Covid Relief Program Could Also Help Italy's Olive Oil Storage Problem

Summary

Italian extra vir­gin olive oil pro­duc­ers are fac­ing a stor­age cri­sis due to increased pro­duc­tion and decreased demand dur­ing the Covid-19 pan­demic, with an 85.9 per­cent rise in stor­age com­pared to 2019. The Italian gov­ern­ment has allo­cated funds to pur­chase excess olive oil for dis­tri­b­u­tion to fam­i­lies in need, in an effort to sup­port pro­duc­ers and pre­vent waste.

Italian extra vir­gin olive oil pro­duc­ers have warned that their stor­age facil­i­ties have quickly filled up in the first weeks of the har­vest­ing sea­son.

Compared to the same period in 2019, the amount of extra vir­gin olive oil in stor­age has risen by 85.9 per­cent to a record 42,900 tons.

“The Covid-19 cri­sis that has hit restau­rants, bars, hotels since March has led to a rel­e­vant increase in the extra vir­gin olive oil stor­age,” the major olive oil pro­duc­ers asso­ci­a­tion, Italia Olivicola, wrote. ​“Quick action by the gov­ern­ment is needed, to unlock the mar­ket and help the pro­duc­ers.”

The asso­ci­a­tion urged for an already-approved €20 mil­lion ten­der by the Agency for Payments in Agriculture (AGEA) to pro­ceed to pub­li­ca­tion.

“[The ten­der] will buy 100-per­cent Italian extra vir­gin olive oil, which will then be dis­trib­uted to the fam­i­lies in need,” the group wrote.

The ten­der is part of a €300-mil­lion ($354-mil­lion) food aid emer­gency fund, which has been set up by the Italian Ministry of Agriculture to dis­trib­ute healthy and sta­ple foods to fam­i­lies in need dur­ing the pan­demic. As part of the plan, olive oil pro­duc­ers will be paid €3.20 ($3.77) per liter, which many con­sider too low.

According to data released by the lat­est Frantoio Italia report, which was pub­lished by the Ministry of Agriculture, 67.5 per­cent of the extra vir­gin olive oil in need of stor­age is located in the Puglia, Tuscany, Calabria and Umbria.

Currently, in Puglia, olive oil stocks sit at 77,398 tons, includ­ing 54,655 tons of extra vir­gin olive oil (some of which was left­over from last year). In Tuscany, there are 44,000 tons of olive oil stocks, of which 36,000 tons is extra vir­gin.

Across the whole of Italy, extra vir­gin olive oils with a Protected Designation of Origin account for four per­cent of total olive oil stor­age, with Terra di Bari PDO occu­py­ing nearly half of the avail­able space.

“Tanks are fill­ing up with the olive oil from the cur­rent cam­paign while it is get­ting harder and harder to place the prod­uct on the mar­ket in light of the overt cri­sis in the Horeca sec­tor,” Fabrizio Pini, the pres­i­dent of Italia Olivicola, said in ref­er­ence to the coun­try’s hos­pi­tal­ity and restau­rant sec­tor. ​“Government inter­ven­tions are absolutely needed to help those pro­duc­ers whose trade chan­nels have been shut down.”

He added that the AGEA ten­der would be ​“a deci­sive step that would allow us to empty the tanks filled with last year’s olive oil through­out Italy” and ​“a breath of fresh air for the sec­tor.”

Giuseppe L’Abbate, the under­sec­re­tary of state for agri­cul­tural poli­cies, said that the money for the AGEA ten­der would be avail­able soon and empha­sized their impor­tance in help­ing all types of Italian pro­duc­ers.

“Those funds are ded­i­cated only to buy­ing Italian prod­ucts, so that we can help Italian fam­i­lies in need while at the same time giv­ing a hand to Made in Italy agri­cul­ture and the agribusi­ness,” L’Abbate said.

“It is just com­mon sense since, among the effects of the cur­rent pan­demic, there is the risk of an increase of the pop­u­la­tion liv­ing below the thresh­old of poverty,” he added. ​“After this decree, AGEA will pub­lish its ten­ders.”

In a last-minute press release posted on the Ministry of Agriculture web­site, Minister Teresa Bellanova also announced that the gov­ern­ment has allo­cated another €340 mil­lion ($402 mil­lion) for the agri­cul­tural sec­tor to face the cur­rent cri­sis.

• Italia Olivicola