News - October 8, 2010

Flat rate good for hill farmers

Traditional olive growers in hilly regions in Southern Europe will benefit from a flat rate subsidy per hectare, a form of compensation for maintaining the landscape. This picture emerges from an analysis by the Land Degradation and Development chair group.

European olive farmers currently get an income allowance based on the quantity of olive oil they produced in the past. Big olive growers on flat land therefore receive more allowance than traditional olive farmers in the hills. When this subsidy programme ends in 2013, EU member states can decide to continue the present system of subsidizing by the litre of olive oil, or implement a flat rate subsidy by the hectare.
Olive growing regions
Wageningen researchers Jan de Graaff and Aad Kessler calculated the consequences of both subsidy possibilities in five olive farming regions in Southern Europe. In the process, they classified olive farms into traditional, organic, semi-intensive and intensive. Their research is a spinoff from the Olivero project of the European Union in which they worked together with colleagues in Southern Europe. Their findings are published this month in the Land Use Policy journal.
Currently, only intensive farms can fetch a good income, reports De Graaff. Semi-intensive farmers and organic farmers who receive a supplementary subsidy only manage to achieve an income just below the minimum wage level. Traditional olive growers earn even less.

Erosion control
Since 2006, such income benefits are tagged to the implementation of landscape maintenance (so-called 'cross compliance'). Farmers have to invest in erosion control and other environmental measures. Such costs are formidable, especially in hilly areas where many small traditional olive farms are located. Because of cross compliance, the wages of these hill farmers become even less. Only if a fixed amount of subsidy per hectare were given, would more traditional and organic olive growers get an income above the minimum wage level.
De Graaff and Kessler therefore plead for the  implementation of a flat rate per hectare in South European countries to improve the standard of life in the countryside. If the present policy is continued, and the allowances are reduced further, many small traditional farms in hilly regions would very soon bite the dust.