Ciolos: Storage Aid Would Be Nothing But an "Aspirin"

By Julie Butler

Apr. 1, 2011 11:30 UTC

The European Commission has called on the Spanish central and regional governments to address structural problems in the country’s olive oil sector and has again rejected calls for the immediate provision of private storage aid.

In Spain today, European Commissioner for Agriculture Dacian Cioloş said that unless the structural problems were addressed, “we’re going to face the same problem every year.” Introducing EC payments for the private storage of olive oil without simultaneously addressing these issues would amount to taking an aspirin. Later, the problem would still persist, “which is why it is necessary to treat it in a more comprehensive and serious way,” he said.

Cioloş accepted that prices were low in Spain, “but they remain above the level which would permit intervention,” he said. However, he did ask for Spanish officials to provide more proof to back their claim that a market disturbance existed and private aid should be introduced. A decision would be taken at an EC management council meeting on April 13^th, he said.

Cioloş was speaking in Madrid before a meeting with Spain’s Minister of Environment, Rural and Marine Affairs, Rosa Aguilar, on the future of the EU’s Common Agricultural Policy. Aguilar told reporters that measures were already in place and starting to produce results in addressing the olive oil sector’s structural problems.

“We will immediately provide the commissioner with all the information necessary to show that we are actively addressing the situation in a sector that is of great importance to Spain and the European Union. “We have the ingredients ready to present the management council with compelling information so it can see the efforts being made address the sector’s structural problems,” she said.

Thousands of people participated in a protest march in Cordoba to publicize the plight of the olive oil sector and support calls for the urgent provision of storage aid. Agricultural unions organizing the protest – the second major demonstration in recent weeks – said about 10,000 people had attended, though police put the figure at about 7000.

Eduardo López, secretary of one of the organizers, COAG-Andalucía, said Cioloş was “playing with the interests of the Spanish economy in general and those of the olive oil sector, which comprises more than 200,000 olive and olive oil producers and more than 2,000 cooperatives and mills” putting at risk, he said, the “more than 14 million jobs in this sector.”

López queried why two years ago, private storage aid had been activated solely on the grounds that there was a market disturbance, “not because prices for any oils had dropped below the trigger level.”

Currently in Spain, “there is no surplus, in fact imports have increased, yet there is a price drop, which indicates market manipulation by an oligopoly formed by four large companies that are manipulating consumers and the industry,” López said, adding ” so there is sufficient reason” to activate storage aid in Spain.

Agustín Rodríguez, general secretary of UPA-Andalusia, said he remained convinced that storage aid would be introduced and agreed that other longer-term steps were needed to curb the “abusive position” of the big distributors.

Olive oil producers should form 5 – 10 big groups in order to better defend themselves against the clout of the country’s five main distributors, who currently bought from about 1700 separate sellers, he said.

Private storage aid would enable producers to receive payments for keeping olive oil in long-term storage containers, withholding it from the market until pricing conditions improve. Spanish growers are suffering from a prolonged pricing crisis during which it has been common practice to sell olive oil for less than production costs.

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Ciolos: Storage Aid Would Be Nothing But an "Aspirin"

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