When Blossom Falls: Mallorca’s almonds

February. In parts of Mallorca there is a familiar and pretty sight. Almond trees in blossom. The tourism they attract may not rival, say, the tulip fields of the Netherlands, but it does attract some. But for how much longer?

In the past five years, the amount of land devoted to almond cultivation has shrunk dramatically. A loss of 33,000 hectares has left the island with less than half the area for almond-growing that it had in 2005; 25,000 hectares remain.

The decline can be attributed not to crisis but to a change in productive agricultural land use. Where once were almond trees are now olive groves. The decline can be attributed also to factors of competition, consumption, markets and to the Common Agricultural Policy.

Almonds are only one example of a shift in agricultural production. One of the more dramatic has been the move to rice and away from potatoes. Less prone to the capriciousness of nature, rice has altered the pattern of agriculture in the traditional potato-growing area in and around Sa Pobla. Yet, the rice is primarily for domestic consumption, whereas the potatoes of Sa Pobla have long had a significant export market.

Export, however, has been highly influential in driving greater olive production. Indeed, most of Mallorca’s olive oil goes overseas. Prized for its quality, it has found new and large markets; China, for instance. Almonds, though also highly valued by these new markets, don’t represent the same opportunity, and this is in no small part due to the competition and the market dominance that comes from California.

In the late 1970s, the US overtook Spain as the leading producer of almonds, or rather California did. Some 80% of the world’s supply of almonds now comes from California. In a manner similar to that of the Californian wine region of the Napa Valley and its inroads into French supremacy in the global wine market, so agricultural technology, way in advance of Spanish methods, secured a position of dominance for the Californian almond from which Spain and Mallorca have never really recovered.

International competition is not confined to American almonds. Imports of other types of nut have altered Mallorcan and Spanish consumption, eroding the demand for the mainstays of Mallorcan nut production, hazelnuts as well as almonds.

Though Spanish production of almonds in 2011/2012 is due to rise by around 11% on a five-year average, this increase is largely down to natural factors; the harvest will have benefited from generally benign conditions. But the vagaries of nature have, as with the potato, occasionally taken their toll. In 2009, Mallorca’s almond production was poor by comparison with other parts of Spain, the result of too much rain and wind inhibiting pollination during the flowering season. And the almond faces another natural threat, in Mallorca and elsewhere: that of worries about the honeybee.

But over and above these different factors, successive reforms of the Common Agricultural Policy (CAP) have probably been most influential.

CAP regulations have been both positive and negative. They brought about a general improvement in the quality of olive oil, but they also, thanks to subsidies and guaranteed minimum prices above world-market prices, brought about a boom in olive-tree plantation. Though the subsidy has changed since the 1980s, the growing of olives has continued to increase, and this despite the adoption of more environmentally sensitive policies in a 2005 reform.

The effects of this reform haven’t necessarily been that environmentally sensitive, notwithstanding CAP criteria that are meant to place environmental issues to the fore. Intensive olive plantations have taken over from what were more traditional crops and, in the process, have reduced biodiversity, and not just in Mallorca.

Allied to this has been a calculation in subsidy known as the coupled payment suppression and its impact on nuts. The outcome of this has been a 13% reduction on margins for Spanish nut farmers and pretty much Spanish nut farmers alone.

Agriculture is only a tiny part of Mallorca’s economy, just a bit over 1% of GDP, but it is being looked at anew for its potential growth. The appointment as environment and agriculture minister in the regional government of Gabriel Company, an independent from agriculture, highlights this renewed attention being given to agriculture. But which priorities are grabbing his attention?

While olive-oil production has clear economic advantages, the minister, in his combined role, will know that almonds, a faltering element in the agricultural mix, contribute also to the natural environment and landscape of Mallorca. And at the current rate of loss, by 2017 there will be no almond growing and no almond blossom.

Any comments to andrew@thealcudiaguide.com please.

