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OLIVE OIL FARMS REPORT

EU Directorate L. Economic analysis, perspectives and evaluations. Microeconomic analysis of EU agricultural holdings Brussels, February 2012. Unit L3 D(2012)

Lunes 8 de abril de 2013, por Carlos San Juan


This report analyses trends regarding farms specialised in olive oil production1 over the period 2000-2010. It analyses structures, costs of production, margins and income indicators. The objective is to identify the characteristics of farms in economic difficulty and those in a better situation. The main source for this report is the Farm Accountancy Data Network (FADN) database, complemented by Eurostat data and information obtained from national authorities. It covers the three main producers: Spain, Italy and Greece. The specialised farms used for the analysis represent 53% of the total EU-27 olive grove area and 73% of the total olive oil production. In Spain, farms with very large areas of olive groves may not be well represented because they are often not specialised enough in olive production (i.e. where it represents less than half of their total output). On the other hand, small to medium-size farms are slightly over-represented. The farms are classified according to the type of product they deliver: olives for oil, olive oil, or a mix of both. According to FADN data, in Spain there are mainly olive producers, in Greece, olive oil producers and in Italy, both and as well mixed producers. Olive oil farms in Spain are on average bigger and have a higher labour productivity than elsewhere. They produce olives processed by other operators. In Italy, some producers grow olives for oil, some process their own olive oil, and others do both. Prices for olives and oil are on average significantly higher in Italy than elsewhere. Costs are higher too, but to a lesser extent. In Greece, family labour is a major input, and farms are very small. A high proportion of producers are on family farms with a relatively low degree of professionalisation. Labour is the most important cost for these farms. Imputed costs for family labour represents 43% to 57% of total costs, and wages 10% to 17%. Specific costs and depreciation are also significant. Olive oil farms in Spain suffered on average unfavourable trends in margins and income indicators over the period studied, with income falling by about a third in nominal terms. This was because labour productivity was unchanged, as was farm size, while prices and direct payments fell. Italian producers of olive oil were the most successful among all types of olive oil producers in the Member States studied: margins increased and income stayed relatively stable over the period 2000-2009. The main drivers were significant price rises, and limited increases in total costs per tonne. However, Italian producers of olives and mixed producers experienced trends similar to those affecting Spanish olive producers. In Greece, olive oil farms showed a significant increase in margins and income indicators from 2000 to 2005, and a decrease from 2005 to 2009. These developments were driven by trends in prices, labour productivity and cost per tonne. In the three Member States, the trend in olive oil farm incomes has been worse than the national average (see graph below) over the period 2000-2009.2 Compared to other types of farming, the trend was the worst, or second worst. The average situation and trends can be very different at regional level: in most regions, income has been decreasing drastically, but Extremadura (Spain) and Sicily (Italy), were the exceptions, showing a positive trend over the period studied. Finally, there are wide discrepancies among farms at individual level. Over the period 2006-2009, a quarter of farms in Spain earned less than 5000 EUR per family work unit (FWU), with 30% in Italy and 37% in Greece. On the other hand, 11% of Spanish olive oil farms earned more than 30000 EUR/FWU, with 10% in Italy and 3% in Greece. High income is linked to large olive groves, a low share of family labour in total labour, higher direct payments and above all, high labour productivity (quantity of olives or of oil produced by the farm and divided by work units). In Italy, it is also related to better yields and in Greece to better yields and higher prices. Low income is linked to the opposite characteristics: small size, high share of family labour, lower direct payments and low labour productivity. Such farms may have off-farm activities complementing their low agricultural income. Overall, the economic situation of olive oil farms has deteriorated significantly over the period studied.

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