`New Report Takes Pulse of EU Olive Oil Farms - Olive Oil Times

New Report Takes Pulse of EU Olive Oil Farms

Aug. 6, 2012
Julie Butler

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Which olive oil farms are thriv­ing and which ones are div­ing — and why — is the focus of a new European Commission report.

Covering the three main EU pro­duc­ers — Spain, Italy, and Greece — the EU olive farms report” analy­ses trends in cost, mar­gin and farm income in the decade to 2010.

The short answer is that income has been on a more or less dras­tic decreas­ing trend every­where except Extremadura and Sicily. Not only that but the aver­age income of olive oil farms is sig­nif­i­cantly lower than the aver­age for all farms.

The aver­age income of Spanish and Italian olive oil farms is about €12,000 – 13,000 ($14,800 – 16,000) per work unit (equiv­a­lent to one per­son work­ing full-time on the hold­ing) per year and about €7,000 ($8600) in Greece, the report says.

But it found some big dis­crep­an­cies. From 2006 – 2009, a quar­ter of all Spanish farms earned less than €5,000 ($6,170) per fam­ily work unit yet 11 per­cent of those ded­i­cated to olive oil pro­duc­tion earned more than €30,000 ($37,000).

High income is linked to large olive groves, a low share of fam­ily labor in total labor, higher direct pay­ments (EU income sup­port) and above all, high labor pro­duc­tiv­ity. In Italy, it is also related to bet­ter yields and in Greece to bet­ter yields and higher prices.”

Low income is linked to the oppo­site char­ac­ter­is­tics: small size, high share of fam­ily labor, lower direct pay­ments and low labor pro­duc­tiv­ity.”

Overall, the eco­nomic sit­u­a­tion of olive oil farms has dete­ri­o­rated sig­nif­i­cantly over the period stud­ied,” the report says.

Family labor a major out­lay

Labor is the most impor­tant cost item in olive oil farm pro­duc­tion: fam­ily labor rep­re­sents 43 – 57 per­cent of total costs and wages 10 – 17 per­cent.

Farms tend to be big­ger in Spain, with an aver­age of 12ha of olive groves, against 3ha in Greece and 3 – 5ha in Italy. The yield is bet­ter in Italy, but labor pro­duc­tiv­ity is higher in Spain. In Greece, where farms are very small, fam­ily labor input is very high.

Overall, the eco­nomic sit­u­a­tion of olive oil farms has dete­ri­o­rated sig­nif­i­cantly over the period stud­ied,” the report says.


Spain’s olive oil farms enjoy higher labor pro­duc­tiv­ity. They pro­duce olives which are processed by other oper­a­tors, the report says.

But of all types of farms, they were the worst hit in terms of income drop, see­ing about a third of their income evap­o­rate while the aver­age for all farms grew 9 per­cent.

This was because labor pro­duc­tiv­ity did not improve, the aver­age farm size did not change, and because prices and direct pay­ments (EU income sup­port) went down.”



Prices for olives and oil are on aver­age sig­nif­i­cantly higher in Italy. Costs are also higher, but the higher price on aver­age more than com­pen­sates for costs, so that mar­gins are in gen­eral higher. Only the net eco­nomic mar­gin of Italian pro­duc­ers of olives for oil is lower, due to their very high fam­ily labor costs.”

In terms of regional dif­fer­ences, Calabria’s olive oil farms achieved the best aver­age income — despite lower prices — thanks to higher yields, a lower share of fam­ily labor, and bet­ter fam­ily labor pro­duc­tiv­ity. But in the last thee years sur­veyed, Sicily’s income trends were more pos­i­tive.


Margins and incomes slid in Greece from 2005 to 2009, dri­ven by trends in price, labor pro­duc­tiv­ity and cost per ton.

Regionally, Ipiros-Peloponissos-Nissi Ioniou tended to fare worse in terms of income while those in Sterea Ellas-Nissi Egaeou-Kriti were more robust.

Worryingly, the share of farms which do not gen­er­ate income from farm­ing rose over the period, and more par­tic­u­larly since 2005” the report says.

The report clas­si­fied olive oil farms into three types accord­ing to the type of prod­uct they deliv­ered: olives for oil, olive oil itself, or a mix of both. In Spain there are mainly olive pro­duc­ers, in Greece mainly olive oil pro­duc­ers and in Italy, there are both as well as mixed pro­duc­ers.


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