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  • Pistachios are ideal for inland Spain

    Mar 16th, 2017

    It could take the place of olives as the new Spanish green gold. It is the crop that could stop rural depopulation, giving its people a profitable and sustainable way of life, and it won't be affected by the end of CAP aid, since it does not receive any subsidies. In short, it is the great hope of Spanish producers for the coming decades. Based on this information, not many are likely to guess which crop we are talking about - it's pistachios!

    In Spain, there are currently more than 12,000 hectares devoted to the cultivation pf pistachios, almost all are concentrated in Castile-La Mancha, which accounts for up to 80% of the total, almost all were planted in recent years. It is a real boom among dryland producers, who are switching from deficient cereal crops to pistachio crops. Of course, they are not doing it all at once, but hectare by hectare, as pistachios, despite their great prospects, are not a golden calf. It takes six to seven years of intensive care before they start bearing fruit. In that time, the profits are zero and the expenses considerable - about 30,000 Euro per hectare. But according to sources within the sector, as soon as it starts to produce, the profit margins are "much better than those of traditional crops," and it can remain productive for decades.

    "There are few countries in the world with the capacity to produce it and there is an increasing demand, with an annual increase higher than that of the rest of nuts. It has the same nutritional level as almonds and just as many or more culinary uses," affirms José Francisco Couceiro, head researcher at the El Chaparrillo Agro-environmental Research Centre and possibly the greatest Spanish expert on pistachios. Couceiro teaches five workshops a year to any growers or engineers interested in getting involved in the planting of this nut, "to prevent them from making mistakes and to teach them the essentials about pruning and other necessary cares." In recent years, his classroom has been packed. In 2016, each of its workshops attracted more than 90 people, which adds to the "avalanche" of calls and emails he receives with questions of all kinds.

    Ideal for inland Spain

    The pistachio is a nut of semi-desert origin. It thrives in dry climates and needs very little water. Iran and California produce it almost exclusively nowadays. In Europe, Spain is the country with the best climatic and geological conditions, but it only accounts for 0.02% of the world production. Sicily, with century-old crops, is the only leading European name. "The biggest hurdle for pistachios to grow in our country is the idiosyncrasy of the southern half of the Iberian Peninsula. It is very difficult to convince growers there to switch from an extensive monoculture like cereal or vineyard to a tree that will take years to start bearing fruit. People are not used to waiting; they look at the present and not at future profitability, but I predict that in Andalusia, as has already been the case in Castile-La Mancha, Extremadura, Madrid and Aragon, growth will be exponential."

    Pistachios have a sale price at origin of six Euro per kilo (already peeled and dry). Taking into account that each hectare yields an average of about 1,000 kilos, this translates into 6,000 Euro per hectare. For open pistachios, the price ranges from 8 Euro to 9.5 Euro, depending on the size. And the price is even higher if you cultivate organic pistachios, which are very demanded in Europe. "It's a tremendous figure. And it is also worth stressing that after the initial period, the tree does not require great care, only an expense of between 500 and 1,000 Euro per hectare. That's why there has been such a craze for pistachios among some people. There are even investment groups looking for areas with deep soils and water to plant pistachios," continues Couceiro. He predicts that "they have the potential to replace olive trees as the great crop of southern Spain. Unlike with olives or almonds, there is no risk of demand collapsing due to oversupply. In any case, everyone is aware of what olives represent for Andalusian agriculture and only the most daring will take the step for now."

    José Aguilar did not switch from olive trees to pistachios, but he owns the largest plantation in Andalusia. He was one of the pioneers in 1985. He invested all his savings in a crop in which nobody believed and he was right. His brand, Pistachos Nazaríes, is possibly the most reputable in Spain. The entire Aguilar family earns its living from it. "In recent years, we have grown in terms of acreage by more than 100%, and the same can be said about the revenue. Everything we produce is sold. There is a huge supply shortage, and the same applies to the plants. If you want to buy plants today you have to wait for a year or two, because there are not enough," affirms José Aguilar, the company's manager.

