Olive glut puts skids under oil producers at risk

A second bumper harvest could see Spanish farmers driven from the land they have worked for generations

Benalua de las Villas

On Thursday, in the grounds of Granada's Parque de las Ciencias, delighted tourists and students watched a demonstration of olive trees being harvested. Flails whirred in the branches, clouds of olives thudded to the ground on to canvases spread for their collection. It was a timeless image of an industry whose Iberian roots stretch back to the Phoenicians in the sixth century BC, and in which Spain is the undisputed world leader.

Some 40 kilometres further north, however, in the tiny town of Benalua de las Villas, where the real olive harvest is currently taking place, the mood is decidedly less festive. As far back as 2010, local media reports regularly described the industry as going through the toughest time in its 2,500-year history. And this winter in Andalucia, a region that annually produces a third of the world's olive oil, there is no sign of improvement. Already faced with a glut of olives equivalent to 95 million litres of olive oil, this exceptionally dry winter means the industry is braced for its second bumper crop in a row, which could see a further 285 million litres flood an already saturated market.

Factor in a 70 per cent increase in production costs, the stagnation of prices paid to olive oil farmers in the past 15 years, (olive oil retails at over 10 times as much in supermarkets) and a Spanish economy on the rocks, and the result is clear: after years of overproduction, large sectors of the olive oil industry are going to the wall.

Sitting in his office in the San Sebastian harvesting plant in Benalua de las Villas as a line of tractors and trailers wait outside to shed their loads late into Thursday evening, the plant's commercial director, Jose Antonio Caceres Ortega, agrees the industry is facing "a perfect storm". "Over the next five to 10 years, 80 per cent of the small olive oil producers are going to disappear," he estimates. "Either they industrialise their output, or they're not going to make it.

"On top of that, fewer young farmers are taking the place of their parents in the fields. Take a typical family here, with three children: at best, one will remain. The others all leave, studying in a big city somewhere. There's no room for the rest. On top of that, we've got people trying to come back [to rural Spain] from the building industry – which has collapsed – to what they thought was a sure-fire profitable job. But agriculture in its current state isn't profitable."

The olive oil sector is already shrinking fast. In the Andalucian province of Seville alone, where it is reported that 83 of its 105 villages are dependent on it, 6,500 farmers have abandoned the business in the past decade. In Granada, with the country's third highest olive oil output, trade unions estimated last week that since 2000, 75 per cent of the province's farms have drained their savings accounts to zero. "That money they had was the only guarantee that they could go the bank, ask for a loan and be able to continue," according to an official, Nicolas Chica. Without the EU grants, soon to be reviewed, he claims over 70 per cent of Granada's farmers now face ruin.

"Our business is run on a cooperative base with 800 members and we're expecting numbers to drop to 200 in the next five years," Mr Ortega says. "The traditional olive groves will have to change to systems where mechanisation is more easily applicable." In the olive oil business since 1997, when San Sebastian increased its processing capacity sixfold to 30 million kilos of olives a year, Mr Ortega recognises that his trade has partly been hoist with its own petard.

"Each year we've beaten the world record in terms of production, [and] there's too much on offer." This has led major Spanish supermarket chains constantly to use olive oil as a loss-leader, to tempt customers and keep prices low. "At the same time, the big purchasers of olive oil have created a monopoly. During this year's harvest, prices have already fallen by the maximum possible. Buyers exploit the fact the processing plants are full to bursting. So you get bad sales. It's the worst possible facet of the law of supply and demand."

Salvation may be at hand, but it will be extremely painful. Mr Ortega believes that although the olive oil industry is on the point of losing its traditional smallholding sector, mass production could save its future. His company is one of the few processing plants which is already adapting its infrastructure in anticipation. "Agriculture has to change," he predicts, "or it'll go under."

If his fellow farmers heed that warning, it would imply a massive drop in rural employment levels, the end of the farmsteads that intermingle with the miles of monocultured olive trees in central Andalucia, and a huge blow to Spain's traditional, and already dwindling, agricultural communities. If he is wrong, the chances are that tourists will only be able to witness olive harvests in science parks like Granada's, as a fading relic of Spain's past: all in all, a bleak crossroads for the country's rural life.

