help the economic viability of the professional farmer in the most depopulated Spain. Asking for support for this sector is not asking for a privilege: it is asking for investment in the future of the rural world".
The pistachio becomes one of the few lights of the agricultural sector in the face of the multiple shadows that affect it since the attack by the United States on Iran. Shadows that hope to be more bearable thanks to the special measures that the Government of Spain disposes.