Bearded Wonders And Robot Presidents

President Zapatero, he of the many nicknames, is often referred to as ZP. It makes him sound like a micro-chip, which is about right seeing as how he is the first fully automated political leader in western Europe. The ZP has been inserted into his motherboard, so he has now become Z-3PO, waving its arms around and screaming “reformas, reformas, reformas”. The Z-3PO was recently interviewed by the “Financial Times”. In the video, one can see it beaming. The original model always beamed a lot, more in confusion than simple affability. The robotic, automated version, now sensing an end to its political career, is beaming at the prospect of retirement, receiving its ex-presidential salary and writing its memoirs.

There is another reason for all the beaming. Astonishingly enough, Spain is groping its way out of recession, and Zapatero is getting the plaudits. The German “iron lady”, Angela Merkel, has been praising his efforts, thus also bolstering her fellow countrymen who do, after all, either own much of Spain or wish to sell even more of it to even more of these fellow countrymen. When pressed on quite how this miracle of recovery has come to pass, the Z-3PO is plugged in, beams a lot, and goes off on the “reformas” chant that has been programmed into its circuits.

The Z-3PO is driven by an operating system known as “New Labour”. This makes it and the party it heads, the PSOE new model non-ideologues, lean ever further away from any socialist roots. The Z-3PO, fashioned after Tony, smooth-faced, grinning, exaggerated hand movements and any policy it fancies, has taken the party so far towards the centre or in the opposite direction to that which it historically had, that it has been able to more or less tame the ogres of the unions. It may not have been a Scargill or a Clause 4 moment, but the air-traffic controllers’ strike was something of a turning-point. Even the barely reconstructed Commies of the CCOO union disapproved of their action (though admittedly they didn’t much care for the packet that the controllers were receiving.)

Taming the unions and changing labour law are crucial elements to all the “reformas”. And remarkably the unions seem prepared to go along with them, given that they have been cast, for the purposes of public consumption, in the role of pantomime villains, as opposed to those in the banking and finance sectors who should be.

The Z-3PO is quite happy with this. It will be de-commissioned in 2012, which will be something of a pity as it is at least the embodiment, as it were, of a modern political leader: wires and circuit-boards in the right place and increasingly further to the right, a clone of Blair and no facial hair. And this last bit is important.

The leadership of the new model PSOE is likely to pass to one Alfredo Rubalcaba, the beardy vice-president who bears an unnerving resemblance to Solzhenitsyn. He will be up against another beardy, the Partido Popular’s Mariano Rajoy – Mr. Grey – who succeeds in making the normally uncharismatic world of Spanish politics seem positively magnetic. Even the robotic Zapatero is full of life by comparison. What a choice faces Spain. Mr. Grey or the Gulag.

Despite having a massive lead in the polls, the Partido Popular faces a problem. Mr. Grey. We have WikiLeaks to thank for knowing that his predecessor, the little accountant José Maria Aznar, had reservations about Rajoy. A lot of people did, and still do. It seems no coincidence that, at what has been a critical period for Spain, Rajoy has been hardly anywhere to be seen. But Aznar has. He has re-emerged, minus, in proper contemporary manner, his old moustache and with his hair even darker than it became during his time as president, so much so that his head is like a Bertie Bassett’s, with a thick layer of liquorice on top.

The re-appearance of the lush Aznar barnet is a reminder of a time when a Spanish leader did command some international kudos. Zapatero has just about managed to acquire some of his own. He may have performed an almost complete about-turn on most things, except his praiseworthy and liberal social reforms, but he seems to be restoring some Spanish credibility. It may have all required him being re-programmed, but he has retained, amidst all the “reformas”, an affability. It is not one that could be said to be shared by Rajoy, the likely next president, a zomboid, and bearded, Borg.

Any comments to andrew@thealcudiaguide.com please.

Hot Air: Electricity prices and government policy

The cost of electricity is to rise again. From 1 January it will increase by 9.8%, the largest single hike for 28 years. Since 2006, while cost of living has risen by 12%, the cost of electricity, including the January increase, will have gone up by over 40%.

The increase is due to a raising of the tariff set by central government. It will apply to the majority of consumers who are on the so-called “tarifa de último recurso”. The increase has not surprisingly been condemned by consumer organisations and opposition politicians alike. The Partido Popular reckons that the hike will make the price of electricity in Spain one of the highest in Europe. It would be more accurate to say that the price is beginning to reach parity with that in other countries; it will still be cheaper than in the UK, Italy, France or Germany.

