Union olive oil reforms get stickier

Date: 06/02/1997

FRANZ Fischler is in for a rocky ride as he attempts to reform the EU's fraud-ridden olive oil market.

It is a measure of the problems he faces that it has so far proved impossible to get his plans past his European Commission colleagues. Even if Fischler does manage to force his ideas on to next week's Commission agenda, it will be three months before he can bring forward firm plans for change.

Reform proposals were originally due to be finalised by February last year, but fierce objections to Fischler's plans forced him to go away and reconsider his approach.

In a bid to silence critics, Fischler has included alongside his reform plan the extra option of simply making minor adjustments to the current aid arrangements. But his officials admit privately that they have little intention of moving away from their preferred approach. This would take away the safety net of intervention for market surpluses, pay aid to producers based on the number of trees rather than the amount of oil processed and end the special regime for 'small' producers.

This perhaps explains why Portuguese Commissioner João de Deus Pinheiro blocked discussion on the proposal at last week's meeting of the full college.

Pinheiro felt Fischler's ideas posed a serious danger to the EU's dominant position in the world market.

“Consumption is growing, so we have to let production increase as well,” said a Pinheiro aide.

The Portuguese believe paying varying rates of aid in different countries would distort competition and kill off the weakest producers. They also fear the new system would have a detrimental effect on the environment.

Pinheiro will not be able to block a Commission discussion for a second time, but Fischler's officials are worried fresh obstacles could be thrown up by the Spanish. Spain has invested heavily in the industry in recent years and fears new plantations which are only now coming on stream will not be taken into account in the calculations.

Similar problems loom when the proposals finally reach the Council of Ministers. Iberian opposition to the plan is shared by the other producer countries (Italy, Greece and France), who will be pitted against northern member states concerned to limit spending on the sector and reduce fraud.

But as the producer countries have enough votes to block any moves they see as a threat, another messy compromise could be on the cards.