Olive Council's New Agreement Takes Effect

The agreement aims to boost the involvement of importer countries by making participation shares more appealing.

IOC Headquarters in Madrid (Google Earth)
By Courtney Slusser
Jan. 11, 2017 08:52 UTC
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IOC Headquarters in Madrid (Google Earth)

The International Olive Council (IOC) ini­ti­ated its new International Agreement on Olive Oil and Table Olives — the sixth such agree­ment drafted by the orga­ni­za­tion.

Approved by the United Nations at its Conference on Trade and Development in 2015, the agree­ment that took effect January 1 aims to boost the involve­ment of importer coun­tries by mak­ing par­tic­i­pa­tion shares more appeal­ing — a fis­cal incen­tive to join the orga­ni­za­tion in its global efforts.
See Also:International Agreement on Olive Oil and Table Olives, 2015
As a suc­ces­sor to the trade agree­ment made in 2005, three key issues stood as the main objec­tives of the agree­ment: 1) stan­dard­iza­tion and research; 2) olive growth and tech­nol­ogy; and 3) the olive econ­omy.”

With respect to the 2005 agree­ment, the biggest change is the cal­cu­la­tion of par­tic­i­pa­tion shares that includes the vol­ume of imports. Previously, this vari­able was not included as a fac­tor in deter­min­ing share val­ues in par­tic­i­pat­ing coun­tries.

The new for­mula from which the IOC may derive par­tic­i­pa­tion shares is:

q = 1/3 (p1 + p2) + 1/3 (e1 + e2) + 1/3 (i1+i2) — with p1 stand­ing for aver­age olive oil pro­duc­tion over the last six crop years and p2 stand­ing for table olive pro­duc­tion (then con­verted into its olive oil equiv­a­lent).

In the equa­tion, e1 and e2 rep­re­sent cus­toms exports of both com­modi­ties and i1 and i2 rep­re­sent imports of the same.

By adjust­ing the per­cent­age of the share value to reflect imports, the new agree­ment aims to increase the par­tic­i­pa­tion of coun­tries that are not major pro­duc­ers of olives and olive oil.

The min­i­mum num­ber of par­tic­i­pa­tion shares guar­an­teed any par­tic­i­pat­ing coun­try is five, out of a total of one thou­sand, divided among each ter­ri­tory.

The EU is cur­rently the largest share­holder with 717 par­tic­i­pa­tion shares; Tunisia places sec­ond with 67 shares; Turkey rests in third with 66 shares.

Reflective of pro­duc­tion vol­ume, the coun­tries of Morocco, Egypt, Algeria and Argentina have shares in the high teens and above; while Middle Eastern coun­tries like Iran, Iraq and Israel remain at the base five-par­tic­i­pa­tion-share level.

The United States is not a mem­ber of the IOC.

From its found­ing on Valentine’s Day, February 14, 1956, the IOC has taken strides in con­nect­ing inter­na­tional bod­ies in the mar­ket­place, mak­ing it the only inter­gov­ern­men­tal orga­ni­za­tion in the world to bring together olive oil pro­duc­ing and con­sum­ing stake­hold­ers,” as described on their web­site.

The IOC’s December 2016 Market Newsletter detailed the agree­ment made between forty coun­tries includ­ing the EU and the UK.

By offer­ing the new incen­tives to par­tic­i­pate in the col­lab­o­ra­tive struc­ture by cre­at­ing greater ben­e­fits, the IOC leads the charge in estab­lish­ing itself as an author­i­ta­tive and com­mand­ing body of lead­er­ship among olive oil and table olive pro­duc­ing and con­sum­ing coun­tries.

As the global econ­omy waxes and wanes, the IOC has bol­stered its efforts to cre­ate a for­ti­fied union of like-minded gov­ern­ments.



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