Cheap olive oil threatens farmers

Photo of olive trees in Spain (Image by Mait Jüriado)

The Spanish olive oil industry is being damaged by cheap costs to consumers.

This story was originally covered by PRI's The World. For more, listen to the audio above.

The new olives are barely beginning to show on grower Manel Lleisa's 1,500 trees. Harvest isn't until next winter. Lleisa says he should have a crew of workers here now, pruning. But he can't afford it.

"Our biggest problem is the cost of labor," Lleisa said. "The more mechanized your operation is the better, to reduce costs. But still we struggle. We're down to just two employees. We used to have up to 10 during off time to prune trees."

It's not that hiring more workers would cut into Lleisa's profits. There are no profits, he says. It costs Lleisa about $3 to make one liter of oil. But the handful of olive oil middlemen – the wholesalers – pay just $2.50. With every liter, he loses $0.50.

"I don't want to get rich, I just want to survive," Lleisa said. And if it costs me $3 or $3.50 to produce, the price should be $4. "In this way we could all get by. Right now the situation is abysmal. The consumer wants cheap products, and that's what we're forced to give them."

Olive oil prices are in the gutter, which is good for consumers today. But olive growers like Lleisa say they're being squeezed out of business.

Spain is the world's largest olive oil producer, much of it going to the US. And farmers there say if they're forced to abandon their orchards it will be an economic and environmental disaster.

At a supermarket in Barcelona called Caprabo, olive oil is dirt cheap, $2.50 a liter. Spaniards use olive oil in just about everything, from dressing salads to frying fish. Stores use it as a so-called "hook product," a cheap staple that draws consumers in, so that they buy other stuff too.

A middle aged shopper named Maria Pilar Fernandez said she knows that olive growers are suffering. She said it's always the wholesalers who make the money.

Spain's main olive oil wholesalers and supermarkets either declined or didn't respond to interview requests.

Stanka Becheva is with Friends of the Earth, an environmental group that defends small-scale farming. She said the dynamic in Spain's olive oil market isn't unique in Europe.

"The whole food chain is mostly controlled by few processors," Becheva said. "They are setting the prices. We have in Europe around 30 million farmers and only a few processors and retailers negotiating the prices. It is not a monopoly but there are only a few of them who can set the prices, and that's a problem."

Becheva said Europe needs to change its agriculture policy, to promote local processing and selling. Such efforts exist, via cooperatives, like the one in Tortosa.

In this co-op's supermarket, farmers like Lleisa can sell their olive oil and actually earn a little. Their market: people who consciously support local growers.

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