The reason for the increase lies primarily with a rise in the cost of electricity futures. These were determined a couple of weeks ago, but the news about the passing on of charges to consumers was largely ignored. A cynical view that has been expressed is that the Spanish Government’s declaration of a “state of alert” to do with further possible action by air-traffic controllers was a way of burying the bad news.

The increase is, though, hard to reconcile for different reasons. One is that the government wishes to cut consumers’ power bills by 2013 by attacking the tariff deficit between what energy companies charge and the revenue they receive from government. Among other things, this will lead to a reduction in revenue by photovoltaic plants (solar energy) by around 30% over the next three years. This is a blow to the renewables energy industry and is a further issue that is hard to reconcile, as it goes against the government’s own policies of clean energy and energy efficiency.

The latter, energy efficiency, is something else that is hard to reconcile, particularly in Mallorca. Consumption of electricity, for heating, is disproportionately high, owing to the inadequacy of much housing stock. Governmental talk of energy efficiency has not been matched by a drive to assist with measures that could significantly reduce consumption.

There is then the effect on the wider economy, and this is something else that is hard to reconcile. The increase can be viewed as being pretty much equivalent to a tax increase. Coming on top of the rise in IVA and the austerity measures, the electricity price rise is likely to make still-born the possibility of economic growth. While the hope is that tourism will steer the Balearics into more benign economic waters in 2011, it will, in all likelihood, disguise the situation in the domestic market as a whole.

The fragility of confidence is reflected in the figures for spending in the Balearics over the Christmas period – down by around 14% per person and 25% per family. This is a substantially greater decline than had been anticipated. The level of Christmas spending may be a special case, but if it is taken as a barometer of activity, then the economic outlook is far gloomier than had been feared. Put 10% on electricity bills, and that outlook just got gloomier still. There has to be a fear that Mallorca and Spain are heading backwards into further recession.

The announcement of the price rise comes at the same time as it has also been announced that a pipeline to bring natural gas to Alcúdia is being planned to come on-stream in 2012. Good news perhaps for the hard-pressed consumer, except that gas is also rising in price, while what the pipeline will mean in the short-term isn’t clear, other than possibly supplying the power station, assuming it can be converted from its reliance on coal.

As part of a wider strategy for energy, the arrival of natural gas can only be a positive, but it is a rare positive amidst an energy policy that the Partido Popular is probably right in criticising for its errors. The hot air (and hot air that is about to cool off in many a household) that comes from government regarding energy has been exposed as being this alone. One wonders if the idea of keeping bar and restaurant doors closed in order to seal in set temperatures will be revisited. Heaven help the poor bar-owner if, on top of the smoking ban and, yes, his own increased energy costs, he is forced to install automatic doors that will maintain a summertime temperature of air-conditioned 26 degrees.

This setting of optimum temperatures is, however, an example of a failure to educate as to how different settings can increase or reduce consumption. The whole notion of energy efficiency is not being well handled, and while it isn’t necessarily a political maker or breaker, price increases could well be. Zapatero’s fate, if it hadn’t already been, may well have been settled by the economics of energy.

Any comments to andrew@thealcudiaguide.com please.

And Cancel Christmas

By the roundabout at the top of Puerto Alcúdia’s “Mile”, a single festive “Bones Festes” sign swings forlornly in the autumn wind. Alcúdia town hall will have to decide whether the rest of the usual lights will go up this Christmas. They might put them up, but whether they switch them on or have them on for only limited periods will also need to be decided. The town hall’s electricity bill has increased by a massive 40% in a year. “A barbarity,” has said mayor Llompart of the rise, one caused partly by new infrastructure in the town but also by – the target of Sr. Llompart’s upset – GESA’s prices.

Alcúdia has already taken the decision to switch off much of the town’s street lighting at midnight, including that by the old town’s walls. Alcúdia like a Christmas tree? Tonight or any other night over the festivities, the city won’t belong to me or to you. We won’t be able to find our way round. Angels of half-light. If that. Not that it probably matters. No one much will be around. They’ll be holed up at home, huddled over the radiators, reduced in the number switched on, the result also of higher electricity prices, or crouched by a gas heater, breathing in butane that has also gone up.

