The agri-food sector is one of the main bases of the Spanish economy, with a significant influence on the development of rural areas and employment. Its economic, social, territorial and environmental impact is vital for the country. In fact, almost half of the Spanish territory, more than 23 million hectares, is useful agricultural land for this type of activity. In addition, 10.35% of small and medium-sized companies (more than 298,000 SMEs) belong to the agricultural sector, according to the SME Figures report from the Ministry of Industry, Trade and Tourism.
To support this key sector, Banco Santander has a powerful strategy of financial solutions for farmers, ranchers, producers, cooperatives or supply companies. The entity has supported the Spanish agri-food sector with more than 3,700 million euros in 2021. Among the most demanded products have been the contracting of Harvest Advances, the Agro R&D&I Loan or long-term credits for the transformation of farms to more profitable crops.
Last year was marked by numerous climatic adversities, by the volcano of the island of La Palma and by the economic consequences that remain in the framework of the pandemic. To boost activity in the sector at such a difficult time, the bank set up lines of financing under preferential conditions and advanced compensation for agricultural insurance, so that farmers and ranchers could cope with the situation. In addition, it supported these businesses with loans guaranteed by the ICO, with almost 4,000 million euros.
Santander has been accompanying the group for decades, but in 2021 it reinforced its commitment and remodeled some of its offices with the creation of an agricultural space, dedicated to serving farmers and ranchers with qualified specialists. This project will continue to expand in the coming months, adapting the branch spaces to strengthen its relationship with its more than 415,000 livestock and agricultural customers.
‘Agro Smart Fund’ to boost the growth of the sector
One of the most important actions at the beginning of 2022 has been the launch of the Agro Smart Fund, a new strategic financing channel promoted by Banco Santander for companies in the sector that want to expand their investments and undertake new growth projects, transformation of farms, digitization and job creation. “With the launch of the Agro Smart Fund, we are consolidating our position as a benchmark financial institution for entrepreneurs in the sector and giving them new instruments to facilitate their development, which is key to sustainable growth,” he says. Ángel Rivera, general director of Commercial Banking of Santander Spain.
This fund is endowed with €500 million and offers long-term financing through debt instruments and flexible structures adapted to the needs of each company. In addition, it will dedicate up to 20% of the resources to invest in capital, which will make it possible to strengthen the solvency of these businesses and promote their development so that they gain size and competitiveness.
Boosting innovation and sustainability
A PWC study on the future of the Spanish agricultural sector concludes that, in order to adapt to megatrends, the sector must establish objectives aimed at guaranteeing sustainability in the medium and long term, and that a series of transformation levers based on the innovation, commitment to new technologies, professionalization and outward orientation. In this sense, Banco Santander has positioned itself as the best ally of this type of business so that they continue to advance towards growth and profitability.
In recent months, the bank has launched the Agricultural Machinery Renewal Plan to promote the digitization and sustainability of Spanish farmers. In Spain, 55% of the machinery is over 18 years old. With the new precision vehicles, farmers can reduce CO2 emissions by up to 25% and generate cost savings on farm inputs. In addition, in order to support green financing and promote sustainability, the bank makes available to its clients the loan for the transformation of farms into woody crops (almond, pistachio, avocado, citrus, olive groves, among others) which has up to 4 years grace period, as well as the R&D&i Agro loan.
Also the Santander Agro App allows you to keep up to date with all the relevant developments in the agri-food sector, with up-to-the-minute information on the rural world: it includes the main news from the primary sector, gives access to auctions and markets, offers information on national or regional economic aid, and has access to direct to mobile banking for the entity’s customers.
At the same time, Santander has launched the campaign of the CAP 2022, with a clear digital and sustainable focus. Farmers and ranchers who have pre-granted said advance, will be able to contract in just three steps, from the bank’s website or through the app on mobile devices. The processing of the PAC is completely free and customers who advance it for an amount equal to or greater than 2,500 euros, will receive the subscription to the Digital Field Notebook, a key tool to record all the information on your farms, use of phytosanitary products, type of seeds, head of cattle or agricultural machinery, for a more sustainable and digital agriculture and that will be essential in the new CAP 2023-2027.
More than 63,000 customers have already pre-granted the CAP advance, for a total amount of more than 1,100 million euros. The bank has a team of specialized agricultural technical engineers so that businesses have the best advice at hand. In addition, until mid-March, Banco Santander will carry out blended sessions in each Autonomous Community under the title News in the year before the entry into force of the PAC reform, in order to be able to share the latest news on the sector with interested businesses.
