Farm Bill Amendment Draws Attention to Divided Industry
By Nancy Flagg
Olive Oil Times Contributor | Reporting from Sacramento
Georgia olive oil producer Jason Shaw
Shortly before the House of Representatives voted against the 2013 Farm Bill, an amendment to remove a section that would impose olive oil import controls was proposed by Congressmen Chris Gibson and Michael Grimm of New York. Rep. Grimm said that the Farm Bill provision was “an attempt to allow 2 percent of the domestic olive oil market to impose a hidden tax on the remaining 98 percent — raising the cost of olive oil for consumers.” The amendment passed by a huge margin (343-81-1). Ultimately, the vote was a moot point because the entire Farm Bill went down; however, the battle over the import control provision drew attention to a greatly divided olive oil industry.
Opponents of the amendment were disappointed by its approval. Jason Shaw, president of the Georgia Olive Growers Association said they worked hard to get the import control language put in the bill in the first place. In a message to the Georgia U.S. Legislators asking them to oppose the amendment, the Association noted that “olive oil importers have permitted rampant olive oil fraud” by mislabeling inferior blends of oil as higher quality. “All we were trying to do was to subject everyone to the same standards that we want to subject ourselves to,” Shaw said.
Shaw believes that there was a lot of misinformation about the implications of the bill. He said that the bill would not have approved a sampling and testing program for olive oil — a marketing order would still have to be developed by the olive oil industry before the provision became effective.
A Congressional Budget Office (CBO) report issued in May, indicated that if a marketing order for olive oil were approved, imports would have to be tested to ensure that they meet standards and that the cost could total “tens of millions of dollars annually.” Shaw counters that the industry would be responsible for setting its own standards and would not be interested in creating ones that were cost-prohibitive. He cites the CBO report as a factor in the amendment being passed. The report “didn’t help the cause. The cards were stacked against us,” said Shaw.
Patty Darragh, executive director of the California Olive Oil Council also expressed frustration over the amendment because it impacts efforts to build a competitive domestic industry committed to producing quality oils and that “is not good news for consumers and retailers.”
Proponents of the Gibson-Grimm amendment included such groups as the National Restaurant Association, the North American Olive Oil Association and the American Hellenic Institute (AHI).
“The marketing order would have been a trade barrier. It would have raised the price of olive oil for consumers, and it would have been harmful to small businesses,” said Nick Larigakis, president of the AHI, a nonprofit Greek American public policy group. “We were also certainly concerned about the ramifications … on future trade negotiations between the United States and the European Union. We believe it would have disrupted those negotiations.”
The Georgia Olive Growers Association disagreed that import control would create a trade barrier, citing that the European Union already has import inspections for olive oil and for all fruits, vegetables and nuts. Any U.S. procedures added would have to be in compliance with world trade organization rules.
The North American Olive Oil Association (NAOOA) supported the amendment because a marketing order would be expensive and yet would not solve the olive oil quality problem, said executive vice president Eryn Balch. “There would be no oversight of the oils past the point of import — blending and mislabeling could occur after inspections,” added Balch.
The Georgia Olive Growers Association, however, contends that olive oil consumed by Americans should be tested at the point of export. Any fraud occurring within the U.S. would be controlled by a domestic marketing order.
As an alternative to a marketing order, the NAOOA is seeking support from the Food and Drug Administration (FDA) for setting a national “Standard of Identity” for olive oil, similar to standards set for white chocolate and other commodities. An FDA standard would define olive oil grades and, unlike the USDA grading standards which are voluntary, FDA standards are mandatory and can be enforced.
Although industry folks agree that ensuring olive oil quality is critical, they do not see eye-to-eye on how best to achieve that goal. They do, however, agree that working to improve consumer education is a high priority. The NAOOA said that it would like to see a research and promotion order be issued by the USDA because it would allow the industry to use USDA resources and infrastructure toward consumer education.
While the Farm Bill dust settles, Jason Shaw said “We will keep doing what we’re doing — educating the public and producing the best product that we can.”
This article was last updated June 25, 2013 - 10:36 AM (GMT-5)