Christmas is coming. The goose is getting thin.

You can get goose for your Christmas lunch in Mallorca, just as you can get turkey. But what has been a meat-buying trend to downscale for some time will carry over into Christmas. Rabbit is going to be popular. And some of it may well be wild. The fincas are alive with the sound of guns, not all of them necessarily those of the licensed hunters.

FACUA, the consumers association, reckons that household spending in the Balearics as a whole will be down by some six per cent this Christmas. While the purchase of gifts is likely to remain at the same sort of level as last year, there is one element of Christmas cheer that has taken a nosedive, and not only at Christmas. Alcohol. Since 2007 sales of beer have slumped by 35%; those of higher alcohol content, spirits etc., by 27%. You can see the evidence of this in the supermarkets. Prominent, so as to grab the attention of shop traffic, are low offers on the likes of cava. Even checkout girls, unused to the role of playing salespeople, are drawing attention to the cheap booze.

It isn’t of course just the supermarkets which have been hit and which have had to introduce more basic lines. There are the bars and liquor stores as well. 30,000 of them across Spain have closed since the crisis took a hold. The “El Gordo” Christmas lottery will still attract its syndicates willing to fork out for what are expensive tickets, but lotteries in general, games of bingo and slot machines are also victims of lower spend on things other than necessities.

And with the slump in sales comes also a slump in revenue – that to the government, one only partially addressed by the increase in IVA. There is a further non-necessity that has seen the treasury’s coffers emptied: the sale of cigarettes. In 2008 this fell by a massive 37% in Mallorca. So maybe tourists don’t spend all their money on fags after all. The upward adjustment in prices on tobacco last year, primarily duty, has enabled the government to recoup some of the loss, but as with more or less everything, the curve heads downwards.

This will be an austerity Christmas, implies FACUA. Appropriately enough amidst the austerity of governmental measures which show no sign of bringing confidence back to consumers or to business. And the fear is that the new year might even herald something worse. The markets have sunk their teeth into Greece and spat it out, just as they are doing to Ireland, despite its regular austerity revisions. Portugal could be on its way out of the euro anyway. So then there’s Spain.

The new year will also see the introduction of the smoking ban. Predictions of a 15% fall in bar sales as a result would come on top of the decline in alcohol consumption that has already been experienced. The bars and restaurants have started a campaign to stop the ban or to at least delay its introduction. It’s a bit late, one would think. But maybe they have a point in that now is probably not the best time to bring it in.

For now is the time of less, less, ever less. Except when it’s more, more, ever more. Like the cost of electricity. Town halls in penury, the lights going out all over Alcúdia and elsewhere in Mallorca. Little to celebrate during the festive season, with less-extravagant feasts and fewer cups that cheer. It would be nice to say “merry Christmas”, but it would be said through gritted teeth. As for a happy new year, the bars will be the first ones to assess the accuracy of that, come 2 January. And after that …?

Any comments to andrew@thealcudiaguide.com please.

We Want Our Money Back: Town halls have to repay

Let’s say you are the head of a major European country which unfortunately finds its economy being held together by a flimsy piece of string and short of a Roberto or two. What do you do? Raise taxes? Yep, can do. Cut investment? Sure, why not? How about asking for your money back? Sounds a bit of a wheeze. And who should you ask for your money back? There are a few targets. Why not go for local authorities? What a splendid idea.

Mr. Bean’s bean-counters in Madrid have come up with a cracking scheme to trawl back some badly needed moolah to fund the central government’s drinks cabinet. That money we gave you, you now being a local authority; that money we gave you in 2008. Well, we want you to hand it back. Not all of it. That would be greedy. Just some of it. For example, that which you failed to collect in taxes. Yes, we know there’s a recession on and that you might yourselves be turning out pockets of old coats and jackets in the town hall wardrobe in the hope of uncovering the odd euro or thousands, but we’re brassic as well, and we’re bigger than you.

The local authorities of Mallorca are none too impressed with this latest initiative. It might demonstrate initiative on behalf of an improvising central administration, but mayors are not about to applaud. And it’s not just the mayors. Oh no. The Council of Mallorca. Them as well.

