EUROMED SUSTAINABLE CONNECTIONS ANNA LINDH FOUNDATION POLICY ANALYSIS 1:1. THE HISTORY OF OLIVE OIL February 20, 2008

THE HISTORY OF OLIVE OIL1 The Cretan word for olive, elaiwa, also changed as the olive and its oil moved north and west through Southern Europe, becoming “The whole Mediterranean, the sculpture, the palm, the gold elaia in Classical Greek, oliva in Latin, olivera in Spanish, olew in beads, the bearded heroes, the wine, the ideas, the shops, the Welsh and olive in German. There is speculation that the Greek moonlight, the winged gorgons, the bronze men, the word for olive tree, elaion, may have been derived from the philosophers,- all of it seems to rise in the sour, pungent taste of Semitic Phoenician word, el’you, meaning superior, perhaps these black olives between the teeth. A taste older than meat, alluding to the higher quality associated with olive oil compared to older than wine. A taste as old as cold water. Only the sea itself other oils that were available at the time. seems as ancient a part of the region as the olive and its oil, that like no other products of Nature, have shaped civilizations from Just as with the word zeit, many name places throughout the remotest antiquity to the present.” Mediterranean region relate to the Greek word, elaia and the Latin Laurence Durrell, Prospero’s Cell, 1945 word, oliva: Ela, a cape and river in Cyprus; Elaia, Elaikhorian, Elaiofiton, Elaion, Elaiotopos, all villages in Greece; the Mount of Olives in Jerusalem; Olivet, a village in France: and Olivares, a Spanish village.

THE CULTIVATION OF THE OLIVE Sun, stone, drought, silence, solitude. These are, according to traditional Italian folklore, the five ingredients that create an ideal habitat for the cultivation of olive trees. They must be able to withstand harsh winters, blazing summers, rainless months and ferocious winds, possessing an “almost titanic resistance, a vital force which renders them nearly immortal” (Global Gourmet).

The olive tree’s ancestor, the wild oleaster, grows prolifically

throughout the Mediterranean Basin. It bears tiny, inedible olives

and does not resemble the cultivated olive tree, the Olea THE ETYMOLOGY OF “OLIVE” Europaea. Fossilized remains of the oleaster, dating back 20 Says an olive tree to its master, “Look after me and I will nourish million years, have been you. Water me and I will enrich you.” discovered near Livorno,

Italy while sixty thousand It is generally believed, as we will see, that olives were first year old fossilized olive cultivated simultaneously on the island of Crete as well in the area trees have been found in we now refer to as Syria. The tapping of the olive for the the volcanic rocks of production of oil has become synonymous with the birth of Santorini, Greece. Records Western Civilization. The Mediterranean names for the olive, exist revealing that wild themselves, indicate how valuable an inter-cultural resource the olives were also collected olive was. It is believed that from Syria, the olive spread south and by Neolithic People in west throughout North Africa and to a lesser degree expanded Anatolia as early as 8500 B.C. north and west. The Semitic word for olive is zeit, or zayt,

becoming zayith in Hebrew, zaita in Aramaic, zait in Arabic, zeitun Experts agree that the olive tree is amongst the oldest known in Farsi, zeituni in Swahili and dzita in Armenia. The names of cultivated trees and was tended before written language was several sites in these regions are derived from the word zeit: developed. They disagree, however, on the exact location where Zejtun in Malta; Wadi Zeit in Jordan; Mt. Zeit in Egypt; El Zeitun, a domestication first occurred. Some scholars theorize that the olive village in Egypt; and Zeytinburnu, a Turkish village. was first cultivated in Asia Minor, in the 6th millennium, B.C., along the Levantine Coast, in the countries of the Eastern Mediterranean, 1 Research compiled by Cynthia Zaferatos, AWISHhellas. particularly in the area between Syria and Iran. Other scholars

EUROMED Sustainable Connections: 1.1 The History of Olive oil 1 contend that the Mesopotamian Fertile Crescent is where the Once introduced to Greece, the Greeks were responsible for raising domestic olive originated. There are also theories hypothesizing the olive and its oil to a status unrivaled by any other substance, that the first cultivation of the olive occurred on the island of Crete plant or food. Homer, the immortal Greek poet, makes prior to 4000 B.C. during the Early Minoan Era, and still others that innumerable references to olive oil in both The Iliad and The suggest that olive oil pressing existed in 4500 B.C. in the land of Odyssey. By 1500 B.C., Greece was the largest producer of olive Canaan, in modern day Israel. It is generally believed that the oil in the ancient world and as the Greeks, along with the peoples of the Levant and the peoples of Minoan Crete developed Phoenicians, emigrated west and established colonies in Italy, olive cultivation independent of each other as no evidence exists France, Spain and North Africa; olive oil became the currency for that they experienced any contact with one another. The evolution establishing trade with these respective cultures. By the 7th of the respective names for the olive would support this Century B.C., olive orchards flourished in Attica, and by the 6th conjecture. For example, in Egypt, the olive was referred to by its Semitic name, suggesting that the Egyptians were introduced to the olive by people living in the Levant region.

Depictions of the olive appear throughout the Mediterranean on ancient pottery, coins and tomb decorations. Hieroglyphics reveal that Egypt was importing olive oil from Syria, as well as from the West Side of the Nile Delta as early as the 3rd Millennium, B.C. The study of 3,000 year old mummies confirms that mummies were customarily preserved with olive oil and adorned with olive branches. Cured olives were also placed in the tombs as food for the afterlife. The olive was mentioned by the Pharaoh Thutmosis III in an ancient Egyptian writing. He described how whenever his men traveled, they received good bread, olive oil, wine, honey and fruits. There is also a reference to the Egyptian Temple of Karnak, noting an inscription engraved on one of the temple walls: “And the men of his majesty’s army were anointed in Djahi with the oil of olives, day after day, as is their wont during feast days in Egypt.” Century B.C., Solon, the great Athenian statesman and poet, Olives, a source of great wealth, were enacted laws that protected the olive trees of Athens. Trees were of tremendous importance to the inspected on a monthly basis and anyone that was convicted of Minoan civilization on Crete. Olive oil cutting down a tree was punished by death. Solon also instituted was a significant trade commodity and legislation that, for a time, prohibited the export of olive oil. the Minoans most likely exported olive However, the winners of Athens’s most important athletic clippings for cultivation along with the competition, “The Panathenaic Amphorae”, whose victory prize oil to Greece and to the North Coast of was 5 tons of oil stored in gigantic amphorae, were exempted Africa. Samos, an island on the Minoan from this law. Consequently, the victors enjoyed the potential of trade route, near the Gulf of Smyrna, becoming quite wealthy. By the 5th Century B.C., Herodotus, the literally translates as “planted with Greek historian who is sometimes referred to as “The Father of olives”. In the Knosses Palace on Crete, in the Room of the Olive History”, described Athens as “a vast center of Greek olive Press, open pipes flowed into amphorae, enormous jars used to culture”. So much oil was being produced, in fact, that the store oil, that are still in use to this day. prohibition of exporting olive oil ended and it became a major

EUROMED Sustainable Connections: 1.1 The History of Olive oil 2 export. Along with her oil, Greece also disseminated her can return to their ancestral villages and participate in the customs techniques for olive cultivation and for olive curing across the and traditions that sustained their families for millennia! Mediterranean. TRADITIONAL USES OF THE OLIVE During the Early Roman Empire, olives and their oil were highly prized, particularly by the Roman Emperors. Until 70 B.C., the oil “Oh, olive tree, blessed be the earth that nourishes you and was considered a luxury item, to be used sparingly. On important blessed be the water you drink from the clouds occasions, such as the election of a new emperor, olive oil was and thrice blessed He who sent you for the poor man’s lamp and distributed to the Roman citizens as a precious gift to be used as a the saint’s candlelight.” means of celebration. Because Rome did not produce sufficient Cretan Folksong amounts of oil herself, she began to import oil, in the form of tax payment, from her subjects in Spain, Tunisia, Istria and Greece. In To the peoples of the Mediterranean, the olive has traditionally fact, in Tunisia, olive cultivation was at its height during Roman been more than just a nutritious and ubiquitous source of food. It occupation, with Tunisians being taxed 300,000 gallons annually has also been essential to the health, well-being, economics, and olive groves covering more than 2 million acres of Tunisian religious ceremonies and daily customs of Hebrews, Muslims, soil. However, by the First Century A.D., the Roman historian, Greeks, Romans and Christians since antiquity. In both ancient Pliny, noted that Italy had “excellent olive oil at reasonable prices”. Canaan and pre-Homeric Greece, olive oil was used as a vital ingredient in sacred anointments and perfumes, as an important As olive oil began to be more widely used in Roman cooking, fuel for illuminating lamps (one liter of olive oil provides at least standards were established, categorizing the quality of the various 200 hours of light), as precious medicine, and of course, as a olives. Cato, the Roman statesman, explained that the finest oil major component of the Mediterranean diet. Because olive wood was made from small, white, immature olives picked in September. has such an efficient burning capacity, (37.3 million BTU’s per Oil from green olives, picked in December, was considered to be cord), the olive tree was also highly valued as a source of heat. good quality table oil while oil pressed from black olives was used by commoners as well as for lighting lamps and for ceremonial Simply stated, olive oil has been, and continues to be, an integral anointments. By the time Rome fell, in 400 A.D., the olive was part of everyday life throughout the Mediterranean. At various flourishing throughout the Mediterranean and the Romans had times it has been used as soap, skin cleanser and conditioner, invented the screw press, producing oil in the manner that would shampoo, chapstick, boot polish, axle grease for Roman continue for the following 2000 years. Though the Roman Empire machinery, a primary lubricant for machines during the Industrial fell, the status of the olive did not. In fact, the olive tree was so Revolution and as a lubricant for clocks and watches. Today, highly regarded that by the 14th Century, the punishment dealt to jewelers continue to use high quality olive oil to polish expensive citizens of conquered cities was not death, but rather the cutting diamonds. down of their olive trees. According to Homer, olive oil was so valuable that it was Following millennia of vibrant exchange by Babylonians, considered to be “liquid gold” and played a significant role in Phoenicians, Greeks and Romans, the olive oil trade, was abruptly funeral rites. Intricately detailed vases from the 5th Century B.C. halted with the invasion of the Barbarians from the North. During depict rituals of ancient Greek funerals. The tombs of wealthy the centuries following the collapse of the Roman Empire, it was people were decorated with vases of sweet aromatic olive oil the monasteries and fortress farms that continued the tradition of which were either shattered at the grave site or placed in the tomb cultivating and pressing the olive. The Greek Orthodox monks, for use in the afterlife. Perhaps this is also why drops of the sacred especially, were able to produce vast amounts of oil, ensuring that oil seeped into the bones of dead saints and martyrs through holes the essential oil was available, not only for physical sustenance, in their tombs. The custom of breaking small containers of olive oil but also for the solemn rites and rituals of the Church. To this day, at Greek funerals continues in some cases to this day. Olive the olive remains an important, integral and treasured part of the branches dipped in purifying water have also been used in funeral Mediterranean culture. In Greece, civil servants are allowed time ceremonies. In Jordan, it is customary that people eat a variety of off from their jobs during the annual olive harvest, so that they pancakes fried in olive oil on the morning after a funeral.

EUROMED Sustainable Connections: 1.1 The History of Olive oil 3 In ancient Greece, the ultimate honor bestowed on victorious In the 7th Century A.D. the Prophet Muhammad advised his athletes was the placing of fresh olive wreaths on their heads. The followers to regard olive oil as an essential component of health, branches of the wreaths were cut from special olive trees that noting more than 70 different diseases that the oil was believed to grew at the western end of the Temple of Zeus and were cure. In fact, throughout the Mediterranean, the belief that olive specifically cut by a pure, young boy who cut them using a golden oil, leaves and blossoms conferred strength, health, vitality and sickle. Athletes would also rub their bodies before exertions and youth was widely held. A Greek text from 1550 B.C. lists olive oil competitions. Common people, too, would rub olive oil into their as one 700 therapeutics, to be taken orally as well as to be applied skin, especially on their feet, before and after long journeys. In the as a healing lubricant and soothing emollient. Between the 7th and public baths and gymnasiums in Greece and Rome, professional 3rd Centuries B.C., ancient philosophers, physicians and historians masseurs massaged their clients with olive oil. Attendees at began classifying the olive botanically and referring to the curative banquets were also anointed with aromatic olive oil and crowned properties of olive oil. with olive wreaths. In the 4th Century B.C., the Greek physician, Several additional practices Herodicus, perhaps history’s first sports involving olive oil were common as physician, prescribed olive oil massages to well. Families in some old enhance the performance of Greece’s elite Mediterranean cultures would athletes. These athletes were apparently so announce the birth of a son by revered, that the oil and sweat that dripped hanging an olive wreath on the from their bodies was bottled and sold for front door of their homes. Farmers medicinal purposes for exorbitant prices. Herodicus’ student, rubbed olive oil into the bark of Hippocrates, considered to be the “Father of Western Medicine”, fruit trees as a deterrent to further advocated the restorative properties of olive oil. Central to harmful insects. This practice also his adage, “Let food by thy medicine and medicine be thy food” insulated the tree against frost and was the rejuvenate power associated with the olive. By drinking helped to retain moisture during the oil, it was believed that the following conditions would be the months of stifling heat. rectified: Weavers rubbed oil onto their • Intestinal parasites fingers in order to soften them, thereby increasing their dexterity. • Bladder and kidney afflictions They also greased the woolen fleece, enabling the wool to be • Mucous membrane inflammation more easily spun and woven. Sandal makers liberally applied oil to • Bowel afflictions leather in order to make it more pliable. The leaves of the olive • Teething discomfort tree were often fed to animals, or dried and used as fuel or even • Rheumatic diseases to make paper. The wood of the olive tree, regarded for its • Yellow fever beauty, was often used in the creation of religious buildings. • Tumors and diseases of the thyroid gland

Finally, despite being extremely hard and therefore difficult to Topical potions made by mixing olive oil with herbs, flowers, work, several objects mentioned in Greek mythology were limestone, clay, charcoal and even snake skin and centipede legs constructed from olive wood: the club and arrows of Hercules, the were used to treat: bed of Odysseus and the icon of the goddess Athena in the • Mushroom poisoning Parthenon. • Burns, including sunburns • Venereal disease THE OLIVE AS MEDICINE • Earaches “Consume olive oil and anoint it upon your bodies • Alcoholism since it is of the blessed tree.” • Pimples Prophet Muhammad • Skin diseases • Paralysis • Coughs

EUROMED Sustainable Connections: 1.1 The History of Olive oil 4 • Arthritis Athens and the virtue of • Dull, damaged hair peace was honored over the destruction of war Such was the regard for the benefits of olive oil that during the Middle Ages, the word “ladi”, Greek for oil, was the name given to Athena planted her olive all medicines that were prepared with this life giving oil. As the tree in a “rock”, a rock Romans declared, “For one’s well being, wine within and olive oil guarded by soldiers who without.” were commanded to protect the tree. The MYTHOLOGY AND SYMBOLISM OF THE OLIVE “rock” became known as “The Acropolis”. It is said that a son of Olives figure prominently in the mythology and symbolism of the Poseidon tried to uproot the tree, an act which proved impossible, Mediterranean, representing rebirth, light, tranquility, victory, as the tree’s roots were literally embedded in the rock. In the futile wisdom, euphoria and wisdom. They are also commonly regarded process, he wounded himself and furthermore, as a consequence as a symbol of peace and because they grow to be extremely old of this sacrilegious act, he was put to death. Athena’s sacred tree and are capable of continuously producing fruit, they also became was also torched by invading Persians. Yet, miraculously, the tree an ancient symbol of fertility. regenerated itself and its offshoots were planted throughout Greece. The olive, consequently, became a symbol of all that was “Its mystical glow illuminated history.” good and noble in mankind as well as a symbol of permanence Global Gourmet and perseverance.

Greek mythology is particularly rich in references to the revered In addition to Athena becoming the patron deity of Athens, there olive tree. In fact, many of the ancient Greek gods and goddesses are other important mythological references to the olive tree. were believed to have been born under the branches of the olive Irene, the Greek Goddess of Peace, is typically portrayed with a tree. It is likely that this is the reason olive leaf wreaths decorated cornucopia in one hand and an olive branch in the other, thereby accomplished soldiers and scholars, olive branches and jars of connecting abundance and peace. On a more gruesome note, olive oil were given to victorious athletes, and tombs from Homer describes Odysseus as jabbing an olive branch into the eye antiquity were adorned with wreaths figured from golden olive of the Cyclops in order to blind him and thus escape being eaten. leaves. Ancient navigators also revered the olive, placing an olive branch between the hands of an image of their god, as they THE FOLKLORE OF THE OLIVE sought protection from the potential wrath of Poseidon. “Angels with long braids and hearts of olive oil.” Frederico Garcia Lorca Perhaps the best known and most loved tale involving the olive tree is the Greek myth explaining how the olive tree was brought Alongside the rich mythology and legends that grew out of the to Greece. Zeus, ruler of the heavens and father of other gods and olive culture, many fascinating superstitions also evolved regarding mortal heroes, promised to give Attica and her newly built city, to the magical properties of the olive tree. the god or goddess who created the most useful invention. The victor would become the protector of the new city and the city • Athenian brides wore crowns of olive branches or carried would assume the victor’s name. The contest narrowed to two bouquets of olive branches in order to ensure a fruitful competitors, Poseidon, the God of the Sea and Athena, the marriage. Goddess of Wisdom and the Arts. Poseidon struck a rock with his • Throughout Italy, an olive branch placed over the doorway trident and out poured water, followed by a beautiful mighty horse was believed to repel witches and wizards. capable of winning wars. Meanwhile, Athena struck the rock with • In Spain, an olive branch was said to keep a husband faithful the spear and created the olive tree, a tree possessing the power and the wife the master of the house. to illuminate the night, soothe wounds and nourish the body. Zeus • Spaniards also believed that an olive tree touched by a marveled at Athena’s creation and thus, she was awarded the prostitute or by an unfaithful husband would fail to produce position of becoming the protector of Attica and its new city, fruit. Conversely, trees tended by young and innocent children would result in an increased harvest.

EUROMED Sustainable Connections: 1.1 The History of Olive oil 5 • In Bild, Algeria, it is purported that there was an ancient olive Egypt, Greece and Rome. The pottery of Greek antiquity depicts tree that infirm people drove nails into in order to cure their elaborate rituals in which olive crowns and branches were offered ills. to Greek deities as symbols of benediction and purification. • In some regions of the Mediterranean, it was believed that the quality and yield of the olive harvest could be predicted In the Bible, alone, there are more than 140 references to olive oil, by the colors and shades of the rainbow, and that if an olive substantiating the notion of how prolific olive cultivation was in the tree blossomed during the night, the harvest would be Land of Canaan. Perhaps one of the most renowned Biblical bountiful. references, found in the Book of Genesis, occurred in the Garden • The Venetians believed that attaching an olive branch to a of Eden where God visited the Patriarch Adam and gave him the chimney would prevent lightning from striking. gift of an olive tree to plant in the garden. Adam was given very • During harvest festivals in Greece, a choir of boys carried precise directions by God as to how to cultivate and care for the wreaths of olive branches wrapped in wool. The wreaths tree so that “oil which would heal man’s wounds and combat all were later hung on the doors of houses to ensure prosperity. ills” could be produced. Olive oil was regarded as a God given gift • In Greece, sailors contended that a few drops of oil from the and Adam the gardener who was entrusted with the responsibility lamp of Saint Nicholas, patron saint of sailors, had the power of passing this gift on to future generations. to calm turbulent seas. • A traditional Cretan folksong proclaims that “the one who In Morocco, there is a similar story about the sacred olive tree in eats the oil and bread and olive oil pie will not get struck by the Garden of Eden. According to this version, on each leaf of this the bowshots of death.” tree, the name of God was invisibly written. It is deemed that it • Pickled and cured olives were considered by some to possess was, in fact, the olive tree, itself, that advised Eve not to be aphrodisiac qualities. tempted by the serpent and that also advised Adam and Eve to • Finally, because the olive tree was so revered in Greece, repent after partaking of the forbidden fruit. God, acknowledging legend has it that only virgins and chaste men were allowed the olive tree’s love and concern for mankind decreed, “Your to cultivate it. Furthermore, during the harvest, an oath of leaves will be the color of silver and emerald. Your fruit will be chastity was required from the harvesters! worth its weight in gold. Flocks will find shelter under your leaves and saints will seek your shade and bless you.” THE OLIVE AND RELIGION The Book of Genesis also contains the “And God blessed man with wine that maketh glad the heart of story of Noah and the Great Flood. man, and oil to make his face shine, and bread which strengthen Noah, a patriarch chosen by God man’s heart.” because of his righteousness, was David, Psalm 93 commanded to construct an ark and populate it with honest and virtuous It is generally agreed upon that olive oil was used as an members of his family, and many anointment throughout the species of animals, both male and Mediterranean before being female. God was preparing to send a commonly used for food or fuel. Its ravaging flood to Earth to destroy the corrupted cities. It rained for application was so significant that forty days and forty nights, water covering even the highest anointing evolved into a deeply mountains. Yet, Noah, because of his obedience to God, saved all religious rite. There are innumerable the creatures on the Ark. After 150 days, the Ark came to rest on references to the oil harvest, to olive the Mountains of Ararat, in the region we now refer to as Turkey. cultivation and to the application of Noah sent forth a dove and when it returned, it was carrying an oil in the religious scriptures of olive branch in its beak, signifying the end of the Great Flood and Judaism, Christianity and Islam, as a return to safety, peace, regeneration and abundance. well as in the sacred texts of ancient The first recoded oil extraction is mentioned in the Old Testament in the Book of Exodus. It is written that oil was derived from hand

EUROMED Sustainable Connections: 1.1 The History of Olive oil 6 squeezing the olive berries and the juice produced was stored in journeyed, signifying, I come in peace.” It was on the Mount of special containers that were guarded by priests. In Exodus 30:22- Olives, Jebel ez-Zeitun, and east of Jerusalem, where Jesus stood, 33, Moses is directed by God to mix spices with olive oil and to use gazed upon the Holy City and wept. And it was in the Garden of this oil for holy anointing. God commands Moses, “This shall be a Gethsemane, a Hebrew word that translates as “the garden of the holy anointing oil unto me throughout your generations.” In oil press”, where Jesus prayed and was arrested before he was Exodus 27:20, God also specifically decrees that olive oil is to be crucified. the oil used to fuel the lamp in the Tabernacle. He instructs Moses that the Israelites should “bring you clear oil of beaten olives for To the Roman Catholic, Greek and Eastern Orthodox Churches, lighting, for kindling lamps regularly. It shall burn from evening to olive oil became a symbol representing the sacred cycle of life and morning before the Eternal. It shall be a due from the Israelites for therefore has been used all time throughout the ages.” in every important ceremony, including rites Another Biblical citation is found in Kings 5:25 which describes marking birth, baptism, how King Solomon bartered olive oil for cedar and cypress wood. marriage, illness and Olive groves were evidently so highly prized by both Kind Solomon death. These perfumed and King David that guards were placed in the orchards and oils are referred to as the around the warehouses to ensure the safety of the trees and the “Chrism Oils”, the treasured oil. Such was the veneration of the olive, that an ancient anointed, holy oils that Jewish law forbade the destruction of any productive olive tree, strengthen the spirit of even if owned by an enemy. Furthermore, in Deuteronomy 24:20, those being anointed. there is an edict requiring olive tree owners to leave any ungathered olives, after the harvest, for the poor to glean, as an Fourteen hundred years ago, the Prophet of Islam, Muhammad, act of charity and social justice. encouraged his followers to apply olive oil to their bodies and he, himself poured oil on his head. The importance of the olive tree is In Jewish religious observance, olive oil is the only fuel allowed to evident in the Qur’an in the following passage from Islam’s Holy be used in the seven branched Menorah, in a service called Book: “God is the light of heavens and earth. An example of His “Mishkan”. Mishkan refers to the temporary dwelling place of the Light is like a lantern inside which there is a torch, the torch is in a Presence of God during the Exodus of the tribes of Israel from glass bulb, the glass bulb is like a bright planet lit by a blessed Egypt and later in the permanent Temple of Jerusalem, the Holy olive tree, neither Eastern nor Western, its oil almost glows even City that was founded at the foot of the Mount of Olives. This without fire touching it, light upon light.: sacred oil was produced from the first drop squeezed from an olive and consecrated especially for this observance by the temple In Islamic priests. The oil was then stored in special holy vessels. A copy of tradition, it is said the Menorah is now used during Hanukkah, a holiday that that at the death commemorates the discovery of the last of such a vessel that was of Muhammad, found in 163 B.C. during the re-dedication of the Temple of most of the trees Jerusalem. The oil, enough to burn for one night, miraculously mourned by burned for eight nights. The ritual of squeezing and consecrating shedding their the first drops of oil is where the term, “pure olive oil” originated. leaves. When the olive tree, who The olive has also played an instrumental role in the evolution of did not shed its the Christian religion and faith. The name, Christ, which means leaves, was asked “the anointed one”, comes from the Greek word chrism, which why it did not means “to anoint with oil”. There are references to washing and mourn, it replied anointing with oil throughout the New Testament. The Gospel of by saying, “You Mark relays that Jesus had precious ointment poured onto his show your sorrow head. The followers of Christ often carried olive branches as they by external signs,

EUROMED Sustainable Connections: 1.1 The History of Olive oil 7 but our grief, who care not for the opinion of others, but only that Allah, who reads the secrets of the heart, should approve of our motives, is no less sincere, though inward. Should you cleave my trunk open, for instance, you would find that at its core it has become black with grief.”

