SPAIN: The Olive Tree, between Landowners, Subsidies and Fraud

By Tito Drago Reprint | | Print |

Tito Drago

MADRID, Mar 31 1997 (IPS) - Traditional Spanish olive farming and its derivate industries are facing drastic changes reliant on the attitude of the large landowners, European Union (EU) subsidies to producers and fraudulent claims.

EU Agriculture Minister Franz Fischler proposed reforms to the current subsidy system which are being resisted by Spain.

In order to show the importance of this matter of State, Fischler, who began a two-day visit to Spain Monday, was received by King Juan Carlos.

The visit will include meetings with all sectors affected by the planned reform.

The EU subsidises the production and consumption of olive oil, a well-developed sector in Spain, Italy, Greece, Portugal and France, in descending size order.

Spain, is the world leader, with 2,156,000 hectares dedicated to this plant, and its production makes up 31 percent of the world total.

Fischler proposed changing the production and consumption subsidy for a replacement scheme according to the number of olive trees, with a certain sum for each individual tree.

This plan would reduce the amount of fraud; “it is easier to count trees than oil,” he said

The problem causes a real headache in Spain, because there are half a million producers and, following several years of subsidies, a tendency to increase production per hectare and also the number of trees planted.

However, the option to grant subsidies according to the number of trees could increase unemployment, with the large landowners collecting the subsidies and abandoning production, said Agriculture Minister Loyola de Palacio, from the ruling Peoples Party (PP).

And the PP is not alone in this fear, for all the opposition parties, including the Spanish Socialist Workers Party (PSOE), think the same.

In fact, the socialist agriculture minister of Andalucia – the biggest oil producing area in the nation – Paulino Plata, gave an outline of the problems the Fischler plan could bring with it.

“The tree-based subsidy will be negative, because it will encourage the producers to be idle, which will lead to job losses and a fall in oil quality, ultimately affecting the consumers,” said Plata.

A farmer, participating in a demonstration opposite the Agriculture Ministry commented ironically; “if the Irakis could trick the satellites with plastic tanks the Italians sold them, there could also be plastic olive trees.”

Madrid daily ‘El Mundo’ said Monday the Queen of England is one of the main beneficiaries of the EU agriculture subsidies, as she is one of the biggest landowners in Spain.

But not only the aristocracy will benefit from this aid. Also the former banker Mario Conde, condemned by Spanish justice for falsifying documents, had 100,000 olive trees planted on his land, and will therefore receive subsidies, be it per tree, or per production.

As for fraud, a report from the European Commission Anti-Fraud Unit, said two percent of all the funds distributed in the EU went this way. Some 90 percent of this was identified in Italy, with 700 cases, followed by Greece with 318 and Spain with 75.

Another issue under debate refers to the quantity of trees and the future of the olive oil market.

Fischler said there are 166 million olive trees in Spain and a further 70 million are expected to come into production soon, half of which will not be needed.

The Agriculture Ministry said it had counted 215.2 million trees adding there was no reliable register of olive oil production for most of the European Union.

According to the International Oil Council, which represents the producers, consumption for Spain in the year 2000 is forecast to reach around 480,000 tons, only half of the expected production.

The subsidies are considered important both in increasing internal consumption and for exports, although these are only aimed at markets and sectors with high levels of consumer power for olive oil is rather more expensive than other vegetable oils.

Fischler will travel more than 200 km in two days, accompanied by Loyola de Palacio, in order to see all the sub-sectors of the Spanish oil industry close up. Only after this visit will he decide definitively on whether or not to change the norms.

The olive growers of Jaen and othe regions are eagerly awaiting the decision, while preparing to protest in Brussels – the European capital – if their demands are not taken into account.