`EU Likely to Increase Private Storage Aid Trigger Prices - Olive Oil Times
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EU Likely to Increase Private Storage Aid Trigger Prices

By Julie Butler
Jan. 7, 2013 15:30 UTC

Prices for extra vir­gin and vir­gin olive oil wouldn’t have to fall so far before the European Commission (EC) pro­vided sup­port via pri­vate stor­age aid, under pro­posed changes agreed to by a European Parliament com­mit­tee.

The Agriculture and Rural Development Committee sup­ports increas­ing the aid trig­ger price for extra vir­gin olive oil by nearly 61 cents to the equiv­a­lent of €2.38/kg and that for vir­gin olive oil by 58 cents to €2.29/kg, accord­ing to a draft report on com­pro­mise amend­ments released in late December by the committee’s rap­por­teur Michel Dantin.

No change is so far pro­posed to the trig­ger for lam­pante, which is €1.52/kg, but pro­duc­ers are hope­ful this will yet occur when the rel­e­vant leg­is­la­tion is dealt with by Parliament.

The com­mit­tee exam­ines and, where nec­es­sary, amends EC leg­isla­tive pro­pos­als by prepar­ing reports on agri­cul­tural pol­icy for later adop­tion by the full European Parliament. It has been review­ing thou­sands of pro­posed amend­ments to the EC’s pro­posed new com­mon agri­cul­tural pol­icy (CAP).

As well as updat­ing the trig­ger prices — set in 1998 — the com­mit­tee pro­poses requir­ing that they be reviewed reg­u­larly on the basis of ​“objec­tive cri­te­ria” such as changes in pro­duc­tion costs and mar­ket trends.

There is also under­stood to be con­sen­sus for an amend­ment remov­ing dis­cre­tion from the European Commission so that intro­duc­tion of pri­vate stor­age aid is almost auto­matic upon prices falling to the trig­ger level.

The aid is designed to help farm­ers in times of weak whole­sale prices. They receive a sub­sidy for the cost of tem­porar­ily tak­ing some of their oil off the EU mar­ket in the hope prices will mean­time improve.

In May last year the EC approved what was then the third round of pri­vate stor­age aid for the olive oil sec­tor in eight months. In February it had agreed to spend up to €20 mil­lion to sub­si­dize the tem­po­rary stor­age of 100,000 tons of extra vir­gin and vir­gin olive oil for up to four months. Aid had also been approved in October 2011.

In each case prices in Spain had been under the trig­gers for weeks before the aid was approved, lead­ing agri­cul­tural unions and the Spanish gov­ern­ment to call for urgent changes to the sys­tem.

Gregorio López, olive oil spokesman for COAG, one of Spain’s biggest farmer unions, told Olive Oil Times it should be capa­ble of being imple­mented with agility and speed.

He also said that the trig­ger prices needed to reflect that the aver­age pro­duc­tion cost for olive oil in Spain is €2.49/kg. Ex-mill prices have been below cost for most of the last three years, putting many pro­duc­ers on the edge of ruin, he said.

Spain’s olive oil price infor­ma­tion sys­tem POOLred has an aver­age bulk price for vir­gin olive oil equiv­a­lent to €2.62/kg for the week to January 7 — up 95c from €1.67/kg early last July when prices started to recover.


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