EU Reform Seeks to Strengthen Farmers’ Bargaining Power

The European Union has formally approved a reform intended to strengthen farmers’ bargaining power across agricultural sectors, including olive oil.

The regulation gives producer organizations a larger role, expands their access to Common Agricultural Policy funding and seeks to encourage more farmers to join them.

Scale in the marketplace is crucial for undertaking development projects, growth and adaptation to new market conditions.– Gabriel Trenzado Falcón, director general of Cooperativas Agro-alimentarias de España

The broader aim is to help producers negotiate prices and commercial terms that better reflect production costs and investment.

Written contracts are expected to become the norm for agricultural deliveries, with provisions that allow terms to be reviewed as market conditions change.

Member states will also be required to publish indicators, including production-cost benchmarks, that may be used during price negotiations.

The rules simplify the recognition of producer organizations and strengthen their ability to negotiate contracts collectively on behalf of members.

Their statutes may allow individual members to communicate directly with buyers. However, essential sales terms, including price, quality and volume, must be negotiated and determined by the organization, and the contracts must not undermine its collective strategy.

The regulation also establishes common conditions for voluntary marketing terms such as “fair,” “equitable” and “short supply chain.” Their use will have to reflect transparent commercial relationships and identifiable benefits for farmers.

The measures do not set agricultural prices. Instead, they are intended to give producers more information and greater leverage when negotiating them.

The imbalance is particularly evident in the olive oil sector, where many small producers negotiate with a much smaller group of processors, bottlers and retailers.

“The legislation will not be effective if there is not a structured sector behind it,” Gabriel Trenzado Falcón, director general of Cooperativas Agro-alimentarias de España, told Olive Oil Times.

“The approved regulation introduces elements that have already been applied in Spain for years, such as the mandatory use of written contracts, so it will not produce significant changes,” he added.

For Trenzado Falcón, the more difficult problem is the structure of the Spanish olive oil sector.

“The fact that there are around 1,800 olive mills, some 700 of them cooperatives, does not help the sector organize itself commercially or improve its commercial relationships,” he said.

“This has an impact on producers’ negotiating capacity when dealing with a relatively small number of operators and intermediaries that are fully aware of this atomization,” Trenzado Falcón added.

Bringing growers into cooperatives is only part of the answer. Trenzado Falcón said smaller cooperative mills must also combine or coordinate more closely to achieve sufficient commercial scale to invest and negotiate effectively.

“To achieve a fairer distribution of value, we must continue working not only on integrating producers into cooperatives, but also on the integration of the cooperative olive mills themselves,” he said.

“Scale in the marketplace is crucial for undertaking development projects, growth and adaptation to new market conditions, ultimately improving producers’ profitability,” Trenzado Falcón added.

Assitol, the Italian association representing the edible oils industry, also welcomed the reform while emphasizing that it is primarily directed at the agricultural end of the supply chain.

“The reform certainly represents a positive signal and a significant step forward for the agricultural part of the supply chain,” Assitol Director General Andrea Carrassi told Olive Oil Times.

“If properly implemented, this legislation can provide more effective tools to protect producers, who represent the initial and often most vulnerable link in the chain, while promoting a fairer distribution of value,” he added.

Carrassi pointed specifically to the stronger role given to producer organizations and their associations.

“For the primary sector, the possibility of negotiating in a more structured and transparent way is fundamental,” he said.

“The new provisions facilitating collective bargaining and price transparency can help reduce the volatility that often damages both producers and processors, providing greater stability for the market,” Carrassi added.

Assitol has repeatedly opposed using extra virgin olive oil as a loss leader and has called for greater recognition of its value beyond its role as an everyday commodity.

“It goes in the direction of a system in which olive oil is no longer treated as a commodity but as a premium food that deserves appropriate remuneration throughout the supply chain,” Carrassi said.

However, he described the regulation as only a starting point.

“The real challenge remains practical implementation,” Carrassi said. “Moreover, the reform mainly concerns the agricultural segment. Rules alone are not sufficient unless they are accompanied by constant monitoring and effective enforcement.”

That challenge is already visible in Italy ahead of the next harvest. National and regional millers’ associations have warned that unsold stocks and insufficient liquidity could leave some mills unable to purchase olives during the coming campaign.

The warning comes amid a broader mobilization by growers, producer organizations and millers seeking measures to clear inventories and protect the sector’s productive capacity. A national demonstration is scheduled for September 19 in Bari.

Prices at origin have meanwhile fallen sharply. Ismea reported an average Italian extra virgin olive oil price of €6.04 per kilogram in June, down 37.1 percent from the previous year.

In Spain, Poolred’s weighted index for all olive oil categories fell from about €3.37 to €3.18 per kilogram between early and late July.

Italian supermarkets have again advertised standard extra virgin olive oil at promotional prices ranging from €3.99 to €5.99 per liter. Oils marketed as 100 percent Italian generally remain considerably more expensive.

“While Italian olive oil remains in storage tanks, supermarket shelves are filled with promotions and flyer offers at impossible prices,” Gennaro Sicolo, president of Italia Olivicola, recently said.

The direction of the market over the coming months is less certain. Favorable spring conditions initially raised expectations for Spain’s olive oil production in the 2026/27 crop year, but prolonged heat, drought and wildfires have clouded the outlook.

Official forecasts are not expected until October. As Spain is the world’s largest olive oil producer, the size of its crop will be a major factor in determining whether prices continue to fall or begin to recover.