Italy to Invest €3 Billion in Olive Oil Sector in Bid to Boost Production and Quality

Summary

Italy is set to receive sig­nif­i­cant funds for its olive sec­tor, total­ing around €3,000 per hectare, from var­i­ous sources includ­ing the European Union’s National Recovery and Resilience Plan. The funds aim to boost Italian olive oil pro­duc­tion and qual­ity, which has seen a decline in yields over the past decade, with a focus on upgrad­ing mills and infra­struc­ture in the sec­tor.

Significant funds will reach the Italian olive sec­tor in the next few years from dif­fer­ent sources, equal­ing about €3,000 for each of the one mil­lion hectares devoted to olive grow­ing in the coun­try.

Those funds will come from the National Recovery and Resilience Plan (RRP) approved by the European Union, the new Common Agricultural Policy (CAP) and the new Common Market Organization (CMO).

The new funds are intended to increase the vol­umes and the qual­ity of Italian olive oil pro­duc­tion, which has seen its aver­age yields sig­nif­i­cantly drop over time.

According to International Olive Council data, Italy has seen its olive oil yields have fallen by 15 to 20 per­cent in the last decade com­pared to the pre­vi­ous one, with fig­ures wors­en­ing dur­ing the last three to four years.

Furthermore, alter­nate bear­ing years show an even more pro­nounced aver­age drop com­pared to pre­vi­ous decades.

According to the lead­ing asso­ci­a­tions of olive farm­ers, olive oil pro­duc­ers and millers, the sec­tor des­per­ately needs the CAP funds.

However, they argue that the Russian inva­sion of Ukraine has fun­da­men­tally changed the out­look of the agri­cul­ture sec­tor and should be taken into account by the pan-European agri­cul­tural plan before it comes into force in 2023.

“We need a dif­fer­ent approach because geopo­lit­i­cal con­di­tions have changed,” said Giuliano Martino, direc­tor of the Italian Olive Inter-pro­fes­sional Organization. ​“Policies approved only a few weeks ago need to be rede­fined.”

“We do not have to aban­don our quest for qual­ity, but we need a bet­ter coor­di­na­tion among play­ers in the pro­duc­tion chain to face the chal­lenges of a new glob­al­iza­tion,” he added.

Nicola Di Nola, direc­tor of Unaprol, the Italian asso­ci­a­tion of olive oil pro­duc­ers, said, ​“we need a step for­ward in olive oil cul­ture,” cre­at­ing new olive oil pro­duc­tion chain experts.

Such a cul­ture would boost ​“con­sumer con­scious­ness on extra vir­gin olive oil use, which can affect large super­mar­ket retail­ers and lead them to give the cor­rect dig­nity to this prod­uct, get­ting rid of the under-cost cheap offers,” he added.

The recent €30 mil­lion invest­ment in the mod­ern­iza­tion and recov­ery of olive groves approved by Rome has been greeted by the indus­try.

Still, Bruno Armillas, a fel­low Unaprol direc­tor, said it ​“is a drop in the ocean, which uplifts the poten­tial yield by about 10,000 tons, but we would need that to be repeated over time to let it have a true impact on the sec­tor.”

“Let us just point out that Spain has invested 10 times more and now has a 1.5 mil­lion tons pro­duc­tion,” he added.

The main focus of the government’s renewed focus on improv­ing olive oil yields is the country’s mills, which were granted €100 mil­lion to upgrade their infra­struc­ture and equip­ment. Still, the olive oil millers asso­ci­a­tion, AIFO, said a new approach is needed.

“We do not want nor have to fol­low the Spanish model, but our 5,000 olive oil millers are not com­pet­i­tive any­more,” said Stefano Caroli, AIFO pres­i­dent. ​“We need a scrap-and-recon­struct mea­sure to allow a reor­ga­ni­za­tion of the olive oil milling sec­tor which today needs and must use the best tech­nolo­gies avail­able.”

“That is why we ask for the funds not to be directed to cre­at­ing small com­pany-wide plants but used to fund more struc­tural ren­o­va­tions, with a large impact on the whole prod­uct chain,” he added.

Luigi Caricato, an Italian olive oil expert and orga­nizer of olive-related con­ven­tions, told IlSole24Ore how Italy ​“always had ups and downs, with sea­sons which had been some­times very neg­a­tive, but there are the con­di­tions for a strong recov­ery on the medium and long term.”

Caricato added how olive oil con­sump­tion is expand­ing through­out the world, well beyond the bor­ders of Southern Europe or North Africa.

“We are now talk­ing of an inter-eth­nic food which has crossed every bor­der; it has pen­e­trated China, Japan and India,” he said. ​“If the Italian con­sumer is always focus­ing on price, olive oil is per­ceived as a valu­able prod­uct that can jus­tify a higher price abroad.”

According to the International Olive Council, global olive oil con­sump­tion has slowly but steadily increased, ris­ing from the 3.061 mil­lion tons in the 2010/11 crop year to the 3.214 mil­lion tons esti­mated in 2021/22.

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