The funding in 2008, as with any funding, is meant to be partially balanced by what the local authorities drag in. The government, you might be surprised to learn, doesn’t just hand the cash over willy-nilly. Nevertheless, the town halls find the demands for repayment slightly lacking in logic. While on the one hand the government has doshed up for projects under its so-called Plan E system, and made a song and dance about how wonderful this all is, on the other it’s taking money back.

One has some sympathy for the mayors who say that all manner of projects will have to be stopped in order to boost central coffers. However, sympathy can be stretched. Take, for instance, Inca town hall. Under this payback scheme, it’s liable to have to fork out a touch over 600,000 euros. Strange. Haven’t we heard about 600k before when it comes to Inca? Oh yes, so we have. The 600 grand over-spend on the local swimming pool. The government doesn’t presumably just pluck figures out of the air. Of course not. It might, though, take a cursory glance at the books and work out that there might just have been some inefficiency when it comes to the spending of its money. Take also the Council of Mallorca. It’s in for a little under five million. Sounds reasonable if one takes account of what it has managed to fritter away or had “borrowed” by certain politicians. Remember, for example, the four hundred grand on a Catalan campaign. Yep, that was the Council’s money. Or maybe it wasn’t.

No, to be honest, I don’t know that I do have much sympathy. Not all local authorities are staffed by wastrels and crooks, but if the Zapatero drive is a control and responsibility initiative dressed up as a financing one, then maybe it should indeed be applauded.

Any comments to andrew@thealcudiaguide.com please.

Men From The Ministry: Downgrading Spanish tourism

In an attempt to reduce costs, the Spanish Government has been cutting back on posts and ministries. In what might seem like a bizarre, almost perverse move, the tourism secretary of state has been, in effect, demoted, and the ministry itself merged.

There is particular anger at the move in Mallorca, whence came the secretary of state, Joan Mesquida. But setting aside any possible feelings of a Mallorcan politician having been slighted, the greater upset is reserved for the fact that tourism as a whole appears to have been downgraded in terms of importance. Now is not the time to be … you can fill in the rest, it all has to do with crisis, recession and competition from other destinations.

While the move does seem strange, to Mallorcan hoteliers and politicians, is it really that important? The percentage of GDP created by tourism in Spain as a whole amounts to around 5%, not that much higher than in the UK. Is there a tourism minister at cabinet in the British Government? Take a look at the list of cabinet members and their jobs, and nowhere does the word tourism appear. I may be wrong but I don’t think tourism has ever commanded a cabinet post, per se, in Britain.

Spain is different though. Take away a tourism secretary of state, and it’s as if national pride and the national psyche have been attacked; it was tourism, as much as anything else, that was the foundation of contemporary Spain and of the economic boom that propelled the country from its position as a basket case. Moreover, Spain is reckoned to have the second largest tourism economy in the world. It is a not insignificant industry.

Though the GDP percentage may appear relatively low in national terms, at local levels it is far, far higher. Some latitude may be applied as to how the figures are arrived at, but in Mallorca, tourism is said to amount to 80% of the island’s GDP, almost certainly an exaggeration, but maybe not when one takes into consideration related industries.

One of the arguments in favour of maintaining the more elevated role of tourism is that in competing countries tourism is at the very heart of government. Yet these competing countries have far greater levels of centralised government, Egypt for example. Spain was once highly centralised, and tourism was once the flagship industry, but no longer; the country is highly decentralised. It is decentralised not just in terms of regional government but also in terms of its tourism diversity. Selling “Spain” is as outmoded as Franco’s state-directed system of government. Do tourists treat Spain and Mallorca as being synonymous? I would very much doubt it. The regional governments, such as that in the Balearics, have their own tourism marketing and their own tourism ministries. The ministry in the Balearics may have become a laughing-stock, but the strategic significance of tourism is reflected in the importance attached to the ministry (one that I have argued should in fact have greater importance attached to it).

One suspects that anger in Mallorca is an expression of anxiety as to possible cuts in funding for tourism from Madrid. Given that the local tourism ministry has found innumerable ways to fritter away public money, not all of them legal (allegedly), one might have sympathy were the Zapatero administration to wish Mallorca a plague on its various tourism houses (and institutes and foundations).

