Subsidies for olive farming

I receive a lot of phone calls regarding subsidies for olive farming and this month I will try to explain this subject as it is more complicated than most people think.

The law which regulates the subsidies for olive farming was changed in 2001. The owner of an olive farm at this time who applied by means of the DUN (Declaración única agrària) for subsidies, is presumably still the holder of the rights (spanish: “Derechos or catalan: “Drets”) to the subsidies. To settle the “Derechos” (rights) for everybody, an average has been established of what amount of olives or olive oil was produced from the farm in the last couple of years. This has been worked out from the number of trees (registered through SIGPAC) and the receipts for the olives that have been submitted from the owner of the farm or the cooperatives. Through that average a value has been determined and from this value an amount of rights (“Derechos”) has been established. This still has validity. Whoever at this time was the owner of an olive farm and still is, has the right to apply every year through the DUN for the subsidies and therefore can activate the rights every year. Usually the cooperative you belong to settles this for you for free or on payment of a small fee. If you do not belong to a cooperative you can do this by yourself or you can consult one of the agencies which offer the service. You have to prepare a couple of documents and fill out some forms and then submit this on time to the „Departament d´Agricultura, Alimentació i Acció Rural“, for example in Tortosa. After a while you will get a reply. If you still have the right to the subsidy, explaining how much you will receive, or telling you why you are not entitled to any subsidy.

Whoever has bought an olive farm, the land together with the rights after 2001, proceeds as described above. Apply through the oficial forms (DUN) and in time for the yearly payment. Please bear in mind that you have to do this every year. The owner of a farm without the rights should now contact the previous owner and have the rights oficially transferred. The previous owner, however, is not obliged to transfer the rights to the new owner. If he owns other olive farms without rights, he can use these rights for these farms. If he has no other farms he can not do anything with the rights. Only farmland together with the rights gives the right to apply for or receive subsidies.

If the previous owner agrees to transfer the rights, you should bear in mind, that fees will be charged by the government for the transfer. Sometimes it is not worth all the trouble for what will be left at the end. Of course, it depends to what extent you produce olives or olive oil and how much land you have. 1 or 2 hectares of land, whilst beeing a lot of work, is not a lot of land in view of the production of olives.
The fees for the transfer of the rights depend on the amount of land and amount of rights to transfer. It will be relevant as well, if the new owner is an officially registered “agricultor” (farmer) with “Hacienda” (Tax Office) and “Seguridad Social” (Social Security). To be registered as a farmer means paying a monthly charge (“Cotización en la Seguridad Social“) that includes social health service and a pension scheme contribution. It comes to more or less 200,- € a month. To become a farmer in Spain, you need a residence here and a NIE / NIF number.

When the rights are transferred together with the land, the transfer is free, that means there are no fees to pay. If somebody has rights transferred without buying land and at the same moment he becomes an oficial farmer, the transfer is free as well. If the new owner is not a registered farmer, a fee has to be paid to the government.
When the farm is under lease, it is possible that the tenant will have the subsidies. No fees to be paid, but a lease in written form has to be submitted. After finishing the lease, the rights for the subsidies go back to the owner of the farm. The procedure is the same in this case; the transfer has to be done oficially and on schedule.

Supposing that somebody bought a farm and the rights have not been transferred to the new owner and the previous owner does not want to pass over the rights, you can apply for financial assistance from the “Reserva Nacional” (National Reserve fund). But this is usually only successful if you are a registered “Agricultor Joven” (young farmer), up to an age of 40 and you have quite a lot of land (i.e. more than 2 hectares normally).
For an officially registered organic farmer there are other types of subsidies which you can also apply for if you have no rights for the normal subsidies. To run an organic farm you have to fullfill a few conditions that the traditional farmer does not have to consider and you will be controlled by a public authority. But maybe, with regard to environmental protection, it is worth thinking about!? But this is another complex subject that I might explain another time.
I always recommand that with the purchase of a rustic property to transfer the rights in one step with the notary. The transfer has to be fixed in the “Escritura” (title deed). It is not enough that it says that the property is passed over with all the rights and duties which belong to it. The rights for the subsidies should really be mentioned. You should insist on this. So it is clear and there will be no dispute between the seller and the buyer.
In the case that both parties agree to the transfer of the rights, this has to be done in November or December. Whoever wants to apply for subsidies for the next season 2008 / 2009 and at present has no rights, has until the end of December to complete the transaction.

If you require help regarding the subsidies, I will be pleased to help you at any time.

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