The History Of Farmers’ Union And Distribution To Ensure Fair Oil Prices

2021-02-08   |   by CusiGO

In recent years, the turbulent relationship between small farmers and major groups has made headlines one after another. Many of the complaints filed with the competition court are against large food chains because they lost certain foods and used them as product claims for consumers. But with the deal initialed in Madrid on Monday by distribution giant lidl, oil giant migasa and the agricultural group uPA, the trade strategy could be reversed 180 degrees. This three legged alliance makes possible the first series of extra virgin olive oils, which come from traditional olive plantations, offer fair prices to producers and will be sold in 30 countries.

“Olive Growers can no longer tolerate the sharp drop in the price of olive oil,” Lorenzo Ramos, Secretary General of uPA, said in introducing the “historical milestone” to traditional olive orchards. The agreement ensures the profitability of agricultural holding certification as a traditional olive tree, and sets a minimum price per kilogram of oil that farmers will receive, in no case lower than the price set by the market at the time. Specifically, three varieties: picual, hojiblanca and coupage will be sold at the lowest price of 2.60 euro per kilogram, which is determined by the Ministry of agriculture’s production cost survey.

The impact of this trade partnership has opened up a new field for traditional olive orchards, which, as Louis Planas, Minister of agriculture, fisheries and food, acknowledged, are facing serious profitability problems due to high cutting costs, atomized sectors and aging farmers. Traditional olive orchards account for 82% of the olive planting area and 75% of the output in China. About 250000 families in rural areas rely on traditional olive orchards. “This initiative is not just a one-off publicity or image campaign, but a new production and industrial relationship based on respect and balance,” stressed Christobal Cano, head of uPA Olivar, who runs a small farm in Alcala La real. Cano made it clear that the agreement showed that “in the olive oil industry, everyone has room to do the right thing.”

The supermarket chain stressed that the agreement strengthens its commitment to sustainability. “We want to push the distribution sector to adopt best practices, just as we are already eliminating caged eggs or introducing fresh milk with grazing and animal welfare certificates,” said Claus Grande, lidl’s general manager in Spain. Traditional or mountain olive oil will provide extra virgin olive oil for the migasa tanker, which will package and distribute it to more than 600 stores in Spain of the German multinational lidl and export it to more than 30 countries.

Liddell is one of the biggest buyers of Spanish olive oil. In the past three years, the supermarket chain has purchased 83 million liters of domestic olive oil, of which 82.2% are extra virgin olive oil and 5.5% are extra virgin olive oil. Some of them are sold in Spain, and the rest are exported to more than 30 countries, which promotes its internationalization.

Planas welcomed the signing of the agreement at a lidl supermarket in Madrid, where he spoke of an “excellent initiative” that proved “the good operation of the value chain of agrifood”. Now, all parties are seeking to extend this partnership to other packages of products, which also pose profitability problems for producers.

The new trade strategy of lidl, migasa and uPA will be the largest in the country’s agricultural food industry. However, in the past, companies such as mercadona or Corte English signed similar direct sales agreements with oleocampo, Puerta de las villas and other tankers, including olive oil, Picualia, goldo Bailen or jaencoop. For Manuel Parras, President of Haan oil, a protected geographical indication company, “betting on extra virgin olive oil will help raise prices and give producers more direct access to the market themselves.”