Europe

Nikos Michelakis on Olive Oil Pricing, the Tunisian Quota, Education and Advocacy

Nov. 27, 2015
By Lisa Radinovsky

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Nikos Michelakis, a sci­en­tific advi­sor of SEDIK, the Association of Cretan Olive Municipalities, and a former direc­tor of the Olive Institute of Chania, recently dis­cussed the status of the olive oil sector in Greece with Olive Oil Times.

Michelakis said the amount of olive oil to be pro­duced this season at the inter­na­tional, national and local levels, olive oil imports from Tunisia, and “the eco­nomic sit­u­a­tion of pro­duc­ers and buyers” in Greece, which is unique after six years of eco­nomic crisis and almost five months of cap­i­tal con­trols, all tend to reduce pro­duc­ers’ prices.

Moreover, new mea­sures are expected to sig­nif­i­cantly increase taxes on Greek farm­ers, some farm­ers in Crete are strug­gling with a short­age of for­eign labor­ers, and no one has been sure when European Union farm sub­si­dies would be paid. There has already been a long delay beyond the usual October sub­sidy dis­tri­b­u­tion, and Michelakis finds gov­ern­men­tal announce­ments about pay­ment at the begin­ning of December overop­ti­mistic.

SEDIK’s price data show that pro­duc­ers’ olive oil prices were sig­nif­i­cantly reduced in early to mid November in all the major olive oil pro­duc­ing coun­tries, with extra virgin olive oil of 0.3 per­cent acid­ity, most recently fluc­tu­at­ing between €2.80 to €3.00 /kg in Greece, €2.89 to €4.29 /kg in Spain (aver­age €3.03), and €3.35 to €4.00 /kg in Italy. Michelakis reported that pro­duc­ers and traders attribute this devel­op­ment to the expected har­vest and, even more, to the duty-free imports from Tunisia.

Michelakis has crit­i­cized the European Commission’s deci­sion to increase duty-free imports of Tunisian olive oil into the EU by 35,000 metric tons (in addi­tion to the usual 56,700 annu­ally) by the end of 2017. While he real­ized that the deci­sion was jus­ti­fied as sup­port­ing the Tunisian econ­omy after severe losses in the tourism sector fol­low­ing the ter­ror­ist attacks last July, Michelakis sug­gested that the offer to import from Tunisia “more than half of its aver­age annual pro­duc­tion, amount­ing to 160,000 tons,” was not a purely human­i­tar­ian ges­ture of direct eco­nomic sup­port to Tunisia.

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Rather, Μichelakis sug­gested that the main reason for the plan “seems to be the desire of the European stan­dard­iza­tion indus­try to ensure lower prod­uct prices.” He argued that this increase of duty-free olive oil imports into the EU “ben­e­fits the EU (olive oil) stan­dard­iza­tion indus­tries, par­tic­u­larly in Italy and Spain,” since the new policy “increases the avail­abil­ity of a cheaper prod­uct for stan­dard­iza­tion indus­tries that will com­pete” with olive oil pro­duced in Europe, reduc­ing the prices of European farm­ers’ prod­ucts and decreas­ing their income. He con­tends that this helps to explain the “down­ward trend in prices that began imme­di­ately after the announce­ment.”

Michelakis men­tioned that Copa-Cogeca, the orga­ni­za­tion rep­re­sent­ing European farm­ers and coop­er­a­tives, sub­mit­ted a mem­o­ran­dum to the European Commission express­ing its oppo­si­tion to the EU plan. At the time of his inter­view, he was sur­prised not to have heard any expres­sions of con­cern from Greek agri­cul­tural orga­ni­za­tions, in spite of what he called poten­tially “cat­a­strophic reper­cus­sions” on the European market that could “threaten growth and jobs in the member states of the south.”

The Greek Minister of Rural Development and Food, Evangelos Apostolou, more recently men­tioned to the European Council of Agriculture and Fisheries Ministers that “we must care­fully exam­ine the impact of such con­ces­sions on European pro­duc­ers,” as Agrocapital reports. Even so, on November 24, after pro­duc­ers faced a sig­nif­i­cant drop in olive oil prices in Heraklion, Crete (from €3.50 to €2.80 /kg), Nea Kriti reported that Vasilis Kegeroglou, a member of Parliament from Crete, asked the Minister to “rec­tify” the prob­lem many believed was cre­ated by the increase in the Tunisian import quota. The same day, Agonaskritis reported that the pres­i­dent of the Union of Agricultural Cooperatives of Heraklion, Andreas Stratakis, asked Prime Minister Alexis Tsipras to remove Apostolou from his posi­tion as Minister of Rural Development and Food since he “con­sents” to the increased import quota from Tunisia.

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Problems are piling up for many Greek pro­duc­ers, who hardly need more dif­fi­cul­ties. Michelakis explained that SEDIK’s goals include increas­ing the use of olive oil in cater­ing estab­lish­ments and restau­rants, improv­ing the diets of Cretans and vis­i­tors to Crete, devel­op­ing gas­tro­nomic tourism, and pro­mot­ing the con­sump­tion of local prod­ucts, thereby pro­vid­ing more employ­ment on the island.

One of SEDIK’s ini­tia­tives is a cam­paign to increase “aware­ness of youth on the health, taste, and cul­tural value of olive oil” in coop­er­a­tion with the International Olive Oil Council. In addi­tion to spon­sor­ing the pub­li­ca­tion of edu­ca­tional mate­ri­als about olive oil in both Greek and English, SEDIK has invited munic­i­pal­i­ties, schools, teach­ers, and par­ents to join them in orga­niz­ing spe­cial events for chil­dren through­out Crete that could include dis­cus­sions, DVDs, games, exhibits, and tast­ings of dishes made with olive oil.

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Eight years ago, SEDIK estab­lished the Olive Tastes Network of Crete to pro­mote the healthy, tasty, and cul­tural value of Cretan olive oil and related prod­ucts through inspec­tion and cer­ti­fi­ca­tion of restau­rants using olive oil as their only oil, and by pro­vid­ing label­ing, infor­ma­tion, and adver­tis­ing in Greek and English. (Next year, it intends to begin cer­ti­fy­ing stores as well.) Two years ago, it began to receive fund­ing from the EU to expand the net­work to include Cyprus.

In early November, Michelakis reported, the General Assembly of the Olive Tastes Network met at the offices of SEDIK in Chania, Crete to dis­cuss their goals and con­cerns. These include a push for clearer indi­ca­tions on menus of the type of oil used by restau­rants, espe­cially for frying, and an explo­ration of the fea­si­bil­ity of requir­ing single-use branded pack­ag­ing for fresh olive oil pro­vided on restau­rant tables in Greece. Many other major olive oil pro­duc­ing coun­tries require this, since it helps pro­mote the health ben­e­fits and taste of high-qual­ity olive oil, increases brand recog­ni­tion and appre­ci­a­tion, and sup­ports the devel­op­ment of gas­tro­nomic tourism.