As one considers the history and significance of the olive, it is difficult to imagine any other food rivaling the role it has played in so many cultures. Since the dawn of civilization, it has been revered as sacred and immortal, it has provided sustenance and nourishment, it has signified peace and prosperity. Poets, artists, historians, physicians, artists, gods, goddesses, priests and prophets have extolled its virtues and paid homage to its life giving qualities. As the Greek poet, K. Palamas so simply yet so eloquently wrote,

I am the Daughter of the Sun; I am the Olive Tree, References The Blessed One. Anagnoisis, www.Anagnosis.com Global Gourmet, www.globalgourmet.com Olives through Time, www.OlivesWeb.com, compiled by Michael P. Garofolo Olive Oil from Tree to Table, Peggy Knickerbocker, 1997 Olive Oil: The Good Heart Protector, Rita Greer and Cyril Blau, 1995 The Feast of the Olive: Cooking with Olives and Olive Oil, Maggie Blyth Klein, 1983 The Olive Tree World, www.olivetree.eat www.wikipedia.org

EUROMED Sustainable Connections: 1.1 The History of Olive oil 8 EUROMED SUSTAINABLE CONNECTIONS ANNA LINDH FOUNDATION POLICY ANALYSIS 2:1. EU AGRICULTURAL POLICY February 7, 2008

EU Agricultural Policy Analysis1 policies specific to Greece since the mid 20th century. The paper concludes with an assessment on EU Regulation (EC) No The EU policy that has had the greatest role in the olive oil sector 1698/2005 which to improve the competitiveness of rural areas, by since the 1960s has been the Common Agricultural Policy (CAP). emphasizing the maintenance and preservation of environment Once a remedy for problems faced by the Mediterranean EU and rural heritage. The analysis reviews subsidy options available Member States to be a competitive producer in olive oil, payment to olive oil producers in the Troianata community case study, support schemes were the founding fabric of the CAP. Similar to including Article 34(3) ‘semi-subsistence agricultural holdings’, the agricultural policies of the EU, Greek policies since the mid- Article 35 ‘producer groups’, and Article 37 ‘mountain areas’. 20th century have been based on price support schemes that encourage high productivity and facilitate agricultural exports. The History of the CAP Price support schemes achieved the productivity and marketing The first production and export subsidies in European olive oil goals of the EU and Greece, but were cause of new problems of came at a time when Italy was the sole significant producer within environmental degradation and marginalization of traditional what was then called the European Economic Community (EEC). agricultural communities, in the EU at large and specifically in In order to support agriculturalists of various designations, the EEC Greece. In recent years both EU and Greek policies have switched created the Common Agricultural Policy (CAP) in 1962. Since then, to focus on preserving the ecosystems and restoring life to lagging the CAP has been Europe’s most important system of agricultural rural communities. Subsidies today continue to focus on making subsidies. EU and Greek agriculture competitive, but now also focusing closely on environmental preservation and the revitalization of Not originally receiving subsidies from the CAP, EU-produced2 marginalized communities. (footnote on Italy) olive oil was non-completive, with cheaper olive oils coming from other Mediterranean producers such as Morocco, This policy analysis Syria, Tunisia, and Lebanon. Because of a more ideal climate for categorizes EU policies the cultivation of olive trees, coupled with less input expenses, th since the mid 20 these countries could produce olive oil at a much lower cost than century under two the developed countries of the Mediterranean European policy regimes, or what Community. Consequently, they could sell their olive oil at lower have been called the prices than their European counterparts. For the EU to compete ‘two pillars’. The first with these lower priced imports, government subsidies were pillar is characterized considered essential to make up for the difference between the by price support high costs of production on European soil and the lower market schemes to encourage value for olive oil which had been determined in part by the productivity and market cheaper imports. competition. This policy regime was To protect domestic producers from market disturbances caused meant to equip EU by the cheaper imports, the EC legislated Regulation No agriculturalists 136/66/EEC September 22, 1966 which would include olive oil in (specifically in this analysis, olive oil producers) to compete against the CAP subsidies3. Regulation No 136/66/EEC on established a cheaper imports and make the EU a net-exporter. The ‘second common organization of the market in oils and fats. Article 3(3) of pillar’ is based on rural development, placing agriculture and rural the Regulation established that “where prices within the development together under a subsidy scheme. Greek policies that affect agriculture and rural development mirror these two 2 Italy was the only EC State that was a significant producer of policy regimes of the EU. This paper begins by discussing the olive oil (with France producing very little) until 1981 when Greece creation and evolution of the CAP and its role in shaping EU joined the Community, and shortly after in 1986 when Portugal and Spain joined. agriculture, specifically in the olive oil sector. It then looks at 3 The Council declared olive oil “of special economic importance” and “the most important source of oil and fats for large categories of consumers” (EC, 2005). As such, olive oil was an important 1 Research investigation prepared by Amaris Lunde, Huxley College agricultural product to protect from the infiltration of cheaper of the Environment, Western Washington University. imports, thus the legislation of Regulation No 136/66/EEC.

EUROMED Sustainable Connections: 2.1 EU Agricultural Policy Analysis 1 Community are higher than world market prices, the difference to auditing. Beyond making it more difficult for producers to claim between these prices may be covered by a refund when olive oil is more subsidies than what they qualified for, the reforms would exported to third countries”. The difference between the cost of prove to cause a major change in olive farming practices. production and the price consumers were willing to pay Encouraging farmers to get as much yield as possible from their represented the subsidy granted to the producers. The goal of the land, the new production-based subsidies prompted higher regulation was to ensure producers a fair income, while supplying chemical input and mechanization. consumers with affordable domestic olive oil. The reforms of 1998 Initial measures were aimed at supporting the income of olive oil Because the amount of monetary aid was determined by the producers by giving special monetary aids, especially to smaller quantity of oil produced, fraudulent claims had transformed to producers. The EEC put limits on the areas eligible for aid, known false reports of the amount of oil produced. Such fraud was as the maximum guaranteed quantity (MGQ). In addition, because possible because individual olive groves producing less than 500 it remained cheaper to attain olives from Mediterranean neighbors kilograms of oil per year could succeed at receiving aid for all of in many cases, the threat that olive oil might be extracted from the oil they pressed, even if the majority of it was for personal imported olives was an issue. To ensure economic benefits were consumption rather than sold on the market. These stresses on isolated to the Community, the regulation of 1966 added that in the CAP subsidies resulted in the 1998 reforms. The reforms order to receive subsidies, the olive oil had to be pressed from included amendments that would increase the maximum olives coming from within the Community. Regulation No guaranteed quantity (MGQ) of olive oil eligible for production aid 136/66/EEC also set minimum prices, established border by 31.6% from 1.35 to 1.78 million tones. They simultaneously protection, supplied public and private storage to take surpluses reduced production aid awards from EUR 142.2/ton to EUR from the market and granted export subsidies to assist marketing 132.5/ton. While the former-mentioned amendment liberalized outside the European Community. the amount of production, the latter made it less profitable for smaller farms to make false claims on the amounts of oil they put The next step would be to facilitate exportation. Subsidy moneys on the market. More quantities of olive oil were eligible for would make up the difference between the real price of the subsidies, while the aid offered per kilogram was less. European olive oil and the cheaper price it would have to sell at on weaker foreign markets, allowing producers to make the same Accordingly, the reforms adopted by the European Union in 1998 profit per liter they did domestically while selling at more further encouraged unsustainable farming practices. In order to competitive prices in foreign markets4. obtain the highest potential yield in olive oil, farmers took up the practice of high-density planting in their groves. Because of the The reforms of 1984 general tendency of olive trees to bare significant fruit only every CAP subsidies to olive oil increased from previous years, but not other year, olive farmers were especially pressed to have densely solely due to an increasing number of hectares in production. In planted groves. The more trees per hectare, the more each one 1981, olive oil subsidies in Italy tripled, in grand part due to fraud. would have to compete for nutrients from the soil, therefore Consequently, in 1984, amendments were made to the 1966 causing a greater need for fertilizer, often in the form of regulation. Rather than being awarded according to the size of chemicals. Irrigation became vital in the semi-arid climate of the plot, the subsidies were now to be distributed in relation to the Mediterranean to promote abundant, fleshy olives especially during quantity of olive oil actually produced. This required that years of unsubstantial rainfall. Intensive irrigation practices in producers keep a record of their yield in oil which would be subject regions where water was a scarce commodity further aggravated water scarcity, not to mention created a greater divide between 4 The 1981 accession of Greece into the EEC was regions that had sources from which to irrigate and those which significant for the olive oil sector. With the addition of this major did not. To further guarantee the maximum yield out of every olive oil producer, the Community was on its way to becoming a tree, farmers needed to ensure that their olives were not key player in the world trade of olive oil. In 1986, Spain and Portugal, the first and fourth world producers of olive oil consumed by insects. Chemical pesticides, often issued by the respectively, joined the EEC as well. By that time, the three top government, became the norm, causing chemical runoff into producers – Spain, Italy and Greece – were thriving and the nearby water sources. The EU Council recognizes the European market was dominated by their oils. environmental problems associated with agriculture. Nitrogen

EUROMED Sustainable Connections: 2.1 EU Agricultural Policy Analysis 2 surplus, ammonia emissions, eutropification, soil degradation and offered by the EU further enable European producers to sell on a a decline in biodiversity persisted in many areas. market where each bottle sells for less than in Europe without compromising the real cost of their product. For instance, Though the CAP subsidies had succeeded at making the olive oil Morocco, has 260 modern olive oil factories, which could produce sector flourish as an economic activity, negative effects 290,000 tons of oil a year for export alone, and yet its biggest year outweighed benefits. This was evident not only in regard to for export was 1997 at 35,000 tons. By contrast, growers in the environmental degradation and the further impoverishment of Andalusian region of Spain are able to export half a million tons of other olive producing countries, but also regarding a decline to the oil every year. Another indication of the exclusion of developing quality of the oil. Concerned with the marketability of its olive oils, countries in the world market is to be found in supermarkets of the the European Commission published a communication in 2000 United States. Since 1996, U.S. imports of olive oil have doubled, called, “quality strategy for olive oil’, in which it set out a plan for and yet there are just as few olive oils from the Arab-world enhancing the quality of European olive oil. A reform in 2001 represented on the U.S. supermarket shelves today as before. made a move to transfer funds from subsidies for the farmers to grants for quality development measures. It had become clear Agenda 2000 that the subsidies had succeeded at flooding the market with olive In 1999, the EU was preparing to add 13 new Member States into oil resulting in new surpluses, and it was now in the interest of the the Union. With this addition, the Council recognized, problems EU to move away from mass production and concentrate on associated with rural depopulation and lagging areas would forming a market where each bottle of olive oil could sell at a become more pertinent to the overall competitiveness of EU profitable price. agriculture. With Agenda 2000, the Commission recognized that “agricultural support is distributed somewhat unequally between Whereas subsides had once served to develop the olive oil industry regions and producers, resulting in poor countryside planning, a in a community whose markets were threatened by outside oil decline in agriculture in some regions and overly intensive farming producers, they had now caused the EU olive oil sector to grow to practices in others, generating pollution, animal diseases and such a disproportionate scale that other Mediterranean producers poorer food safety.” Despite being successful in attaining most of could no longer compete in the olive oil market. Production CAP's initial objectives, price support schemes encouraged the subsidies allowed EU farmers to produce on a mass scale not high intensification of agricultural production. Agenda 2000 was a attainable by farmers in developing countries. Because the latter reform meant to address specific agro-environmental measures, were unable to subsidize their production, countries including making them requirements within the CAP. Morocco, Syria, Tunisia and Lebanon no longer had a chance at selling their olive oil in markets where EU oil appeared. The overall objective of Agenda 2000 was to foster the regeneration of rural areas, which meant preserving the Though originally aimed at boosting the oversea sales for an ailing environmental and human resources entwined with agriculture. European olive oil industry, export subsidies had caused an unfair Agenda 2000 emphasized the importance of lagging agricultural advantage for EU olive oils all over the world by distorting market communities and introduced special aid schemes for what had prices in comparison to real production costs. Though the climatic been called less favored areas within the EU. Agenda 2000 states: attributes and low cost of production in developing countries would allow them to sell for less per bottle of olive oil, 95% of the olive Certain rural areas are designated as less favored areas (LFAs) oil sold in world supermarkets was coming from Spain, Italy and because the conditions for farming are more difficult, due to Greece in the 1990s. natural handicaps which increase production costs and reduce agricultural yields. These conditions may threaten the long- In recent years, Morocco, Syria, Tunisia and Lebanon have not term survival of farming, continued land management and the been able to compete even on their domestic markets because the viability of rural communities in these areas. floods of olive oil caused by EU subsidies have spilt into the 5 developing world’s market place . In addition, the export refunds percent of the olive oil sold in world supermarkets comes from Spain, Italy, and Greece. This is because the European Union, through its 'Common Agricultural Policy,' neutralizes the 5“The lowest-cost producers of oil are on the southern and western comparative advantage of its Muslim-world neighbors by paying shores: Morocco, Tunisia, Lebanon, Syria, and Turkey. But 95 European olive oil growers $2.3 billion each year.

EUROMED Sustainable Connections: 2.1 EU Agricultural Policy Analysis 3 Shortly after World War II, the development strategy in Greece Less Favored Areas was based on industrialization, originating in private initiatives, and The following areas are considered less favored: any design of rural development policy had to support this • Mountainous areas subject to a considerable limitation of development model. The Greek government used a price support land use and a significant increase in production costs; scheme for agriculture in its rural development policy. This • Areas threatened with abandonment and where resulted in an emphasis on prices and incomes policy, which maintenance of the landscape is necessary; temporarily assisted agriculturalists, while the structure of Greek • Areas affected by specific handicaps in which the agriculture was not addressed. While agriculture on the plains and maintenance of agriculture is necessary to ensure the coastal areas of Greece were supported under CAP subsidies, the conservation or improvement of the environment, the more remote agricultural areas did not receive EU subsidies. management of the landscape, its tourism value or in Though policies succeeded at modernizing the agricultural sector order to protect coastlines. and improving agricultural incomes, structural problems such as small average size of agricultural holdings, low productivity, The 2003 reforms isolation, and ageing population made it so agriculture in rural Responding to pressures from other countries to amend its unfair Greece was unequipped to improve. The results were twofold: domination of the olive oil market and further addressing some of agriculture was moved to the plains where mechanized practices the environmental problems manifest in large-scale production, the with high chemical input were successful at producing high yields, EU Commission in 2003 reformed the CAP to enhance and fewer people remained in the traditional agricultural competitiveness, stronger market-orientation, improve communities. The massive exodus of labor from agriculture during environment, reduce trade distortions and stabilize incomes for the 1960s and 1970s aggravated the structural problems and farmers. added new ones stemming from rural abandonment. Through 1991, continued emigration reduced the agriculture population by To address the problems of intensive farming, the CAP Reform more than half, from 45% to about 17%. The effects on the rural readopted its original form of subsidy awards. Where once it was landscape were apparent, with the total cultivable land area in the interest of development to encourage mass production, it decreasing by 10.5% in the period of 1987-1993. had now sought to discourage intensive farming. This separation of subsidies from the amount of production was termed The structural problems of Greek agriculture weakened the sector “decoupling”. Awards would be granted based on hectares of land to the point that Greece was unable to compete against and number of trees, and would be awarded under a Single international food products. Policies complemented incomes of Payment Scheme. This new payment plan would account for at farmers but there was a lack of policies to promote investment in least 60% of the average production-linked payments that were restructuring the sector in a manner that it would prepare to recorded from 1999 to 2003. The remaining aid would be allotted compete and not be entirely dependent on subsidies. The policies to Member States as ‘national envelopes’. These envelope funds implemented by the Greek government did not change for would still go to olive growers, during years of land rest or merely agriculture with the accession of Greece to the EEC in 1981, as to preserve olive groves for cultural purposes. The new system of they were in conformity with the framework of the Common decoupled payments was scheduled to take effect in the 2005-06 Agricultural Policy. Acting as the umbrella policies for all European marketing year. Community states, the policies of the EEC overlooked the fact that agriculture was not as developed and equipped to compete in It was assumed under the reform that a reduction in production- Greece as is was in other member states. linked subsidies would help prevent dumping olive oil in the markets of the developing world. The 2003 CAP Reform proposed Because Greece never adopted an integrated rural development to further avoid market imbalances by limiting payments to olive- policy of its own and none was supplied by the greater growing areas existing prior to 1 May 1998 and to new plantings Community, it depended on regional development policies to under approved programs. achieve partial goals. The approach towards rural development was sectoral, not integrated, based on special programs that were Rural development policy in Greece implemented separately by different planning agencies.

EUROMED Sustainable Connections: 2.1 EU Agricultural Policy Analysis 4 Today, Greek rural development and agricultural policies are taking the Regulation provides, in particular, for support for mountain a slightly different direction. It is a top priority of the Greek regions with natural handicaps and other disadvantaged areas. government to redistribute its national population back to the abandoned countryside by restoring the remote agricultural This shift in the direction of funding reflects a change in the CAP communities, and investing in structural building. The Greek from its priority to make EU agriculture competitive to a focus on Ministry of Rural Development and Food identified at the new environmental preservation and sustainable development in the millennium several policy objectives to promote the development countryside. Because the Regulation aims in particular to support of agriculture, the competitiveness of Greek products and the mountain regions with natural handicaps, olive oil producers in restructuring of the countryside. The plan for the restructuring of Troianata Village who chose to follow sustainable agricultural the countryside concentrates on an integrated economic and social practices should be likely candidates for receiving funding. The intervention in agriculture. This intervention seeks to make Greek Regulation includes funding for semi-subsistence farming agriculture attractive, modern and viable. Greek Prime Minster practices. Three provisions relevant to Kefalonia communities Kostas Karamanlis announced a national priority to establish "a include: new economic policy that will ensure development in all aspects, prosperity and more jobs for all people" and "a new agricultural • Semi-subsistence agricultural holdings - Individual producers policy that will give to the Greek people the ability to become more could benefit from Article 34(3) for ‘semi-subsistence competitive in Europe and worldwide". agricultural holdings’. This grant is awarded in an annual payment of up to €1,500 per agricultural holding. Subsidies for sustainable agricultural practices • Producer groups - Article 35(2) of Council Regulation (EC) No. Support schemes of particular relevance to sustainable agriculture 1698/2005 grants money to ‘producer groups’. As a and rural development activities fall under the second pillar of the cooperative, the olive oil producers Troianata Village could CAP (Rural Development Council Regulation No. 1698/2005), benefit from moneys allocated by this article. As stated adopted in 2005 to be implemented January 1st, 2007 and under the Annex of Council Regulation (EC) continuing through 2013. This regulation responds to the • Mountain areas - Finally, under the same Regulation, there problems caused and the criticism evoked by the price support are funds available to mountain areas. Article 37 lays the schemes of the first pillar of the CAP. For the purpose of “Conditions for measures targeting the sustainable use of guaranteeing that funds are used for the redevelopment of the agricultural land” including regard to mountain areas. The countryside, the regulation creates a financial and programming article states: “Payments should compensate for farmers’ framework for rural development policy that is separate from the additional costs and income forgone related to the handicap other projects of the CAP. This fund is called the European for agricultural production in the area concerned.” Agricultural Fund for Rural Development (EAFRD). Final Assessment The fund contributes to achieving the three objectives of rural Agriculture in the European Union in general, and specifically in development defined at Community level: Improving the Greece can be categorized into two regimes. The first policy competitiveness of agriculture and forestry by means of support regime modernized agriculture; the second regime attempts to for restructuring; improving the environment and the countryside equip the lagging rural communities to survive. The prior regime by means of support for land management; improving the quality attempted to make EU agriculture competitive by rewarding of life in rural areas and encouraging diversification of economic subsidies based on the level of production of agricultural goods, activity. while the second regime attempts to make agriculturalists competitive by investing in structural needs. Under such a regime, The policy contributes to sustainable development by encouraging assistance is available to support traditional agricultural farmers and forest holders to employ methods of land use communities to become economically autonomous while fostering compatible with the need to preserve the natural environment and principles of sustainable agriculture. Policies are now designed to landscape and protect and improve natural resources. The main fund small producers whose practices will preserve the aspects to take into account include biodiversity, water and soil environment and rural communities in order to build their capacity protection, and climate change mitigation. Against this backdrop, to survive in the market.

EUROMED Sustainable Connections: 2.1 EU Agricultural Policy Analysis 5 EUROMED SUSTAINABLE CONNECTIONS ANNA LINDH FOUNDATION POLICY ANALYSIS: 2:2. OLIVE OIL IN GREECE February 7, 2008

Olive Oil Production in Greece1 the olive in the Greek islands to the Phoenicians in the 16th century B.C. and on mainland Greece sometime between the 14th and 12th The 1981 accession of Greece into the EEC was significant for the century B.C., where its cultivation increased and gained great olive oil sector. Greece is covered by 1,025,748 hectares of olive importance (International Council of Olive Oil, 2005). In Greek groves. In the period of 1991 to 1996, the country produced an mythology, Zeus was originally the protector of the holy olive tree, annual average of 307,000 tons annually, which accounted for the "oria elaia". Legend holds that the city of Athens obtained its 16% of the total world production. And in 2002, the production name because Athenians considered olive oil more essential than was up to 430,000 tons. The greater production is attributed to a water, thus preferring the offering of an olive tree from the number of factors, including: a) the intensification and goddess Athena over a spring of water gusting out of a cliff from mechanization as well as the use of external inputs and irrigation, Poseiden the god of the sea. The olive-laden landscape, which b) improvements in olive cultivation, c) the sufficient net income claims approximately 5.5 million hectares of European soil, has comparing to other crops due to the high level of CAP support and aesthetic and sentimental value to the people of that region, high olive-oil prices and d) the lack of opportunities for other crops appearing in traditional artwork and literature. due to agro-climatic and socioeconomic conditions. Because olive It is a symbol of abundance, glory and peace oil production has been a practice since the ancient Greeks and within Greek mythology. The EU the Romans, it is deeply embedded Mediterranean countries can all be in the nutritional, historical and characterized by their olive tree landscapes; cultural identity of the they share a cuisine that is centered on olive Mediterranean. The olive tree is oil; and olive oil production is something emblematic of the European embedded in their histories. Mediterranean, its cultivation dating back to ancient times. Social concerns Olive oil is appropriate to look at in order to understand the causes Environmental implications and implications of the marginalization of particular rural Olive oil production, from the planting of the trees to pressing the agricultural communities, an important concern of the social aspect olives at the mill, is associated with a variety of positive and of sustainable agriculture. Olive trees were traditionally grown in negative environmental implications. The Mediterranean landscape hill-side landscapes in the European Mediterranean. Like much of is littered with olive trees. This is because olive trees are well agriculture, olive farming has moved toward industrialized adapted plants for the arid Mediterranean climate, potentially agricultural practices, leaving many of the traditional olive groves putting minimum demand on water supply compared to other to abandonment. agricultural crops. One ecological service olive trees provide is the prevention in soil erosion. Also, they provide an agricultural Economic importance of olive oil ecosystem to native insect and bird species. However, the The Mediterranean and specifically those states that are part of intensification of olive cultivation is associated with environmental the EU, have depended and continue to depend on olive oil as one concerns including the application of chemical pesticides and of their agricultural industries. The Greeks had used olive oil as a fertilizers, and the compacting of the soil through the use of medium of transaction and marketing since the Minoan Times. mechanized tilling. More recently, olive oil production has become a significant industry for the southern Member States. The European Historical and cultural importance of olive oil Community records showed that there were 2,311,998 producers The Romans extended the cultivation of the olive tree throughout between 1991 and 1996. As of the year 2000, the European Union their occupied territories on the Mediterranean coast. The cultural (EU) produced 70% of the world supply of olive oil (EC 2000). Its importance of the olive for Greece in particular is apparent in its five top producers are Spain, Italy, Greece, Portugal and France history and mythology. Some historians date the appearance of respectively.

