Environmental Regulations Squeeze Spanish Hog Farmers

“It was a successful model. It seemed like everybody was winning.”

– VICTORIA SOLDEVILA

Large-scale hog farming worked wonders for the Catalonian economy – for a while.

Economically depressed for decades by a long civil war and later the rule of fascist dictator Francisco Franco, the Spanish autonomous territory bordered by France on one side and the Mediterranean Sea on the other first jumped into hog production to boost the rural economy in the 1960s.

With little land for growing feed, local farmers were eager to tap imports of cheap corn and soybeans from the United States. Raising hogs under contract from local feedmill companies didn’t require large land holdings – only enough to build a barn – and many saw it as a way out of poverty.

The companies provided the pigs, feed and veterinary support, while the farmers supplied the facilities and the labour, and soon contract integration operations accounted for 90 per cent of the province’s production.

“Raising pigs on contract was easy because the companies took all the risk,” said Victoria Soldevila, a professor of applied economics from Spain in a recent presentation sponsored by Brandon University’s Rural Development Institute. “It was a successful model. It seemed like everybody was winning.”

RICH REGION

Catalonia is now one of the richest, most industrialized regions in Spain, with per capita income of $41,000. Spain is the world’s fifth-largest pork-exporting nation, ahead of Canada, which ranks eighth. Catalonia accounts for over 65 per cent of Spain’s pork exports.

Domestic demand for meat was high in the 1970s, then in the 1990s, the target shifted towards exports.

Things were going so well, in fact, that nobody seemed to mind that as more and more farmers took the specialization route, their dependency on large agribusiness companies was growing. In 2006, 63 per cent of farms were raising mainly pigs, up from 17 per cent in 1989.

Farms consolidated, and got larger and more intensive, with average hog numbers rising from 400 per finishing farm in 1988 to over 1,000 head in 2006.

From 1.7 million head in 1970,hog numbers in Catalonia grew to 6.6 million in 2008, which represented 27.4 per cent of total agricultural output. Half of the pork

produced is further processed into products such as their world-famous Serrano-cured hams and sausages, while the rest is sold as fresh meat.

INTEGRATED MODEL

From the 1970s up until the 1980s, the feed companies held the reins of power in the value chain in the form of integration contracts with farmers. But in the 1990s, that power shifted to the slaughterhouses, processors and retailers, which began inking their own contracts with farmers to ensure a steady supply of pigs to kill.

“All links in the value chain were coping with sinking margins,” said Soldevila, and eventually, low-cost production and larger economies of scale became the key to survival in a highly competitive industry heavily dependent on exports. Onerous EU animal welfare requirements also pressured profitability, she added.

With three times as many pigs as the Manitoba herd squeezed into an area the size of Vancouver Island, eventually environmental problems began to surface in the form of nitrate contamination in surface and groundwater.

Although drinking water nitrate maximums are high at 50 mg per litre, compared

to 45 mg/l in Canada, some countryside wells have been condemned by local authorities and the finger of blame is being pointed at the hog industry, which accounts for 46 per cent of total manure nitrogen.

EU regulations cap soil nitrogen at 170 kg per hectare, but by 2004, more than 500,000 hectares had levels in excess of 210 kg/ha, up from 290,000 ha in 1998.

LIMITED LAND BASE

With most pigs owned by landowners with limited areas to spread manure, eventually the bonanza of fertility became a curse, and the burden of transporting the bulk material the necessary 20 to 30 kilometres to reach fresh lands is becoming increasingly cost prohibitive.

Faced with a mountain of cheap pork, niche operators, who raise hogs the old-fashioned way in Catalonia, also struggle to get the premiums they need to be profitable, even with European Union labelling rules that aim to boost Protected Designation of Origin products, or locally grown, artisan-style production.

“In Spain, when we travel, we don’t buy souvenirs as gifts. Instead we buy local sausages to bring home,” she said, adding that some degree of protectionist measures might allow small operators to thrive.

Now, many of the 7.2 million residents in the balmy “land of castles” and picturesque Roman ruins see tourism and the sale of retirement and vacation homes to rich foreigners as a more sustainable economic growth engine, and opposition to industrial hog farms is growing.

BACK TO THE FUTURE

Also, with unemployment nearing 18 per cent as the country’s credit fuelled construction and housing bubble implodes, there has lately been an exodus of young people laid off from high-paying jobs in the tech sector in larger centres such as Barcelona back to the rural areas.

In a stunning turnabout – especially for older Catalonians – few of the younger generation are interested in large-scale hog farming, but many are keen on slow food, diversified small farming and bui lding sustainable local economies.

“They say, ‘You want to go back to the 1950s?’” said Soldevila. But stung by the economic crisis, many are attracted by the job security and lifestyle that agriculture provides. [email protected]

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