The Spanish Government yesterday activated the first aid to the agricultural sector which is already suffering the effects of the drought in its farms. An initial lifeline focused on two fronts. On the one hand, he authorized reductions in personal income tax for farmers and ranchers who are taxed by the module system, and, on the other hand, he advanced a package of economic aid for different sectors.
In the fiscal section, the Ministry of Finance published yesterday in the Official State Gazette (BOE) an order to apply a general reduction of the net yield of 25% to which, according to calculations by the Tax Agency , they will be able to have access to up to 800,000 self-employed professionals. The reduction in income tax is extended up to 30% for professionals dedicated to cereals, oilseeds and legumes, chestnuts, peaches, nectarines, apricots and livestock sectors, and reaches a 50% in the case of olive groves, almond groves and beekeeping. The Spanish Executive has therefore decided to apply a greater tax reduction to farms most affected at the moment due to the absence of rain. Professionals who are dedicated to fruit growing in the interior of Catalonia, where there are 70,000 hectares planted, will be able to opt for this aid.
The Treasury estimates that the order will result in a reduction in the tax base of 1,807 million euros, the largest in the last decade, as the Minister of Agriculture, Luis Planas, highlighted yesterday after the meeting of the Spanish Government .
The same order from the Ministry of Finance contains additional aid for professionals in the field who declare personal income tax through the agricultural objective estimate. That is why it approved a reduction of 35% of the previous net yield for the acquisition of agricultural diesel and of 15% in the case of the purchase of fertilizers.
Farmers who purchase feed from third parties, both intensive and extensive, and farmers with crops on irrigated land that use electricity will continue to benefit from a reduction in the correction index of 0.5 and 0.75 respectively.
The Council of Ministers, for its part, gave the green light to a package of agreements to activate urgent and direct financial support to the agricultural sector. This is the first aid measure activated in this precipitation crisis, since, as stated by the third vice-president and Minister for the Ecological Transition, Teresa Ribera, the Spanish Government is planning new exceptional aid.
This set of measures includes the renewal of the agreement between the State Agricultural Insurance Agency (Enesa) and Agroseguro to subsidize the hiring of policies for 2023 for a total of 317.7 million. This is one of the main claims of farmers and ranchers: that insurance be flexible so that, in the event that they have to be activated, their activity does not stop for too long. At the moment there are 410,000 policies and last year, as Planas pointed out, around 14,800 million national agricultural production was insured.
The Council of Ministers also approved the mobilization of 292.7 million for special funds for the countryside. Specifically, the Central Administration will contribute 158.2 million more to various sectors and subjects from this year’s budgets. The aid is directed to the beekeeping sector, to the control of milk yield, to the program of specific options due to remoteness and insularity (focused on the Canaries) and to indigenous national livestock breeds. “Our farmers and ranchers can rest easy because we will continue to support them,” said Luis Planas.
According to the Andalusian Council, these grants are not enough. The Minister of Agriculture, Fisheries, Water and Rural Development, Carmen Crespo, yesterday called for CAP funds to be advanced to 90%, other tax reductions affecting VAT, a reduction in social security contributions and deductions in the IBI.
