After months of relative silence on the European Commission (EC) proposal to increase duty-free imports of Tunisian olive oil into the EU by 35,000 metric tons per year in 2016 and 2017, Greek unionists and politicians have begun to debate the issue. The question is not whether to support the proposal, since almost no one does, but whom to blame for supporting it.

Since late November, two lines of argument have dominated the debate. One side claims that the increased import quota benefits the olive oil standardization industry of Italy and Spain by reducing oil prices with an infusion of cheaper olive oil from Tunisia, thus harming Greek (and other European) farmers.

This side opposes the quota increase and criticizes the Greek government for allegedly failing to oppose it, arguing that Greek farmers are already struggling enough with an economic crisis, delayed EU subsidy payments, and the expectation of drastic tax increases.

Many point to the recent major drop in olive oil prices in Greece, Spain, and Italy as evidence that this line of argument is valid. In Greece, some agricultural union leaders and politicians critical of the governing coalition composed of the leftist SYRIZA and the right-wing Independent Greeks, or ANEL, have made such claims.

The president of the Union of Agricultural Cooperatives of Heraklion, Crete, Andreas Stratakis, has gone so far as to call for the removal of the Minister of Agriculture and Food, Evangelos Apostolou, whom many blame for either allegedly supporting or at least failing to strongly oppose the proposal.

On the other hand, supporters of the governing coalition and of Minister Apostolou offer several arguments in his support — but not in support of the increase in the Tunisian quota. His supporters point out that Apostolou was not at the September meeting where this proposal was first approved; rather, a member of the temporary caretaker government attended the meeting in that pre-election period.

Furthermore, the discussion of the Tunisian quota at that point was not primarily about agricultural matters under Apostolou’s jurisdiction, but about humanitarian assistance for a country that was the victim of jihadist terrorism.

Two recent press releases from the Ministry of Agriculture and Food emphasized that Apostolou had on several occasions objected to the proposal and the fact that it was drafted without consultation with agriculture ministers, as well as expressed concern about its effect on farmers. The press releases added that there had been no final decision on the quota increase, and no increase in Tunisian oil imports into the EU so far.

Apostolou warned that “those who for reasons of petty political confrontation cultivate an atmosphere of panic among the producers are playing the game of speculators who seek a collapse in the price of outstanding Greek olive oil,” urging them to be careful.

Panayotis Karantonis, a member of the International Olive Council (IOC) advisory committee and director of ESVITE, told Olive Oil Times that he regarded the issue from a regional and global perspective. He acknowledged that Greek “farmers are facing a very difficult situation — no doubt about it. If you consider it on an agricultural basis only, you should be with the Greek farmers, but if you consider the bigger picture, you have to reconsider.”

Karantonis pointed out that the proposal was made by foreign ministers who were looking beyond the agricultural sector to concerns about terrorists in North Africa, seeking a way to demonstrate solidarity with the secular Tunisian government and show that “Europeans are with the Muslim people who are not radical jihadists.”

Especially since Tunisian Prime Minister Habib Essid was executive director of the IOC from 2004 to 2010 — as another Tunisian, Abdellatif Ghedira, will be, starting January 1 — an offer to increase duty-free imports of one of the country’s major exports may have seemed like a reasonable gesture of solidarity. Since the majority of EU countries in favor of the increase virtually ensures its approval, Karantonis recommends that Greece vote in its favor as well, to cultivate its relationship with Tunisia.

However, Agronews reported that SYRIZA Member of Parliament Nikos Papadopoulos suggested “that the main concern of the government is the protection of the agricultural world and the productive reconstruction of the country,” so that the government would oppose the proposal, in spite of the original aim of “protect[ing] the Tunisian economy following the recent terrorist attacks.”

Karantonis argues that Tunisia’s reduced olive oil production this year means it will export no more than 110,000 metric tons, which could hardly pose a real threat to European farmers. This is especially true since it is already possible for countries such as Italy and Spain to legally import large amounts of raw materials to be processed and exported (rather than circulated in the EU) under existing inward processing arrangements. The only difference with the new proposal is that an additional duty-free 35,000 metric tons can circulate within the EU market, but “35,000 [metric] tons will not destroy Greek farmers” or “solve the problems of the Italian” processors.

Given these factors, Karantonis contends that the Tunisian duty-free import quota increase has a “more psychological than real” effect on olive oil prices, which were bound to decrease in any case, given Spain and Italy’s greater production this year. He does admit that “this discussion has definitely affected the climate in the market,” and perhaps speeded up the pace of the fall in prices.

Karantonis also cautions that next year’s crop estimates should be watched carefully, since a quota increase could become a problem in 2017 if very high yields are expected for next year’s harvest. In that case, the EC’s offer to reconsider quotas should be taken up. The other thing to watch is the “ongoing discussion between Mediterranean countries and the EU about a free trade area,” which has already been signed by the EU and Morocco, making Moroccan products free of import duties. “If Tunisia signs that, ALL its production could enter the EU duty-free. This is a real threat, and we must be careful and try to stop this.” But that has nothing to do with the current quota increase proposal.

It appears that a low olive oil price now feels like a greater threat to Greek farmers than jihadist terrorists do, but support of the Tunisian government and people through a temporary quota increase may not hurt Greek farmers as much as they fear.

More articles on: , ,