A new threat is facing small olive growers, in the cradle of world olive oil production, in southern Spain.
As climate change makes drought increasingly likely across southern Europe, thousands of small farmers in Andalusia have come up against a new and fast-growing “enemy”, none other than competing big farmers.
The aim of the “big” farmers has long been, according to a report in the FT, to break into a market previously dominated by small farmers, as olive oil prices remain close to record high levels. After all, this is an industry worth 14 billion euros.
The area of land devoted to ultra-intensive olive cultivation is increasing
In particular, “super-intensive” businesses are trying to take advantage of olive oil prices that remain close to the record high levels set during the year. They feature rows of trees in densely stacked lines on flat land near rivers or reservoirs.
This allows for irrigation – critical during drought and something most small farmers can only dream of – and mechanical harvesting. This means lower costs, higher productivity and higher profits.
Expansion of olive cultivation
The area of land devoted to ultra-intensive olive cultivation is increasing. In the past two decades they have expanded from nowhere to account for 7% of Spain’s olive land and 11% of production, according to industry figures. They are also spreading north beyond Andalusia and attracting capital from major olive oil groups such as Innoliva and De Prado.
Such crops seem to have fared better than traditional olive groves during the drought, suffering less drastic reductions in production.
“The economic logic of mountain olive oil is decreasing because productivity is decreasing, mainly because of the water problem,” said Ignacio Silva, president of Deoleo, which buys from small and large farmers as the world’s largest olive oil trader.
Mega-olive crops have also proliferated as landowners, concerned about climate change, turn from citrus, cereals and root vegetables to olives, which can cope with water stress better than most other crops.
This hasty turn to olive cultivation was accelerated by high prices and the prospect of opening up new markets. Industry executives are courting millions of potential new consumers outside Spain and Italy, mainly in the US and northern Europe, where many households still rely on other cooking fats.
High-density olive plantations are also attractive to investors in Italy, the world’s second largest producer of olive oil after Spain. Funds are pouring in from private equity firms such as Milan-based DeA Capital, historic winemaking families and bottling companies.
Traditional farms produce an average of 500 to 850 kg of olive oil per hectare, compared to a yield of 1,200 kg in the largest irrigated enterprises
The area dedicated to high-tech olive cultivation in Italy is still small, representing only 15,000 hectares of the 1 million hectares of olive trees. But Michele Buccelletti, scion of a family that has grown olives in Tuscany since the 17th century, predicts that Italy will follow the path of super farms blazed by Spain.
The contrasts
The figures for the cultivation in Spain are of interest. According to the FT, while traditional olive growers in Spain have an average of 80 to 120 trees per hectare, large farmers have anywhere from 800 to 2,000 smaller trees. Traditional farms produce an average of 500 to 850 kg of olive oil per hectare, compared with the 1,200 kg yield in the largest irrigated enterprises, according to industry figures.
At the same time, the “super farms” use olive harvesters that look like 4 meter tall tractors. The closest traditional farmers have to mechanization are manual shakers, which shake the olives from the branches.
Consequently, the cost of production for a typical traditional farmer is €3.80 per kilo of olive oil, while the cost in a typical super farm is half that.
A large farmer near Córdoba is preparing to start harvesting one of his 100 hectare plots at the end of October. “With five machines I can do the whole estate in five days,” he declared. To harvest the same area of mountain olives, a team of 10 people could take 70 to 100 days.
Speed brings another advantage. The fruit for extra virgin olive oil must come from the first harvest of the year, but if left on the tree for too long it spoils. In a large agricultural holding “you can choose the exact moment of the harvest”, characteristically said Rioboo Cabello de Alba. But a mountain farmer, he added, cannot harvest everything at the time of optimal ripeness.
Although they can’t compete for speed or yields, small growers claim they offer a superior product.
“Superfarms” and polyphenols
Polyphenols give extra virgin olive oil the spicy taste and bitterness that is valued in the Mediterranean. They also provide, along with oleic acid, the antioxidant and anti-inflammatory benefits that many scientific studies have shown. “People need to know that a spoonful of our olive oil can relieve you of a headache or joint pain,” said Jiménez López.
High-density farms, meanwhile, use only a few olive varieties that tend to produce fewer polyphenols. “Then the irrigated olives lose their flavor intensity, because the water acts as a softener,” said Manuel Parras Rosa, professor of marketing at the University of Jaén.
For some new markets, however, this is not necessarily a problem. Deoleo has found that US consumers, for example, don’t like the slight burning sensation that a southern European would expect from a premium extra virgin oil.
Source OT
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