Agriculture in Spain: Extroversion in practice
Spain — like all the other countries of the European South — is staggering under the burden of the economic crisis. A preeminent solution for the country, the motivation for this article, is export activity. The export performance of the economy has been impressive, in particular over the last ten years, with continuous growth in all the sectors of the Spanish economy with a strong export orientation and correspondingly with the command of ever greater market shares, principally in the countries of northern Europe, North Africa and Latin America.
In the middle of the economic crisis and in the aftermath of the infamous “property bubble” of a few years ago, good news from the front of the Spanish economy is to be found — and not only — in those companies with impressive export performances. In the last few years, Spanish businesses can boast of one of the highest rates of export growth in the Eurozone, and as a country Spain (the fourth largest economy in Europe) has frequently demonstrated a dynamism greater than that of other European countries.
Exporting companies not only withstand the competition but are recording considerable increases in exports on a European level. Spain is showing itself to be a force to be reckoned with. Even small and medium enterprises are slowly but surely gaining those abilities which will allow them to increase their exports, faithfully following the model that has given them an advantage in the economic crisis and in the stagnating — at best — domestic market, given that domestic demand in Spain has dropped considerably.
A further significant fact about the country is that there are many companies whose entire production is for export and whose central aim is to strengthen innovation.
Most company executive directors stress that if they don’t discover something new in the next few years, they will have major problems. That message permeates the entire company structure and characterises the behaviour and performance of their organisations; it creates in other words a corporate culture.
Exports in many sectors, including vehicles, agricultural products, clothing, etc., are steadily growing in volume, inducing, naturally, an increase in production and consumption.
This impressive economic extroversion is not of course enough to end the internal crisis, with its serious funding problems, especially for small and medium enterprises, at a time when most new job creation is happening in markets abroad, not helping to reduce the millions of Spanish unemployed. Although it is worth noting that lately there has been a drop in unemployment, principally deriving from the service sector. There has been a notable drop in the manufacturing sector as well as the agricultural economy, a sector hit by agricultural restructuring, intense demographic pressures and an aversion for agricultural work.
The agricultural sector had to learn to survive in difficult conditions (which exist and will continue to exist) and in the end move ahead with improvements, in both the economic and social cohesion of the Spanish farming communities.
Large parts of the rural population initially felt threatened by the new innovative and technological farming methods. The immigrant influx from the Balkans, Africa and Asia, however, provided the hands necessary for the labour-intensive sectors of the economy, including the restructured agricultural regions and the fast developing specialist seasonal farming. In many agricultural areas of Spain today, they have already started to form a “new agricultural class”, which is attracting considerable interest in relation to their conditions and manner of living and also in relation to their demands for legalisation and better wages.
The overall extroversion of the economy has distinguished Spain from other countries of the Mediterranean basin, such as Greece, and if nothing else its exporting prowess provides the Spanish people with some “comfort” and reason for pride every time a new, large project is secured from abroad.
This trend seems to be stable and the experts are of the opinion that these successes are not only due to the pragmatism of the financial policy followed by Spanish governments, but mainly to the dynamism of the large companies, especially those that have focussed on Latin America and North Africa.
Exports of agricultural supplies and final products is a sector in which Spanish companies have managed to innovate and differentiate themselves, from the point of view of both the final product and the packaging. Over recent years, there are many examples of companies in the food sector that have carved out significant market shares abroad, combining the use of traditional raw materials in production with imaginative marketing activities, excellent information networks, the development of long-term relations of trust and innovative packaging.
This arsenal together with the heightened disposition for self-sufficiency and greater food security (one of the principal societal challenges of the “Europe 2020” strategy) has meant that the Spanish are in a position to create even greater added value and higher profit margins, based on providing products promising better health, physical wellbeing and pleasure, factors central in determining the consumer preferences of the developed economies.
Moreover, for a number of years now, Spain has very correctly recognised the dynamism arising from the development of Innovation, Research and Development Clusters in specialised sectors of the food industry, combining European funding and the work of research and academic institutes with the interest of large companies in the implementation of new technologies.
With this infrastructure, a wealth of opportunities arise — and will continue to arise — for the creation of added value in many categories of agricultural products, particularly given that global interest in safe and healthy foods continues to expand.
Exports of Agricultural Products
A key part in this trend then is played by Spanish agricultural product exports, where the virtues of organisation, extroversion, networking and vertical integration are the principal characteristics distinguishing Spain from other countries and pushing it high in the global ranking in this sector.
In contrast, as is well known, the larger part of Greek production in olive oil is still exported in bulk, mainly to Italy and Spain.
One might also note that Spain joined the European Community in 1986, whereas Greece has been a member since 1981.
Since joining, the Spanish have consistently followed a systematic, non-negotiable policy aiming to establish their olive oil as the dominant product worldwide and they have succeeded over the years in building up a very strong position. Instead of trying to maximise subsidies, as happened in Greece, they all worked on the basis of the logic of the competitive product and of course were vindicated and continue to reap the benefits, given that they are the first to receive information about opportunities and conclude agreements that will bring about further development.
The case of COMPO Expert Spain
I work in an innovative company working in the field of inputs, of products and services in the agri-food chain. COMPO Expert GROUP is an internationally recognised leader in the field of specialty fertilizers for an agriculture that will give surplus value to its products and with users who respect the environment.
So what did COMPO EXPERT Spain do to ensure that it was in step with the country’s exporting rhythm, with the trend towards extroversion, with this trend that leads to growth?
· It developed a technical approach to the final user (farmer) with specific actions, the implementation of concepts for monitoring large areas, and increased resources at the same time as our competition was decreasing budgets and consolidation was the order of the day.
· Despite the negative growth of the domestic market in agricultural supplies, Compo sought and achieved larger market shares through pull strategies, new products and the development of CRM (Customer Relationship Management) methods based on mutual understanding, offering know-how and commitment to the attempt (not just to the result).
· It set itself — not without huge effort — to change old business practices holding in countries of cooperation (Spain acts as the hub for the Iberian Peninsula as well as North and West Africa) with new models of operation demanding a greater focus on sustainable development in an extremely competitive environment.
· It took swift decisions which entailed — and entail — risks to growth in other countries, working on the basis that “better a wrong decision at the right time than the right decision at the wrong time” (implying that in the end decisions may otherwise not be taken at all) and was vindicated by the response of its collaborators.
· It approached foreign markets, not wielding prices and aggressive commercial policies, but basing its position on the knowledge of our staff and the special needs of the countries, promoting the difference in the value of its services in relation to the product prices and also providing the correct information on successful examples and techniques from more developed countries, principally Spain.
· It participated systematically in sectoral exhibitions, focussing at the same time on transferring know how to fields and “minds”.
· It aimed to influence the food chain and not just sell through traditional sales networks.
This is our standard practice and a systematic approach which will continue and can be seen as the password for the next ten years.
· The company set — and sets — a high standard for itself.
It had and has the good fortune to be able to count on a creative team of people, with open minds and the enthusiasm, ambitions and potential to create, through initiative rather than simply following, not complaining but seeing solutions where others see problems, aiming to produce surplus value for those they work with.
The only thing “copied” was the trend that has developed in the country and which constitutes a fundamental characteristic:
Create business not just in the country but outside it, otherwise you will be left “outside” the business!
This was its success, creating in a time of economic crisis the largest corporate organisation within the folds of the COMPO GROUP. We believe that this example will be followed by other COMPO organisations throughout the world and will constitute the business model with which to face all the difficult obstacles which we encounter in our sector and which require agility and solutions beyond and outside previous experience and business stereotypes.