`High Level Meeting to Address Low Olive Oil Prices and Industry Fragmentation - Olive Oil Times
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enEnglishfrFrançaiselελληνικάdeDeutscheitItalianozh-CN中文ptPortuguêsesEspañoltrTürkçehrHrvatskija日本語hiहिंदी

High Level Meeting to Address Low Olive Oil Prices and Industry Fragmentation

By Julie Butler
Apr. 28, 2011 11:03 UTC

Reducing the high level of frag­men­ta­tion in Spain’s olive oil pro­duc­tion indus­try will a pri­or­ity issue at a meet­ing of gov­ern­ment and indus­try mem­bers next month.

While still hop­ing for some tem­po­rary respite from low prices via EU pri­vate stor­age mea­sures, stake­hold­ers will gather on May 20 to con­sider changes with longer-term impacts.

The sit­u­a­tion they con­front is one of record low prices – – the farm-gate price of EVOO fell to €1.98 ($2.94) per kg this week, accord­ing to infor­ma­tion sys­tem Poolred – – and a highly dis­perse agri­cul­tural sec­tor.

According to national news­pa­per El País, the agri-food sec­tor is Spain’s biggest employer but its exces­sive frag­men­ta­tion robs it of much of the clout that might carry. Of the about 5,000 rural busi­nesses in Andalusia, more than 80 per­cent employ less than nine peo­ple.

And the prob­lem is worst in the olive oil sec­tor, where there are 800 enti­ties on the pro­duc­tion side and just 4 – 5 big dis­tri­b­u­tion groups mov­ing the world’s largest olive oil sup­ply. Andalusia’s regional gov­ern­ment last year beefed up incen­tive pay­ments for agro-busi­nesses to inte­grate but only 50 ended up doing so.

Hojiblanca did go down the inte­gra­tion path and the group now has 120 coop­er­a­tives in Andalusia, 91 for olive oil. Hojiblanca direc­tor gen­eral Antonio Luque told El País that a few years ago few would have pre­dicted the con­cen­tra­tion that had since occurred in Spain’s bank­ing sys­tem. Agriculture needed to go down the same path.

“We need groups with the dimen­sions nec­es­sary to make their oper­a­tions prof­itable and to wield influ­ence in the mar­ket,” he said.

Earlier ths week, Eduardo Tamarit, sec­re­tary gen­eral of Spain’s Ministry of the Environment, Rural and Marine Affairs (MARM), said the Ministry was work­ing on var­i­ous eco­nomic and struc­tural mea­sures which would be dis­cussed at the May 20 meet­ing of indus­try and gov­ern­ment rep­re­sen­ta­tives.

Among them were increased inte­gra­tion incen­tives for olive oil pro­duc­ers , steps to pre­vent those on the dis­tri­b­u­tion side allow­ing olive oil to be used as a loss leader, and pos­si­ble leg­is­la­tion to reg­u­late the chain of food pro­duc­tion. The lat­ter could be accom­pa­nied by a code of good busi­ness prac­tices for the sec­tor and stricter rules on price con­tracts, he said.


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