1 The economic viability of olive oil has fluctuated throughout Research investigation prepared by Amaris Lunde, Huxley history, depending on the scale of farms, competitiveness of the College of the Environment, Western Washington University. market, environmental constraints such as drought or frost, and

EUROMED Sustainable Connections: 2.2 Olive Oil Production in Greece 1 governmental intervention. Today the economic benefits of olive traditional groves generally do not replace plants when they are no oil production go primarily to large-scale intensive producers longer in their full productive capacity, preferring to preserve the whose productive value is high but whose intensive practices richness that olive trees add to the landscape and history of the compromise the integrity of surrounding ecosystems and whose region, and thus the oldest trees are found in these groves. The industrialized form has encouraged the movement of olive olive groves of Kefalonia all fit into this designation of scale. cultivation out of remote traditional olive oil regions, marginalizing those communities. Traditional high-input groves Next, the intensified traditional olive farms are typically located in Current state of olive oil in the European Union hills and rolling plains, with 80 to 250 trees per hectare. Though Within olive oil production, the scale of production that is the number of trees does not exceed the number in the first associated with the highest environmental, social and cultural category, these small modern groves differ in scale due to the attributes is not the most economically lucrative system. Olive maximization of yield per tree the farmer attempts to achieve. In farms in southern Europe with the highest environmental values, order to encourage maximum fruiting every year, this scale of olive including biodiversity, landscape conservation, and water farming can be characterized by repeated tilling and herbicides to conservation, have not shown to be profitable for the individual mange the under storey and the use of 2-6 kg/ha of combined farmer. A study conducted by the Technical College of Agricultural fertilizer per tree and 2 to 10 pesticide treatments per year. Engineers, Madrid found that for olive oil production in the Though not all have been equipped with irrigation, these groves southern Member States of the EU, the farms that were most are increasingly receiving water by way of drip irrigation, to further favorable to the health of local ecosystems suffered from net encourage maximum fruiting and a heavy average weight for each annual losses of €402.50 per hectare while the farms that had the olive. most negative effects on the ecosystem made an average annual profit of €1,378 per hectare. These economic disparities come as Large modern high-input groves a result of market competition coupled with EU subsidies that Finally, the intensive modern olive farms are located on plains, reimburse farmers according to the volume of production. with the capacity for 200 to 400 trees per hectare. There is no Numerous studies including the “report on sustainable agriculture” terracing and the under storey is managed through repeated use of the European Community conclude that the general state of of herbicides. Chemical fertilizers are usually applied through drip European agriculture is of the domination of intensified production irrigation in the form of Nitrogen (150-350kg/ha annually). Finally, leading to certain negative effects on the environment and rural trees are treated with pesticides 2 to 10 times a year as they are communities. Three categories of olive groves are: a) traditional under intensified traditional practices. low-input groves; b) traditional high-input groves; and c) large modern high-input groves: The low-input traditional olive farms have potentially the highest natural values, including biodiversity and landscape conservation. Small traditional olive groves They also provide the most positive effects (such as water The first category includes small groves of 40 to 250 trees per conservation in upland areas) as well as the least negative effects hectare, and is often characterized by scattered trees. These are on the environment. These plantations also represent an ancient the groves that are typically located in the remote mountainous culture, harboring trees that date 500 or more years and areas, and in continual decline because of their inability to continuing the traditional practices of small olive groves. The compete economically. The traditional small groves often have more intensified the plantation and the higher the chemical inputs, terrace walls, as they are predominantly associated with steep the greater the negative environmental impacts, particularly in the terrain. Their under storey is often maintained by grazing rather form of soil erosion, run-off to water bodies, degradation of than through the use of herbicides or heavy tilling. There is little habitats and landscapes, and exploitation of scarce water to no chemical fertilization associated with these small resources. In addition to degrading local ecosystems, the larger productions, with manure as the most common application for the plantations are more representative of industrialized agriculture addition of nutrients. Pesticide application is rare and usually than they are of the olive landscapes associated with Greek means applying traditional treatments such as copper and lime. tradition. Due to the inaccessibility of water sources in these inclining areas, traditional plantations are rarely irrigated. Farmers in these

EUROMED Sustainable Connections: 2.2 Olive Oil Production in Greece 2

Economic concerns in olive oil production Olive oil in remote mountain communities Because looking at olive farming from an environmental standpoint Economic, cultural, climatic and landscape variables compete to would lead one to believe that traditional, low-input practices are determine what agricultural practices each olive producer will the most favorable, it is useful to look at the differences in yield choose. In the mountainous regions of the European and labor input in order to see why the more environmentally and Mediterranean, steep terrain limits the amount of mechanization culturally supportive system is not necessarily regarded as the possible within the olive groves. These areas are also associated most attractive alternative by the individual farmer. While the with human populations that are resistant to change, and average annual yield of the traditional low-input plantations is 200 therefore older traditional practices tend to be most prevalent in to 1,500 kg of olives per hectare, the most intensive plantations these regions. Such resistance simultaneously offers the attribute can produce up to 10,000 kg/hectare. It also doesn’t help that the of cultural preservation and hinders a community in its ability to trees of smaller plantations, due to a lack of heavy irrigation, adapt and compete. produce according to their natural rhythm, which is usually only every other year. Intensely fertilized and irrigated plantations The puzzle to be examined therefore is not how rural communities succeed at getting at least some olives from trees every year. can adapt technologically to assimilate the more competitive Further, the labor requirement is much higher for the smaller intensive farming practices of the plains, but how traditional plantations, where the harvest and pruning are done by hand in practices can be supported by modern technology, the global comparison with the mechanized system of harvesting and pruning market and progressive policy reforms. common to modern practices.

A 1998 ESTIA study on these three types of plantations for Spain estimated that the low-input traditional plantations received €97.50 per hectare in production support each year while the most intensive plantations received €975.0 (ten times the amount of the former). Though the direct costs were significantly lower for the traditional groves (€650 per hectare) compared to the intensive farms (€1,547/ha), the sales were disproportionately lower - €150 per hectare compared to €1,950 per hectare annually - for each plantation. In all, the net annual income for low-input traditional olive oil farmers was a loss of €402.50 per hectare while intensive modern plantations made an average annual profit of €1,378 per hectare.

EUROMED Sustainable Connections: 2.2 Olive Oil Production in Greece 3 EUROMED SUSTAINABLE CONNECTIONS ANNA LINDH FOUNDATION POLICY ANALYSIS 2:3. RURAL ABANDONMENT AND SUSTAINABLE DEVELOPMENT in GREECE February 7, 2008

Rural Abandonment and during the post war era, thereby drawing people from the 1 countryside into industrial cores. Second, the industrialization of Sustainable Development agriculture rendered small mountainous farms unable to compete with intensified agricultural practices on lower elevations and Socio-economic forces and governmental policy have encouraged leading to a depopulation of those areas. This industrialization the intensification of agriculture and have aggravated the trend caused further depopulation of rural areas. toward abandonment of remote agricultural communities in mountainous regions. Traditional practices that represent the Low economic competitiveness and pervasive socio-economic highest potential for sustainable agriculture are threatened by the pressures led to the migration of populations from mountainous changes in the intensity of farming which have characterized Mediterranean regions and the abandonment of their agricultural Mediterranean agricultural sectors during the whole post-war activities. Agriculture was more economically viable in the more period and in particular by the combination of abandonment and fertile plains and people either followed their work to the plains or intensification processes. The intensification of agriculture is moved to cities to find work in other sectors. The model of associated with high productivity and economic profitability but economic growth which Mediterranean agricultural sectors have negative environmental consequences, while the abandonment of followed in the post-war period has led to the creation of only small agricultural communities is associated with a loss of the certain pockets of intensive farming mainly following the most more sustainable traditional agricultural practices and the general easily accessible flat and coastal routes of the continental part of marginalization of those communities. these countries, while leaving the inaccessible mountainous and insular regions in the shadow of this development process. The resurrection of agriculture in remote agricultural regions The motivations underlying the intensification of agriculture have of the EU is necessary to the been economic. Agricultural production can be expected to move survival of the communities where it is most productive. In contrast, agricultural land is themselves and to the abandoned when it fails to generate an income flow to households movement toward sustainable and businesses and when farmers are unwilling or unable to agriculture. However, the modernize their agricultural practices. The inability of small continued viability of low- traditional farming communities to adapt to the modernization of yielding dry land cultivation agriculture has been attributed to limitations of the physical that is typical to these remote environment such as steep terrain, dry climate and climatic farming communities seems to be under serious threat because of instability; the small size of agricultural plots; isolation; and the inability to compete on the market. This inability to compete resistance from local people. The results of the case-study renders remote agricultural systems unable to provide a livelihood illustrate that olive oil production in Kefalonia is limited by these for agriculturalists. The challenge then is to identify an agricultural very factors. system appropriate for rural communities that not only have a neutral effect on the ecological surroundings but that are Environmental and social repercussions of industrialized simultaneously economically viable. agriculture Though the reason that agriculture has concentrated in the plains Causes of marginalization has been predominantly economic in nature, the repercussions on In Greece, as in many EU Member states, two phenomena have rural communities have not been restricted to economics. Their been identified as the major causes of the continued physical restraints, climatic conditions and geographical marginalization of remote agricultural communities. First, EU remoteness make these mountain areas of Europe representative policies geared toward industrialization of agriculture and parallel of an extreme case of economic and social vulnerability while efforts by the Greek government to grow its industrial sector abandonment is associated with land desertion and spontaneous deforestation which pose a threat to the rich diversity of flora and

1 fauna that would typically characterize European mountain areas. Research investigation prepared by Amaris Lunde, Huxley College The EU Council recognizes the environmental problems associated of the Environment, Western Washington University. with agriculture (including olives) that were augmenting in the

EUROMED Sustainable Connections: 2.3 Rural Abandonment and Sustainable Development 1 1980s and 90s. As regards water quality, nitrogen surplus was being based purely on net financial gain, within the concept of especially a problem in the 1980s, slightly declining with the new sustainable agriculture, economic vitality is considered as the long- decade within the Member States. Problems of ammonia term increase in the value to the community. Long-term economic emissions, eutrophication, soil degradation and decline in stability is achieved through sustainable agriculture by 1) the biodiversity persisted at the same rates in many areas. reduction of the long-term costs of pest resistance and destruction of beneficial insects that occurs with overuse of pesticides; 2) Sustainable development reduction of the costs of external fertilizers and other chemicals; Sustainable development, in its broader sense, rests on the and 3) a decrease in the costs of work-related illness. Costs and principle that present generations must meet the needs of the benefits are measured beyond economic terms in an agricultural present without compromising the ability of future generations to system that strives to be sustainable. Practices that attempt to meet their own needs. Authors commentating on sustainability meet current and future societal and environmental needs are integrate a concern for the well being of natural and human measured by their ability to maximize the net benefit to society resources. Stewardship of human resources includes consideration when all costs and benefits of the practices are considered. of social responsibilities such as working and living conditions of laborers, the needs of rural communities, and consumer health Social needs and safety both in the present and the future. Stewardship of land Tightly integrated with the economic components of agriculture and natural resources involves maintaining and enhancing this vital are its social needs. The economic returns of an agricultural resource base in the long run. activity must be locally concentrated so that the local economy is strengthened. Further, to be sustainable, the route of Because many socio-economic and environmental issues are development should be determined by the cultural tendencies and intertwined in a society’s food production, and because many needs of the local population, known as endogenous developing regions are agricultural, agriculture is at has become development. synonymous within EU policy with rural development. As each agricultural system is a combination of wider societal forces and Environmental health local conditions, a precise definition for sustainability remains A sustainable agricultural system is one that is not reliant on high elusive. The term sustainable development reveals a focus on chemical input or mechanization that threatens environmental or development, which has been the focus of policies and movements human health. The conflicts between environment and that have presented the very problems that the movement of development were first acknowledged by the United Nations in the sustainability attempts to solve today. However, sustainable 1972 Stockholm Conference on the Human Environment. The development pays attention to how these needs are met. concept of sustainable development grew from there at the 1982 World Commission on the Environment and Development called by As with the broader concept of sustainable development, the General Assembly of the United Nations. The report from the sustainable agriculture emphasizes the need to promote the health Brundtland commission gained recognition as the first international of human and natural resources simultaneously. In other words, address of sustainable development. Within the report, the concept of sustainability recognizes the interdependency of Brundtland proclaimed: people and their natural surroundings. Sustainable agriculture can be viewed as a system that includes concerns for social equity and “The environment does not exist as a sphere separate that recognizes the interconnectedness of the individual farm and from human actions, ambitions, and needs, and attempts its workers, the local ecosystem, and communities affected by this to defend it in isolation from human concerns have given farming system both locally and globally. the very word "environment" a connotation of naivety in some political circles. The word "development" has also Economic vitality been narrowed by some into a very limited focus, along Embodying the principles of a holistic approach to development, the lines of "what poor nations should do to become sustainable agriculture concerns itself with economic vitality, richer, " and thus again is automatically dismissed by environmental preservation and social equity all inclusively, many in the international arena as being a concern of straying from the isolationist tendency to focus only on the ability specialists, of those involved in questions of "development of a food system to produce maximum quantities. Instead of assistance. " But the "environment" is where we live; and

EUROMED Sustainable Connections: 2.3 Rural Abandonment and Sustainable Development 2 "development" is what we all do in attempting to improve heart of sustainable development is development. Many authors our lot within that abode. The two are inseparable” describe development and agriculture as sustainable when they The evolution of sustainable development are able to meet the needs of the present without compromising Within policy and planning discourse, sustainable development the ability of future generations to meet their own needs. The aim groups together the concepts of sustainable agriculture and rural of sustainability is to achieve economic development that takes development. As stated, most lagging rural areas are dependent overall human and environmental well being into consideration. on agriculture as their main livelihood. With the industrialization of Technological advancements that have enabled greater agriculture, the inability of small farming communities to compete productivity and higher profit with less labor requirements were has perpetuated the marginalization of traditional farming successful at meeting the economic needs of some agriculturalists communities. These areas become less attractive to younger and the nutritional needs of a greater number of people. An generations due to their lack of economic opportunity, and the agricultural system that maximizes the economic potential and communities lose their population to the pulls of more developed produces the greatest volume of food however has been criticized economies. Therefore, international bodies such as the United as being too narrow in focus. To be sustainable, development and Nations have recognized the link between development and agriculture should recognize the interconnectedness of the farm, agriculture. its workers, the local ecosystem, and the communities affected by the farming system both locally and globally. In 1992 the United Nations held the first Earth Summit in Rio, making sustainable development one of its guiding principles in Less Favored Areas (LFAs) international policy. More than 178 governments representing Sustainable agriculture and Rural development policies are a developing and developed nations alike met to adopt a plan known response to problems faced by lagging agricultural regions. On an as Agenda 21, calling for action on global, national and local levels international level, the majority of these regions are within the in "every area in which there is human impact on the parameters of developing countries. However, the United Nations environment" (UN 2006). Chapter 14 of Agenda 21 is titled acknowledges the poor state of rural areas in developed nations as "Sustainable Agriculture and Rural Development" or SARD. well as developing nations (UN Agenda 21: Chapter 14: 14.2) and the importance of restoring their agricultural lands and revitalizing Chapter 14 of Agenda 21 defines sustainable development as "the their communities. Within the European Union, policies for rural management and conservation of the natural resource base, and development were arrived at in response to agricultural the orientation of technological and institutional change in such a abandonment that was emblematic of the post war and has manner as to ensure the attainment and continued satisfaction of escalating in the past few decades. human needs for present and future generations". Following Rio, the UN established a Commission on Sustainable Development Rural abandonment in Greece (CSD) to monitor progress in implementing Agenda 21 and the Of the European Mediterranean region, Greece is the country most Food and Agriculture Organization (FAO) was designated as Task touched by land abandonment. In the post-war period, there was Manager for Chapter 14. The FAO is an international forum an enormous rural exodus of approximately 1.5 million people. composed of developed as well as developing countries for the Men of working age sought employment in other countries purpose of negotiating agreements and policies within fisheries, including Germany and the United States, or moved to forestry and agriculture. Since its creation in 1945, FAO has metropolitan areas of Greece, mostly Athens. In response to focused primarily on developing rural areas. With the Rio summit international market pressures, the priority of the Greek and the resulting SARD charter, the concept of sustainability would government was to develop the urban sector through rapid now be the focus of FAO efforts in rural development. The SARD industrialization of the economy. A study based in five concept defined at the Rio Summit and adopted by FAO would act communities in Ionnina revealed that a lack of infrastructure and a as a paradigm for holistic development. lack of economic activities, alternative or complementary to agriculture, promoted the gradual depopulation and By virtue of being focused on development as opposed to marginalization of these areas. preservation, the concept of sustainability laid out by Agenda 21 and the FAO emphasizes technological advancements that aim to Rural depopulation signaled the need to reform the countryside, support human needs for the longest possible time. Indeed, at the and between the 1960’s and 1981 – the year Greece became a full

EUROMED Sustainable Connections: 2.3 Rural Abandonment and Sustainable Development 3 member of the EU - the national agricultural policy adopted price supports designed to reduce economic class and regional divisions and to generally raise the standard of living in the countryside. Still, between 1961 and 1991, continued emigration reduced the agriculture population by more than half, from 45% to about 17%. The effects on the rural landscape were apparent, with the total cultivable land area decreasing by 10.5% in the period of 1987- 1993. Despite these great losses of rural populations through the 1990s, 39% of the total income of households in Greece came from agriculture in 2005. Such a large percentage of income from a deteriorating area of cultivated land indicates an intensification of crops and high-input practices

Today it is a top priority of the Greek government to redistribute its national population back to the abandoned countryside. The Ministry of Rural Development and Food identified at the new millennium several policy objectives to promote the development of agriculture, the competitiveness of Greek products and the restructuring of the countryside. The plan for the restructuring of the countryside concentrates on an integrated economic and social intervention in agriculture. This intervention seeks to make Greek agriculture “attractive, modern and viable” (Ministry of Agriculture web announcement, 200). Current policy reflects the growing national goal for the modernization of rural Greece. Fueled by the opportunities offered by the global economy, the nation hopes to bring jobs and life back into the countryside.

EUROMED Sustainable Connections: 2.3 Rural Abandonment and Sustainable Development 4 EUROMED SUSTAINABLE CONNECTIONS ANNA LINDH FOUNDATION POLICY ANALYSIS 3.1. FOOD SECURITY AND SUSTAINABILITY March 9, 2008

FOOD SECURITY AND criteria for cooperative enterprises, however, may be unique to these villages, and not necessarily suited everywhere. SUSTAINABILITY: A CRISIS OF 1 CULTURE AND POLICY In this paper I will review political economy, as a framework for contextualizing some of our current sustainability dilemmas. The “Given the chance, poor communities hold the key to the solution emerging geopolitical dynamic may in fact help open a world of their own problems” (Pretty et al 1995, 139) system which would allow for the reassertion of comparative advantage, and thus open up markets for the high-quality Introduction processed olive oil from Troinata and Farsa, and indeed for other Food is both practical necessity and cultural product. Food reflects study villages in Italy, Jordan, and Palestine (EUROMED 2008). a communal order that can be exclusive (as in industrial agriculture) or inclusive (with more evenly distributed size classes). Geopolitics Issues around food call into question cherished beliefs regarding Just as in the US, reforms over the past 15 years in the EU’s consumption and intriguing ideas of whether achieving the triple Common Agricultural Policy (CAP) have created crop program rules bottom line (optimal economics, environment, culture) in that discourage crop rotation and other sustainable practices. This production is a possibility. is in order to maintain high base acreages, which then qualify for subsidies (EUROMED 2008; European Communities 2004). More often than not, though, meeting the triple bottom line is fraught with constraints. The Sustainable Community Connections Within the past several years in the World Food Programme, the project, coordinated by AWISH-HELLAS, seeks to address food cost of obtaining basic commodities such as wheat, rice, and corn security issues in creating “stronger and closer relationships has doubled. Observers may blame this on “food shortages” between Mediterranean cultures” (EUROMED 2008: Project created by resource constraints. A careful look at USDA data, briefing-report from the Dec 8-9 2007 workshop, 3). In this four- however, show why stocks are being depleted: both production part workshop (the first was held in Athens in Dec. 2007, we are and consumption are high (Fig. 1) – food and farm policies explain here today at Lake Como for the second one, a third will be held in much of the variation in any food equation. For example, a Tunisia, and the fourth in Athens), the specific goal is development burgeoning livestock and ethanol market, the latter of which has and planning for implementation of Fair Trade (FT) olive oil-related absorbed 15 percent of the US corn crop in the past year and products, with targeting of markets in the European Union (EU) could take as much as 30 percent this year, have significantly and United States (US). Through planning, the project aims to contributed to such demand (Fig. 2). Clearly, competition between support local economies, promote cross cultural understanding, the 860 million people in the world who own gas-gulping and provide a modern and practical planning tool both utilizing and automobiles and the 2 billion poorest (with little purchasing power) advancing local economic development theory. are at odds. Food and farm policies actually exacerbate and create such anomalous situations – pitting humans against animals for To do this, it is first necessary to consider principles of consumption of traditional staples (see Figures 1 and 2). sustainability, which include considerations of community, resilience, and food security – all of which should be incorporated Decreasing grain stocks have led social critics to call for even more into sustainability criteria guiding the EUROMED project. The triple grain eating (whole grains). Earlier work such as France Moore bottom line concept of sustainability includes consideration of Lappé’s Diet for A Small Planet, Food First, and this author’s World economic viability, social acceptability, and at the same time, Food, Population, and Development exposing political economies environmental integrity and sustainability. This calls for the preceded the spate of "locavore" writing today (Kingsolver, Pollen, “reconfiguration of human economies,” in the words of Wes Smith and Mackinnon, many others). This latter approach is stated Jackson of the US-based Land Institute, molding agricultural cogently by journalist Michael Pollen in his newest book, In economies to nature’s image (Jackson 2002, 75). Sustainability Defense of Food. Pollen’s Mantra is “Eat Food, Not too Much, Mostly Plants.” Pollen is referring to grass-fed (“natural”) livestock 1 Research report prepared by Professor Gigi Berardi, Chair, – as well as plant products such as olive oil. Department of Environmental Studies and Interim Director, Institute for Global and Community Resilience, Huxley College of the Environment, Western Washington University.

