There are aproximately 500 million olive tree‘s planted across southern Europe. The eurozone produces around 75% of the worlds olive oil. Now if you are not involved in the olive oil industry you may be thinking so what? I just know how much a medium sized bottle of olive oil costs when I go shopping in the local supermarket?
Hold that thought for a moment,as a bottle of olive oil is not a particularly cheap purchase wether its the extra vigin or just the normal olive oil. Farmgate prices at the moment are around 00.30€ cents for one kilo of olives? Thats right 00.30€ cents (29p) for one kilo of olives. Some olive oil growers say its hardly worth shaking the tree to gather up all the fallen olives, if you consider transport costs etc taking the olives to the pressing mill to be pressed into olive oil?
So I hear you say why are there 500 million olive tree’s across the whole of southern Europe. Top producers in relative order are – Spain, Greece, Italy, Portugal, Cyprus, Malta. Spain is by far the largest producer, closely followed by Greece, then Italy. So if the price of olives per kilo is so dire, and so low, how do the olive growers manage to maintain an income? Mmm well its that old long time favourite of all eurozone farmers the CAP gravy train. Olive growers recieves grants and subsidies from the fat Brussels eurozone agricultural teat, drinking in the generous payments they recieve from European tax payers?
This state eurozone intervention only distorts and artifically makes the problem much more worst than it already is. But thats what Brussels and the eurocrats do best, meddle and interfere until the problem becomes 10 times more dire than just letting the natural ups and downs of the olive oil market correct and adjust itself over the supply and demand of olive oil. Too much supply means lower prices, so in a non subsidized market some olive oil growers would either rip up there olive tree’s and grow a different produce, or leave the olive growing industry altogether. Less olive tree’s producing less olives would then raise the market price of olives. A simple case of supply and demand. But of course thats not how the European technocrats see it?
Subsidies will always produce an over supply and the result is a ever increasing glut of produce pours onto the market. This general rule applies to all commodites wether its olive oil, coffee, cotten, sugar, etc. The EU thinks it can manipulate prices by subsidizing growers, but only manages to make a bad problem much worst? Subsidizing growers to grow ever more crops that no one wants as there is already a glut that just grows ever bigger and bigger, as the price per kilo drops ever lower and lower.
And who pays for all of this EU eurocrat interverence? Well you the reader actually, and you end up paying twice. You pay a higher price for the olive oil when you actually purchase the produce, and you pay for the growers subsidies through your personal taxation and VAT. Thats the European way of doing things, when an industry is failing, prop it up with government money, and throw money at the problem and hopefully it will all just go away?
The Spanish, Italian, Greek, and Portuguese olive growers do not want the European public to know this, why should they, as they are riding on the comfortable EU CAP Gravy Train? The Eurozone olive oil industry with the EU subsidy system is overly complex and confusing, so it comes as no surprise that reforms are resisted in the Mediterreanean EU counties every inch of the way. Mean while the world is swimming in olive oil over production, and the EU subsidy gravy train rolls on regardless?