The Italian olive sector lags largely below its potential because of the lack of a shared vision and solid data upon which the future of the industry should be developed, according to the latest report from the Institute for Services to the Agricultural Market (Ismea).
The report dissects the Italian olive oil sector, analyses its costs and infrastructures and highlights the opportunities that lie ahead for growers and producers in collaboration with the major agricultural associations.
Not by chance, the report comes ahead of EU negotiations regarding the new Common Agricultural Policy (CAP), which will provide funds to Europe’s agriculture sector from 2023 to 2027.
The entire Italian olive oil industry is worth an estimated €3 billion (AU$4.63 billion), according to Ismea, which represents slightly more than 3% of the entire Italian food sector.
The report began its analysis of the sector with growers, concluding that olive production is too fragmented. According to Ismea, the average olive grove covers just 1.8 hectares, far below the nine hectares of an average Italian agricultural company.
Furthermore, the report added 97% of all olive farming businesses in the country are managed by a single individual. The 3% of businesses run at a larger scale are mostly found in northern Italy, and are often based on a more entrepreneurial approach, the report added.
“Competitiveness is a major issue for the whole Italian olive oil sector,” Anna Rufolo, head of the olive sector at the Italian Farmers Confederation (CIA), told Olive Oil Times. CIA was among the associations that collaborated on Ismea on the report.
“We will need to work further to overcome the weaknesses, such as production and market fragmentation or the often diverse costs dynamics,” she added.
Along with the highly fragmented nature of the sector, the Ismea report also found that many of these farmers are entering the traditional retirement age and there is a scarce supply of younger farmers taking their place.
Less than 5% of specialised olive farms are managed by growers under the age of 40. The figure rises to 8% in the broader agricultural sector. According to the aging index used by Ismea, for every young olive farmer in Italy, there are 11 over the age of 65.
The Ismea report also pointed out that many of the country’s olive groves are inhabited by older trees, which decreases production efficiency.
The trees grown in more than 61% of dedicated olive growing areas have an age of 50 or more. Trees younger than 11 years old cover only 3% of the whole olive surface.
Based on its analysis, the Ismea report advocated for the implementation of more high-density and super-high-density farms in the country to increase the profitability of the sector. However, the report also acknowledged the importance of traditional and small-scale subsistence farms to national culture and identity.
According to the report, subsistence olive farming makes up 30% of the country’s total olive oil production.
“While there are a few territories where intensive olive farming can be developed, policies have to adapt to the diversity of the conditions growers face,” Rufolo said. “Models which have worked in other countries cannot always be translated to our own. Given that, quality and connection with the territory remain the focus for a renewed competitiveness.”
Overall, the best ways to mitigate the costs incurred by the fragmented nature of olive growing and oil producing, the Ismea report reasoned, are to focus on promoting quality and creating more synergy among the different parts of the olive oil sector.
An opportunity lies in the further development of olive oils certified with a Protected Designation of Origin (PDO) or Protected Geographical Indicator (PGI), unique regional products protected by the European Union.
The report adds that more can be done since only about 10,000 tons of olive oil are produced among the 42 PDOs and6 PGIs, representing between 2 and 3% of Italy’s overall annual production. More