Spain’s next olive harvest could be down 50 percent due to the current drought, agricultural union ASAJA warned today.

The agricultural sectors in general in both Spain and Portugal have been crippled by one of the driest winters in 70 years, leading the union to call today (March 21) for urgent governemnt aid.

European Commissioner for Agriculture Dacian Cioloş has already said he would be open to expediting payment of EU agricultural aid to the countries in light of the situation’s severity.

Though it rained and snowed today in various parts of the Iberian peninsula, damage has already been done as far as next year’s olive harvest.

Spain’s olive oil sector was already on its knees anyway but won’t really feel the drought’s impact until next season, “when the olive sector could lose more than half of its crop, ” according to an ASAJA press release. “In hard numbers that could mean Jaén is down more than €400 million ($529 million) ,” it said.

The silver lining is that the olive oil production slump could lead to an upturn in the current rock-bottom farmgate prices.

This season’s harvest is another bumper one in Spain. Drawing on estimates in a report by olive oil giant Deoleo, Europa Press reports that Spanish olive oil production for 2011-2012 will be up 14 percent on last year to 1.59 million tons. The country started the season with stocks of 473,700 tons.

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