`Local Olive Oil Crisis Underscores Argentina's Bigger Problems - Olive Oil Times

Local Olive Oil Crisis Underscores Argentina's Bigger Problems

Jan. 5, 2011
Sarah Schwager

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By Sarah Schwager
Olive Oil Times Contributor | Reporting from Buenos Aires

A state of emer­gency has been declared within Argentina’s olive oil sec­tor, with com­pa­nies involved in olive pro­duc­tion in the Pomán region to be exempted from pay­ing munic­i­pal taxes and fees for the next six months.

The announce­ment comes after a fall in returns and numer­ous redun­dan­cies across the sec­tor, caused by the world­wide drop in olive oil prices, the require­ment for vari­etal con­ver­sion to other species with higher yields, and dif­fi­cul­ties related to the mar­ket­ing of prod­ucts. Pomán coun­cilors have demanded that the Catamarca Government move to counter the cri­sis that is
affect­ing olive oil ven­tures and that has led to fifty lay­offs in the past two weeks.

Pomán Mayor Francisco Gordillo hopes the dec­la­ra­tion of an emer­gency will ease the region by reduc­ing the tax bur­den on the sec­tor.

The olive oil indus­try has hugely ben­e­fited Pomán, which lies in the Catamarca Province in Argentina’s north-west and has a pop­u­la­tion of just 9,500 peo­ple. Its main source of income is from the agri­cul­tural indus­try, chiefly wine, nuts and olives.

The cri­sis has led to a pub­lic bat­tle between the City Council and the Provincial Government, with the mayor lash­ing out against the Government for its lack of a pol­icy to help counter the plight.

Mayor Gordillo told Catamarca news­pa­per El Ancasti that the province needs to imple­ment a sub­sidy sys­tem that will address the sit­u­a­tion, in turn pre­serv­ing
the source of employ­ment for many local fam­i­lies.

Expectations are not great for a com­mu­nity that has grown mas­sively. This is seri­ously hurt­ing us because peo­ple are los­ing their jobs and there are tech­ni­cians who had set­tled in the town who have started to move,” he said.

He says the Argentinean Government is not look­ing for ways to pre­serve pri­vate employ­ment, espe­cially in the regional areas.

Catamarca’s Minister of Production and Development, Juan José Bellón, denied the crit­i­cism, say­ing the Government is work­ing to mit­i­gate the con­se­quences of the cri­sis in the olive sec­tor.

He also acknowl­edged the prob­lems through­out the local olive indus­try, which he attrib­uted mainly to the low inter­na­tional price of olive oil. He says the depart­ment is work­ing with the Ministry of Finance and other depart­ments to try to relieve some pay­ments, and is call­ing on the nation to lower the value-added tax on elec­tric­ity rates.

But the mayor says the Government does not pro­vide a sup­port mech­a­nism for olive oil pro­duc­tion, and says there should be nego­ti­a­tions with com­pa­nies to help pro­vide a solu­tion and keep these jobs. I was try­ing this with some employ­ers. They say they talked with the Government and that they are not giv­ing
weight to this issue. They have not been pro­vided any type of solu­tions and they have to reduce some fixed costs, which in this case passes through to the employ­ees. The returns that they have had were not what they hoped and com­pa­nies must cut costs. The sit­u­a­tion becomes increas­ingly com­pli­cated,” Mayor Gordillo said.

Meanwhile, Argentina’s Ministry of Agriculture, Livestock and Fishing has car­ried out a review on the devel­op­ment of the 2010 – 2016 Agri-Food and Agribusiness Strategic Plan, which applies to all of the nation’s 23 provinces. The Ministry says the Catamarca province has been work­ing for some time on the elab­o­ra­tion of strate­gic plans.

Working groups have been formed to design strate­gies for the grapevine, wal­nut, olive, cit­rus, aro­mas and spices, grains and oilseeds, sweets and con­fec­tionery,
dairy and live­stock sec­tors.

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