California olive growers should blame their government for inability to compete with Spain, not the EU

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The Olive Growers Council of California (OGCC) has called on the United States government to maintain tariffs on table olive imports from Spain, despite the latest World Trade Organization ruling.

The OGCC is unhappy after the WTO ruled that the European Union has the right to subsidize its farmers, arguing that this gives them an unfair advantage.

The vast majority of farmers do not benefit from federal farm subsidy programs, and most subsidies go to the largest and most financially secure farms – Farm Subsidy Database, Environmental Working Group

Make no mistake, the huge olive subsidies provided by the European Union and Spain, and the deliberate efforts to throw Spain’s ripe olives into the US market, have allowed the Spanish industry to take almost all of it. our restaurant business in the United States and put our retail business at risk, said Michael Silveira, President of OGCC.

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Today, anti-dumping and countervailing duties [anti-subsidy] The duties imposed by the US government have given our family olive growers and thousands of allied workers hope for the future and time to revive the industry, he added.

The OGCC president further accused the EU and Spain of facilitating the country’s unfair pricing in the US market by using complicated and non-transparent farm payments.

However, the WTO ruled that the US anti-subsidy tariffs imposed on imports of black Spanish table olives in 2018 were illegal, with the WTO adding that the argument for tariffs was based on a fundamental misunderstanding about the functioning of the common agricultural policy of Europe.

In fact, the United States gives its own farmers tens of billions of dollars in subsidies every year. The government could make similar payments to California olive growers, but chooses not to.

According to data from the United States Department of Agriculture (USDA), direct government assistance (subsidies) accounted for 39% of net farm income in 2020, with farmers receiving a record $ 46.5 billion from the government.

Chris Edwards, director of tax policy studies at the Cato Insitute, a libertarian think tank, and former director of PricewaterhouseCoopers, one of the world’s four largest accounting firms, said the US government is protecting farmers against fluctuations in prices, incomes and returns and subsidizes their conservation efforts, insurance coverage, marketing, export sales, research and other activities.

However, the main beneficiaries of these subsidies are the large industrial farmers who grow corn, soybeans, wheat, cotton and rice in the Midwest. Small California olive growers tend to be in short supply, but were still eligible for direct payments of up to $ 250,000 to compensate for lost productivity during the Covid-19 pandemic.

According to the Environmental Working Groups (EWG) Farm Subsidies Database, California is home to 3.4% of U.S. farms and received just 2.2% of all federal farm subsidies released in 2019, latest year for which a full set of data is available. By comparison, Iowa, home to 4.2 percent of U.S. farms, received 8.7 percent of all federal aid.

Of the $ 591 million allocated to California farmers in 2019 (the USDA spent $ 26.9 billion in subsidies that year), 92% did not receive any subsidies, and those who did harvest grew mainly. cotton, rice, wheat, corn and barley or raised cattle.

Despite the rhetoric of family farm preservation, the vast majority of farmers do not benefit from federal farm subsidy programs and most subsidies go to the largest and most financially secure farms, the EWG said. Small commodity producers are only entitled to a pittance, while meat, fruit and vegetable producers are almost completely excluded from the subsidy game.

By comparison, Spain will receive around 6.8 billion ($ 7.7 billion) each year for the next seven years from the European Union under the latest CAP.

While 75 percent of CAP money will be allocated to the country’s 695,000 farmers in the form of direct payments, these subsidies are capped at 60,000 ($ 68,000) per farm or 100,000 ($ 113,000) per farm. company with several farms.

In addition, a survey by the European Data Journalism Network found that European small farmers were largely in the same boat as their American counterparts.

In the previous iteration of the CAP, 76 percent of the EU’s 6.5 million farmers received 15 percent of available funds. Back then, the money was largely allocated per hectare, so bigger farmers got more benefits. Seems familiar?

The problem for California olive growers is not an overzealous European Union trying to make them disappear.

Instead, they must focus their energies on convincing an indifferent government that growing olives in California is a better investment for public health and the climate than subsidizing corn in Iowa.

President Joe Biden will sign the next Farm Bill in 2023, which will determine where grants go for the next five years. California olive growers, start lobbying.

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