In Greece, Millers Call for Subsidies to Soften Impact of Rising Costs

Olive oil mill owners want the same energy subsidies given to bakers and bread manufacturers to cover the cost of rising energy bills.

By Costas Vasilopoulos
Oct. 31, 2022 13:58 UTC

Energy prices are on the rise in Greece as every­where in Europe, threat­en­ing to derail the bud­gets of the coun­try’s olive oil mill own­ers ahead of a boun­ti­ful har­vest this year.

The goal is not to dis­rupt the bal­ance of pro­duc­ers, millers, traders and con­sumers at the expense of the prod­uct and its future prospects.- Representative, farm­ers asso­ci­a­tion of Kritsa

To over­come ris­ing pro­duc­tion costs fac­ing the sec­tor, miller and pro­ducer asso­ci­a­tions from across the coun­try have asked the Greek gov­ern­ment to give more money to mills from the European funds allo­cated for the energy tran­si­tion of indus­tries and man­u­fac­tur­ing facil­i­ties.

On Crete, the farm­ers asso­ci­a­tion of Kritsa, a large coop­er­a­tive of 1,350 olive grow­ers and olive oil pro­duc­ers with 300,000 olive trees, oper­ates a mod­ern mill near the city of Agios Nikolaos on the east­ern part of the island.

Despite the antic­i­pa­tion of a high olive oil yield in the area, the asso­ci­a­tion is highly con­cerned with mount­ing pro­duc­tion costs.

See Also:E.U. Green Lights €100M Subsidy for Italian Olive Millers

We expect a strong har­vest, but we also expect the cost of extract­ing olive oil to increase sharply this sea­son due to the higher prices of energy,” Yianna Peraki, an asso­ci­a­tion mem­ber, told Olive Oil Times. We have sent a let­ter to the min­is­ters of agri­cul­ture and finance ask­ing them to increase the funds directed to mills to reduce the energy costs.”

Otherwise, we will be forced to increase our olive oil enti­tle­ments [a per­cent­age of the olive oil pro­duced from each batch of olives with which millers in Greece are paid], which will make our pro­duc­ers unhappy,” she added.

In the let­ter to the two min­is­ters, which was seen by Olive Oil Times, the Kritsa asso­ci­a­tion said that mills are in a dead­lock hav­ing to absorb the addi­tional cost of olive pro­cess­ing or alter­na­tively trans­fer the cost to pro­duc­ers.

The increased costs will have a series of unde­sired side effects,” the asso­ci­a­tion wrote. The only real­is­tic and fair solu­tion is to sub­si­dize the energy con­sump­tion of olive oil mills sim­i­larly to bak­eries for the five-month time period from November to March.”

The goal is not to dis­rupt the bal­ance of pro­duc­ers, millers, traders and con­sumers at the expense of the prod­uct and its future prospects,” they added.

Since September, bak­eries and large bread man­u­fac­tur­ing facil­i­ties in Greece have been funded with an increased state sub­sidy of €604 per kilo­watt-hour, which cov­ers 89 per­cent of the rise in their energy bills.

The demand of the Cretan pro­duc­ers for stronger finan­cial aid from the state was echoed by their coun­ter­parts in other olive oil-pro­duc­ing regions of the coun­try.

See Also:Producers in Greece Generate Electricity with Olive Mill Wastewater

In Laconia, in the south­ern Peloponnese, local millers have also asked for sim­i­lar sub­si­dies to those of the bread indus­tries to secure a decent liv­ing.”

They argued that the mills oper­at­ing costs have risen by 50 per­cent this year com­pared to 2019 despite the com­par­a­tively higher olive oil prices at ori­gin this year.

The olive oil mills face the dilemma to increase the olive oil enti­tle­ments they receive [from the pro­duc­ers] or sus­pend their oper­a­tion, which will put an extra bur­den on the pro­duc­ers who are already con­fronted with increased costs in their grow­ing and har­vest­ing oper­a­tions,” the millers’ rep­re­sen­ta­tives said.

Millers and pro­duc­ers rep­re­sent­ing almost every olive oil-pro­duc­ing region in Greece have made sim­i­lar requests for increased fund­ing, includ­ing the regions of Ilia and Messenia in the Peloponnese, Aetolia-Acarnania and Magnesia in cen­tral Greece, Chalkidiki and Kavala in north­ern Greece, and the island of Lesbos in the east­ern Aegean Sea.

Meanwhile, Yiorgos Georgantas, the Greek agri­cul­ture min­is­ter, prompted the coun­try’s farm­ers and grow­ers to form coop­er­a­tives as a means to reduce pro­duc­tion costs and achieve bet­ter prices.

There is only one solu­tion to the prob­lem of frag­mented farms so as not to alter the Greek tra­di­tion and break the ties that urban pop­u­la­tion has had for years with their home­land,” Georgantas said at an agri­cul­tural trade show in Thessaloniki. And the solu­tion is the coop­er­a­tive schemes.”

The min­is­ter added that coop­er­a­tion among farm­ers pro­motes trade and enables exten­sive use of new tech­nolo­gies, which can reduce costs and increase the pro­duc­tion quan­tity.

The future of the Greek rural econ­omy lies in coop­er­a­tive schemes,” Georgantas con­cluded.

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