`Three Fronts Converging in U.S. Olive Oil Industry - Olive Oil Times

Three Fronts Converging in U.S. Olive Oil Industry

Dec. 3, 2012
Nancy Flagg

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Three fronts in the efforts by American olive oil pro­duc­ers and their sup­port­ers to strengthen olive oil stan­dards and com­pet­i­tive­ness are rapidly con­verg­ing. The fronts are: nego­ti­a­tions for the Farm Bill in Congress that would add olive oil to the list of prod­ucts under import con­trols; the push for a fed­eral mar­ket­ing order for olive oil stan­dards; and the USITC inves­ti­ga­tion of olive oil’s global com­pet­i­tive­ness. Each of these efforts is pro­gress­ing, but res­o­lu­tion and impacts will not likely occur quickly.

Farm Bill 2012

U.S. Congressional Farm Bill 2012 has a pro­vi­sion that would amend Section 8e of the Agricultural Adjustment Act to include olive oil in the list of com­modi­ties already under import con­trols. Although the U.S. Senate ver­sion of the bill did not include the pro­vi­sion; the ver­sion that cleared the House of Representatives Agriculture Committee did con­tain it.

The next step is for the bill to be con­sid­ered by the full House before December 31, 2012 when the cur­rent five-year bill and many of its pro­vi­sions expire. U.S. House Agriculture Committee Ranking Member Collin Peterson is push­ing to get the bill on the floor before the dead­line and is opposed to an exten­sion of any kind for any time.”

Even if the House passes the bill, a con­fer­ence com­mit­tee made up of mem­bers from both the Senate and the House would have to work out dif­fer­ences in their ver­sions of the bill. The con­fer­ence com­mit­tee would then sub­mit a report to be approved by both the House and the Senate. These actions would all have to occur by December 31 for the bill to become law, explained Ben Mosely from the office of Senator Chambliss of Georgia.

Passage of the Farm Bill by the end of the year is uncer­tain because dis­cus­sions over the eco­nomic fis­cal cliff have soaked up all the polit­i­cal oxy­gen,” said a spokesper­son from the House Committee on Agriculture.

If the Farm Bill doesn’t pass, there could be a tem­po­rary exten­sion of the cur­rent law, but the new pro­vi­sions, includ­ing the one for olive oil, would prob­a­bly not be auto­mat­i­cally included. A new farm bill would have to be rein­tro­duced next year and the process would start from scratch.

Federal Marketing Order

In January 2012, American olive oil pro­duc­ers pro­posed a draft fed­eral mar­ket­ing order for olive oil. The order would estab­lish new qual­ity stan­dards for U.S. pro­duced olive oil, set char­ac­ter­is­tics of olive oil grades and require olive oil inspec­tions and cer­ti­fi­ca­tion.

The mar­ket­ing order and the Farm Bill are sep­a­rate but linked actions. If the Section 8e pro­vi­sion in the Farm Bill is passed, it would mean that olive oil importers would have to meet the same stan­dards as domes­tic pro­duc­ers. Those stan­dards would be defined by the mar­ket­ing order and enforced by the U.S. Department of Agriculture (USDA). However, with­out a mar­ket­ing order in place, Section 8e has no teeth.

Section 8e would have no qual­ity stan­dards and noth­ing to enforce with­out a fed­eral mar­ket­ing order,” explained Alex Ott, Executive Director of the California Olive Committee.

Although an advi­sory group has a work­ing draft of a mar­ket­ing order, Ott empha­sized that no fed­eral mar­ket­ing order for olive oil has been for­mally intro­duced. The indus­try has not put together a draft that has gone for­ward to the USDA.”

Even if a mar­ket­ing order is drafted, there are many steps that have to occur before it can be approved. There is a lengthy pub­lic process and it could take from eigh­teen months to two years for a draft to become an approved fed­eral mar­ket­ing order,” said Ott.

Ott is puz­zled by the out­rage from some camps over dis­cus­sions of a mar­ket­ing order. Other coun­tries already have qual­ity stan­dards in place but now that the U.S. is talk­ing about hav­ing them, peo­ple are oppos­ing them even before we have dis­cus­sions.”

The bot­tom line is that con­sumers need con­fi­dence in what they’re buy­ing. So, the ques­tion is, how are we going to get there?” asks Ott.

USITC Investigation

In October 2012, the U.S. International Trade Commission (USITC) launched an inves­ti­ga­tion of global mar­ket com­pe­ti­tion and prac­tices that con­front the U.S. olive oil indus­try.

The USITC is cur­rently in the infor­ma­tion gath­er­ing process,” said Peg O’Laughlin, Public Affairs Officer. Briefs and writ­ten sub­mis­sions from the pub­lic have been filed with the Commission and over twenty grow­ers, pro­duc­ers, indus­try orga­ni­za­tions, uni­ver­si­ties and other inter­ested par­ties have requested an appear­ance at the upcom­ing hear­ing.

The hear­ing will be held on Wednesday, December 5, 2012 at 10:30 am at the U.S. International Trade Commission Building in Washington.

Following the hear­ing, fur­ther writ­ten sub­mis­sions will be received until February 13, 2013 and the Commission report will be released on August 12, 2013.

Since it is a fact-find­ing inves­ti­ga­tion, no pol­icy rec­om­men­da­tions will come out of the process. The USITC will report its results to the U.S. House of Representatives Committee on Ways and Means. However, USITC inves­ti­ga­tions sim­i­lar to this one are often fol­lowed by U.S. trade actions that can have a trade impact, includ­ing lim­it­ing imports,” explained Dr. Peter Koenig in an Olive Oil Times report.

Despite move­ment in the Farm Bill, mar­ket­ing order and USITC inves­ti­ga­tion, none of these actions alone is likely to have an impact on the indus­try imme­di­ately, how­ever the exis­tence of the fronts, and the oppo­si­tion to them, are clear evi­dence of the grow­ing strength and voice of the U.S. domes­tic olive oil indus­try.

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