EUROMED Sustainable Connections: 3.1 Food Security and Sustainability: A Crisis of Culture and Policy 1 World Grain Production and Consumption, 1960-2007 Friedman argues that the wheat complex facilitated food import dependency, the durable food complex reduced demand for 2,500 traditional tropical exports, especially sugar and (tropical) vegetable oils (but allowing developing economies to export high- 2,000 valued olive oil), and the livestock complex undermined local, Million Tons Million mixed economies with its emphasis on a “world (marbled) steer”

1,500 and appropriation of lands for grazed cattle. Almost all of the Production complexes were enabled by farm and food policies, which Consumption eventually added distributive economic and social goals (see, for 1,000 example, European Communities 2004: The Common Agricultural Policy Explained). 500 Principles of sustainability are needed to guide such efforts. Certainly, mobility of capital and labor, and global outsourcing and 0 1960 1970 1980 1990 2000 2010 marketing, all disrupt the living and material cycles of local Source: USDA ecosystems and attempt to compensate for the disruptions by (Brown, 2008, http://www.earth-policy.org/Books/PB3/Plan%20B%203.0%20Data%20-%20Chapter%202.xls) more technology, more purchase of inputs, and more selling or Fig. 1 using of wastes. Although capital movements and markets tend to

eliminate wild places and ecosystems, they may then be relinked U.S. Corn Used for Fuel Ethanol, 1980-2007 through the very social institutions – markets and transnational 90 corporations—that disrupt them.

80 According to Friedmann (1994, 2000), agriculture, the method of 70

Million Tons Million human food getting, is key to transforming economy and 60 governance. Others argue that it must be placed at the center of 50 economy, governance, and science. This elevating of agriculture is

40 the essence of food security. It involves substituting certain management practices and minimal interventions for annual 30 disruptions of tilling, planting, and leaving the soil bare, as in the 20 old English “High Farming” that Friedmann writes about. This is 10 otherwise called “habitat enhancing agriculture,” which reverses the logic of industrial agriculture and modern capitalism. Some 0 1980 1985 1990 1995 2000 2005 2010 would call this “agroecology” or “ecological agriculture,” and it is Source: USDA (Brown, 2008, 1Hhttp://www.earth-policy.org/Books/PB3/Plan%20B%203.0%20Data%20- designed to consciously recover the self-renewing qualities of %20Chapter%202.xls) much traditional agriculture. Such practices are most certainly wise Fig. 2 traditions.

No scholar touches on the purview and extent of economic Greece, Olive Oil, and the Common Agricultural Policy distortion and havoc as well as Harriet Friedmann of the University (CAP) of Toronto (Friedmann 1994, 2004). Friedmann neatly tells the Since the mid 20th century, two “pillars” of policy have operated in story of the commoditization of food in terms of three complexes the Mediterranean -- one to offer price supports so products can that form the “shaky foundation” of the world food economy. be sold at competitive prices, the second, to advance rural These complexes are: Wheat, Durable Food, and Livestock. Each development (EUROMED 2008). Within the EU, Italy had been the complex includes many class, race, and gender relations within a sole producer of olive oil until 1981 when Greece joined the Union certain international division of labor – few of which are positive, in (France had been producing very little); Spain and Portugal joined terms of achieving principles of sustainability. in 1986. At that time, competition was coming from cheaper

EUROMED Sustainable Connections: 3.1 Food Security and Sustainability: A Crisis of Culture and Policy 2 producers – Morocco, Syria, Tunisia, Lebanon – with better climate abandonment, areas affected by certain physical constraints where and less expensive inputs. agriculture is necessary to preserve the environment (with, for example, the addition of cover crops and vegetative cover), or to The first regulation of note affecting olive oil was 136/66/EEC of ensure tourism value or protect coastlines. Sept 22, 1966, which included olive oil in the CAP subsidies. The Council declared olive oil of “special economic importance” and The 2003 CAP reforms of the EU Commission brought decoupling: “the most important source” of oils and fats for large categories of separating subsidies from levels of production. It established a consumers (European Communities 2004). Single Payment Scheme (60 percent of funds) based on hectares of land and numbers of trees –and the rest (40 percent) was The goal was to ensure that producers received a fair income. To allotted to states as “National Envelopes” – given to olive growers do this, olives would need to come from the locales themselves, to in years of rest or to preserve the area for cultural purposes. be “native (and traceable) to place.” The rule set minimum prices, These reforms were scheduled to take effect in the 2005-06 established border protection, supplied public and private storage marketing year, ostensibly limiting payments to olive areas in to manage surpluses from the market, and granted export production before May 1, 1998 and to new planting under subsidies to assist marketing outside the EU. approved programs.

In 1981, in large part due to fraudulent cases in Italy and the Greece itself has experienced steady policies of industrialization unwarranted and unprecedented tripling of Italian subsidies, and rural-to-urban migration. Through 1991, the agricultural amendments were made to the 1966 regulation – subsidies were population was reduced by more than half from 45 percent to 17 to be distributed according to the quantity of oil produced. This percent; between 1987 and 1993 alone, total cultivable land area resulted in intensified production to achieve even higher yields, decreased by 10.5 percent. Today Greek agricultural policies aim including denser plantings of trees. Chemical-laden surface water to restore agricultural communities. runoff became a problem, as did the quality of the olive oil itself. Reforms in 2001 aimed at addressing this, and grants were issued On the basis of “environmental” and “rural heritage” specifically for quality development measures. considerations, communities like Farsa and Troinata on the island of Kefalonia would qualify for subsidy funds under the recent EU At the same time, attempts were made to ease barriers to Regulation No 1698/2005. Subsidies are available through this production and marketing for other Mediterranean countries. It regulation to villages under categories such as Article 34(3) “semi- was recognized that 95 percent of the olive oil sold in world subsistence agriculture holdings,” Article 35 “producer groups” and supermarkets was coming from Spain, Italy, and Greece. The CAP Article 37 “mountain areas.” The regulation was implemented had effectively neutralized the comparative advantage of its Arab January 1, 2007 and will continue through 2013. It also creates a neighbors by paying European olive oil growers 2.3 billion dollars separate fund, the European Agricultural Fund for Rural each year in subsidies; for example, Morocco had 260 modern Development (EAFRD), which provides funds for land olive oil factories and could produce 290,000 tons of oil a year for management, improvement of the rural quality of life, and export but the biggest export year was 1997 at only 35,000 tons. encouragement of diversification. As such, it was designed to By contrast, growers in the Andalusian area of Spain exported support traditional agricultural communities to become 500,000 tons of oil each year (EUROMED 2008). economically independent while adhering to principles of sustainable food production. In 1999, the EU was preparing to add 13 new member states and agricultural inequalities were looming large. In the previous 10 Sustainability Indicators and Benchmarks years, United States’ imports of olive oil (mostly from the three Sustainable development as a term first appeared in World major suppliers) had doubled. Previously, policy tools such as Conservation Strategies in 1980. Within the past 15 years, a Agenda 2000 (a project of the Network of Mediterranean Non- “gallery of definitions” for sustainability – over 70 uses – has governmental Organizations focused on Ecology and Sustainable emerged (Birkmann 2000a, Kirkby et al 1996). The most common Development) was meant to address agro-environmental usage is given by the Brundtland Commission report (Our Common measures and to foster the regeneration of agricultural areas – Future) – “Sustainable development is development that meets the especially in mountainous areas, those threatened with needs of the present without compromising the ability of future

EUROMED Sustainable Connections: 3.1 Food Security and Sustainability: A Crisis of Culture and Policy 3 generations to meet their own needs.” (Birkmann 2006b, 43) ƒ Low input or low external input – reduced use of materials Today, ideas about carrying capacity and ecological footprint, from outside; bioregionalism, food miles, and fully integrated food systems build ƒ Ecologically-sound (consistent with principles and processes on the ideas first elaborated by the Brundtland Commission that govern natural environmental systems; may include (Spector 2002). labels such as ecological agriculture or agroecology); ƒ Regenerative (continuing ability to recreate the resources that It may seem odd talking about relatively recent studies of the system requires); or, sustainability with a Greece or Roman or Tunisian or Jordanian ƒ Organic (like an organism or a whole consisting of inherently case – cultures that have existed for millennia. Yet Greece functioning parts). presents a very interesting case of environmental modification. Greece is one of the cradles of civilization, yet (Jackson 2002, 67) In Kefalonia, a great advantage for sustainable agriculture studies the impact of millennia of agriculture practice is everywhere -- and research informing agriculture-based cooperatives is the work “archeological investigations of ancient ecosystems using soils and of the Department of Organic Farming of the Technological fossil pollen along with human relics and artifacts reveal that when Educational Institute (TEI) of Ionian Islands in Argostoli. hill slopes lose their soil, people move; when usable soils re-form Established in 1999, this is the first and only department of higher thousands of years later, people return to farm.” education in Greece whose sole subject is organic farming. With 800 students, the department is in its ninth year. It works closely Plato and Aristotle witnessed this degradation. Plato, in one of his with the Hellenic Environmental Movement – the environmental dialogues, has Critias proclaim: “What now remains of the formerly movement in Greece (Doukas 2001). rich land is like the skeleton of a sick man, with all the fat and soft earth having wasted away and only the bare framework The first attempt at organic farming in Greece may have been in remaining…The plains that were full of rich soil are now marshes. 1982 in Egialeia in Corinthos, with organic raisins. In 1993, the Hills that were once covered with forests and produced abundant Division of Organic Farming was established in the Ministry of pasture now produce only food for bees. Once the land was Agriculture (renamed in 1994 the Ministry of Rural Development enriched by yearly rains, which were not lost, as they are now, by and Food). Throughout Greece, 1200 ha are registered as flowing from the bare land into the sea.” (Jackson 2002, 67) organically cultivated according to EEU Legislation (2092/91); this represents only .03 percent of total cultivated land in Greece. In For the Romans, the earth was “mater terra” – when topsoil was 1999, organic livestock was introduced (EU Legislation 1804/99). lost, fertility declined. According to Virgil, Today, of 5.1 million ha cultivated in Greece, 31,000 are organically farmed, which represents .6 percent of the total (Lunde Before we plow an unfamiliar patch 2007; Doukas, undated). According to IFOAM (Doukas 2001), of It is well to be informed about the winds, 95 countries, Greece places 36th in extent of relative cultivated About the variation in the sky, acres. According to data from 2003, the top producing counties in The native traits and habits of the place, Greece are Laconia, Aitoloakarnania, Achaia, Chalkidiki, and What each locale permits, and what denies. Grevena. In Kefalonia, a variety of organic products are grown or produced with an option of three certification organizations: Dio, One of the challenges today confronting sustainable agriculture is Fysiologiki, BioHellas. Growers also participate in international taxonomic – the concept is often vaguely defined. One of its oldest programs. precursors is “organic,” although even Rodale himself admits to not knowing its derivation (Lockeretz 1990). Sustainable Greece has four organic farming agencies (Doukas 2001): the agriculture can, in fact, alternatively mean: Union of Organic Farmers of Greece, Science Society for Organic Agriculture, Workshop for Ecological Practice, and the Union of ƒ Sustainable over time (an ability to endure, maybe Consumers of Organic Agriculture Products. The main organic indefinitely); products are olives, olive oil, other vines, and other tree crops ƒ Alternative (something different from the prevailing or especially citrus. Currants are listed only by DIO, crocuses for conventional); saffron by Fysioogoki. Organic olive cultivation is popular – it is distinguished by non-toxic fertilization and pest control practices.

EUROMED Sustainable Connections: 3.1 Food Security and Sustainability: A Crisis of Culture and Policy 4 ƒ National regional (good governance and policy). The practical application of concepts of sustainability to agricultural systems is illustrated by the recommendations of numerous The production system should be designed with consideration of analysts as outlined below. the following (Altieri 1995, 89ff):

Natural/Habitat-based Farming ƒ Purpose (why the system is being established --quality, yield, heritage considerations); Ecosystem service Farm practices Agricultural landscape ƒ Boundary (where the system begins and ends); provided management ƒ Context (external environment in which the system operates); practices ƒ Components (main constituents that form the system); Protect native Protect or restore Maintain corridors in ƒ Interactions (relationships between components); ecosystems patches: and between ƒ Inputs (items used by the system that come from outside it); wetlands, forests, farmstead areas with ƒ Resources (elements in the system that are used in its prairies high conservation functioning: e.g., soil, energy, etc.); value ƒ Products of performance (primary desired outputs); and, Improve landscape Hedgerows, ƒ By-products (useful but incidental outputs) connectivity windbreaks

Protect Breeding area Yet another way to conceptualize thinking about these systems aquatic/terrestrial habitats, etc. includes the following factors (Kok et al 2006): species

Landscape beauty Environment Recreational access • Net energy inputs Pollinator protection • Soil degradation • Safe water Such systems would: • Arable land ƒ Build on local knowledge of pest management, soil, and • Net thermal units to environment nutrient conservation, water conservation and harvesting, • Air quality waste recycling and irrigation; • Noise quality ƒ Build on local social organization and management systems; • Biological diversity and, • Climate, weather ƒ Use process-oriented approaches for projects to permit • Water quality, siltation sequential and adaptive planning and development. Economy • Percent arable land that’s actually being used They would incorporate: • Real GDP per capita ƒ Efficient energy and resource use; • Adult illiteracy rate ƒ Practices that optimize the rate of turnover and recycling of • Different indicators of literacy/illiteracy nutrients, maximize multiple use capacity of the landscape, Society establish energy efficient flow (Warner 2007); • Rural population growth (annual percent) ƒ Marketing of crops with unique characteristics due to • IMR microclimate and physical locale; and, • Life expectancy • Morbidity In our discussion, it also is important to consider the scale of Institutions analysis (Schneiderbauer and Ehrlich 2006): • Public expenditures on defense vs. education, primary and ƒ Individual; secondary ƒ Household (building quality); • Degree of democratization ƒ Administrative community; • Human freedom index ƒ Cultural community; and,

EUROMED Sustainable Connections: 3.1 Food Security and Sustainability: A Crisis of Culture and Policy 5 Another schema (Scherr and McNeely 2007) would include: reduce carbon emissions in agriculture and throughout other • native ecosystems; economic sectors cannot be overemphasized. • landscape connectivity for mobile species; • habitat for native aquatic and native terrestrial species; Wine grapes, and perhaps olives, too, are highly sensitive to • carbon emission reduction (avoids deforestation and rapidly-changing climatic conditions. Some observers use wine encourages perennials); grapes as an indicator of global warming, as in the last medieval • water quality; warm period in England. Recent research shows a gradual increase • flood control; in the potential alcohol levels at harvest for Riesling in Alsace of • landscape beauty; nearly 2 percent in the last 30 years-- and worldwide as well; the • recreation; and, same tendencies are being observed elsewhere in Europe as well • pollinator protection. as in the Pacific region of the US.

At any rate, criteria for designing and assessing the system should The Case of Kefalonia be (Birkmann 2006a; Schneiderbauer and Ehrlich 2006): Considerable information exists on traditional olive cultivation, • Measurable; processing, and marketing techniques (Lunde 2007). In Farsa, • Capable of measuring important key elements instead of some trees are over 2,000 years old, in Troinata, 1,000 years. trying to indicate all aspects; According to the 2000 Census of Agriculture, 534,701 ha of land • Analytically and statistically sound; with trees of various sorts were reported in Kefalonia, divided • Understandable; among 4,735 plots; olive trees are present in almost all tree- • Easy to interpret; containing plots. Additionally, unregistered trees also may exist in • Sensitive and specific to the underlying phenomena; some places. • Valid/Accurate; • Reproducible; The Union of Agricultural Cooperatives of Kefalonia and Ithaca has • Based on available data; information on current co-op members in Farsa. Members receive • Cost effective. funding from the Reformed 2004 CAP “Uniform Subsidy” which is granted yearly. The subsidy is independent of the kind and amount Climate change of production. Members are required to respect laws of public One very important consideration in planning and implementing health, health of plants and animals, and environmental agricultural systems for food security is accelerated climatic protection. change. One of the most well respected scientists in this area, Cynthia Rosenzweig, has produced some widely-cited estimates for In 2004-05, 15 producers of olive oil in Farsa were registered with the agricultural effects of climatic change. Rosenzweig is co-chair the co-op. There were 1,201 trees registered as well as 1,536 kg of the working group of the International Panel on Climate of oil production. Absentee landlords are not allowed to participate Change. in subsidy programs. The Ministry of Environment and Public Works registered 1000 trees in Upper Farsa alone. Given that a Using computer simulations as "crop models," which were high-producing tree can produce 20 kg of olives yearly and that 3- originally created during the 1950s in part to help the United 5 kg of olives are needed to produce one kg of oil, the trees of States predict how much grain the Soviet Union was likely to Farsa could produce 5,600-9,300 kg olive oil/yr; this is more than harvest. Rosenzweig estimates that for the next few decades, enough to support a local co-op press (Lunde 2007). climate change probably won't seriously impact global food supplies. Canada and other temperate-zone countries are likely to It is important to note, however, that many of the trees above the grow more food, partly because rising temperatures will lengthen old village suffer from neglect, particularly a lack of pruning the growing season in higher latitudes; developing countries will resulting in trees taking the shape of a globe so that light can’t get less rain and experience more frequent droughts. The penetrate fully and most solar energy is expressed in the branches additional warmth negatively affects crops, and thus farmers in rather than the fruit. Perhaps as with Robola, which has over developing countries are more vulnerable. By 2080, however, 1,000 members in the San Gerasimos region of Argostoli managed global food production overall will begin to decrease. The need to by EUROMED partner Spiros Andonatos, vines have been

EUROMED Sustainable Connections: 3.1 Food Security and Sustainability: A Crisis of Culture and Policy 6 revitalized and a small percent of profits given back since few global restructuring of agro-food systems (pp. 258-276). growers have any investment capital. Such ideas can perhaps be Ithaca and London: Cornell University Press. adopted in our case villages. Friedmann, H. (2000). What on earth is the modern world-system? Foodgetting and territory in the modern era and beyond. Concluding Words Journal of World-Systems Research, VI (Summer/Fall The EUROMED project seeks to reframe food security as a crisis of 2000). access to information and management of sustainable inputs – in Friedmann, H. (2004). Feeding the empire: The pathologies of production and consumption. It seeks to use policies and planning globalized agriculture. In L. P. a. C. Leys (Ed.), The tools to envision a plentiful and secure food supply which also empire reloaded: Socialist register 2005. New York: protects the resource base and cultural heritage. In so doing, the Monthly Review Press. project offers ways forward in addressing the ever-illusive tripartite Jackson, W. (2002). Farming in nature's image: Natural systems goal of economic viability, social acceptability, and environmental agriculture. In A. Kimbrell (Ed.), The fatal harvest sustainability. reader: The tragedy of industrial agriculture (pp. 65-75). Washington: Island Press. References Kingsolver, B. (2007). Animal, vegetable, miracle: A year of food Altieri, M. A. (1995). Agroecology: The science of sustainable life. New York: HarperCollins Publishers. agriculture. Boulder: Westview Press. Kirkby, J., O'Keefe, P., & Timberlake, L. (1996). The earthscan Barker, D. (2002). Globalization and industrial agriculture. In A. reader in sustainable development. London: Earthscan Kimbrell (Ed.), The fatal harvest reader: The tragedy of Publications. industrial agriculture (pp. 249-263). Washington: Island Kok, M. T. J., Narain, V., Wonink, S., & Jager, J. (2006). Human Press. vulnerability to environmental change: An approach for Berardi, G. (Ed.). (1986). World food, population and UNEP's global environmental outlook (GEO). In J. development. Savage, MD: Rowman & Littlefield Birkmann (Ed.), Measuring vulnerability to natural Publisher, Inc. hazards: Towards disaster resilient societies (pp. 128- Birkmann, J. (2006a). Indicators and criteria for measuring 147). New York: United Nations University Press. vulnerability: Theoretical bases and requirements. In J. Lappe, F. M. (1971). Diet for a small planet. New York: Ballantine Birkmann (Ed.), Measuring vulnerability to natural Books. hazards: Towards disaster resilient societies (pp. 55-77). Lappe, F. M. (1981). Food first. New York: Ballantine Books. New York: United Nations University Press. Lockeretz, W. (1990). Major issues confronting sustainable Birkmann, J. (2006b). Measuring vulnerability to promote disaster- agriculture. In C. A. Francis, C. B. Flora & L. D. King resilient societies: Conceptual frameworks and (Eds.), Sustainable agriculture in temperate zones. definitions. In J. Birkmann (Ed.), Measuring vulnerability Hoboken, NJ: John Wiley & Sons Inc. to natural hazards: Towards disaster resilient societies Lunde, A. (2007). Rural development and sustainable agriculture in (pp. 9-54). New York: United Nations University Press. the European Union Mediterranean: A case study on Brown, L. R. (2008). Plan B 3.0: Mobilizing to save civilization. olive oil production in Kefalonia, Greece. Bellingham, Retrieved January 22, 2008, from http://www.earth- WA: Western Washington University. policy.org/Books/PB3. Pollen, M. (2007). The omnivore's dilemma: A natural history of European Communities. (2004). The common agricultural policy four meals. New York: Penguin. explained. Germany: European Commission Directorate Pollen, M. (2008). In defense of food: An eater's manifesto. New General for Agriculture. York: Penguin Press HC. Doukas, A. (2001). Organic Farming in Greece: Problems, Trends, Pretty, J., Guijt, I., Scoones, I., & Thompson, J. (1995). Prospects. Kefalonia, Greece: TEK. Regenerating agriculture: The agroecology of low- EUROMED. (2008). Project Briefing (4-1-08): Report from the Dec. external input and community-based development. In J. 8-9, 2007 workshop. Paper presented at the AWISH- (1996), P. O'Keefe & L. Timberlake (Eds.), The Hellas. earthscan reader in sustainable development (pp. 125- Friedmann, H. (1994). Distance and durability: Shaky foundations 145). London: Earthscan Publications Ltd., F. X. (2005). of the world food economy. In P. McMichael (Ed.), The Slow down and smell the garlic: An Italian university

EUROMED Sustainable Connections: 3.1 Food Security and Sustainability: A Crisis of Culture and Policy 7 focuses on the craft of creating food--and pleasures of the palate. The Chronicle of Higher Education. Scherr, S. J., Milder, J. C., & Inbar, M. (2007). Paying farmers for stewardship. In S. J. Scherr & J. A. McNeely (Eds.), Farming with nature (pp. 378-398). Washington: Island Press. Schneiderbaur, S., & Ehrlich, D. (2006). Social levels and hazard (in)dependence in determining vulnerability. In J. Birkmann (Ed.), Measuring vulnerability to natural hazards: Towards disaster resilient societies (pp. 78- 102). New York: United Nations University Press. Smith, A., & Mackinnon, J. B. (2007). Plenty: One Man, one woman, and a raucous year of eating locally New York: Harmony Books. Spector, R. (2002). Fully integrated food systems: Regaining connections between farmers and consumers. In A. Kimbrell (Ed.), The fatal harvest reader: The tragedy of industrial agriculture (pp. 288-294). Washington: Island Press. Warner, K. D. (2007). Agroecology in action: Extending alternative agriculture through social networks. Cambridge, MA: The MIT Press.

EUROMED Sustainable Connections: 3.1 Food Security and Sustainability: A Crisis of Culture and Policy 8 EUROMED SUSTAINABLE CONNECTIONS ANNA LINDH FOUNDATION POLICYPOLICY ANALYSIS ANALYSIS 3.2. 3.1. FOOD FOOD SECURITY: SECURITY Cooperative ProductionAND SUSTAINABILITY and Marketing FebruaryMarch 20, 9, 2008

FOOD SECURITY: WAYS • To advance economic, environmental, and social equity in communities, FORWARD THROUGH • To consider organizational structures that reflect the common COOPERATIVE PRODUCTION values, traditions, needs, and expectations of local AND MARKETING1 communities, and, • To promote the interests of marginalized peoples, especially

advancing the role of women, youth, and minorities in rural “Given the chance, poor communities hold the key to the solution community development. of their own problems” (Pretty et al 1995, 139)

Most of my remarks will be confined to the Argostoli region of the Introduction Greek island of Kefalonia, and in particular two villages – Farsa Food is a cultural artifact – specific to place and locale, although and Troinata, which may serve as important cases in how to globalization seeks to blur both. The Sustainable Community achieve all three objectives. Connections project, coordinated by AWISH-HELLAS, seeks to address food security issues in creating “stronger and closer The production and marketing of foods has been governed in relationships between Mediterranean cultures” (EUROMED 2008: recent times by food and farm policies designed to transform Project briefing-report from the Dec 8-9 2007 workshop, 3). In this staple foods into export crops, as with olive oil in Greece. This four-part workshop (the first was held in Athens in Dec. 2007, we reorientation of staple foods as export crops for livestock feeding are here today at Lake Como for the second one, a third will be clearly subordinates place or locale to relentless capital flows in held in Tunisia, and the fourth in Athens), the specific goal is globalized consumer markets. This commoditization of food development and planning for implementation of Fair Trade (FT) negates place and culture, as well as principles of sustainability olive oil-related products, with targeting of markets in the and social protectionism (McMichael 1994). It is effective, European Union (EU) and United States (US). Through planning, however, in globalizing markets, amassing differential wealth, and the project aims to support local economies, promote cross creating inexpensive food, primarily for rapidly urbanizing cultural understanding, and provide a modern and practical societies. The olive branch which now graces Greek Euros, planning tool both utilizing and advancing local economic assumes new cultural significance for the urban majority. development theory.

