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

Summary

Rising energy prices in Greece are pos­ing a threat to olive oil mill own­ers ahead of a promis­ing har­vest, lead­ing miller and pro­ducer asso­ci­a­tions to request increased finan­cial aid from the gov­ern­ment to off­set costs. Farmers in var­i­ous olive oil-pro­duc­ing regions of Greece have expressed con­cerns about mount­ing pro­duc­tion costs and have called for sub­si­dies to reduce the impact on pro­duc­ers and main­tain the bal­ance of the indus­try.

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.

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.

“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.

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.

• ERT News
• SofokleousIn