Mallorca is in competition with other destinations, and included among the competition are other parts of Spain, the Canaries and the Costas. The island’s politicians want Madrid to be its benefactor and seemingly its tourism “leader” as part of a greater Spanish tourism industry, while at the same time doing whatever they can to nick tourists from other parts of the country. It doesn’t quite add up. The regional government has its own structure, its own tourism industry, its own ministry, its own ability to determine industries (well, one) of strategic importance; it should get on with what it’s meant to be doing and not fret about musical chairs in Madrid. They can’t have everything. Why should there be a tourism secretary of state? There isn’t one for construction or one for making donkeys with sombreros on their ears. They should just get over it.

Any comments to andrew@thealcudiaguide.com please.

The Nuclear Option: What if … the volcano?

Something approximating normality is beginning to return, though normality will only resume when tourists start coming in and are not departing – finally.

These have been extraordinary days. And their impact will slowly diminish, as the ash starts to fade or heads off in the direction of Canada. Sorry, Canada, but you shouldn’t feel that you can escape the problems. The good news is that tourists tend to have short memories and to not be deterred by extraordinary events. Except. Whereas an extraordinary happening, such as 9/11, brought chaos, such an occurrence is somehow manageable. There is a degree of control that can be brought to bear. It’s not the same with nature. It is the sheer unpredictability, with no hope of control, that heightens a sense of uncertainty.

April is going to be a wash-out, despite the good weather. May? The hotels, we understand, will be making “super” offers, largely because the tour operators are forcing them to. To get confidence back, there has been a grand meeting involving the tourism minister, hoteliers, tour operators, travel agencies, airlines and other transport operators, from which will come a concerted spate of PR to get the British and the Germans to travel. Let’s just hope those memories are indeed short.

Someone said yesterday that it’s like last year. The volcano is this year’s swine flu. By implication, the effects of the ash – on jet engines – have been exaggerated, just as the flu’s impact and diffusion was. Maybe it has been, and I guess we can be assured that any way in which planes can be kept in the air will be being looked at, in the event that there is another eruption, but you wouldn’t count on there being a solution. The comparison with swine flu isn’t valid. That didn’t stop people flying. And the effect was minimal.

The good news is that volcano Katla shows no sign of doing a copycat eruption. We can but hope that it doesn’t. While the airline engineers study the data and ways to mitigate the effects of volcanic ash, we have to suppose that there is some serious consideration being given, in governmental circles, to what would happen if the worst case did happen. Now that the effects of one, not-that-massive eruption are being digested, the scenario planning for something altogether more cataclysmic has to be undertaken. Gloomy would be an understatement as a prediction.

Were the worst case to occur, God forbid, and were it prove impossible to fly, except perhaps intermittently, for months, then the prognosis would be dire. The tourism market would collapse, along with what currently remains of the property market and much of the island’s economy. Unemployment would be unprecedented. It might be possible to enjoy the sun – and the roads – untrammelled by hordes of tourists, tourists buses, rented cars, but the reality, for all but those with plenty stashed away, would be horrendous. Businesses failing. People on the streets. Soup kitchens. Riots. Curfews. Initially, people would doubtless help each other, but a time would come when they wouldn’t; when survival takes over. Society would, if not collapse, then be deeply and angrily polarised. The centre would be unable to hold.

It would be the nuclear option, or rather the nuclear possibility. It might not be nuclear winter, because the sun would still shine, but then when winter returned, it would be colder and wetter because of temperature cooling caused by the ash clouds, and there would be even less work and even more on the streets or leaving to head back to what would be uncertainty elsewhere.

One can over-exaggerate, but foolish would be the Mallorcan politician who isn’t having sleepless nights as to what might happen and who isn’t establishing contingencies. Of course nothing might happen. Or not for many, many years. But the fact is that it has happened; just that we may have got away with it.

There would be one solution. Oh, that there were. “Beam me over to Mallorca, Scotty.” Or there’s another one – that all the panic over the ash was just that, panic, and that there was not the need to be as cautious, as the British Government now seems to be admitting.

Any comments to andrew@thealcudiaguide.com please.