Spain Seeks Self-Regulation for Olive Oil Sector

Spain's Ministry of Agriculture, Fisheries and Food has asked the European Union whether its olive oil sector can self-regulate. Advocates hope the measure will stabilize olive oil prices.

Photo courtesy of Ministry of Agriculture, Fisheries and Food
Jun. 17, 2019
By Daniel Dawson
Photo courtesy of Ministry of Agriculture, Fisheries and Food

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Spain is seek­ing assur­ances from the European Union that self-reg­u­la­tion mea­sures intended to sta­bi­lize the country’s domes­tic olive oil mar­ket will be legal within the frame­work of the future Common Agricultural Policy (CAP), which comes into force in 2020.

The mea­sures would be sim­i­lar to those that already exist in the wine indus­try and will be dis­cussed at the European Union’s next Council of Ministers of Agriculture sum­mit, in Luxembourg.

It is vital that the (Interprofessional’s) mea­sure is manda­tory because, oth­er­wise, the objec­tive pur­sued will not be achieved, which is noth­ing other than to sta­bi­lize the mar­kets and avoid the price swings.- Cristóbal Gallego Martínez, pres­i­dent of the Council of Olive Oil Cooperatives of Andalusia

The self-reg­u­la­tion mea­sures would allow Spain’s Interprofessional Olive Oil Organization to con­trol how much olive oil is avail­able on the mar­ket across the coun­try. Surplus olive oil would be stored appro­pri­ately and could be intro­duced to the mar­ket if demand were to rise higher than the cur­rent supply.

Our com­mit­ment is that the olive oil sec­tor has a mea­sure of this type,” Fernando Miranda, Spain’s Secretary General of Agriculture, said. “[To sta­bi­lize] long-term prices in the sec­tor, mar­kets and domes­tic consumption.”

See Also: Olive Oil Prices

Many olive oil indus­try ana­lysts in Spain have attrib­uted the unusu­ally low prices for oil to a cur­rent sup­ply that has far out­paced demand. Advocates of the mea­sures say that they would pre­vent the kind of severe price drops that have led to recent protests in Jaén.

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It is a tool demanded by the sec­tor,” a spokesper­son from Spain’s Ministry of Agriculture, Fisheries and Food, said, adding that the mea­sures could be imple­mented in time for the start of the 2019/20 har­vest sea­son.

Under cur­rent E.U. leg­is­la­tion pro­ducer orga­ni­za­tions and their asso­ci­a­tions are per­mit­ted to come to agree­ments on how much olive oil to allow into the mar­ket as well as store. These agree­ments on reg­u­lat­ing the olive oil sup­ply tend to be local and vary greatly from one pro­ducer orga­ni­za­tion to the next.

This lack of uni­for­mity is seen as an inef­fec­tive way to reg­u­late the over­all mar­ket, which the Interprofessional sees as nec­es­sary to pos­i­tively influ­ence prices.

While some pro­duc­ers with­draw prod­uct from the mar­ket, oth­ers [who did not have to do so] could ben­e­fit from the recov­ery of prices,” Cristóbal Gallego Martínez, the pres­i­dent of the Council of Olive Oil Cooperatives of Andalusia, said. It is essen­tial to enforce the mea­sure so that it has its effects on the mar­ket and the sec­tor as a whole.”

It is vital that the [Interprofessional’s] mea­sure is manda­tory because, oth­er­wise, the objec­tive pur­sued will not be achieved, which is noth­ing other than to sta­bi­lize the mar­kets and avoid the price swings,” Gallego Martínez added.

Several of Spain’s olive oil orga­ni­za­tions met in Jaén ear­lier this week to dis­cuss the idea of self-reg­u­la­tion. The orga­ni­za­tions all unan­i­mously agreed that self-reg­u­la­tion was the way for­ward, but did not nec­es­sar­ily agree on how it should be implemented.

For now, I can tell you that the indus­try does not agree with mod­i­fy­ing the for­ma­tion of prices, through sup­ply and demand,” Rafael Pico Lapuente, the direc­tor of the Spanish Association of Olive Oil Exporting, Industry and Commerce (Asoliva), told Olive Oil Times.

The Interprofessional and Spain’s many other olive oil orga­ni­za­tions will need to wait until the European Commission rules on whether the pro­posed self-reg­u­la­tion mea­sures are legal. Once the deci­sion is made, the sec­tor can begin the process of deter­min­ing how the mea­sures will be implemented.





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