`E.U. to Allow Member States to Regulate Olive Oil Supply - Olive Oil Times
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E.U. to Allow Member States to Regulate Olive Oil Supply

By Costas Vasilopoulos
Jul. 20, 2020 08:09 UTC

The three main insti­tu­tions of the European Union deal­ing with new leg­is­la­tion – the European Commission, the European Parliament and the Council of the European Union – have agreed to extend the exist­ing Common Agricultural Policy (CAP) until the end of 2022, when new rules will come into effect.

Along with the exten­sion agree­ment, an amend­ment was intro­duced in the Common Market Organization (CMO) reg­u­la­tion of the CAP to allow olive oil pro­duc­ing mem­ber states to reg­u­late the pro­duc­tion and sup­ply of olive oil in the European mar­ket.

Undoubtedly, the news is a great mile­stone, and will play a deci­sive role in guar­an­tee­ing the prof­itabil­ity of the olive oil sec­tor that is expe­ri­enc­ing one of the worst crises in its his­tory.- Cooperativas Agro-Alimentarias, 

The adjust­ment was requested by Spain in the wake of the olive oil sur­plus and the per­sis­tently low prices, which have plagued the sec­tor for more than a year.

“In order to improve the oper­a­tion of the mar­ket for olive oil, mem­ber states should be able to imple­ment mar­ket­ing rules to reg­u­late sup­ply. The scope of such deci­sions should, how­ever, exclude prac­tices which could dis­tort com­pe­ti­tion,” the Council wrote in their pro­posal to sup­port the olive oil sec­tor.

See Also:Olive Oil Prices

The Council also asserted that any rules applied should be pro­por­tion­ate to the pur­sued objec­tive, not relate to any trans­ac­tion after the first mar­ket­ing of the prod­uct and not allow for any price fix­ing.

The pro­posed reforms will be sim­i­lar to the way in which the E.U. con­trols the sup­ply of wine in the trad­ing bloc, which is gov­erned by Article 167 of the CMO agree­ment. The olive oil sup­ply will now be gov­erned by Article 167a.

“In the frame­work of the tran­si­tion reg­u­la­tion, the European Parliament pro­posed to include in the CMO reg­u­la­tion a new arti­cle, 167a, which would allow pro­duc­ing mem­ber states to adopt mar­ket­ing rules in order to reg­u­late the sup­ply of olive oil,” a European Commission source told Olive Oil Times.

“The Council had already pro­posed to include this pro­vi­sion in the CMO in the frame­work of the CAP reform,” the source added. ​“The European Parliament is propos­ing to include it in the tran­si­tion reg­u­la­tion with the aim of adopt­ing it faster.”

E.U. leg­is­la­tion is pro­posed by the European Commission. Then the Council of the E.U. (the group of the min­is­ters) and the European Parliament nego­ti­ate and adjust the pro­posal in a process known as code­ci­sion. The Commission also medi­ates the process and con­sti­tutes the exec­u­tive arm of the E.U., imple­ment­ing the deci­sions of the two leg­isla­tive bod­ies.

The CMO amend­ment was wel­comed by Cooperativas Agro-Alimentarias, the agri-food coop­er­a­tives of Spain, as a solu­tion to the cur­rent hard­ship of the olive oil sec­tor.

“It is a recur­ring demand of Agri-food Cooperatives of Spain, which will finally see the light of day in a short period of time,” the orga­ni­za­tion said. ​“Undoubtedly, the news is a great mile­stone, and will play a deci­sive role in guar­an­tee­ing the prof­itabil­ity of the olive oil sec­tor that is expe­ri­enc­ing one of the worst crises in its his­tory.”

The for­mu­la­tion of the new arti­cle is still on the draw­ing board and is expected to be wrapped up to coin­cide with the com­ple­tion of the tran­si­tional reg­u­la­tion period of the CAP in late 2020. However, the exact effect of the new reg­u­la­tion on the mar­ket of European olive oil is still impre­cise and not mea­sur­able until final­ized.

“The text of the tran­si­tion reg­u­la­tion is still under dis­cus­sion between the co-leg­is­la­tors and the Commission (tri­logue). It should be adopted by the end of the year,” the Commission source said. ​“It is not pos­si­ble to assess the effects on the quan­ti­ties and prices of olive oil as this arti­cle is still under dis­cus­sion.”

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