`European Parliament Provides Some Comfort for Spanish Olive Oil - Olive Oil Times

European Parliament Provides Some Comfort for Spanish Olive Oil

Mar. 18, 2013
Julie Butler

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A hatchet still hov­ers over high European Union sub­si­dies paid to farm­ers in world olive oil cap­i­tal Andalusia but the European Parliament last week gave them some hope of eas­ing the immi­nent blow.

In a full sit­ting, Parliament effec­tively backed a heav­ily amended draft of the new farm pol­icy pro­posed by the European Commission, with mea­sures mak­ing it eas­ier for olive oil farm­ers to get aid in times of low prices and giv­ing pro­ducer orga­ni­za­tions more clout in the food chain, includ­ing scope to man­age sup­ply and nego­ti­ate bet­ter prices with­out falling foul of com­pe­ti­tion law.

One of the amend­ments most wel­comed by the sec­tor in Spain will help cush­ion a big drop in direct income sup­port for its farm­ers under the Common Agricultural Policy (CAP) for 2014 – 2020.

More than 280,000 farm­ers in Andalusia receive annual amounts under the EU‘s cur­rent sin­gle pay­ment” schemes and half of the total allo­ca­tion there goes to the olive oil sec­tor. The aver­age per hectare in the region is €571 but rises to €690 in olive oil epi­cen­ter Jaén.

Meanwhile the aver­age for Spain is just €346 and for the EU-15 (first 15 EU mem­ber coun­tries) €371, but could fall to €245 and €250 – 300 respec­tively under the new pol­icy, the Universidad de Jaén esti­mates. (1)

Fairer, greener sys­tem sought

That’s because as part of a fairer, greener” CAP, the Commission wants to replace these schemes — prone to dis­crep­an­cies in pay­ment lev­els between farm­ers, regions and EU coun­tries — with a new one mov­ing to a flat rate per hectare nation­ally or region­ally by 2019.

Furthermore, EU coun­tries would have to reserve almost a third of their fund­ing allo­ca­tion to top-up these pay­ments for farm­ers who under­take three green” mea­sures: main­tain per­ma­nent pas­ture, cul­ti­vate at least three crops, and main­tain an eco­log­i­cal focus area” of at least 7 per­cent of their farm­land.

Fear of fund­ing dilu­tion

At the same time, in 2014 there will be a new count of how many hectares of farm­land are poten­tially eli­gi­ble for the pay­ments and changes to the def­i­n­i­tion of the kinds of farm­land that qual­ify.

Spain says its total of eli­gi­ble hectares will greatly increase — from 4.5 mil­lion to up to 6 mil­lion in Andalusia alone — but its fund­ing enve­lope won’t and thus cur­rent pay­ment enti­tle­ments would be watered down even more.

But under the amend­ment passed by Parliament, coun­tries fac­ing an increase of more than 45 per­cent in their total of eli­gi­ble hectares will have the flex­i­bil­ity to limit those actu­ally allo­cated pay­ments.

Juan Corbalán, Brussels del­e­gate of Spanish Agri-food Cooperatives, told Olive Oil Times the amend­ment was designed to reduce the trauma for pro­duc­tion areas that had been receiv­ing big sup­port, such as olive oil, cot­ton, rice and cere­als.

If cov­er­age expanded to include many other pro­duc­ers (such as to live­stock farm­ers for pas­tures) they could all end up get­ting “€100 – 200/ha, which is noth­ing,” he said.

Concerns about green mea­sures

Spain has so far unsuc­cess­fully lob­bied for another con­ces­sion — to have olive plan­ta­tions treated as per­ma­nent cul­ti­va­tion and qual­ify for the full green pay­ment with­out hav­ing to meet the Commission’s three require­ments, such as set­ting aside 7 per­cent of their land for eco­log­i­cal pur­poses.

Italian Social Democrat MEP and Agri com­mit­tee chair­man Paolo De Castro had raised con­cerns about this green mea­sure from the out­set of nego­ti­a­tions back in 2011. How can I…explain to peo­ple who pro­duce olive trees that they have to reduce by 7 per­cent? Do they have to cut their trees down? I don’t think it’s the cor­rect way to go,” he said.

But while last week Parliament slashed the tar­get to an ini­tial 3 per­cent, it rejected var­i­ous amend­ments intended to give coun­tries flex­i­bil­ity to grant exemp­tions.

Hopes for deal before July

Last week’s vote paved the way for nego­ti­a­tions with EU mem­ber states via the Council of EU Ministers, which hopes to final­ize its nego­ti­at­ing stance this week. A final deal will then have to be reached between rep­re­sen­ta­tives of Parliament, the Council, and the Commission, with the goal of an over­all agree­ment by the end of June.

But even then Spain’s olive oil sec­tor won’t know its full fate under the new CAP until fund­ing dis­tri­b­u­tion is decided at national and regional lev­els.

And any­way, next year will be a tran­si­tion year. With the EU’s next long-term bud­get also still to be agreed on, the Commission has acknowl­edged it won’t be able to fully imple­ment the new direct pay­ments scheme in time for 2014.

Spain’s over­all CAP fund­ing to increase

Agustín Rodríguez, gen­eral sec­re­tary of the Andalusia branch of the UPA, which rep­re­sents small-scale farm­ers, said amid a likely 2.6 per­cent cut to fund­ing for the new CAP, Spain had been rel­a­tively lucky that its over­all pack­age was actu­ally set to increase 1.2 per­cent, to about €44 bil­lion over six years. (2)

However, while Spain’s national and regional fund­ing envelopes will thus not dimin­ish, the UPA says the change to flat pay­ments for farm­ers could dev­as­tate Jaén, a province where olive oil gen­er­ates 80 per­cent of jobs, 95 per­cent of groves are tra­di­tional and where pro­duc­tion this sea­son is down 80 per­cent on last year.

Farmers will take to the streets in their trac­tors next month if help is not forth­com­ing, Rodríguez warns.


1. Implications of the PAC 2014 – 2020 for the Olive Oil Sector” (in Spanish, Universidad de Jaén)

2. UPA-Andalucía afirma que el resul­tado del pre­supuesto de la UE garan­tiza que las comu­nidades autóno­mas, ter­ri­to­r­ial y sec­to­rial­mente, sigan reci­bi­endo al menos su actual cheque en tér­mi­nos de ayu­das

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