    The shortage and the boom of pistachios have even harmed Aguilar's company, which has frequently been a victim of the theft of trees. Up to 100 pistachio trees were stolen on one occasion, causing him a loss of 1,400 Euro plus the expense of replacing them (with the consequent six year waiting period without any production). "Sometimes I have come across people showing my farm to ten or fifteen people, making it look like it was theirs to convince them to buy their pistachios," he laments.

    "There are many scams, so you have to be watchful," confirms Juan Gallego, manager of Iberopistacho, a leading company in consulting and brokerage. "In Spain, there is a tremendous shortage and a lack of knowledge; that is why scams are taking place. If you are scammed with a cucumber seed, you see it after 90 days, but with this you only realise after six years, so you have to be very careful. We work with the most powerful greenhouse in Europe, which is in Andalusia. Those are the seeds we sell to producers," he continues.

    Iberopistacho is involved in all fronts. It supplies seeds to producers and then, when the tree begins to bear fruit, it buys the production in order to sell it in wholesale markets and food chains. It also packs and sells to the consumer. "It is a crop with a wonderful present and an extraordinary future. Since the plant has been genetically formed in semi-deserts, it withstands the dryland conditions of the inland of the Peninsula without any problems. And when irrigated, it is a crop that makes the most of each drop. Almond trees offer a similar performance, but that crop is currently in a bubble that is about to burst, while the price of pistachios is rising slowly and there is still much room for growth to meet the demand," he continues. Gallego believes that Spain will be a world power as soon as it reaches the 50,000 hectares cultivated. When that time comes, he says, pistachios will be for rural Spain "in a similar position as that of wine or cheese today."

    The Symaga group is one of those investment companies that did not want to pass up the opportunity. Alfonso Garrido owns the subsidiary of the group devoted to pistachios: Agropecuaria de Frutos Secos. "We have bought 66 hectares of pistachio trees with an age of between 25 and 30 years, in full maturity to bear fruit, and now we are working to plant a total of 200 hectares," he reveals. "Not only do you need to plant the seeds or grafts, but also to install a dryer and prepare machinery to select and pack the production," he continues.The pistachio business does, in fact, not make sense without a drying plant. "After the nut's picking, you have 24 hours to remove the layer that protects the shell (similar to that of almonds) and dry it, otherwise it will spoil," explains Rubén Cruz, a Symaga plantation technician. The company expects to obtain about 1,500 kg per irrigated hectare, with a "very conservative" gross value of 6,000 Euro; eight times more than what they currently obtain from other crops like wheat, barley or peas." The CAP is providing less support and we thought that now was the time to change. Around our estates, in Ciudad Real, there is a craze; the fields of La Mancha are undergoing a huge transformation. Pistachios are being planted even in old vineyards," explains Garrido.

    Spain is still far from fulfilling these golden prospects. The country consumes about 15,000 tonnes of pistachios per year, but only produces 3,000 tonnes. Of the total consumed, 99% is roasted and salted (in 'snack' format), which according to producers kills the nut's taste and properties (in addition to being generally the worst quality). In other words, it is first necessary to educate the palates of Spaniards. "That is one of our missions; we want the consumer to know what a natural pistachio smells like, and to be familiar with the different varieties that can be used in their dishes, with pastas, salads, desserts, etc.," points out the manager of Iberopistacho. The sector is still light years away from that of almonds, for which Spain has 400,000 hectares cultivated, making it the world's third largest producer.

    Not all investors are producers; Carlos Suárez is an agronomist. He has participated in international cooperation missions with the Red Cross in half the world and on his return to Spain he had a clear plan. Together with another partner, he founded New Crops in mid-2016. "We wanted to dedicate ourselves to innovative crops that do not depend on CAP subsidies, and today we are very much in love with pistachios. We have planted six hectares, which will still take a while to become productive, and in the meantime we sell pistachios from other growers and provide advice and sell pistachio trees through a nursery. The business has been profitable from the start," he confirms.

    "People see pistachios as an alternative to subsidised agriculture; for the rural world, it is like being in a desert and seeing an oasis." Small towns are currently becoming depopulated due to a lack of economic alternatives. With the CAP, the older people can make a living, but the young ones have to emigrate. Pistachios have the capacity to change all that," assures Suárez.