In terms of FT Olive Oil cooperatives, although transnational agri- Many disciplines inform this project, including sociology, food capital disconnects production from consumption and re-links anthropology, and environmental studies. Dozens of disciplines – it through buying and selling, it also dissolves the boundaries from zootechnics to medicine – can help in describing natural between sectors, and creates more than one possibility for systems of production as well as social organization for marketing relinking producers and consumers. This is where there is perhaps (e.g., cooperatives), much less convivia (groups that promote room to maneuver – political strategies can build on social, wholesome food) for eating (Birkmann 2006a).2 Co-ops represent cultural, and economic pressures to relink them locally (Friedmann networks of co-production, marketing, and consumption where 1994, 2000, 2003). In this way, communities can place a higher knowledge is shared and sustainable practices are the norm priority on ecologically sound land use and wholesome foods and (Peduzzi 2006). reject the social and technical imperatives of industrial farming.

For almost a century, transnational agri-food capital has In the work here at this workshop, our objectives include: undermined the integrity of traditional agriculture and local diets everywhere -- but it also is the way forward. Devices and tools 1 Research report prepared by Professor Gigi Berardi, Chair, such as cooperatives, controlled appellation and traceability, and Department of Environmental Studies and Interim Director, labeling products by origin operate within (and further) these Institute for Global and Community Resilience, Huxley College of the Environment, Western Washington University. dissolving boundaries. 2 See “Slow Down and Smell the Garlic” (Rocca 2005) for a discussion of the growing ecogastronomy program 40 miles south Community, Resilience, Sustainability of Turin in Pollenzo, Italy, the Agenzia di Pollenzo, University of Policies are changing, beginning to emphasize nature’s wisdom Gastronomic Sciences. over human economies and political cleverness – a reconfiguring

EUROMED Sustainable Connections: 3.2 Food Security and Sustainability: A Crisis of Culture and Policy 1 of food-producing economies3 of social protectionism and allowing • flexible, dispersed community leadership. natural processes to do work for free. Policies are meant to help build capacity to do this – and facilitate community4 building as Such characteristics apply, by and large, to both food producers well. and consumers in the community itself. Such communities also enjoy a reduced social vulnerability (Birkmann 2006b), namely: What makes a viable, agrarian, rural community then includes: • diversified farming systems; • initial well-being (nutritional status, physical and mental • better links to consumers/markets; health); • more participation and responsibility in community • livelihood and resilience (assets, income); affairs; and, • self-protection and security (a safe home); • sustainable practices for food, shelter, water, and • social protection (preparedness); and, energy. • social and political networks and institutions (social capital, institutional environment). There are numerous examples of farming-dependent communities displaying local sustainability initiatives; the following are some Robust agrarian communities, such as Farsa and Troinata, can common characteristics: develop innovative and equitable marketing strategies, sustainable • acceptance of controversy as normal; production techniques, and responsible eco- and cultural-tourism. • strong schools; What is needed are benchmark criteria and principles of • sufficient surplus to allow for collective risk taking; sustainability to guide the work. • investment of surplus in local private initiatives; • willingness to tax themselves and invest in the For some, resilience is the new “sustainability” (Birkmann 2006b, maintenance of rural infrastructure; 41). In most agrarian communities the average age of farmers is • ability to define community broadly, including larger increasing, and it is becoming increasingly difficult for small- and boundaries for small communities; middle-sized farmers to compete. Globalization, by its very nature, • ability to network vertically and horizontally to direct delivers unfair competition, energy inefficiency, threats to regional resources, particularly information, to the community; self-sufficiency, and decreasing consumer acceptance of regional and, and seasonal foods.

What is, then, an alternative food system based on principles of 3 This includes reducing the extraordinary number of “Food Miles” social justice, economic viability, and ecology? It is one based on (in the words of University of Essex’s Jules Pretty) that rack up principles of sustainability and sustainability indicators or with every-day food consumption. For example, the Wuppertal benchmarks – for production, processing, marketing, and Institute of Germany has produced a classic case of the composite consumption itself. outsourcing for a container of strawberry yoghurt, which is then shipped from Europe – the food miles embodied in a carton of European strawberry yoghurt. The Institute estimates that a 150 g The cooperative itself may be considered a collection of biotic and strawberry yoghurt container travels about 2000 km in the process abiotic elements forming an ecological system. It should be self- of being made and then shipped. It includes strawberries from Poland, corn and wheat flour and syrups from Holland, jam and regulating, and its effectiveness will depend on the quality of sugar beets form Germany, and plastic and paper containers and human management. Boundaries and scale are important wrappers from various other places. In the United States the considerations. Participatory methods for its establishment may be average plate of food on American dinner tables can easily have traveled 1500 miles from source to plate (Barker 2002). important (see addenda). Flexibility also needs to be built into the project. (Pretty et al 1995). Principles for success include: 4 According to Flora, community can be defined “in social psychological terms of personal identification and perception of • Start small and cheap; reality and in social organizational terms as an organization whose • Promote uncomplicated design or organization; structure and function provides for basic interactions that give • Do not try everything at once; individuals their sense of identity and their basic institutional setting.” (Flora 1990, 343). • Promote low risk technologies for farmers, easy to teach and demonstrate, and tested under local conditions;

EUROMED Sustainable Connections: 3.2 Food Security and Sustainability: A Crisis of Culture and Policy 2 • Offer the prospect of learning; displaying extraordinary tolerance with the initial ambiguity and • Offer large on-site benefits in the coming year or season; uncertainty as the cooperative first develops. Perhaps the greatest and, challenges to leadership are in multi-stakeholder settings, which • Avoid paternalism in the form of financial or food incentives deal with a diversity of cultures, interests, and goals and also with to encourage adoption because this creates dependency and the initial lack of trust among people from different backgrounds threatens the long-term commitment of local people. and power bases (Hemmati 2007).

Cooperatives The Case of Kefalonia5 In many ways, cooperatives are the way of the future. They help Considerable information exists on traditional olive cultivation, in building a food system that relies on multiple, redundant, and processing, and marketing techniques (Lunde 2007). In Farsa, independent regional food supply chains. They support local jobs some trees are over 2,000 years old, in Troinata, 1,000 years. and economies and promote environmental stewardship (Kimbrell According to the 2000 Census of Agriculture, 534,701 ha of land 2002, 9). with trees of various sorts were reported in Kefalonia, divided among 4,735 plots; olive trees are present in almost all tree- A co-op can be as informal as a small group of households with a containing plots. Additionally, unregistered trees also may exist in common interest in resource management and control, or as some places. complex as a multi-unit intra-regional institution (Pretty et al 1995). The Union of Agricultural Cooperatives of Kefalonia and Ithaca has information on current co-op members in Farsa. Members receive Typically, there are several phases in a co-op’s development: funding from the Reformed 2004 CAP “Uniform Subsidy” which is granted yearly. The subsidy is independent of the kind and amount • groups establish rules for management and decision making; of production. Members are required to respect laws of public • members continue to channel information or loans to health, health of plants and animals, and environmental individual members; protection. • group expands and common action projects and programs are initiated (example: small credit groups in southern India); In 2004-05, 15 producers of olive oil in Farsa were registered with and, the co-op. There were 1,201 trees registered as well as 1,536 kg • intergroup cooperation occurs as several groups might come of oil production. Absentee landlords are not allowed to participate together to pool resources and knowledge (economies of in subsidy programs. The Ministry of Environment and Public scale may bring greater economic and ecological benefits – Works registered 1000 trees in Upper Farsa alone. Given that a protection of more of the watershed, for example). high-producing tree can produce 20 kg of olives yearly and that 3- 5 kg of olives are needed to produce one kg of oil, the trees of It is important to note that cooperatives sometimes fail as, over Farsa could produce 5,600-9,300 kg olive oil/yr; this is more than time, local groups become less and less involved in planning. enough to support a local co-op press (Lunde 2007). Technical and economic change is easier to promote than social change, and is usually seen first. Groups are often more effective It is important to note, however, that many of the trees above the in their early years; as they grow, they may encounter new old village suffer from neglect, particularly a lack of pruning conflicts. Alternatively, growth in size can threaten effectiveness, resulting in trees taking the shape of a globe so that light can’t and certain social hierarchies, particularly adapted to large groups, penetrate fully and most solar energy is expressed in the branches may dominate. All these pressures promote incentives and enforce rather than the fruit. Perhaps as with Robola, which has over rules and penalties aimed at eliciting certain behaviors conducive 1,000 members in the San Gerasimos region of Argostoli managed to rational and effective use of resources. by EUROMED partner Spiros Andonatos, vines have been revitalized and a small percent of profits given back since few Typical cooperatives include water user groups, farm preservation groups, youth groups, housing societies, and livestock grazer 5 networks. Most are concerned with transparency, fairness, and This section also appears in EUROMED Sustainable Connections: EU Agricultural Policy Analysis-Food Security and Sustainability: A inclusion. Members may feel like they’re muddling through at first, Crisis of Culture (Berardi).

EUROMED Sustainable Connections: 3.2 Food Security and Sustainability: A Crisis of Culture and Policy 3 growers have any investment capital. Such ideas can perhaps be One of the main advantages of FTC is that it greatly increases adopted in our case villages. awareness of poor labor conditions. There are some problems with implementing FTC, however: Fair-Trade Certification Certification is the process by which an independent organization • Insufficient monitoring and no technical assistance; verifies compliance with a set of standards and awards a seal, • Standards are not available for all crops (coffee is the major which demonstrates the social and environmental value of one’s crop; cocoa, bananas, sugar, honey, and some nuts also have products. Three basic kinds of certification are applied in FTC standards; sustainable agriculture: organic, environmental management, and • FT must be part of a cooperative structure, which excludes fair trade. For example, coffee is certified as organic in 25 owners of large estates; individual farmers selling through countries, fair trade in 22, and ecological in 9. Only one private channels may actually earn more); certification scheme will be discussed here: fair trade (for more, • Aggressive promotion of some FT labeling organizations has see addenda to this white paper). upset companies; • A perception exists that FT products are not high quality; Fair-trade certification (FTC) began in the Netherlands in 1988 and • Big companies need consistent supply; spread rapidly throughout North America. Currently, 17 national • Standards are confusing for consumers; FTC organizations belong to the international umbrella group, • Barriers exist for low income farmers, organizations; and, Fairtrade Labeling Organizations International (FLO). Each national • Successful cooperatives may succumb to economic pressures organization awards its seal to companies that demonstrate to expand their land base (through forest encroachment). compliance. Transfair USA is the leading US labeling organization. Further, not all cooperatives abide by the seven principles for Much of the growth in FTC has to do with consumer interest in cooperatives identified by the International Labor Organization: social issues. Fair trade has become an integral part of the world economy and represents 5 percent of the specialty coffee market • Voluntary and open membership; growing at 15 percent annually (Clay 2004). FLO also certifies • Democratic member control; cocoa. In 2004, six countries exported about 1500 tons of FT • Economic participation; cocoa (Millard 2007). • Autonomy and independence; • Education and training; The force of this is impressive – for example, in the UK, the value • Cooperation among cooperatives; and, of fair trade (FT) coffee sales grew from 15.5 million British • Concern for community. pounds in 2000 to 65.8 million in 2005; the fair trade (FT) standards currently incorporate a minimum price, presently US A Consumers International study in 2004 found that claims on food $1.26 per pound of export grade coffee with an additional 15 cent labels for food products on sale in eight countries complicated premium for organic certified. From 1999-2005, such sales yielded choice for consumers, so ISEAL (the International Social and $75 million in additional income to farming communities affecting Environmental Accreditation and Labeling Alliance) was founded. It half a million farmers (Burkham 2004). sets international standards for production and certification, and for accreditation organizations that focus on social and Another consideration in the FT market involves possibilities for environmental issues. ecotourism. In villages in Kefalonia, for example, this might mean October festivals celebrating the official first day of harvest, with All these activities and trends suggest a move towards industry tourists plucking olives and feasting on bread soaked in the olive self-regulation (as happened with infant formula production in the oil (Lunde 2007). Commercial products could include olive pate, 1960s and 70s). In September 2004, a major coffee company beauty products, wood sculptures, breads with olive taste testing, launched The Common Code for the Coffee Community, a cooking classes, seminars, and village feasts and dancing. voluntary initiative addressing social and environmental practices. Before that, the Sustainable Agriculture Initiative (SAI) Platform was created by the food industry in 2002 to develop more sustainable supply chains. The Platform included Nestlé, Unilever,

EUROMED Sustainable Connections: 3.2 Food Security and Sustainability: A Crisis of Culture and Policy 4 and Groupe Danone and within two years it had 18 members Flora, C. B. (1990). Sustainability of agriculture and rural (Millard 2007, 369, 372). FTC also has been taken on by the communities. In C. A. Francis, C. B. Flora & L. D. King (Eds.), Sustainable agriculture in temperate zones. International Federation of Alternative Trade (IFAT). McDonald’s Hoboken, NJ: John Wiley & Sons Inc. Corporate Social Responsibility Team develops socially responsible Friedmann, H. (1994). Distance and durability: Shaky foundations food supply guidelines. Starbucks is one of the leaders in this and of the world food economy. In P. McMichael (Ed.), The global restructuring of agro-food systems (pp. 258-276). pays a premium for FT coffee; standards have been developed Ithaca and London: Cornell University Press. with the assistance of Conservation International – and have gone Friedmann, H. (2000). What on earth is the modern world-system? a long way in breathing life into conservation organizations (Millard Foodgetting and territory in the modern era and beyond. 2007). Journal of World-Systems Research, VI (Summer/Fall 2000). Friedmann, H. (2003). Eating in the gardens of Gaia: Envisioning Clay argues that there is still much work to be done in improving polycultural communities. In J. Adams (Ed.), Fighting for certification and eco-labels (2004, 550). No doubt this is true. Most the farm: Rural America transformed. Philadelphia, PA: University of Pennsylvania Press. certification programs cannot backup claims – processes are Hemmati, M. (2007). Multistakeholder partnerships. In S. J. Scherr certified, not products. The FTC is nontransparent, highly & J. A. McNeely (Eds.), Farming with nature (pp. 344- subsidized, rarely involves multiple stakeholders, and needs to be 357). Washington: Island Press. Kimbrell, A. (2002). Corporate lies: Busting the myths of industrial more crop-specific. Much work remains. agriculture: Seven deadly myths of industrial agriculture. In A. Kimbrell (Ed.), The fatal harvest reader: The Concluding Words tragedy of industrial agriculture (pp. 9). Washington: The EUROMED project has as its objective to consider Island Press. Lunde, A. (2007). Rural development and sustainable agriculture in organizational structures that reflect the common values, the European Union Mediterranean: A case study on traditions, needs, and expectations of local communities, and, in olive oil production in Kefalonia, Greece. Bellingham, so doing, address the particular needs of marginalized peoples. WA: Western Washington University. McMichael, P. (1994). Global restructuring: Some lines of inquiry. Much discussion is necessary to consider the structure and In P. McMichael (Ed.), The global restructuring of agro- function of fair trade olive oil cooperatives – but they are a useful food systems (pp. 277-300). Ithaca and London: Cornell organizational structure, and most likely a necessary one to University Press. Millard, E. (2007). Restructuring the supply chain. In S. J. Scherr & achieve sustainable agricultural practices in the Mediterranean and J. A. McNeely (Eds.), Farming with nature (pp. 358-377). its domestic and external markets. Washington: Island Press. Peduzzi, P. (2006). The disaster risk index: Overview of a References quantitative approach. In J. Birkmann (Ed.), Measuring Barker, D. (2002). Globalization and industrial agriculture. In A. vulnerability to natural hazards: Towards disaster Kimbrell (Ed.), The fatal harvest reader: The tragedy of resilient societies (pp. 172-181). New York: United industrial agriculture (pp. 249-263). Washington: Island Nations University Press. Press. Pretty, J., Guijt, I., Scoones, I., & Thompson, J. (1995). Birkmann, J. (2006a). Indicators and criteria for measuring Regenerating agriculture: The agroecology of low- vulnerability: Theoretical bases and requirements. In J. external input and community-based development. In J. Birkmann (Ed.), Measuring vulnerability to natural (1996), P. O'Keefe & L. Timberlake (Eds.), The hazards: Towards disaster resilient societies (pp. 55-77). earthscan reader in sustainable development (pp. 125- New York: United Nations University Press. 145). London: Earthscan Publications Ltd. Birkmann, J. (2006b). Measuring vulnerability to promote disaster- Rocca, F. X. (2005). Slow down and smell the garlic: An Italian resilient societies: Conceptual frameworks and university focuses on the craft of creating food--and definitions. In J. Birkmann (Ed.), Measuring vulnerability pleasures of the palate. The Chronicle of Higher to natural hazards: Towards disaster resilient societies Education. (pp. 9-54). New York: United Nations University Press. Burkham, J. (2004). A local response to globalization: The study of a fair trade coffee community in Chiapas, Mexico. Bellingham, WA: Western Washington University. Clay, J. (2004). World agriculture and the environment: A commodity-by-commodity guide to impacts and practices. Washington: Island Press. EUROMED. (2008). Project Briefing (4-1-08): Report from the Dec. 8-9, 2007 workshop. Paper presented at the AWISH- Hellas.

EUROMED Sustainable Connections: 3.2 Food Security and Sustainability: A Crisis of Culture and Policy 5 EUROMED SUSTAINABLE CONNECTIONS ANNA LINDH FOUNDATION POLICY ANALYSIS 3.3. SOCIAL WELL-BEING March 9, 2008

Social Well-being in Community As the problems inherent in the conventional way of exploiting natural and human resources become ever more magnified, Development: Challenges in politicians, producers of goods, and the public alike face a 1 Creating Justice Objectives profound challenge: the impossibility of simply continuing to grow all economies. The high price of materialism and widening Introduction stratification negates the complacent assumption that the market The viability of rural communities and methods of food production will, in time, rectify everything. The end of cheap oil and the is central to the health of the environment as well as humanity. alarming reduction of Arctic sea ice are perhaps the clearest So mounting evidence of the destructive and unsustainable ways signals of an inevitable transition ahead, voluntary or not. more and more food is produced today is especially alarming. The prevailing model of economic development, widely referred to as There is, however, an “upside to down” (Homer-Dixon) – globalization or neoliberalism, includes massive export-oriented fortunately so, given the seeming acceleration of the world into agriculture as a major component, and creates structures of multiple, deepening crises, with limited time to change course. concentrated power and wealth that generate far-reaching Growing awareness of the ominous trends in planetary health and problems on a global scale (Cavanaugh; Porritt; Robbins). social problems has spurred a range of adaptive responses in Industrial agriculture can be directly or indirectly linked to communities and countries the world over. The multitude of widespread contamination of rivers, soil erosion (currently voices of concern being raised and the myriad actions taken estimated at 1% annual loss worldwide), depletion of fresh water together comprise the arena of sustainability (Hawken; Korten; supplies, growing chemical imbalances of oceans, loss of seed McKibben; Raven). varieties, and acceleration of global climate change. Whether rationalized or unintended, the cumulative impact of such Sustainability and education for sustainability have become the deleterious trends brings to mind the experience of Green heart of a transformation in thinking about development. These Revolution technologies several decades ago, which raised new approaches are plural, with different strategies allowed to productive potential but often at high social and environmental thrive. They also extend beyond simply defending the natural costs. environment, endeavoring as well to reverse the current widespread erosion of possibilities for equitable growth and Recent growth and shifts of human population figure prominently satisfaction of human needs. in the expansion justification, and ultimately also the implications of global economic integration. The new millennium commenced Fundamentally, sustainability efforts are grounded in social justice. with world population exceeding six billion people, and, for first They reaffirm and strengthen the social as well as economic time in human history, a majority being urban dwellers (UN). capabilities of people. In light of today’s growing inequality and Growing numbers are concentrated in burgeoning cities, many undermining of rural communities, this pairing is critical. Building comprised of millions of inhabitants. The corresponding pressures on principles of creative use of local resources, a diversified to produce needed food and other resources are tremendous. productive base, and participatory planning and operations, Promising efficiencies and volume, large-scale corporate emergent sustainable alternatives promote greater autonomy in agribusiness does so at great cost – simultaneously undermining the provision of material bases for a good standard of living. the viability of smaller-scale food production, dramatically reducing Greater equity and capacity in turn enables better stewardship of biodiversity, and dislocating millions from the countryside. Few human and natural resources. regions in the world today have been spared the devastating combinations of rural exodus, declines in both local and national This paper suggests that issues of sustainability may be usefully food security, and ever widening gaps in wealth and access to engaged by considering distinctive productive strategies and resources (Berry; ISEC; Norberg-Hodge). associated social relations that have ensured the long-term viability of rural communities, often for centuries, if not millennia. Drawing on the experience of rural communities in Latin America, as well as wider cross-cultural evidence, several key questions emerge: 1 Research report prepared by Professor James Loucky, Department of Anthropology, Western Washington University.

EUROMED Sustainable Connections: 3.3 Social Well-Being in Community Development 1 1. Can we identify a set of principles and practices that promote Increasingly, the complex multi-dimensionality of even small community wellbeing and overall social justice? communities has come to be understood as key to their resilience 2. Is it possible and useful to relearn or re-create such principles as well as potentiality. The sustainable livelihoods approach is and institutions – including in contemporary urban and particularly noteworthy for shifting focus from needs to assets and industrialized settings – in order to help restore communities empowerment. For livelihoods to be sustainable, they must be and their natural environments? economically efficient, reflect precepts of social equity, adhere to 3. How might we meet the major challenges for more measured principles of ecological integrity, and maintain flexibility (Helmore and equitable integration into the global marketplace, rather and Singh). Ultimately, the human right to a sustainable livelihood than reinforcing current imbalances? is also asserted. The collective responsibility of all, across strata 4. Can fair trade and related cross-border cooperative frameworks and including governments, is to uphold the dignity of others, most effectively foster mutual community wellbeing? which includes creating and sustaining the social and natural environments in which people can use their abilities, fulfill their Lives and Livelihoods potential, and flourish. For most of human history, and continuing in many indigenous and traditional societies today, concepts of inviolable common With traditional agriculture as our focus, we now consider evidence resources and shared community use have been understood and of how people seek to assure their consumption needs in accord respected as basic, endemic truths. More than a matter of with local resources. In doing so they also participate in and community commons, the teachings of the natural world are reaffirm diversity, and in turn they find benefits through closely intertwined with social, political and spiritual values. integration of appropriate scales of operation and product mix. Peoples living in direct relationship with the earth generally share similar worldviews, grounded – as they are to the land – in Small-Scale Producers relatively communal, nonhierarchical relationships. Rural food producers play a critical role in sustaining urban regions as well as themselves. Their significance is strangely incongruous One would hardly expect peoples living across such vast ecological with how frequently they have been denigrated and targeted for diversity as exists on earth to hold to universal ethics. Yet living in dislocation or persecution. Their designation in much of the particular ecosystems, for generations and even millennia, literature – peasants – has come to have mainly negative engenders not only intricate place-based knowledge but also an connotations, as people who are largely backward, stubborn, and overall conservation ethic. That ethic, whatever its variations, not very intelligent. Even their popular connotation as “traditional” tends to emphasize cooperation, cross-generational may be equated with something romantic or quaint, but hardly communication and learning, concern for well-being of future competitive or worthy of investment. generations, primary reliance on locally available resources, collective and inalienable rights to land and resources, and respect Extensive ethnographic and empirical evidence reveals that small- for and restraint in exploiting them (Posey). The shared wealth of scale producers are anything but anachronistic (Gonzales; knowledge, resourcefulness, and adaptive strategies within Norberg-Hodge, et al.; Shiva; Wilken). In fact, they are communities also provide them with their generally effective remarkably resilient. Tasks may require considerable time and capacity to respond to difficult circumstances or emergencies. effort, but hard work, tenacity, and sacrifice do not equate with inefficiency. Common concern for maximizing security generally Such primary relationships have not always been politically provides broader overall resilience than occurs when emphasis is favored, as states grew larger and elite sectors more dominant. on maximal output or unitary products and processes. Even so, Not surprisingly, they have also been central targets of colonialism productivity is often higher than the low or non-existent yields that and capitalist expansion (Wolf; Robbins). Subsequently, even well would come through mechanized production. Furthermore, in a intentioned development efforts were also often misdirected. local economy, skills and resources (including money) remain Focus on poverty and needs, related interventions directed to circulating locally over and over, rather than being siphoned off single issues, and arrogance of experts and outsiders, frequently and often lost to the community forever as characterizes the resulted in disregard for the intricate livelihood systems that amalgamation of global food production. represent the true wealth of seemingly impoverished communities. As a result, such efforts have usually had mixed outcomes at best.

