New E.U. Ag Policy Could Benefit Greek Olive Growers If Requirements Are Met

Funding for Greek farmers is expected to exceed €20 billion under the new subsidy program. However, some worry that small olive growers will miss out.

S.A. Andriotis
Jul. 20, 2021
By Costas Vasilopoulos
S.A. Andriotis

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The lat­est reform of the Common Agricultural Policy (CAP), the European Union’s farm­ing sub­sidy pro­gram, has been final­ized after a pro­vi­sional agree­ment was reached between the European Parliament and the E.U. gov­ern­ments. The new rules will apply from 2023 until the end of 2027.

The next CAP includes fund­ing for farm­ers and rural devel­op­ment total­ing €387 bil­lion, almost a third of the E.U.’s entire bud­get.

It is too early to tell (what the impacts of the new CAP will be), and the infor­ma­tion released by the min­istry of agri­cul­ture is still gen­eral and vague.- Nikos Michelakis, sci­en­tific advi­sor, SEDIK

Greece will receive €19.3 bil­lion under the new scheme, an amount sim­i­lar to the funds pro­vided by the CAP cur­rently in oper­a­tion. The finan­cial back­ing of the country’s farm­ers remained the same despite an E.U.-wide 10 per­cent reduc­tion in funds allo­cated for pay­ments to ben­e­fi­cia­ries with the new pol­icy.

We have achieved the most ambi­tious polit­i­cal reform of the Common Agricultural Policy since the 1990s,” said Spilios Livanos, the Greek Minister of Rural Development and Food. We cre­ated a proper European frame­work for the safety, ade­quacy and sus­tain­abil­ity of our agri-food sys­tems.

See Also: Croatian Producers Question Minister Over Common Agricultural Policy

It is a fair, green, social and ulti­mately more sus­tain­able CAP,” the min­is­ter added. Greece will retain the same fund­ing of the cur­rent CAP. It is a big oppor­tu­nity for our coun­try to trans­form its rural econ­omy, achieve the much-cov­eted periph­eral devel­op­ment and change its whole pro­duc­tive model.”

An addi­tional €2 bil­lion from the European Recovery and Resilience Fund, which was tar­geted to sup­port the recov­ery from the Covid-19 pan­demic, is also expected to be directed to the agri­cul­tural sec­tor of the coun­try over the next few years.

All pay­ments will be tied to some min­i­mum envi­ron­men­tal require­ments, such as that at least three per­cent of arable land is set aside by farm­ers to let nature thrive, or farm­ers rotate crops every other year for soil regen­er­a­tion.

The E.U.‘s new farm pol­icy also stip­u­lates that only active farm­ers” can ben­e­fit from the sub­si­dies. Each mem­ber state must pro­vide a def­i­n­i­tion for its own active farm­ers accord­ing to some gen­er­ally accepted terms, such as that farm­ing activ­i­ties account for at least a spe­cific per­cent­age of the farm­ers’ income, but also has the flex­i­bil­ity to add its own cri­te­ria in the def­i­n­i­tion.

business-europe-new-eu-ag-policy-could-benefit-greek-olive-growers-if-requirements-are-met-olive-oil-times

Sparta Gourmet

The Greek offi­cials clar­i­fied that only the farm­ers who really pro­duce will be eli­gi­ble to receive direct income sup­port under the new CAP.

The new tar­get­ing of sub­si­dies in con­junc­tion with the def­i­n­i­tion of the active farm­ers pro­vide us with the abil­ity to sup­port those who pro­duce and oper­ate in the value chain with­out apply­ing illicit prac­tices,” Yiannis Economou, the assis­tant min­is­ter of rural devel­op­ment and food, said dur­ing a con­sul­ta­tion in Chania.

The exact cri­te­ria for active farm­ers in Greece under the next CAP have yet to be deter­mined by the min­istry.

The olive oil sec­tor of the coun­try should also be pre­pared for some changes that are meant to bet­ter sup­port olive farm­ers when the 2023 – 2027 CAP comes into force.

Funds are expected to be dis­bursed more quickly and eas­ily than before. However, uncer­tainty exists in the sec­tor about the CAP reform and its real impact on the indus­try.

