Reform of aid to olive growers delayed by North-South division

Date: 04/07/1996

By Michael Mann

FARM inspectors in five EU member states will have their work cut out if the European Commission gets its way.

Almost six months after they were supposed to appear, the Commission is still working on proposals to reform the system of subsidies paid to olive growers in the EU's southern member states.

Much to the horror of agriculture ministries everywhere, the Commission wants to base aid payments on the number of trees under each producer's control.

Although officials argue this would be more transparent and less open to abuse than the current arrangements, the proposal is unlikely to win many friends among the statisticians charged with the thankless task of wrestling with the complexities of the Common Agricultural Policy.

It is also questionable whether the reforms will go far enough to satisfy northern member states, for whom the olive oil regime has long been a bête noire because of its reputation as one of the most fraudulent sectors in the CAP. Annual spending on the sector averages about 1.8 billion ecu.

COPA/COGECA, the organisations representing the EU's 11 million farmers, agree there is a need to simplify the current set-up, but believe that what the Commission is considering will merely damage production and do nothing to improve the quality of EU produce, thought to be the key to increasing sales.

Not for the first time, the Directorate-General for agriculture (DGVI) has a complex juggling act to perform, which helps explain why proposals promised in February and in May are now on the Commission's agenda for 11 September.

In May, while their political masters were enjoying the culinary delights of Otranto in Italy, long-suffering officials on the Special Committee for Agriculture held their first discussion on the scope of the reform.

Unfortunately, this did nothing to make the Commission's work any easier. While Spain and Portugal spoke up for a single system of aid linked to the quantity of oil produced, Italy and France wanted aid to be based on the area or the number of trees. Greece, the EU's other producer country, had no strong feelings either way.

Not for the first time, the main concern of northern consumer countries is to limit the cost of the reforms and curb fraud.

Germany, the UK and Sweden believe the key to increased consumption is to blend olive oil with other vegetable oils and produce a milder flavour.

But this idea would horrify connoisseurs of Mediterranean cooking, who would be only slightly pacified by calls from the French for clear labelling if blending was allowed.

The olive oil market, which has only been tinkered with since coming into operation in the 1960s before Spain, Portugal and Greece joined the Union, is typically complex.

Aid payments are based on volumes produced, although there are special arrangements for “small producers”, defined as those who produce less than half a tonne a year. A consumption aid paid to bottlers to encourage use of EU products has been only a limited success.

In true CAP style, prices are set on the basis of “semi-fine virgin olive oil with a free fatty acid content, expressed as oleic acid, of 3.3 grammes per 100kg”.

The Union is reasonably self-sufficient in olive oil compared to other oilseeds. As often as not involving small-scale producers, one of the regime's central planks is to ensure a reasonable income for farmers in the poorest regions. Concerned by the sector's poor reputation, the Commission is anxious not only to simplify the regime, but also to ensure that rising production is matched by increased consumption.

COPA rejects charges of fraud. “We shouldn't just be talking about fraud, although this is the unjustified reputation the sector has gained over the years,” said an official, adding: “Most of all we need to improve quality. In the case of olives, lower production does not necessarily mean higher quality.”

Cooks all over the Union will be watching developments with interest.