Suggested Topics
Arts and Entertainment
books
Voices
Caustic she may be, but Joan Rivers is a feminist hero, whether she likes it or not
voicesShe's an inspiration, whether she likes it or not, says Ellen E Jones
Arts and Entertainment
The Doctor and the Dalek meet
tvReview: Doctor Who Into the Dalek more than compensated for last week's nonsensical offering
Sport
Diego Costa
footballEverton 3 Chelsea 6: Diego Costa double has manager purring
PROMOTED VIDEO
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Life and Style
3D printed bump keys can access almost any lock
techSoftware needs photo of lock and not much more
Arts and Entertainment
The 'three chords and the truth gal' performing at the Cornbury Music Festival, Oxford, earlier this summer
music... so how did she become country music's hottest new star?
Life and Style
The spy mistress-general: A lecturer in nutritional therapy in her modern life, Heather Rosa favours a Byzantine look topped off with a squid and a schooner
fashionEurope's biggest steampunk convention heads to Lincoln
News
Dr Alice Roberts in front of a
peopleAlice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
News
i100
Arts and Entertainment
Star turns: Montacute House
tv
News
i100Steve Carell selling chicken, Tina Fey selling saving accounts and Steve Colbert selling, um...
Arts and Entertainment
Unsettling perspective: Iraq gave Turner a subject and a voice (stock photo)
booksBrian Turner's new book goes back to the bloody battles he fought in Iraq
News
The Digicub app, for young fans
advertisingNSPCC 'extremely concerned'
News
i100
Arts and Entertainment
Some of the key words and phrases to remember
booksA user's guide to weasel words
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Senior Data Scientist (Data Mining, RSPSS, R, AI, CPLEX, SQL)

£60000 - £70000 per annum + Benefits + Bonus: Harrington Starr: Senior Data Sc...

Law Costs

Highly Attractive Salary: Austen Lloyd: BRISTOL - This is a very unusual law c...

Junior VB.NET Application Developer (ASP.NET, SQL, Graduate)

£28000 - £30000 per annum + Benefits + Bonus: Harrington Starr: Junior VB.NET ...

C# .NET Web Developer (ASP.NET, JavaScript, jQuery, XML, XLST)

£40000 - £50000 per annum + Benefits + Bonus: Harrington Starr: C# .NET Web De...

Day In a Page

The other Mugabe who is lining up for the Zimbabwean presidency

The other Mugabe who is lining up for the Zimbabwean presidency

Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

The model for a gadget launch

Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
Alice Roberts: She's done pretty well, for a boffin without a beard

She's done pretty well, for a boffin without a beard

Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
Get well soon, Joan Rivers - an inspiration, whether she likes it or not

Get well soon, Joan Rivers

She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering
Fashion walks away from the celebrity runway show

Fashion walks away from the celebrity runway show

As the collections start, fashion editor Alexander Fury finds video and the internet are proving more attractive
Meet the stars of TV's Wolf Hall... and it's not the cast of the Tudor trilogy

Meet the stars of TV's Wolf Hall...

... and it's not the cast of the Tudor trilogy
Weekend at the Asylum: Europe's biggest steampunk convention heads to Lincoln

Europe's biggest steampunk convention

Jake Wallis Simons discovers how Victorian ray guns and the martial art of biscuit dunking are precisely what the 21st century needs
Don't swallow the tripe – a user's guide to weasel words

Don't swallow the tripe – a user's guide to weasel words

Lying is dangerous and unnecessary. A new book explains the strategies needed to avoid it. John Rentoul on the art of 'uncommunication'
Daddy, who was Richard Attenborough? Was the beloved thespian the last of the cross-generation stars?

Daddy, who was Richard Attenborough?

The atomisation of culture means that few of those we regard as stars are universally loved any more, says DJ Taylor
She's dark, sarcastic, and bashes life in Nowheresville ... so how did Kacey Musgraves become country music's hottest new star?

Kacey Musgraves: Nashville's hottest new star

The singer has two Grammys for her first album under her belt and her celebrity fans include Willie Nelson, Ryan Adams and Katy Perry
American soldier-poet Brian Turner reveals the enduring turmoil that inspired his memoir

Soldier-poet Brian Turner on his new memoir

James Kidd meets the prize-winning writer, whose new memoir takes him back to the bloody battles he fought in Iraq
Aston Villa vs Hull match preview: Villa were not surprised that Ron Vlaar was a World Cup star

Villa were not surprised that Vlaar was a World Cup star

Andi Weimann reveals just how good his Dutch teammate really is
Bill Granger recipes: Our chef ekes out his holiday in Italy with divine, simple salads

Bill Granger's simple Italian salads

Our chef presents his own version of Italian dishes, taking in the flavours and produce that inspired him while he was in the country
The Last Word: Tumbleweed through deserted stands and suites at Wembley

The Last Word: Tumbleweed through deserted stands and suites at Wembley

If supporters begin to close bank accounts, switch broadband suppliers or shun satellite sales, their voices will be heard. It’s time for revolution