Olive farmers combat EU subsidies

Local olive farmers are positive about the industry’s future, despite the fact that large-scale imports of cheap olive oil from the European Union (EU) are putting pressure on producers.

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According to Andries Rabie, the managing director of Willow Creek Olive Estate in the Nuy Valley near Robertson and chairperson of the South African olive industry association, SA Olive, there was hope that the new statutory levy on olive oil and table olives, implemented at the beginning of July, would give the industry access to much-needed funds to launch a generic marketing campaign. The campaign would promote the use of local olive oil and table olives.

“A levy of 40c/l on extra virgin olive oil and 8c/kg on table olives now applies for all locally produced products,” said Rabie.
One of the olive industry’s current challenges was the absence of minimum quality standards. The industry was working with the Department of Trade and Industry (DTI) to implement standards for olive products, locally produced and imported, sold in South Africa, Rabie told Farmer’s Weekly.

“At the moment, customers have no guarantee that the products they buy are in fact the same as what is stated on the product labels,” he said. Due to the effects of cheap imported olive oil on the domestic extra virgin olive oil price, many farmers were forced to lay off staff, since very low profit margins left them with no other choice. The industry remained hopeful that things would soon change for the better.

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“We have submitted an application for the implementation of a countervailing duty, also known as an anti-subsidy duty, on imported olive oil at ITAC (International Trade Administration Commission) through the DTI,” he said. The duty will amount to about R14/l on extra virgin olive which will neutralise the negative effects that subsidies paid to farmers in the EU are having on domestic extra virgin olive oil prices, said Rabie.

South Africa currently produces less than 20% of total domestic olive oil consumption. Rabie said the country imported 6,8 million litres of olive oil last year and total production this year was expected to reach only 1,5 million litres. “If farmers could expect to earn a fair price for their extra virgin olive oil, I believe production would increase exponentially and the industry can easily create 50 000 jobs.”