Measures to support the sustainable development of Europe's olive oil crops find their roots in reform to the EU's Common Agricultural Policy (CAP) cleared in June. The Commission is working on new rules to take this further with decoupling as the cornerstone.
When reaching its agreement on the CAP reform in June, ministers from member states - under the Council - invited the Commission to submit proposals for the reform of certain Mediterranean crops in line with their present budgetary envelope and based on the objectives and the approach of the first reform package.
"The main goal of our proposal is to support the sustainable development of the olive oil sector by re-orientating the aid scheme to reward healthy, high-quality products and practices while developing alternative resources of income and economic activity," said EU agriculture commissioner Franz Fischler this week.
At the heart of the proposals are tools to boost the geographical areas where olive oil is produced - more often than not lagging behind in economic development.
As a result the Commission said in a statement this week that it intends to come up with a rounded proposal that will include the 'social, economic and environmental dimensions' of the producing areas.
"We propose a partial transfer of support from the current production aid to the Single Farm Payment. Based on historical references for the 2000-2002 period, 60 per cent of the production aids except for the very small producers would be integrated into this new support mechanism," said Fischler.
The grants will be conditional on respecting statutory EU environmental and food safety standards, through cross-compliance, and rules of good agricultural and environmental condition, as well as to the modulation and financial discipline mechanisms.
"The remaining part of the production aid during the reference period would be allocated to producer MS as national envelopes for additional aids to olive groves and for the financing of quality measures carried out by olive oil producer organisations," added the commissioner.
In a bid to silence critics of the proposed 60/40 partial decoupling adopted by the Commission, Fischler defended his position, remaining convinced of the merits of decoupling - the heart of CAP reform.
"Our goal has been to maximise the benefits of decoupling by proposing the largest possible transfer of current aids into the Single Farm Payment," he said.
"In our view, this would result in a better market orientation of the olive oil sector, more stable income for farmers and increasing transparency and consumer confidence."
The European Union is the leading world producer, accounting for 80 per cent and consuming 70 per cent of the world's olive oil. Demand is steadily increasing both in the EU and in third world countries, helped by information and promotional campaigns supported by the Union and others.
According to the Commission, given its importance to the economies of many regions, the main aim of EU olive oil policy is to 'maintain and strengthen its position in world markets by encouraging production of a high quality product for the benefit of growers, processors, traders and consumers'.