EUROMED Sustainable Connections: 3.3 Social Well-Being in Community Development 2 Being part of, and living within, the ecosystem, local food more than conservatives. They adopt and adapt when relative producers both survive and thrive by accommodating social advantage and compatibility is evident and when measured systems to ecological circumstances within which they exist, rather changes can be tried. Nor are their communitarian values simply than by altering those environments simply to accommodate to sentimentalist romanticism. Essentially they are advocates and their particular desires. Together they build synergies, holistic practitioners of common sense, and their values constitute arrangements (the organizational whole being more than the sum pragmatism more than fatalism. of component parts), and resilience in the face of adverse developments. While relative self-reliance is fundamental, this is not synonymous with self-sufficiency. Interdependent relationships are critical to their reliance on Small-scale producers are, in fact, almost always intricately sustainable economic endeavors. Interdependence is vital to connected to the state and urban centers, usually to considerable quality of life, across its physical, social, emotional, and moral disadvantage as a result of having relatively less power. Tribute, dimensions. Work in functioning rural communities, even tiring taxation, conscription, and expropriation mark the histories of physical labor, is often associated with sociability. Especially when many rural peoples at the hands of city and state authorities. tasks are performed together, they may be done at a moderate Dependency theory help reveal how “underdevelopment” of the pace, with shared sense of purpose or even celebration. Tangible rural periphery is the underbelly of more powerful cores. But it is connectedness through work in turn extends into meaning and also essential to move beyond thinking simply in dualisms and a purpose, encouraging pursuit of happiness rather than singular rural-urban continuum. These complex relations are more usefully pursuit of self-interest. reconceptualized with respect to how they are articulated or bound into circuits of exchange that fuel their differentiation (Kearney; The multifaceted lives as well as productive systems of small-scale Wolf). producers have, unfortunately, often been ignored in top-down thinking. Rural residents are not “just” farmers, nor are they Everywhere today we can observe how rural peoples and the simply duplications. Tremendous diversity persists across the social identities are being simultaneously undermined and often spectrum of rural and small-scale societies. Each is grounded, destroyed by modern capitalist agriculture. Family farms in the physically and mentally, in a unique and complex combination of United States reveal similar social and economic benefits as pertain place-based experiences and knowledge. This diversity is in small-scale farming worldwide. Studies dating to the 1940s find witnessed in the ways people refer to themselves, frequently with both social vitality and economic advantages to be much better in names that mean “we the people.” communities surrounded by family farms, compared to where corporate-owned industrial agriculture was the norm Nonetheless, rural peoples share commonalities in basic values (Goldschmidt). When the webs of interdependence are strong, that are concomitant with their means of production. Social relationships personal, and economic transactions blur with social concerns revolve around complementary responsibility and interactions, a sense of community is clearly strengthened as well. responsiveness. When interactions and lives remain on a human So while efficiency and anonymity may result in impressive scale, people are able to enjoy social relations and nurture them volumes, they often come at the cost of psychological as well as by taking time and practicing reciprocity. This does not presume physical dislocations. blind compliance or automatic harmony, however. Disputes are, after all, a human universal, including in villages and towns. While Central America: Corn, Coffee and Community not wholly democratic, people within smaller-scale economies Development nonetheless generally remain deeply engaged in decisions that In Latin America, locally based food producers, or campesinos, affect the whole. They value each other within socially embedded have a lengthy history of resilience amid uncertainties, resistance relationships. This encourages a sense of shared identity through to injustice, and realism paired with retrospection when modes of enculturation and inculcation. They also share a confronting change. For thirty-five years, I have been following common concern with children as their future. developments in highland Guatemalan communities that lacked electricity and road access when I first visited during college. In In contemporary parlance, rural peoples demonstrate intelligent the face of pervasive and accelerating changes associated with a localism as well as social responsibility. They are conservationists globalizing economy, residents of San Juan are attempting to

EUROMED Sustainable Connections: 3.3 Social Well-Being in Community Development 3 retain as much control as possible over their lives and livelihoods. growth speaks to how people recognize that inequalities, such as Rainfall-dependent corn cultivation continues, but coffee has those inherent in plantation-based export agriculture (Cambranes), become a major cash crop in recent decades. Increasingly, coffee lead to environmental degradation. Their self-definition has is produced through careful hand cultivation and natural inputs, increasingly come to emphasize present and future as well as past. with growing proportions achieving organic certification, including They welcome opportunity to demonstrate and deepen through communal efforts in a sizeable cooperative. When asked, understanding of the dynamics of their natural systems, while people say they are interested in getting ahead, by which they actively participating in redesigned productive systems that enable include greater material comforts as well as access to new them to be productive by conserving environmental integrity. information and opportunities. But they are also deliberate in their promotion of reforestation, restoration of degraded lakeshore, Two organic coffee cooperatives in southern Mexico provide systematic litter collection, and environmental education. Through further evidence for how social wellbeing is intrinsic to local deeds as well as words, then, people acknowledge that their future responses to globalization. As they considered whether and how hinges on the health of both natural and social environment. to participate the increasingly competitive global market for coffee, small producers in a poor Maya hamlet in Chiapas drew on The San Juan experience is also grounded in participatory indigenous general assembly and other community structures democracy. “With everyone (con todos) we work out a community (Burkhart). Their transition from conventional to organic diagnostic, and through community dialog everyone participates production was continuously guided by concern for improving and understands our development plan,” says the young mayor, a social and economic conditions, and implicit recognition that this bilingual teacher committed to fully involving youth in community was predicated on environmental health. Despite major planning and projects. They are now working on a regional plan impediments associated with unfavorable and disarticulating terms regarding potentials. They increasingly speak of opportunities of trade, they gauged their growing effectiveness in addressing rather than needs, recognizing this as a significant change from and meeting social needs in terms of decreasing need to migrate being passively buffeted by wider events, while focusing on shared and expansion of more sustainable land use practices. possibilities and benefits. Traditional communal landholdings and use rights have eroded over the years, but through such Just Coffee is another example of how innovation can be community efforts they continue to uphold a basic Mesoamerican effectively blended with social justice. Taking advantage of the principle – that of mutual support (apoyo mutuo). possibility for completing all stages of coffee production within the same country, the coffee cooperative ships beans that are This case reveals the benefits of an innovative process that organically growth through a cooperative in the southern tip of encompasses cultural and environmental activities as interrelated Mexico to roasting and shipping facilities along the northern border parts of one process. The early involvement of women has proven with the United States. The worker owned company builds on to be crucial. Capacity building extends existing strengths while direct and internet marketing and socially conscious education, as building on unique niche-advantages. This includes soliciting a well as geographic niche. In addition to providing incentives for variety of views locally, as well as adjusting direction to what is both young and old to remain on family lands, Just Coffee provides valued by visitors as well as abroad. People’s self-definition higher returns, health care, and even retirement benefits to increasingly emphasizes present and future as well as past. participants – benefits that are almost unheard of in the region, Community members speak of “adaptive resilience,” rather than and befitting their motto, “caffeine with a conscience.” sustainability, development, or progress, when describing the direction they are creating – a syncretism of elements that have The Reframing Imperative worked well, with what lends themselves to new definitions and The preceding examples reveal how small, mainly rural use. communities manage the complex interplay between production and reproduction, distribution and consumption, and individuality The experience of fair trade coffee production is another example and the collective. Those dynamics stand in sharp contrast to the of redistribution of both political and economic power. Recent paradigm that dominates today. Global market expansion has years have seen rapid growth of organically produced and fairly proceeded with such rapidity and lack of monitoring that traded coffee operations, often within cooperative organizations, in increasing numbers of people even foresee impending life system highland communities from southern Mexico to Costa Rica. This collapse. The more the global market system produces and

EUROMED Sustainable Connections: 3.3 Social Well-Being in Community Development 4 consumes, the better. Damage to others is masked through community strengths and strategies, rather than deficits and sophisticated advertising, media myopia, and political manipulation needs. It is also deeply empowering, influencing attitudes and of terms and parameters of debate. Even mammoth impacts of behaviors so people are better able to be responsible for, or reject, overall global predation are conveniently externalized. Denial aspects of and changes in their situation. Finally, their becomes convenient. Rarely does public authority remain to sustainability is about the long term, working within limits, in line protect common life interest; even protection, such as it is, is with an ethos that promotes equilibrium. Contemporary routinely transferred to the private sector. capitalism, by contrast, tends to reduce the natural world to resources and places to dispose byproducts of production, while In Latin America, neoliberal market mantras are especially coming promoting excess, eschewing the idea of limits, and responding to under question, as externalities are found to have real and often the shortest of terms. damaging impacts (Barkin; Escobar). Privatization – of land, subsurface resources, and water – is prominent in this recent Ironically, while capitalism and sustainability seem diametrically rethinking. In Bolivia during 1999-2000, for example, an attempt opposed, converging imperatives may be drawing both into the to criminalize even collection of rainwater provoked mass protests work ahead. For this to happen, certain aspects of small and worldwide condemnation. As the myths of privatization are communities merit simulation. aligned alongside purported benefits, both the wisdom and the morality of wholesale dismantling of public enterprises is In the first place, there is immeasurable value to regarding society increasingly coming under question. as an ecosystem. Communities are similar to living organisms, with each member playing a crucial role, living in interdependent Globalization definitions trumpet growing interconnectedness, and relationship with other parts, functioning together to help sustain even creation of a “global community.” In fact, linkages are often the whole, and collectively ensuring responsiveness to threats as highly specific (goods and media images) and tenuous. Global well as opportunities. Community life and wellbeing are reach is pervasive, encompassing almost all peoples, countries, paramount. Seen in this light, economics are part of living and resources in a convergence of technologies, production systems, characterized by patterns and processes as well as systems, and mechanisms of political control. But global reality is capability for being regenerative (Ikerd; Porritt). something quite different. Large, urban, face-paced directions proceed at the expense of small, human, and socially responsive Community rights are equally fundamental. Putting an “s” on interrelatedness. While the nature and implications of the peoples and communities is more than symbolic; it affirms contemporary global economic structure have been subject to uniqueness and gives value to diverse experience and expertise. growing critique, the social values and practices that have long We should again speak of peoples and cultures as nations. Doing sustained human societies require equally substantial attention. so gives them a standing and status in international law, along with individuals and nation-states. At the least, declarations that Emulating Small Communities support social and cultural rights provide moral and symbolic force, Not everyone can, nor should, return to farming or village life. and become part of customary law as accepted standard, until and Cities, nation-states, and corporations will likely persist for some unless sanctionable laws are agreed to. time. However, supporting self-determination and distributive economic models – in rural areas as well as in more urban and Readjustment of material consumption as well as expectations to a industrialized contexts – encourages healthier balance between sensible level is also required. Today we are seeing a movement trade and local production, concomitantly with the deep social and of movements, helping to reclaim real needs from the mounds of psychological benefits of living in community. desires (Hawken; Pollan). Appropriate technology and localization efforts reflect commitment to reducing the stages, and the In farming and small communities, we can perceive key elements problems, in processing and distribution. The experience of small that make them sustainable (McKibben; Norberg-Hodge). First, groups and local communities is also providing much to their development is fundamentally local, incorporating what the encourage. Evidence is irrefutable that innumerable local impacts community knows with any introduced technological or externally add up to ominous global consequences, but this also reminds us derived knowledge. It is participatory, encouraging critical that global betterment can and must also be based on manifold thinking and ultimately transformation through asserting small actions and cumulative synergies.

EUROMED Sustainable Connections: 3.3 Social Well-Being in Community Development 5 Reaffirming Human and Social Capital to means for facilitating harmonious relationships among people, The drift of large-scale capitalism has been toward promoting and between them and their natural environment. Stewardship – material wellbeing rather than enhancing quality of life. This may protecting and preserving the commons, and the good of the have been reasonable during times when lives entailed hard labor commons – is critical for assuring the wellbeing of future and deprivation. But as gains in productivity through industrial generations. Unmistakably one of the most fundamental cultural development engendered systematic degradation of social values values, and perhaps the most widely shared moral virtue, and relationships, along with ecosystems, priorities must be re- ultimately it is also intimately linked to both interpersonal and examined. In practice, this requires shift to the social and ethical intergenerational equity. as part of systemic redesign. Changing the Metrics In the “five capitals” framework, outlined by the UK-based Forum More sophisticated understanding of traditional agriculture and for the Future (Porritt), the benefits generated through human and integration of new technologies are, as we have seen, among the social capital must be valued just as much as the more familiar changes that are both necessary and already underway. New natural, manufactured, and financial stocks. The physical, mental models of the possible also call for a return to common intellectual, emotional, and spiritual capacities of individuals, as sense – oddly, something that is not always customary in the well as the “social glue” that binds people together, both have formulation of economic and political policies. But practical steps immeasurable worth. and clear measures make good sense, for business as well as applied research. Social capital, in particular, is critical to development efforts. Reflected in the ability and commitment of people to relate to each How might we best articulate the social criteria conducive to other, social capital is evident in cultural affiliation and the nurturing a sustainable way of life? Identifying valid benchmarks formation of families, communities, and countries. Anthropological should draw on the cross-cultural record of societies that have studies demonstrate how culture has enabled human beings to lived in ongoing accord with each other and with their become both pervasive and powerful, for good and for ill. surroundings. Commonalities are also likely to be found within the Through a shared culture, people both conserve their funds of multiplicity of visionary frameworks for a better world that are so knowledge and stocks of social capital, and adapt and direct them energetically proposed today. towards forming new relationships that are more effective and satisfying. Shared initiatives, trust, and networks may be difficult A set of generic values and related practices that reflect to quantify. But they are also so encompassing and reinforcing as fundamental social and environmental justice might include the to be essential in the development of any concrete proposals. following (cf, Porritt; Cavanaugh, et al.; Bopp and Bopp):

A moral consensus for sustainability underlies the social continuity - recognition of interdependence (holism; “it takes a village”) of traditional cultures and communities. Individual have rights to - affirmation of diversity (beyond tolerance; building from its pursue and collaborate in economic pursuits, to the extent that emergent qualities) such activities and associations do not exceed limits of and - individuality (encouraging different aptitudes, passions, site- reinvestments in society as well as natural surroundings. This is specific opportunities) routinely codified in laws, embedded in child socialization, and - compassion for others (hurt of one is hurt of all; honor of implicit in proverbs and mythology. Contributing to social and one, the honor of all) ecological wellbeing is paramount. - commitment to equity (expressed through sharing and reciprocity) Essentially, culture is a reflection of the pursuit of the common - respect for non-human interests and rights (biocentrism) good – for society as a whole, not just a collection of disparate - intergenerational justice (respect for future generations, as individuals. This need not imply equal rights of everyone to well as elders) everything, nor equal allocations. But it does mean right to - creative participatory procedures (living democracy) adequate services and access to resources to which they have - interactive learning (with nature and each other) inherent rights as community members. Clearly these rights - cultural significance (development must be rooted in culture) extend equally to protection from economic exploitation, as well as

EUROMED Sustainable Connections: 3.3 Social Well-Being in Community Development 6 - local control/subsidiarity (authority from below, effectiveness (subscription farming) systems and community supported of small groups) agriculture (CSA), and public insistence on accurate source and ingredient labeling. The creation of indicators of social wellbeing must also proceed from the bottom up. What are the realities and expression of These trends reveal that far from being just a single global market, needs of the people? What health, housing, and sociability consumers express varied and increasingly ecologically mindful opportunities exist? Does greater local production have choices. A host of new concepts reflecting ecological health and measurable contributions to nutritional status and improved health agricultural ethics – such as the “slow foods” movement and terms indices, as has been established elsewhere? How much autonomy like “locovores” and “edible lawns” – have found their way into is optimal in the provision of the material basis for a satisfactory public discourse in a very short period of time (Pollan). standard of living? What is the best way to consider potential trade-offs in valuing quality of life? In the United States, concerns about healthy foods are increasingly tied to promotion of sustainable modes of production. In the Social impact assessment and enumeration of social indicators Pacific Northwest, for example, students and researchers have through surveys could also prove useful, especially when combined collaborated with community members to initiate the Whatcom with qualitative methods based on long-term participation and County Community Food Assessment (WCCFA) project. Its goals partnerships within and between communities. Scoping out are to accumulate data on economic and physical access to circumstances around the problem in question, and profiling healthy food, distances to retail food outlets, options for procuring possible implications such as social costs, are requisite steps food through gleaning and urban-gardening projects, and before one can formulate scenarios if different things are incentives for expanding organically produced foods. prioritized, technological inputs included, or complications experienced. Comparison provides additional advantages, with Informed people make better decisions. Awareness and reduction evidence elsewhere contributing to more precise projections. of food miles has become an essential component of smarter Through such means, successful management and accurate consumption. Yet many goods, including a variety of foods, are monitoring of developments become more likely. not and cannot be produced locally. Alternative trade arrangements are helping consumers make more intelligent Socially Responsible Consumers choices about what and from whom to buy. The challenge lies in The movement toward sustainability involves a dual strategy. On creating a support structure, including through education that is the one hand, it entails creating opportunities for alternative and inclusive of producers as well as consumers. relatively autonomous resolution of problems. It also enables formation of new social pacts, in which promotion of economic One hopeful scenario is the emergence of a network of cross- wellbeing is established through democratic incorporation within border relationships built on more direct exchange, as well as more diverse productive and distributive structures. Formalization collaboration and reciprocity that characterize many small of such autonomous production systems is immeasurably communities. As with the Just Coffee model described above, we strengthened as well through collaborative arrangements with can extend such strengths through efforts such as community more distant, yet equally committed, partners. supported agriculture spanning borders. As markets and technical resources are provided to traditional societies, they in turn provide As the broad implications of contemporary agricultural methods, valuable goods such as healthy foods. In the process, people who trade policies, and political structures have become ever clearer, have become fairly disconnected from the natural world are more and more people are seeking out ecologically sound and reminded that humans depend on it, as do all forms of life. In that equitable alternatives (Suzuki and Dressel). Concern for both sense, geographically dispersed local producers have become healthy foods and healthy environments, along with growing educational leaders, helping the more affluent moderate their understanding of their interconnections, is evident in remarkable consumption. growth in organic farming, demand for less refined and chemical- free foods by consumers, and desire for more direct links to local Shifting Direction communities and economies. Recent years have seen a In present conditions, where accumulation of wealth proliferation of farmers’ markets, spread of local food-share simultaneously creates insecurity and impoverishment, the

EUROMED Sustainable Connections: 3.3 Social Well-Being in Community Development 7 challenges ahead are enormous: how to respond promptly and References most effectively to a series of prospective catastrophes. Our collective sustained effort to make wise decisions now as well as Altieri, Miguel. 2002. For an Agriculture that Doesn’t Get Rid of the long term must make the most of the expertise of local Farmers. NACLA Report on the Americas 35(5):29-34. communities as well as myriad international development groups. Barkin, David. 2001. Neoliberalism and Sustainable Popular Both can guide us, for example, in building on the known Development. In Transcending Neoliberalism: Community- synergistic effects between biological utilization and food Based Development in Latin America. Henry Veltmeyer and production on the one hand, and education and health programs Anthony O’Malley, eds. Pp. 184-204. Bloomfield CT: Kumarian. to raise living standards on the other. Berry, Wendell. 1990. What are People For? San Francisco: North Point. Ultimately, putting physical, social, and spiritual wellbeing of Bopp, Michael, and Judie Bopp. 2006. Recreating the World: A people at the heart of political and economic systems may come Practical Guide to Building Sustainable Communities, 2/e. through non-negotiable necessity, in the face of profound Cochrane AB: Four Worlds Press. environmental crisis or collapse. But it can also be volitional and Burkham, Jonathan. 2004. A Local Response to Globalization: The transformative. Such reconfiguring may be born of awareness of Study of a Fair Trade Coffee Community in Chiapas, Mexico. interdependence and desirability of working together to meet real M.S., Western Washington University. needs for human security, connectedness, and fulfillment. To local Cambranes, J.C. 1985. Coffee and Peasants in Guatemala: Origins communities we can look for clues to social justice, and in turn of the Modern Plantation Economy. Stockholm: Institute of how rather than being impoverished, the human spirit can be Latin American Studies. enriched. Cavanaugh, John, et al. 2002. Alternatives to Economic Globalization: Report of the International Forum on The imperative for shifting direction is therefore becoming ever Globalization. San Francisco: Berrett-Koehler. more collaborative as well as insistent. Local systems and the Escobar, Arturo. 1995. Encountering Development: The Making communities in which they are embedded can not only survive but and Unmaking of the Third World. Princeton: Princeton also thrive, especially through the international links possible University Press. today. Some of the redirection that is required may be difficult, Goldschmidt, Walter R. 1947. As You Sow: Three Studies in the even impossible, without adopting certain insights, tools, and Social Consequences of Agribusiness. Montclair NJ: Allanheld, drivers of capitalism itself (Ikerd; Kitching; Porritt). It is a matter Osmun and Co. of selectivity and reform. Rediscovering, personalizing, and Gonzalez, Roberto J. 2001. Zapotec Science: Farming and Food in investing in interdependent localized alternatives is critical to the Northern Sierra of Oaxaca. Austin: University of Texas breaking out of today’s centralized and destabilizing juggernaut. Press. Such innovative courses of action are also central to trade based Hawken, Paul. 2007. Blessed Unrest: How the Largest Movement on common sense and mutual benefits, and ultimately also to in the World Came into Being and Why No One Saw It broader understanding and peace. Coming. New York: Penguin. Helmore, Kristin, and Naresh Singh. 2001. Sustainable Livelihoods: Opinions vary on the prospects for successfully averting what Building on the Wealth of the Poor. Bloomfield CT: Kumarian. seems to many to be a looming Malthusian disaster. But perhaps Homer-Dixon, Thomas. 2006. The Upside of Down: Catastrophe, implicitly cognizant that “pessimism wouldn’t do any good Creativity, and the Renewal of Civilization. Washington: Island anyhow,” people everywhere and together are increasingly Press. debating the range of prognoses, deliberating the efficacy of Ikerd, John. 2005. Sustainable Capitalism: A Matter of Common alternative models, and engaging in an array of new practices. Sense. Bloomfield CT: Kumarian. Taken together, we may be witnessing something unprecedented Kearney, Michael. 1996. Reconceptualizing the Peasantry. Boulder: – a rise of an instinctive, species-level adaptive response, perhaps Westview. even a fundamental awakening of collective consciousness Kitching, Gavin. 2001. Seeking Social Justice through Globalization: (Hawken; Korten). Escaping a Nationalist Perspective. State Park: Pennsylvania University Press. Korten, David. 2006. The Great Turning: From Empire to Earth

EUROMED Sustainable Connections: 3.3 Social Well-Being in Community Development 8 Community. San Francisco: Berrett-Koehler. McKibben, Bill. 2007. Deep Economy: The Wealth of Communities and the Durable Future. Times Books/Henry Holt. Norberg-Hodge, Helena. 2000. Shifting Direction: From Global Dependence to Local Interdependence. International Society for Ecology and Culture. Norberg-Hodge, Helena, Todd Merrifield, and Steven Gorelick. 2002. Bringing the Food Economy Home: Local Alternatives to Global Agribusiness. Bloomfield CT: Kumarian. Pollan, Michael. 2006. The Omnivore’s Dilemma: A Natural History of Four Meals. New York: Thorndike. Porritt, Jonathan. 2006. Capitalism as if the World Matters. London: Earthscan. Posey, Darrell A. 2001. Biological and Cultural Diversity. In On Biocultural Diversity: Linking Language, Knowledge, and the Environment. Luisa Maffi, ed. Pp. 379-397. Washington: Smithsonian Institutions. Robbins, Richard. 2008. Global Problems and the Culture of Capitalism, 4/e, Boston: Pearson. Shiva, Vandana. 2000. Stolen Harvest: The Hijacking of the Global Food Supply. Cambridge MA: South End. Suzuki, David, and Holly Dressel. 2002. Good News for a Change: How Everyday People are Helping the Planet. Vancouver: Greystone. Wilken, Gene C. Good Farmers: Traditional Agricultural Resource Management in Mexico and Central America. Berkeley: University of California Press. Wolf, Eric. 1982. Europe and the People Without History. Berkeley: University of California Press.

