Rising Production Prices Force Some Farmers in Sicily to Forgo Harvest

As the harvest season tentatively opens, some farmers have decided not to harvest, while others are working with local authorities to agree on fixed prices.
By Paolo DeAndreis
Oct. 12, 2022 12:42 UTC

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.

Our extra vir­gin olive oil could go unsold, (with their mar­ket share) sub­sti­tuted by Spanish extra vir­gin olive oil. - Mario Terrasi, pres­i­dent, Oleum Sicilia

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.

See Also:Farmers in Lazio Kick Off Harvest at Emperor Hadrian’s Estate

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.


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