N. America

Farm Bill Notes Call on Agencies to 'Remove Obstacles' to Olive Oil Trade

Feb. 12, 2014
By Nancy Flagg

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Similar to a cheat sheet, or CliffsNotes, the Joint Explanatory Statement of the Committee of Conference offers a walk-through of the behind-the-bill posi­tions under­ly­ing the iter­a­tions of the Farm Bill. Although the Agricultural Act of 2014 signed by President Obama last week makes no ref­er­ence to olive oil, the Act’s accom­pa­ny­ing explana­tory state­ment calls for action on the olive oil front.

We’re thrilled about the strong state­ment and the spot­light on the indus­try- Kimberly Houlding, American Olive Oil Producers Association

A Joint Explanatory Statement is con­sid­ered highly reli­able leg­isla­tive his­tory when inter­pret­ing a statute.

In the 186-page con­gres­sional doc­u­ment attached to the bill, sev­eral pages were devoted to the olive oil indus­try.

The Statement indi­cates that dis­putes over test­ing stan­dards and meth­ods result in an unen­force­able morass of prod­uct qual­ity that is con­fus­ing to con­sumers, and blames tar­iffs for imped­ing U.S. exports of olive oil to other coun­tries.

The report calls upon the U.S. Department of Agriculture, Trade Representative and the U.S. Food and Drug Administration to review the U.S. International Trade Commission report on olive oil com­petive­ness com­pleted last year and “remove the obsta­cles that are pre­vent­ing the U.S. olive oil indus­try from reach­ing its poten­tial.” In addi­tion, the Statement urges the USDA to assess whether a mar­ket­ing order for olive oil would be a viable solu­tion to pro­tect con­sumers, domes­tic grow­ers and importers.

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Although the Joint Explanatory Statement is not part of the bill lan­guage, it “has quite a bit of weight,” said Kimberly Houlding, exec­u­tive direc­tor of the American Olive Oil Producers Association (AOOPA). “We’re thrilled about the strong state­ment and the spot­light on the indus­try.”

The AOOPA sup­ports adopt­ing test­ing and label­ing stan­dards, making inter­na­tional sub­si­dies trans­par­ent and elim­i­nat­ing tar­iffs that pre­vent U.S. pro­ducer com­pet­i­tive­ness in for­eign mar­kets. “Consumers deserve the abil­ity to choose from the great­est vari­ety of prod­ucts pos­si­ble and to be sure they are get­ting the qual­ity prod­uct for which they are paying,” said Houlding.

The North American Olive Oil Association also sup­ports the Statement’s call for test­ing and label­ing stan­dards. Executive vice pres­i­dent Eryn Balch said, “One fed­eral stan­dard of iden­tity for olive oil would be ben­e­fi­cial to the U.S. market,” and indi­cated that the asso­ci­a­tion plans to work with the agen­cies and the olive oil indus­try to develop “effec­tive enforce­ment of global stan­dards.”

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Excerpt from the Joint Explanatory Statement con­cern­ing olive oil:

In addi­tion to the chal­lenges asso­ci­ated with the pro­duc­tion of an agri­cul­ture com­mod­ity, olive grow­ers and olive oil proces­sors face addi­tional con­cerns related to trade and prod­uct stan­dards of iden­tity. With ref­er­ence to inter­na­tional trade, tariff dis­par­i­ties pose a sig­nif­i­cant bar­rier to our export poten­tial.

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Regarding stan­dards, the International Olive Council, an inter­gov­ern­men­tal orga­ni­za­tion under the aus­pices of the United Nations, has tra­di­tion­ally set stan­dards for olive oil through­out the world. USDA stan­dards for olive oil closely match those of the IOC, even though the United States is not an IOC member.

However, test­ing stan­dards con­tinue to be an area of dis­pute due to dif­fer­ences in nat­u­rally occur­ring com­pounds, rapid chem­i­cal decom­po­si­tion in olive oil, chal­lenges related to sen­sory test­ing, and dis­agree­ment over what con­sti­tutes adul­ter­ation. Because of the dif­fi­culty in estab­lish­ing an enforce­able national stan­dard of iden­tity, there is poten­tial for con­sumer con­fu­sion in cases where blend­ing of oils and lesser qual­ity oils into extra virgin olive oil is alleged to have occurred. In fact, Connecticut, New York, and Oregon have recently enacted olive oil grade stan­dards to address con­sumer con­cerns.

A recent U.S. International Trade Commission report, “Olive Oil: Conditions of Competition between U.S. and Major Foreign Supplier Industries (Investigation No. 332 – 537),” issued September 12, 2013, at the behest of the U.S. House of Representatives Committee on Ways and Means doc­u­ments some of these con­cerns.

The Commission’s staff inter­viewed U.S. olive oil importers, European olive oil pro­duc­ers and exporters, U.S. olive grow­ers and proces­sors, gov­ern­ment offi­cials and others involved in the world olive oil indus­try. In the U.S. the total value of domes­tic and imported olive oil exceeds $1 bil­lion and at the retail level the value is in excess of $5 bil­lion. The report pro­vided evi­dence of dif­fer­ent olive oil stan­dards in the U.S. and in for­eign mar­kets, which adds to the con­fu­sion.

Highlights from the report point indi­cate that:

 — 1096 Current inter­na­tional stan­dards for extra virgin olive oil allow a wide range of oil qual­i­ties to be mar­keted as extra virgin. In addi­tion, the stan­dards are widely unen­forced. Mandatory test­ing with penal­ties for non­com­pli­ance exists only in Canada and the European Union. However, test­ing in the EU is only manda­tory for a very small share of pro­duc­tion (0.1 per­cent). Broad and unforced stan­dards lead to adul­ter­ated and mis­la­beled prod­ucts, weak­en­ing the com­pet­i­tive­ness of high-qual­ity pro­duc­ers, such as those in the United States, who try to dif­fer­en­ti­ate their prod­uct based on qual­ity.

 — Olive oil con­sump­tion has risen due to a recent focus on the ben­e­fits of a healthy diet, and as a result, the olive oil indus­try has great poten­tial for our nation’s farm­ers. However, bar­ri­ers remain for domes­tic pro­duc­tion. Many con­sumers also make pur­chas­ing deci­sions based on price. The Managers acknowl­edge that addi­tional test­ing pro­ce­dures could have an effect on olive oil importers and con­sumers.

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The Managers urge the U.S. Department of Agriculture, U.S. Trade Representative and the U.S. Food and Drug Administration to study the U.S. International Trade Commission report and take action to remove the obsta­cles that are pre­vent­ing the U.S. olive oil indus­try from reach­ing its poten­tial. The Managers encour­age USDA to col­lab­o­rate with indus­try offi­cials to deter­mine if a mar­ket­ing order for olive oil would effec­tively address con­cerns, ben­e­fit the U.S. con­sumer, and pro­tect domes­tic grow­ers and importers.