Rising Production Prices Force Some Farmers in Sicily to Forgo Harvest

Summary

Olive grow­ers in Sicily are fac­ing ris­ing pro­duc­tion costs dur­ing the 2022 har­vest, with con­cerns that this will lead to higher prices for con­sumers and poten­tial mar­ket loss to cheaper alter­na­tives from other regions. Despite chal­lenges, some regions in Sicily have reached tem­po­rary agree­ments to facil­i­tate har­vest oper­a­tions and address ris­ing energy costs for millers, with local author­i­ties urg­ing sup­port for the olive farm­ing sec­tor.

Olive grow­ers, millers, retail­ers and regional admin­is­tra­tors in Sicily are work­ing together to over­come ris­ing pro­duc­tion costs as the 2022 har­vest gets under­way on the island.

At stake is one-tenth of Italy’s annual olive oil yield, and sev­eral munic­i­pal­i­ties on the island have already sus­pended har­vest oper­a­tions.

Local experts fear that increas­ing costs for grow­ers and millers will trans­late into sig­nif­i­cantly higher olive oil prices for con­sumers, which may lead some to turn to cheaper alter­na­tives.

According to the local branch of the farm­ers asso­ci­a­tion Coldiretti, trans­form­ing the fruits now costs grow­ers at least €0.16 per kilo­gram, com­pared with the €0.12 aver­age for the pre­vi­ous sea­son. Due to the energy costs, the bill in sev­eral areas could reach €0.20.

Along with energy, costs for bot­tling, label­ing and ship­ping have also gone up. Coldiretti esti­mated that one liter of Sicilian extra vir­gin olive oil could end up with a €10 price tag.

Given the low har­vest expec­ta­tions and ris­ing costs, there is con­cern that some small grow­ers and millers will decide not to har­vest at all.

According to Ismea, the pub­lic agency for ser­vices to the agri­cul­tural mar­ket, one liter of olive oil in Sicily is cur­rently traded at €5.65 per kilo­gram, which is below cur­rent pro­duc­tion costs.

Mario Terrasi, pres­i­dent of the Sicilian olive pro­ducer asso­ci­a­tion, Oleum Sicilia, told local media that high-priced local extra vir­gin olive oil is already in super­mar­kets, sit­ting on the shelves near far cheaper prod­ucts.

“Whichever prod­uct is cheaper comes from other Italian regions, other European coun­tries such as Spain or Greece or even by extra‑E.U. coun­tries such as Tunisia,” said Terrasi. ​“Now we are antic­i­pat­ing a fur­ther price rise, and [many con­sumers] do not under­stand how qual­ity and the health pro­file of our prod­uct jus­tify those prices no mat­ter what.”

Terrasi added that both large retail­ers and restau­rants would have to deal with such increases.

“Those are sec­tors which will not adjust to such quickly ris­ing prices,” he said. ​“That means our extra vir­gin olive oil could go unsold, [with their mar­ket share] sub­sti­tuted by Spanish extra vir­gin olive oil. Those are dif­fer­ent… but come from com­pa­nies less frag­mented than ours, and more com­pet­i­tive.”

Coldiretti said Sicily’s olive groves cover more than 160,000 hectares and are linked to a huge por­tion of local farm­ers’ income. According to Ismea, there are more than 618 active millers on the island. In the 2021/22 crop year, Sicily pro­duced 38,000 tons of olive oil by trans­form­ing more than 281,000 tons of olives.

Olive oil and table olive pro­duc­ers on Sicily tra­di­tion­ally enjoy a slight com­pet­i­tive advan­tage as their har­vest begins ear­lier than in other Italian regions.

During a meet­ing with local author­i­ties and stake­hold­ers in Trapani, on the west of the island, Coldiretti noted how this advan­tage is gone since the har­vest will not pro­ceed.

“The sale price both for olive oil and table olives is very low and not yet estab­lished for the sea­son,” Coldiretti said. ​“That puts hun­dreds of com­pa­nies at risk, they might close down, trig­ger­ing the worst sce­nario for the whole province, which relies on olive farm­ing income.”

A sign of hope came from Agrigento and Sciacca, key pro­duc­tion regions on the south­ern coast. There, grow­ers, reg­u­la­tors and stake­hold­ers man­aged to reach a tem­po­rary agree­ment that may facil­i­tate har­vest oper­a­tions.

They agreed to fix the price for extra vir­gin olive oil at €6 per kilo­gram for the fol­low­ing 10 days, a short period dur­ing which the regional author­i­ties are expected to enact a pub­licly-financed mea­sure that will allow lower millers’ energy costs back to the lev­els of 2021.

To this end, many local coun­cil rep­re­sen­ta­tives have signed an open let­ter in which they warn of the 50 to 70 per­cent rise in energy costs for millers. In the let­ter, they ask local and regional author­i­ties to work together to sup­port one of Sicily’s most rel­e­vant farm­ing sec­tors.

• Meridio News
• Coldiretti Sicily
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