Executive summary

Spain’s agro-food sector is competitive and successful in international markets. The diverse Spanish agriculture has proven able to adapt and respond to international trends and demands in traditional export markets and in emerging new markets. Spain is among the top world exporters of many agro-food products, and its agriculture and up and down-stream industries are an important part of the local economy and a significant source of income in many regions.

However, this positive performance is not exempt from environmental sustainability concerns, particularly in the case of water. Spain has one of the highest levels of water stress amongst OECD countries, and climate change is likely to reduce average annual rainfall and increase the frequency of acute droughts in many country locations. Agriculture − being at the origin of 80% of water demand − would be one the most affected sectors. Pollution from agricultural nutrients also affects water quality and threatens important ecosystems. The set of economic, regulatory and governance incentives existing up to now needs to evolve to address the challenge and urgency of water pressures from agriculture and its capacity to adapt to climate change. Although the most recent data shows an improvement, Spain did not meet its emissions commitments for ammonia − most of which comes from livestock activities – between 2010 and 2020, and the sector’s contribution to the country’s greenhouse gas (GHG) emissions increased.

Spain is embarking on policy efforts to tackle these environmental challenges. New policies and regulations are supported with substantive funding from the 2023-27 Common Agricultural Policy (CAP) and the EU-wide COVID-19 recovery funds. Among other objectives, they aim to mitigate negative environmental impacts, promote a transformation of the sector, and attain ambitious sustainability and innovation objectives. Support to farming from the EU’s CAP is increasingly subject to environmental conditionalities, and Spain has been able to tailor some measures ‒ in particular the eco-schemes ‒ to its needs and ambitions through the CAP Strategic Plan (CSP). An innovative and promising farm information system (SIEX) has been approved and is in development to track farm practices for emission control, estimate GHG and ammonia emissions and monitor fertiliser use at the farm level for farmers and policy makers.

The Spanish innovation system has much potential to contribute to Spain’s policy objectives and to ensure the sector’s environmental sustainability. The country’s dynamic agro-food sector must receive clearer environmental incentives, both economic and regulatory, and a stronger innovation response to balance productivity and sustainability objectives, and to respond more assertively to the challenges brought by climate change. The Agriculture Knowledge and Innovation System (AKIS) is fragmented; linkages and co-ordination among the diverse actors must be strengthened to create critical mass and foster the creation and flow of knowledge and the adoption of innovation. Spain is very good in the production of scientific knowledge and is one of the most successful participants in collaborative approaches at the EU level, but research often struggles to reach the productive sectors. Advisory services differ across Spain’s Autonomous Communities (ACs); strengthening them can play an important role in the adoption of innovative and sustainable practices at the farm level.

The government could lead in developing and implementing an ambitious agricultural innovation strategy. All policy levers should converge to make innovation the cornerstone for reconciling environmental performance and productivity growth. A comprehensive innovation strategy for the agro-food sector would complement the changes promoted by the new CAP Strategic Plan and reinforce their potential to promote a transformation. This entails clearly targeting agricultural policies − in particular the implementation of the new eco-schemes in the Spanish CSP − and evaluating their impact and effectiveness, including through the collection and use of data. Increased public investment on innovation and improved incentives for private investment, supported by a clear and stable administrative and regulatory environment, will play a key role.

  • Strengthen institutions, policies and regulations to strategically guide and support agricultural innovation. Spain should develop an ambitious and comprehensive agricultural innovation strategy. Agricultural policies should be better targeted to specific income or environmental objectives and supported by an agricultural data strategy to improve the collection and use of data for policy design, assessment and monitoring. Administrative simplification and clear and stable rules would also help promote innovation and effectively implement the actions included in the new CSP.

  • Boost the agricultural innovation system and exploit its synergies to make it work for sustainability. The AKIS should be strengthened to obtain maximum advantage of its diversity. This includes better co-ordination, enhanced public-private collaboration and engaging farmers in the development process. Spain should increase public investment and create incentives for private investment, ensure access for SMEs, and promote the efficient use of innovation funding. Further reducing the digital gaps will encourage the adoption of digital technologies. Farm advisory services can be harnessed to better respond to the environmental challenges and farmers’ needs.

  • Tackle urgent environmental pressures via innovations that will lead to more sustainable agriculture. Given the serious water pressures, urgent action is required to address the full extent of this problem and the responsibility of the agricultural sector. The impact of irrigation policies deserves an in-depth assessment to make sure that they tackle water stress, and insurance policies should be aligned with the need for climate adaptation. Mitigation and adaptation actions should be strengthened to better respond to climate change and ensure the sector’s preparedness.

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