EUROMED Sustainable Connections: 3.3 Social Well-Being in Community Development 9 EUROMED SUSTAINABLE CONNECTIONS ANNA LINDH FOUNDATION POLICY ANALYSIS 3:4. BENCHMARKING SUSTAINABILITY: THE USE OF INDICATORS April, 2008

Benchmarking Sustainability: the meet their own needs” (Milne, 1998). For the WCED, this involves a process of change in which economic use of Indicators prosperity must be integrated with environmental integrity in a manner that is socially equitable and Introduction preserves the culture of a society. In this sense, The concept of sustainable development is both very sustainable development is a comprehensive and popular and elusive. The overwhelming appeal of inclusive approach which stresses the sustainability is situated in the strong belief of mutual interdependence of the natural environment with care for the world, hindering or excluding unwanted economy and society – the “triple-bottom-line”. environmental effects of development, and responsibility towards future generations (Wheeller, Evidently, the concept of sustainable development is 1993). However, while appropriate and praiseworthy complex both in theory as well as implementation. in principle, this conception appears to be too vague In an ideal situation we would be looking at a to provide an adequate basis on which to build a strategy that promotes environmental conservation, generally shared perception of sustainable development of peripheral areas, enhanced natural development (Butler, 1998). For many people, this is resource management, community support etc. an important reason to discard the notion and argue Furthermore, in addressing sustainable development, about the actual effects of such an approach. different levels of analysis may be used from global to the destination level, or from household to Defining and achieving sustainable development has individual level (Butler, 1998). The relative weight become one of the major policy debates of our and importance of the subjects related to sustainable generation. Since the term “sustainable development is hardly objectively determinable with development” first came to public attention with the universally true standards and depends on the values publication of the Brundtland Report (or “Our and ideologies of various stakeholders (Hall, 1998). Common Future”) in 1987, it has been much contested by international forums, academics, All the above seem to have created a lot of confusion scientists, public sector institutions, and private regarding sustainability and its indented use businesses (Eber, 2002). However, it is fair to say depending on the point of reference we choose to that much of the discussion on the concept has been employ which in turn has led over the years to a lot structured around the World Commission on of …convenient criticism and many lost opportunities. Environment and Development’s (WCED, 1987, p. 43) well-known definition of sustainable development In fact, and for no obvious reason, sustainable as “meeting the needs of the present without development was for a long time synonymous to compromising the ability of future generations to environmental protection. (Garrod and Fayal, 1998)

Theodore S. Benetatos POLICY ANALYSIS 3:4 BENCHMARKING SUSTAINABILITY: THE USE OF INDICATORS

and this partially true reality led all the developments protects the human rights and strengthens economic in the field for some years and up to the late 80s. prosperity” (Modified from the Eagan review-UK, 2004)

Sustainability and Community Development But the question still remains. How do we reach to Since the 1990s a social movement has emerged the point of creation of such a community and how focusing more on sustainable community do we create effective policies and measures to development. (Innes & Booher, 2000) thus validate our strategy. Some of the answers may be broadening the initially perceived spectrum of found in the usage of the wide spread techniques of sustainability. policy axis that denote priorities and indicators that

provide the measurement instruments. It may be argued that the social element was already incorporated in the core idea of sustainability but it is Using Performance Indicators also true that it was never explicitly stated or clearly defined. In reality, social wellbeing would be The most widely accepted and at the same time considered more as an aftereffect of the proposed challenged method of measuring sustainability refers acts for environmental conservation. However, this to the use of Sustainability Indicators. There are clarification did not wave the complexity of many definitions available for indicators and we can sustainability but it did lead to new theories accept that an indicator may be defined as the concerning sustainable development and its measure that enables you to understand your community context. position in relation to where you want to go and

under certain conditions; it shows you the way to do The key element in this approach can be found in the so. In other words we are using indicators to provide very definition of what constitutes a sustainable a point of reference when comparing effects of community. Obviously, the description of a development in different points in time thus sustainable community may vary upon perspective evaluating whether our strategy and policy measures and should be geographically, economically and had the anticipated result. As an afterthought such a historically defined (Benetatos, 2008). You do need system can also provide with valuable information however a starting point and if we had to agree upon about the reasons of success or failure. a generic definition then we might say that:

“Sustainable is a community that meets the diverse needs However it has been said that the use of indicators is of existing and future residents, their children and other users, contributes to a quality of life and provides an intellectually appealing idea with little practical opportunity and choice. They achieve this in ways that application (Wheeller, 1996). In fact it has been makes effective use on natural resources, enhances the argued that: “Millions of Dollars and much time of environment, promotes social cohesion & inclusion, talented people has been wasted on indicator reports

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Theodore S. Benetatos POLICY ANALYSIS 3:4 BENCHMARKING SUSTAINABILITY: THE USE OF INDICATORS

that remain on the shelf gathering dust” (Innes, to be of great value in a specific societal 2000), representing some of the heavy criticism context, they may be also rendered useless in addressed towards the use of indicators. other destinations where there is lack in appropriate data. In any case it is always important to remember that: • Indicators produce only a snapshot in time. In order for such a system to be effective we need “Everything that can be counted does to secure continuity. not necessarily count;…and everything that counts cannot necessarily be Indicators and Benchmarking ” counted As quoted above, a set of indicators may have effect Albert Einstein only when seen through a relevant benchmarking It is reported that the use of indicators has some system that will give meaning to the produced very important limitations that need to be taken measurements. under consideration when engaging in employing Benchmarking off course is widely used in business such a system. terminology in an effort to measure effectiveness. Indicator Limitations However, in our case we would like to consider • The role of an indicator is...to indicate…not to benchmarking in a different manner: dictate: This implies that the actual scores of

an indicator are not the goal but only the means “…not though the spectrum of competitiveness. We to our broader plan. would rather view this as a process that exemplifies • In order to provide meaningful information an average and best known practices” (Modified from the Eagan indicator must be seen through an evaluation review-UK, 2004) process like benchmarking. • Indicators are created in a given moment in time This is not a process that will lead us from “bad to and a community is not a machine. good” but from “bad to better” in an ongoing A community is a living organism that usually improvement development. A partially self regulating evolves faster than the supporting theory of the and self adjusting procedure to match the evolving indicators. nature of a community, leading to the best possible • Some indicators are too demanding in terms on outcome given resources, place and time. data requirements. Furthermore, these indicators may have been developed based on Creating a benchmarking Model information provided by a more organized It is not in the nature of this study to test a society that already possesses significant data benchmarking model for our indicators. This would collection systems. In this case, and even require resources such as testing time that is not though such indicators may be tested and found available. Thus, we chose to use as a basis already

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Theodore S. Benetatos POLICY ANALYSIS 3:4 BENCHMARKING SUSTAINABILITY: THE USE OF INDICATORS

established models such as the EU Sustainable Development Indicator report that was revised over a Based on these areas we produced 25 indicators: period of about 10 years as well as the UK model for Governance 1. Provide Continuous Process of Participation Sustainable Communities issued in 2004.  Document frequency of meeting and participant participation processes  Establish indicators of participation Focal Point: with an international group of experts (composition, demographics) in the broader field of sustainability, academics and  Document meetings and responses (Establish record of public participation) partnering to the EUROMED program community  Provide for local community access to representatives we adjusted the appropriate information and feedback 2. Establish means for continuous monitoring elements of existing theory to create a tailor made  Develop evaluative assessment tool for sustainability model. This model was designed: measuring goal attainment  Establish strategic milestones • to address the particularities of the  Provide participation for multiple participating regions (Greece, Tunisia, Italy, respondents (farmers, producers, community, partners) Palestine & Jordan) as a pilot for the broader 3. Promote local community resiliency area of the Mediterranean  Establish “over-time” collection of measurement date on participation • to suit the needs of a fair trade driven local  Document participation changes over economy based on producing and exporting time  Measure progress towards goal olive oil to US and EU Markets. attainment The model develops indicators in seven major  Establish an index measuring residents’ ability to achieve agreement categories, all aiming to provide a framework for policy making that will lead to our vision of a Economics 4. Optimize benefits to households sustainable community as presented in previous  Collect data on employment and income points.  Establish profile relating to cooperative venture More specifically these areas include the following:  Establish indicators relating to housing residency and other permanency factors  Employ economic data sets measuring individual wealth Governance  Employ indicators to measure local “good Social & Economics Cultural life” factors  Establish community health index 5. Optimize direct consumer and producer Labor Capital Environmental linkage  Monitor types and amount of contact (i.e. website hits)  Develop education and promotion Global Sustainable Quality Partnerships Community materials about producers  Promote open houses in villages  Promote youth exchange programs (Bellagio 2008)  Create website

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Theodore S. Benetatos POLICY ANALYSIS 3:4 BENCHMARKING SUSTAINABILITY: THE USE OF INDICATORS

6. Emphasize social and environmental business  Curriculum in schools models  National publications and news releases  Incorporate elements of presentations at  Visible manifestation of cultural practices Bellagio workshop as aspect of business  Regional and global workshops and plan festivals  Reduce carbon footprint of cooperative 14. Promote family identity and wellbeing venture  Measure family connectivity to  Incorporate an environmental community management, social and cultural element  Increase of Diaspora connectivity in business plan regarding production 15. Special attention to non-native workers and delivery process  Provision of directed social services  Attempt to achieve “zero waste”  Perform satisfaction surveys production and operational goals  Inclusion of non-native workers through 7. Invest in local capacity interviews to assess sense of  System for identification of local needs “belonging” through surveys, meetings and other 16. Opportunities for women/youth means  Provisions for inclusion in all aspects of  Measurement of investments in local project community  Increase in wages and monitoring of  Rate of return on community unemployment rates investments  Subsidies provided through available Social and Cultural grant-in-aid programs 8. Ensure adequate local olive oil supply  Survey of expectations of work  Establish export surplus quota respecting conditions compared to experienced adequate local supply to community work conditions  Measure affordability and availability of  Inclusion of youth and woman in conduct local oil supply of planning evaluation and surveys 9. Reverse rural abandonment Environment  Measure number of people 17. Environmental friendly processes returning/remaining in village  Air and water quality assessment of  Migration profile indicators production processes  Overall growth of local economy (i.e.  Application of ‘best management new business starts) practices/ in all phases of production  Assessment of future goals of residents  Evaluation of local versus imported through attitude surveys production inputs 10. Promote education and cross communication  Achievement of FLO (Organic product)  Workshops and meetings compliance and certification  Online networking 18. Practice Regenerative Agriculture  Technical services  Employ soil testing monitoring and  Reflection of program objectives in local practices for organic certificiation school curriculum  Conduct water quality testing 11. Provide equitable returns  Emphasize bio diversity in orchard  Establish system of fair profit distribution management practices 12. Respect cultural and legal norms  Encourage collaboration with universities  Promotional material about local for research of data and testing communities  Establish school curriculum enabling  Compliance with local and national laws students to engage in local monitoring  Co-authorship of locally produced for environmental quality materials reflecting communities 19. Increase resiliency to hazards 13. Protect Heritage and Enhance community  Measure local preparedness to hazard resiliency events

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Theodore S. Benetatos POLICY ANALYSIS 3:4 BENCHMARKING SUSTAINABILITY: THE USE OF INDICATORS

 Develop hazard prevention and fire 24. Understanding Diversity and Commonality prevention plan among partners in promoting peace and  Develop protocol for hazard mitigation justice in Mediterranean Region drills and evacuation  Promote programs for inter-cultural  Incorporate resiliency to hazards plan in exchange (including youth exchange) business plan  Develop sense of broader collaborative and dependency among cooperative Quality partners 20. Establish traceability  Promote system for exchange of  Certification of product origin, type, place technology and traditional practices of production among partners  Emphasize traceability in marketing and  Encourage direct, cross-cultural and labeling producer-consumer connectedness  Establish independent testing 25. Cross-cultural connection among consumers laboratories to assure quality product and producers evaluation  Establish programs promoting exchange  Emphasize quality in terms of objective of local and technical knowledge for measurement as well as subjective, producers and farmers. based on local expert evaluation 21. Implement Best Practices employing scientific

and local knowledge  Establish protocols for product production

 Emphasize local beliefs, traditions, and wisdom in local product production  Emphasize aesthetic qualities and

functionality of packaging  Ensure quality in storage for pre and post bottling of product

Labor 22. Fair Wage and Protection of Workers

 Meet International Certification Rules (FTO, others)  Meet ICO and UN standards, as

applicable  Ensure human working conditions  Conduct continuous research on worker

conditions  Establish system for worker conditions monitoring and assessment

23. Non-Exploitive Relations  Provide for worker access to voice opinions and concerns

 Inspection and monitoring mechanisms ensuring evaluation and investigation of worker complaints

Global Partnerships

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Theodore S. Benetatos POLICY ANALYSIS 3:4 BENCHMARKING SUSTAINABILITY: THE USE OF INDICATORS

Bibliography and References principles of sustainable development into human resource management curricula in hospitality and Abbott (2002) “Sustainability Initiatives tourism, Journal of Hospitality and Tourism Education Benchmarking Report” City of Seattle 13(5), 36-50. Airey D. (2003) Tourism Education: From Practice to Milne S. (1998) Tourism and sustainable Theory, Paper presented at the WTO 15th General development: the global-local nexus. In C.M. Hall & Assembly, Beijing. A.A. Lew (Eds.) Sustainable Tourism: A Geographical Bramwell B. (1996) Sustainable tourism Perspective, Essex: Longman, 35-48. management education in Europe, Tourism Redclift M. (1988) Sustainable development and the Management 17(4), 307-310. market: a framework for analysis, Futures 20(6), Butler R. (1998) Sustainable tourism – looking 638. backwards in order to progress? In C.M. Hall & A.A. The Egan Review, (2004) “Skills for Sustainable Lew (Eds.) Sustainable Tourism: A Geographical Communities” Perspective, Essex: Longman, 25-34. Urry J. (1996) Consuming Places, London: Eber S. (2002) Guidelines for Integrating Routledge. Sustainability into the Undergraduate Curriculum: Wheeller B. (1993) Sustaining the ego, Journal of Leisure and Tourism, London: University of North Sustainable Tourism 1(2), 121-129. London & Tourism Concern. Wight P. (2002) Tourism Strategies for European Commission (2007) “A Sustainable Sustainability and Profit: Is Balance Possible? Future in Our Hands”, EU Sustainable Development World Commission on Environment and Guide. Development (WCED) (the Brundtland Report)

(1987) Our Common Future, London: Oxford Eurostat (2007) “Measuring Progress to a more University Press. Sustainable Future”, Monitoring Report of the EU Sutainable Development Report. Innes J & Booher D (2000) “Indicators for Sustainable Communities” Hall C.M. (1998) Historical antecedents of sustainable development and ecotourism: new labels on old bottles? In C.M. Hall & A.A. Lew (Eds.) Sustainable Tourism: A Geographical Perspective, Essex: Longman, 13-24.

Jurowski C. & Liburd J. (2001) A multi-cultural and multi-disciplinary approach to integrating the

EUROMED Sustainable Connections: Benchmarking Sustainability: the use of Indicators 7 EUROMED SUSTAINABLE CONNECTIONS ANNA LINDH FOUNDATION COMMUNITY PROFILE 4:1. TROIANATA, KEFALONIA February 7, 2008

the majority of the island is rugged and mountainous, suitable only COMMUNITY PROFILE for goat herding. Less than a quarter of the island's land is arable. Village of Troianata Island of Kefalonia, Greece The majority of Kefalonians lived in rural areas before the 1953 Kefalonia was named after the earthquake, but today the urban population accounts for two- mythological figure king thirds of the population in the Prefecture, and the other third “Kefalos”, the head of a great remain in rural towns and villages close to farms. family that included Odysseus. Village of Many people believe Kefalonia to Troianata be Homer’s Ithaca. Kefalos Troianata is a arrived as a refugee from Athens rural mountain and displaced the island’s initial village located inhabitants, the “Taphians”. 11 km ESE of Kefalonia has the largest Argostoli in the landmass of the seven Ionian municipality of islands, measuring 800 km² (300 Argostoli. mi²). It consists of four Troianata is peninsulas: the Paliki, Krani, Erissos, and Pergii. It is a linked to surrounding villages and to the Argostoli-Sami Road. The mountainous region with deep ravines. The tallest mountain is Mt. village lies in the hilly Omalia Valley surrounded by a mixed forest, Aenos at 1628 meters. grasslands, pastures, olive groves and farmlands that dominate the

valley. A view of the Krani plain as well as of Argostoli Bay, Lixouri The official population of Kefalonia, and parts of Paliki can also be seen. The small road through the according to the 2001 census, was village leads to the monastery of St. Gerasimos, the island’s Patron 36,404. Currently, the island's Saint noted for his good works. population is nearly 45,000.

Kefalonia experienced one of the The population of Troianata is rural. The main economy is based fastest population growth rates in on agriculture. Businesses include a restaurant, an olive oil press, Greece during the 1990s. The two general stores and cafes, an iron works factory, and a small present population density is 55 rug weaving cottage industry. Animal husbandry includes the people per km² (140/mi²), with raising of cows, sheep, goats, chickens and rabbits. Many families Argostoli, the capital, home to one- have vegetable gardens, olive trees, and vineyards, and make their third of the island's habitants. Lixouri is the second major own cheese, olive oil and wine. There is also a church, a park, settlement, and the two towns together account for almost two- and a community center that served as an elementary school when thirds of the prefecture's population. the village population was higher and included families with young

children. Kefalonia is located in the heart of an earthquake zone, lying east of a major tectonic fault where the European plate meets the Hundreds of people traditionally lived in Troianata but as the 1953 Aegean plate. Dozens of minor or unrecorded tremors occur each Ionian earthquake destroyed nearly every building in the village, year. On August 12, 1953, the third of four major earthquakes to the entire population suddenly become homeless. Villagers hit in August, measuring 7.3 shattered the island. 100,000 of the relocated to Argostoli, Athens, Germany, the USA, as well as other 120,000 inhabitants of the island were forced to leave the island. destinations. Little by little, homes in the village were rebuilt and The only area escaping damage was around the town of Fiscardo people began returning. In 1991, 130 people permanently lived in in the north untouched. The earthquake caused the entire island to Troianata with significant increases in resident population during be raised by 60 cm. summer months and holidays.

Agriculture The primary agricultural resources in Kefalonia are animal Community Partners breeding, vineyards and olive orchards, with the remainder largely The village population today stands at about 130 persons, with a composed of grain and vegetables. Most vegetable production summer population swelling to over 400 persons. The year round takes place on the plains, which cover less than 15% of the island; population continues to live in a traditional manner – tending to the olives, the vineyards, and the livestock. Youth, as in most EUROMED Sustainable Connections: 4.1 Community Profile – Troianata, Kefalonia, Greece 1 areas of rural Greece, have migrated to the larger towns for EUROMED olive oil cooperative, which he sees as a way to bring a education or employment. The principle objective in reviving the competitive market to his village. He needs assistance in order to olive oil industry in Troianata is to help revive a year round harvest hundreds of the resident population by establishing economic vitality through olive trees in his orchard that now oil harvesting and production, and by creating new employment in lie idle. As a village leader, the olive oil cooperative. George looks forward to the day when the cooperative Makis Christoforatos is can help him harvest his an important village underutilized orchard in leader and serves the order to supplement his EUROMED project as a family’s income. principle community representative. He Sprios Theotokatos, the operates the village’s project’s “expert” olive oil press and community representative, owns an orchard has rebuilt his family’s home containing about 500 in the village, and works as a professor of sustainable agriculture ancient olive trees. As a community leader, he is dedicated to the at the island’s technical college, while also serving as the full time continuation of the agricultural vitality of Troianta. He employs general manager of the Agroindustrial Cooperative of Robola villagers in several of his agricultural enterprises. Besides the olive Producers of Kefalonia. In addition to his own grape and olive press, Makis also has a large herd of cows, goats and sheep as orchards, he is responsible for the management of the valley’s well as a very popular restaurant located in the village. He Robola wine cooperative, and brings substantial expertise about provides mechanical equipment services to till the agricultural organic farming practices, domestic and foreign export markets, fields for village farmers, and organizes field crews to manage and cooperative farming and manufacturing production to the many orchards. project.