It is too early to tell, and the infor­ma­tion released by the min­istry of agri­cul­ture is still gen­eral and vague,” Nikos Michelakis, the sci­en­tific advi­sor of the asso­ci­a­tion of the olive oil mak­ing munic­i­pal­i­ties of Crete (SEDIK), told Olive Oil Times. It men­tions goals and strate­gies with­out describ­ing how these will be real­ized.”

In any case, there is no sci­en­tific, envi­ron­men­tal or agro­nomic evi­dence to jus­tify the equa­tion of olive groves, an invest­ment of high expen­di­ture which requires the labor of gen­er­a­tions, with pas­tures and arable land,” he added.

See Also: New CAP Provides Plenty of Opportunities for Italian Olive Growers

Michelakis also had sec­ond thoughts about the planned redis­tri­b­u­tion of the income sup­port to ben­e­fit the smaller farms at the expense of big farms and com­pa­nies the new CAP espouses.

The redis­trib­u­tive pay­ments’ of the new CAP will sup­pos­edly favor small farm­ers,” he said. However, if the reports in the agri­cul­tural press are accu­rate, all ben­e­fi­cia­ries are set for a 10 per­cent cut in direct pay­ments in order to sup­port the smaller farm­ers, who will likely get around €40 per acre.”

So, small-sized olive grow­ers will not actu­ally ben­e­fit but instead suf­fer some income loss,” Michelakis added. No reduc­tion in fund­ing should be imposed on small farm­ers.”

Table olives, on the other hand, will be added to the list of agri­cul­tural prod­ucts eli­gi­ble for apply­ing a pri­vate stor­age mech­a­nism under the new CAP. The aim is to pro­vide the means to reg­u­late sup­ply and demand and recu­per­ate mar­ket prices when required.

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Monogram Olive Oil

Private stor­age is occa­sion­ally used by the European Commission to sta­bi­lize the olive oil mar­ket (among other prod­ucts) in cases of imbal­ances, how­ever with dubi­ous results.

Another impor­tant aspect of the new CAP is to be able to cre­ate an attrac­tive work­ing envi­ron­ment for young peo­ple.

Young European farm­ers were not par­tic­u­larly lured by the cur­rent CAP to enter the agri­cul­tural sec­tor, research con­ducted for the 2014 to 2020 period on behalf of the European Union found.

The research con­cluded that the gen­er­a­tion renewal’ mea­sures of the CAP, specif­i­cally tar­geted to safely trans­fer farms from one gen­er­a­tion to another, are not ade­quate by them­selves to tempt more young peo­ple to become farm­ers. The main prob­lems for young farm­ers remain the access to funds and land.

In this con­text, Livanos asserted that the new E.U. pol­icy should pro­foundly put for­ward its mer­its rather than its penal­iz­ing mech­a­nisms.

“[The new CAP should be] a lever for young peo­ple to enter agri­cul­ture, not a deter­rent,” he said dur­ing a meet­ing of the E.U.‘s min­is­ters of agri­cul­ture in Lisbon. “[It should] be an inspi­ra­tion to farm­ers, not a fear of sanc­tions.”

A require­ment of the new CAP is that every mem­ber state imple­ments a strate­gic plan to out­line how rural poli­cies will be applied and funds will be allo­cated accord­ing to its needs and spe­cial national char­ac­ter­is­tics. All plans will be vet­ted by the European Commission before any funds are dis­bursed.

Greece has already started putting together its strate­gic plan after con­clud­ing the con­sul­ta­tion pro­ce­dures with the stake­hold­ers, such as farm­ers and live­stock breed­ers.

We con­tinue our plan to develop a part­ner­ship’ and the max­i­mum pos­si­ble con­sul­ta­tion on the new CAP,” the Greek min­istry of agri­cul­ture said in a press release.

The con­sul­ta­tion is an oppor­tu­nity for an open pub­lic dia­logue, the press release stated, in order to diag­nose, dis­cuss, and pin­point all the issues, the prob­lems and the chal­lenges of the Greek agri­cul­tural sec­tor, to shape the proper sug­ges­tions and search for the best solu­tions in design­ing the strate­gic plan of the new CAP.”

The CAP strate­gic plan devised by Greece is expected to be ready for pub­lic con­sul­ta­tion in October and final­ized by the end of 2021. Then it will be sub­mit­ted to the European Commission for approval.





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