Olive growers block major reforms

Date: 17/04/1997

By Michael Mann

PLANS to reform the fraud-ridden olive oil sector are in danger of heading up a blind alley once again after next week's meeting of agriculture ministers.

The vast majority of EU governments have fallen in behind European Commission proposals for a radical reform of the system for paying aid to olive growers - but not those countries actually involved in producing olives.

In theory, Agriculture Commissioner Franz Fischler has put forward two alternatives for the reform of the industry. In practice, his preferred option is a wholesale change which would mean growers being paid according to the number of trees they cultivate.

But Spain, Italy, Greece and Portugal have come out firmly in favour of the second option, involving only minor adjustments to the existing set-up, which Fischler only included in his proposals to get sceptical Commission colleagues to go along with them.

The Commissioner had been hoping to get the go-ahead from ministers to turn his preferred option into a firm legislative programme. But officials predict that he will receive opposing signals from those on either side of the argument.

“These proposals have already taken six months to get through the Commission. There will be a proposal, but it is unclear what it will look like,” said one member state official.

Faced with damaging and critical reports from both its own anti-fraud unit UCLAF and the Court of Auditors, the Commission is determined to take action to reduce fraud in the olive oil industry.

Fischler also wants to avert the danger of overproduction and structural surplus. “New plantings have taken place on a massive scale in recent years. There is a serious risk that EU production could outstrip demand at home and abroad,” the Commission has warned.

Of the non-producer countries, the Nordic countries, the UK and the Netherlands have clearly spoken out in favour of the aid-per-tree option as a more transparent way of using the 1.8 billion ecu budget allocated to the sector. But Italy, Greece, Portugal and particularly Spain have vehemently opposed the idea, preferring to maintain the current system of paying support to processors and providing financial incentives to encourage greater consumption.

“For the Spanish, the shift in aid from bottlers to actual farmers seems especially hard to accept. They also want consumption aid increased, even though the Commission accepts this is the prime route for fraud,” said another official.

Alone among the producers, France is taking a more neutral stance. Paris has rather less to lose as it produces just 2,000 tonnes every year, compared with over half a million tonnes in Spain.

The producer countries deny any danger of surpluses. “They say that if you spend a little more on the regime, you will certainly get rid of any problem. Instinctively, that makes us suspect there really is a danger of overproduction,” said an official from a northern country.

The olive oil sector is extremely important to the economies of the countries involved. Olive trees cover about 5 million hectares of EU land, comprising 70&percent; of total world cultivation. The Union's annual production of 1.45 million tonnes accounts for 80&percent; of global production.