Jaume Pedrós (62) has spent his entire life dedicated to the fields, where he grows wheat, barley and corn in the Lleida municipality of Linyola. He is the owner of a micro-enterprise, which this year is on a tightrope due to the closure of the Urgell canal. “Because of the drought I am going to lose my winter cereal harvest and this year I am barely getting any income. This season I already stopped growing corn because of the impact of climate change.” The farmer regrets that the drought comes after the energy crisis and inflation, which has skyrocketed the costs of fuel and phytosanitary products.
Like Pedrós, hundreds of small businessmen in the agricultural sector are going through a bad time. “Businesses linked to agriculture, livestock and fishing activities have the highest disappearance rates in recent months,” says Inmaculada Pardo, spokesperson for the employers’ association Cepyme, citing a report prepared by Social Security.
The agricultural sector presents the worst results due to the effects of climate change
According to Cepyme, the situation has been critical since last year: throughout 2022, 7,057 agricultural SMEs (-6.8%) were lost in Spain, with consecutive falls for three quarters. This is practically equivalent to the disappearance of one in every 15 SMEs in this sector.
Pardo assures that not only companies in the primary sector are going through a bad time. In the industrial sector, the number of SMEs has also decreased, although more moderately: 876 fewer industrial SMEs in 2022 (-0.8%). On the other hand, the number of SMEs increased both in construction (+2,895; +2.1%) and in services (+3,888; +0.4%). “The pandemic crisis, inflation, restricted access to credit, the drop in demand and the end of public aid due to the covid have left SMEs in a vulnerable position,” says Pardo.
According to Cepyme, it is the first time in nine years (except for the 2020 financial year) that the number of SMEs has fallen in Spain. Comparing the averages of the fourth quarter of 2022 with the same period of 2021, the net balance of SMEs (the difference between companies that are created and companies that are destroyed) was -0.1%. Although the decrease is very limited, if broken down by size, the data reveals the difficult situation of micro-SMEs. Companies with fewer than ten employees have fallen by -0.6% (there are 6,262 fewer companies). This is partially offset by the increase of 4,164 small firms (with between 10 and 49 employees; +2.6%) and the increase of 948 medium-sized companies (with between 50 and 249 workers, +3.7%).
In Catalonia, the business fabric has resisted better than the Spanish average with an annual increase of 1.9%. According to data from Pimec, 2022 closed with a positive net balance of 633,177 SMEs, compared to 621,000 companies in 2021 and 628,000 in 2020.
“The agricultural sector is suffering the impact of the drought, but, on the other hand, hospitality and industry companies are better resisting the situation,” says Moisès Bonal, Pimec’s head of studies and sector policies. According to the Catalan employers’ association, uncertainty will mark 2023, but there are reasons to think that this year will be better. “The debt ratio of Catalan SMEs is 47%, compared to 60% in the days before the financial bubble. In addition, Spanish inflation is falling compared to that of other European competitors, which benefits exports”, concludes Bonal.