While pig breeders in many European countries are suffering from a crippling Russian embargo, their counterparts in Spain, Europe's second-biggest pork producer, have stayed afloat thanks to a system that sees a large majority work for a company -- and not for themselves. The companies -- more often than not firms that make cattle feed -- own and supply the animals, fodder and veterinary products, while the farmer receives a fixed sum per pig produced and is tasked with investing in infrastructure and paying employees.
The system acts as a safety net for farmers as the company takes the hit when prices fall -- as they are doing now due to Russia's ban on EU meat imports in retaliation for Ukraine-related sanctions -- though it also means that the firm reaps the profits when good times roll.
In Lerida in northeast Spain, the Albesa Ramadera farm has profited from a model that has allowed it to invest six million euros ($6.5 million) in state-of-the-art infrastructure and technology to become a mega-farm that counts nearly 3,300 sows.
The so-called integrated farm-company system in Spain differs radically from Europe's number-one pork producer Germany or third-place France where independent farms or cooperatives are the norm. Independence there has come at a price. In France for instance, thousands of stock breeders are on the verge of bankruptcy -- a situation that in several cases has led to suicide.
Farms in Spain are also bigger, with an average of 500 sows per Spanish operation compared with 260 in Germany and 230 in France, allowing them to be more competitive. As a result, according to the latest official figures, Spain -- the fourth global pork producer after China, the United States and Germany -- enjoyed a record year in 2014. The figures also show the sector generated a trade surplus of three billion euros in 2014 and employs 180,000 people. And the integrated model has others casting an envious eye.