Nikos Kavaliaratos returned General permanently to his mother’s characteristics of olive village of Troanata seven years groves in Kefalonia ago. He and his wife, Sevesti, The census of 2004 by an icon writer and painter, the Greek Ministry of relocated from Athens years Finance indicate that the after Nikos’ family left the island of Kefalonia island as a result of the produced 1,623 tons of earthquake of 1953. He, olive oil. The mills in Sevesti, and their cousins from Dilinata, St. Thekli and Athens participate in the annual Stkanthata produced about 100 tons of olive oil each in 2005. The olive harvest at the family’s Ekologiko mill near Lixouri reported that they produced close to orchards. Their harvest is 1000 tons of oil in 2005. Given the extensive olive resource on the limited to domestic production, enough only to supply their annual island and the fact that the vast majority of olive trees are consumption needs. With an export market available through an underutilized, yields could potentially increase by 500%. According olive oil cooperative, Nikos looks forward to expanding his olive to the census conducted by the Greek Ministry of Finance, in 2000 harvest and to supplementing his income with agricultural there was a total of 534,700.8 hectares of land with trees of revenues. various types in Kefalonia, divided among 4,735 plots. Of these, 518,780.2 hectares have olive trees (on 4,720 plots). These George Christoforatos is a taxi driver in Kefalonia by day. The taxi statistics highlight the olive-dominated landscape of Kefalonia. business provides dependable income so that he can afford to The range of olive trees in cultivation was 50-600 per family continue his rural lifestyle and agricultural practices. His olive estate, with a mean of 174.35 and a median of 110. Land orchard numbers more than 400 trees. However, due to a limited holdings are measured in Stremata, the traditional Greek export market, he harvests only enough oil to support his own measurement for farm land. The plots ranged from 10 to 110 family’s domestic use. He is very interested in the formation of the stremata (the equivalent of 10,000-110,000 m²), with a median of EUROMED Sustainable Connections: 4.1 Community Profile – Troianata, Kefalonia, Greece 2 28.17 stremata (28,166 m²). Olive tree density ranges from 2.5 to 1950s from Ithaca and Crete. The olives are more abundant than 13 olive trees per strema. In the 1999-2000 census of Kefalonian the Dopia tree, but the olives are smaller, rendering less oil each. agriculture, the density of olive trees per strema island-wide was 10.9. The Thiaki is common on Kefalonia. The trees grow from 5 to 8 meters high, the average olive weight is 1.6 grams, the relation of Village Olive Oil Production flesh to pit is 6 to 1, and the yield in oil per kilogram of olive is The village lies in the Omalia Valley, one of Kefalonia’s most about 1:5 or 21%. The Thiaki variety is also cultivated for an olive productive agricultural regions. In addition to olive orchards, which oil of high quality and is drought-resistant. dominate the bottom lands of the valley, the village is famous for its unique variety of grapes – Robolla. Formed over 20 years ago, The Kalamata variety, or the Robolla Cooperative of Farmers produces one of Greece’s Καλαματα variety, premier table wines. The wine cooperative is responsible for coming from the bringing back into production the vineyards that became idle Kalamata region of following the earthquake of 1953. Greece, is also cultivated The Kefalonia prefecture has estimated a production potential from in Kefalonia. The trees the village’s olive orchards to over 400,000 kilos per year. The grow from 7 to 10 Troianata village olive oil press has a capacity to produce between meters tall, with the fruit 120,000 – 200,000 kilos per year. It currently produces about weighing an average of 100,000 kilos per year. That translates into 80,000 – 120,000 liters 5.6 grams, the ratio of flesh to pit is 8.3:1, and the yield in oil (kilos) of capacity for export. Several obstacles were identified by from the olive is about 17%, yielding significantly less than the the olive oil producers that must be addressed before the Koroni and Ithaki varieties. Kalamatas are primarily grown for production potential can be realized: lack of sufficient labor to table olives and do best in regions with ample precipitation, but harvest the fruit; management of dormant trees; quality control in are nonetheless commonly found in Kefalonian olive oil mills. production; bottling facilities; and competitive export markets. Finally, the ‘Dopia’ is commonly used to make Kefalonian olive oil. The word ‘Dopia’ translates simply to mean ‘local’, but is also referred to as ‘Korfuelias’. It is likely that this variety has been dubbed ‘local’ because of its ubiquitous presence on the island. Dopia is more round in shape than the other varieties and it produces more olive per berry than Koroni. Producers indicate that they produce about 1 kilogram of oil for every 5 kg of olives.

Pruning and Fertilizing To maintain the health of their olive trees, farmers engage in pruning the branches and applying fertilizers, natural or synthetic, to the soil. Farmers engage in some kind of pruning during the harvest season, using a combination of Primary olive tree cultivars in Kefalonia hand pruners, hand-saws, and chain saws to prune their olive The four main varieties of olive tree in Kefalonia include: Koroni, trees. Most of the annual pruning entails cutting only small sucker Ithaki, Kalamata, and Korfuelias or what they call ‘Dopia’, meaning branches and dead branches. More extensive pruning is done ‘local’. The Koroni variety grow 5-7 meters tall, with olives having once every five years. With major pruning, branches that are cut an average weight of 1.3 grams, the ratio of flesh to pit is 6.6:1, will not produce fruit until the second growing season, as olives and the olives yielding up to 27% of their weight in oil under the fruit on one-year old wood. The purpose of pruning is to re- right conditions. The Koroni variety is implemented for the concentrate the tree’s energy into a select number of branches, production of high quality oil. It is a very productive variety, encouraging stronger growth and more abundant olives. resistant to drought, and was imported to Kefalonia around the To fertilize, farmers rely on the application of animal manure. EUROMED Sustainable Connections: 4.1 Community Profile – Troianata, Kefalonia, Greece 3 Some also apply synthetic fertilizers in addition to manure. Olive oil is considered sacred to the Greek people as a whole and Synthetic fertilizer is extremely effective but also expensive. For Kefalonians are not an exception. Olive oil is used to anoint 50 kilograms of the fertilizer it costs approximately €20, and each babies during baptism into the Greek Orthodox Church and it is tree needs about three kilos applied annually. Manure application placed on the forehead and temples of the dead just before they is less expensive as most of the farmers also have farm animals. are buried, serving as a holy “final seal”. The most common manure used comes from sheep, goats, and chickens. Some farmers let their chickens roam the olive groves to Harvest and labor fertilize the trees. Another technique used to fertilize the olive The harvest is a family occasion. trees is by planting phosphorous-rich legumes in between the olive Even some absentee landowners trees when they are first planted. come from Athens during the olive season to harvest their trees. Pests and pesticides Friends often rotate to help each The major pest that olive farmers in Kefalonia are aware of is other with the harvest in their Bactocera (Dacus) oleae commonly called “Dakos”. It is a tiny respective groves. From the insect that lays its eggs in the olives during the spring, when the months of October to as late as weather becomes warm and wet. Between late summer and March depending on the season autumn is when the Dakos become apparent and, if left untreated, and the variety of olives, by mid-autumn they can destroy the majority of olives. Dakos- Kefalonians are to be found in or infected olives that are harvested yield a more acidic oil. For below the olive trees. They place Kefalonian olive oil producers who desire high quality olive oil, mesh netting underneath the trees acidic oil is highly undesirable. Farmers attribute the increase in and climb branches or ladders to reach the harder-to-reach olives, the insect’s population to the use of pesticides which they believe combing them off with a little plastic hand rake. Mechanized has had a negative effect on other beneficial insects and birds. harvesting exists on the island but most harvest is still done by hand. Women and men alike, young and old, all join in the The prefecture of Argostoli had historically sprayed pesticides to harvest. The harvest is completely reliant upon family and friend kill Dakos before they attacked the olives. In earlier years they participation. applied by helicopter spray application. Honey producers complained that the sprays were annihilating honey bees, and Economics of olive oil eventually the prefecture limited their spray technique to hand The number of producers that bring their olives to be pressed at application. A more environmentally sound practice used by many each of Kefalonia’s mills ranges between 150 to 1,141. Troianata farmers is hanging a plastic bottle on each tree filled with a sweet attracts between 150-200 producers. This mill produces about 100 liquid. Dakos drown upon entering the bottle and drinking the tons of olive oil each year. Dilinata hosts about the same amount liquid. of olive oil producers. Saint Thekli presses the olives of between 250-300 producers each season. Stakathata is a cooperative press Cultural importance of olive oil comprised of 150 farmers, producing 950 - 1000 tons of olive oil. Making olive oil is a longstanding tradition in Kefalonia. Most The largest of the mills is Ekologiko where over 1,000 tons of olive farmers inherited olive trees from their parents, who inherited oil is produced each year. In 2005, its membership was at 1,141. them from their parents. Many of the producing trees in Troianata are 200 – 500 years old. Older trees still bare fruit and their The presses are generally open for quality is considered excellent, but their yields are often lower. To operations starting in late October or establish a stronger harvest, farmers plant new trees in addition to early-mid November until February or their standing trees. On the other hand, no one removes the older later, depending on how long into the trees for the sake of planting new ones. The trees are sacred to winter or spring the olives are the Kefalonians. harvestable. During the four main months of production, each mill The average household consumption of olive oil for a family of four employs two to four workers to run the is 270 kilograms per year. Kefalonians use olive oil in nearly facilities. However, each farmer everything they eat. They use all qualities from the first pressing monitors the pressing of his or her own olives. Everybody takes of the olives to the last. With the last pressing, poorer quality oil turns sending their olives up the conveyor belt to be washed, into is used to fry fish and for other uses. A favorite is tomatoes, feta the grinding stones to be mashed, through the centrifugal tanks to and bread doused in olive oil. EUROMED Sustainable Connections: 4.1 Community Profile – Troianata, Kefalonia, Greece 4 be separated into oil and juice/water, through the pipes and out Export limitations the spigot into their vats. To pay for the use of the olive pressing As noted, export markets are extremely limited in facilities, farmers pay 10% either of the produced oil or the cash Kefalonia. The limited available export market has equivalent. In 2004 most producers received 2 Euros per kilogram been through traders who pay an average of 2 euro of olive oil from traders who would export the oil to other parts of per kilo for Kefalonian virgin olive oil, and ship their Greece or to Europe. The Kefalonian producers have few market bulk products to Italy for further processing and alternatives because in order to sell to outside markets they distribution. The EUROMED project seeks to require bottling facilities. The oil that is sold island-wide is establish a cooperative venture for direct production packaged in plastic bottles, typically old water bottles or soda and marketing of oil products through cooperative bottles, or in tin vats. Once a competitive market is established, it partnership between European local communities, is believed by farmers that olive oil production can be significantly foreign specialty markets, and local producers in order to retain increased by three to four-fold over current production levels. the greatest possible value added benefits to the local communities. A secured export market would result in financial Potential Economic Benefit resources necessary to improve local production capacities and Producers receive approximately 2 euro per kilo of high quality quality control measures as well as significantly increased olive oil. However, a competitive market could yield to producers production from idle olive resources through the employment of 4 euro or more per kilo. A production of 100,000 liters could yield field labor teams. An initial estimate of financial proforma is a direct economic return to producers of 400,000 euros or more provided below. annually in addition to other community reinvestment benefits. Research of US specialty markets indicates retail prices ranging Cooperative Initial Proforma In Euro between $12 and $16 per half liter of oil. That results in an average retail price of $28. Given current exchange rates, the Wholesale sales per liter 15,00 Bulk product Cost: 4 ,00 retail values average about 20 euro per liter and a wholesale price Net revenue 11,00 per liter in the US specialty market at about 15 euro. Securing a Bottling & shipping 3,00 market price at that level could produce 11 euro net profit after Distribution and marketing 2,00 paying producers a higher target price for their oil. The net Administration 2,00 Net Profit 4,00 revenues are available to cover the costs of bottling, shipping, Fair Trade Profit Distribution Scenario marketing, administration, and reinvested improvements to bolster Wholesale revenue (10,000 liters) 150,000 harvest and production capacity at the village cooperative. Net Profit: 40,000 Farmer bonus incentive 25% 10,000 community reinvestment 25% 10,000 coop reinvestment 50% 20,000

EUROMED Sustainable Connections: 4.1 Community Profile – Troianata, Kefalonia, Greece 5 MANI Community Profile

Geography

The term Mani Peninsula is used to define the central peninsula of the three which extend southwards from the Peloponnesus in southern Greece. To the east is the Laconian Gulf, to the west the Messenian Gulf. The peninsula forms a continuation of the Taygetos mountain range, the western spine of the Peloponnesus.

The terrain is mountainous and inaccessible. Until recent years many Mani villages could be reached only by sea. Today a narrow and winding road extends down the west coast from Kalamata to Areopoli, then south to Akrotainaro (the pointy cape which is the most southward soil of continental Greece) before it turns north until Gytheio.

“Messinian Mani” However, the Mani in the frame of this case study will be considered the western bank of the peninsula, the so-called “Messinian Mani” and more specifically the municipality of Lefktron, which extends from the village Kampos to the village Agios Nikon.

History

Mani has a long and very important history.

Neolithic remains have been found in many caves along the Mani coasts. Homer refers to a number of towns in the Mani region, and some artifacts from the Mycenaean period have been found. The area was occupied by the Dorians in about 1200 BC, and became a dependency of Sparta. When Spartan power was destroyed in the 3rd century BC, Mani was self-governing for a time before being absorbed into the Roman Empire in the 2nd century BC.

As the power of the Byzantine Empire declined in the 9th century AD, the peninsula drifted out of the Empire's control. The fortress of Maini in the south became the area's centre. Over the subsequent centuries the peninsula was fought over by the Byzantines, the Franks, and the Saracens.

After the Fourth Crusade in 1204, Italian and French knights (known to the Greeks as Franks), occupied parts of the Peloponnese. In 1249, Mani was occupied by the Venetians, who made it one of the twelve baronies of the Principality of Morea and built the fortresses of Mystras, Passavas, Gustema (Beaufort) and Megali Maini.

In 1460, after the fall of Constantinople, Mystras fell to the Ottomans, but Mani was not subdued and retained its internal self-government in exchange for an annual tribute. Local chieftains or beys governed Mani on behalf of the Ottomans. As Ottoman power declined, the mountains of the Mani became a stronghold of the klephts, bandits who also fought against the Ottomans.

The last bey of Mani, Petros Mavromichalis, was among the leaders of the Greek War of Independence. He proclaimed the revolution at Areopoli on March 17, 1821. The Maniots contributed greatly to the struggle, but once Greek independence was won they wanted to retain their local autonomy. During the reign of Ioannis Kapodistrias, they violently resisted outside interference to the point of killing Kapodistrias.

The Mani's local autonomy was abolished in 1870, and the area gradually became a backwater as the inhabitants abandoned the land through emigration. It was not until the 1970s, when new roads led to the growth of the tourist industry, that the Mani began to regain population and become prosperous. Maniots were known for their obstinate character, conservative views, sometimes extreme frugality, and their zealous safeguarding of the family property.

Despite the region's aridity, Mani is known for its unique culinary products such as glina or syglino (pork or pork sausage smoked with aromatic herbs such as thyme, oregano, mint, etc. and stored in lard along with orange peel). Mani is also known for probably the world's best extra-virgin olive oil, soft-pressed from partially ripened olives of the Koroneiki variety that are organically grown on mountain terraces. The local honey is also of superior quality.

Today the Mani's coastal villages are full of cafés and souvenir shops. The peninsula attracts visitors for its Byzantine churches, Frankish castles, secluded sandy beaches and stunning scenery. Some popular beaches during the summer are Kalogria beach and the beaches by Stoupa harbor, while Kardamyli and Agios Nikolaos have nice pebble and sand beaches too. Furthermore, the famous towers of Mani (pyrgospita) are significant tourist attractions, and some offer accommodations for visitors.

The Diros stalactite and stalagmite caves, near Oitylon, are also a popular tourist destination; they are partly underwater and visitors tour them in gondola-like boats.

Gytheio, Areopoli, Kardamyli and Stoupa are filled with tourists during the summer months but the region quiets down during the winter months. Many inhabitants are still working as olive farmers, and thus many of the winter months are devoted to the olive harvest. Some of the villages in the mountains are less touristic and often have very few inhabitants. Mani is considered to be one of the most traditionalist and conservative regions of Greece, and is a stronghold of the right-wing New Democracy party.

There were fires in Mani in the summer of 2007 which have risen the concern about the protection of the environment and thus the protection of the well being of the local community.

Olive oil Olive harvest is the main agricultural activity in this area, whith many land owners’ and workers’ families depending on it. In this area (Municipality of Lefktro) there are about 10 mills. The 3 main ones are in the villages of Riglia, Agios Nikolaos and Neochori, which annually produce 150-300 tn of olive oil each. The whole area has an annual production of 500-800 tn. Local extra-virgin olive oil is considered by many to be the best in the world.

Olive trees performance (Kg/olive tree)*

Olive oil production in the Mani Community*

The main variety of olive tree (the vast majority of olive trees) is “koroneiki” or as the locals call it “lianolia” which grows the small-sized olive fruit from which high quality olive oil is produced. There are also some trees of a variety the locals call “chondrolia” (thick olive) which grows medium sized eatable olives. Very rare in this area are olive trees of the “kalamon” (kalamata’s) variety which grow the large black eatable olives.

Mills usually produce the oil from an olive producer’s yield and keep a certain amount (percentage) as a payment which they then sell it usually in cans. There are no significant bottling facilities in the area.

Organic There is some organic olive oil production, and a common belief that given the right incentives and motivation, producers will easily switch from non organic to organic cultivation. There is also a production of nearly 100 tn of oil that is certified to be organic, although there are reasons to believe that this certification is not necessarily trustworthy as locals say that the checks are rare or never happen at all. It is worth mentioning that some olive production is compulsory to be organic because some olive trees are inaccessible to means of fertilization due to geography.

It is a common practice that certain days are picked by a mill’s owner specifically for the organic olive yield of various olive producers in order to avoid non-organic mixing with organic.

Labour In recent years, many Albanians immigrants have come to live in the area. Today there are lots of Albanian families living, working and raising their children by working at the olive crops and in construction works. Land owners’ families hire these workers to help with pruning and olive harvesting. They usually pay them by day of work. Sometimes, depending on what the deal is, they provide them lunch and drinks during their work, machinery is available to help separate the olives from the branches and on the whole the working conditions are considered to be good. However the technical expertise of the workers is in many occasions poor. Pruning, for example, is considered to be a very important aspect of good and sustainable olive oil production, and though there are workers with the substantial know-how and skill, there are a lot who don’t, damaging the trees’ ability to grow much olive fruit, this having an effect on next year’s yield quantity. Sadly, as the younger people in owners’ families tend to leave the area and not be interested in practical matters of olive farming, the know-how of the owners’ is also lessened and unable to pass to future generations of workers.

Pests Pesticide use is widely practiced especially in rainy years. In cases when it doesn’t rain much, need for pesticide spraying is dramatically reduced as Dakos (the most common insect infection of the olive tree) needs a wet environment. If not attended properly, Dakos can spoil olive oil quality as the insect itself gets milled along with the olives that contain it.

Our Contacts Alekos Kyvelos is the owner of the mill in Riglia and thus an important olive producers’ community representative. His son Makis Kyvelos is an architect who lives and works in the area along with his family (wife and three children). He is very concerned about environmental issues and also has great interest in preserving the well being of the local community and so expressing the views of the majority of local olive producers he is looking forward to seeing international markets open to local products.

*(Source: Kyvelou Stella, “Le tourisme dans l’espace littoral du Péloponnèse: son rôle dans le processus d’ urbanisation des régions hétérogènes: le cas du Magne Messénien” PhD thesis, University Paris I-Panthéon-Sorbonne, Paris, 1989) EUROMED SUSTAINABLE CONNECTIONS ANNA LINDH FOUNDATION COMMUNITY PROFILE 4:3. Jlioula, Tunsia May, 2008

Finally, the governorate (governorship) of Kairouan COMMUNITY PROFILE numbers 5,470,000 olive trees 4,500,000 of which are Jlioula, Tunisia productive; and 108 oil mills, 47 super mills, 29 traditional mills, and 27 continuous conveyer mills.”1 THE OLIVE TREE IN TUNISIA “The olive tree is an ancient species, dating from well Strategic positioning study of the olive oil before the Christian era (2,000 BC), well before it was processing branch introduced to North Africa by the Romans. The medical “The study contains a diagnosis of the olive oil profession continues to find new benefits associated processing branch, which is comprised of 1 440 olive oil with olive products, above and beyond those traditionally processing units, 60 private sector exporters, 12 associated with lowering cholesterol and preventing extraction units for olive pits, and 24 olive oil packaging arteriosclerosis. According to local lore, the olive is also units. Tunisia exports annually on average 112,000 tons effective against intestinal parasites, has a laxative of olive oil, representing 70% of overall olive oil function, has a sedative effect, and is antiseptic as well production, and is ranked number 4 among exporting as diuretic. olive oil countries after Spain, Italy and Greece. In the context of the benchmarking of 10 criteria specific As far as other uses for olives and olive wood are to the branch, the sector in Tunisia is compared to those concerned, its oil is used in natural soaps, and its in 3 different countries: Spain, Italy and Greece.”2 beautifully grained wood is much appreciated by wood workers and artisans of all types. Considered divine, Jloula since it’s mentioned in the Koran, the olive tree is also a Ain-Jloula is an administrative sub-district (imeda) rural universal symbol of peace and freedom. municipality 35 km / 20 miles west of Kairouan city. It totals a population of about 3,000 people. Its parietal When I was a child, my mother would put a small olive (rock) paintings dating back ca. 10’000 ago in the twig in her hair for the scent. Olive oil is also used to nearby Jebel Ouesslat mountain attest of a Primitive life. perfume, massage, and keep the scalp and skin healthy, nd th and is especially comforting to little boys who are ill or A former, prosperous important Roman city (2 -7 tired. centuries A.D.) until the arrival of the Arabs in the first half of the 7th century A.D., Jloula witnessed the climax In the Kairouanese production, the best oils are of its development towards the 13th century A.D. “Oueslati” (from “Oueslatia”), and “El hor” (‘the authentic, It is located between mountains, thus enjoying from “El Ala”), produced from olive groves going back to ecological and economic privileges of both heritage and Roman times. The oil called “Enndhouh” (i.e., ‘the nature. Its population lives mainly from agriculture clearest’) is manually pressed, using neither olive mill without being tenants of the land for most of them. nor centrifuge, and is becoming increasingly popular due to its reputed medicinal and culinary qualities. Olive growing: the farmer used to exploit millennium olive trees. After Independence, the mountainous terrain In 2004 the olive harvest was 57,000 tons (which results was invested following soil-protection works and an in ca. 11,500 liters of oil). In 2003 the harvest amounted awareness-campaign for almonds and olive trees by the to 280,000 ton, which represents 40-50% of national agricultural authorities. production. The 2003 harvest was 150,000 tons, 50,000 tons of which are destined for the local market (the olive The number of olive trees is estimated at 20,000 in tree gives fruit every other year). The rest is exported to Jloula (8,000 of which are in Magra) half of which is the USA and Europe; the largest part, however, transits multi-centenary. They are 5 m high, maximum. The through Italy where it is rebottled, relabeled and re- ‘Oueslati’ olive tree species (25% of trees) is of medium exported. size (3 to 4 grams), gives better quality olives and oil The olive tree produces only between its 8th and 100th and more oil because the area is semi-arid, the soil is year of age. Older than that, it is decorative and gives rocky, and the species has many pharmaceutical values: shade. The circumference of an olive tree can be as coughing, abdominal pains (massages), dermatological, high as seven meters; a tree expands 40–50 cm each one hundred years. To determine the age of an olive tree (like with other tree species), dendrochronology is used (i.e., the enumeration of the number of layers or 1 Mohamed Rebai, www.kairouan.org circles within the trunk). 2 http://www.tunisianindustry.nat.tn/en/doc.asp?docid=668 &mcat=3&mrub=137 EUROMED Sustainable Connections: 4.3 Community Profile – Jlioula, Tunisia 1 contains less cholesterol, etc). But ‘El gueem’ species probably connected to spiritual life and perhaps to the followed by the Sahli species predominate. artist's conception of the origins of the world. Unfortunately, prehistoric cave paintings (rock art and Farmers cultivate olives harvested in Family. Some use petroglyphs) are extremely vulnerable and are currently traditional manual small presses (the ‘gargeb’ or roller, undergoing a progressive and irreversible degradation. producing best quality-oil) for small-scale production for The region of Jebel Ouesslat could be at one and the domestic consumption; the rest is entrusted to modern same time an exceptional ecological (fauna and flora) presses (2 presses in Jloula). Half of the production and archeological park. pressing is ‘subcontracted’ at nearby Mansourah-Kesra and in Kairouan oil mills. The yield in oil from the olive is Speaking about Tunisia as a cradle of civilizations, a about 20%.3 history going back 3,000 years has always been evoked, whereas our country is still overflowing with ARCHEOLOGY AND ECO-TOURISM undiscovered treasures from the past. Human presence has been traced to 5,000 years ago, well documented in The Rock Art of Jebel Ouesslat the Ouesslatia region. Jebel Ouesslat, the extension of which is Ain-Jloula village, is a large and imposing mountain range covering It should be remembered that only 13 sites of rock art approximately 135,000 hectares and dominating the are mentioned on UNESCO's list of that type of Ouesslatia and Merguellil plains to the east, the archeological treasure. They are found in Algeria, Kairouan plain to the west, and the Haffouz valley to the Australia, Libya, Brazil, Mexico, Argentina, France, Italy, south. Portugal, Spain, Sweden, and Norway. There is no mention of sites in Asia, sub-Saharan Africa, the USA, Although of difficult access and poor in water, the Jebel or Canada . Ouesslat has always known occupation. Prehistoric man's presence has been traced back to the most The caves of Djebel Ousslat could very possibly one day ancient times, at least 5,000 years before our times be classified fourth in Africa, after those of South Africa (Neolithic era). (Ukhahlamba/Drakensberg), Algeria (Tassili n'Ajjer), and Libya (Acacus). This range contains an impressive quantity of dwellings dating from that era as well as a number of petroglyphs It is hoped that the Oueslatia region (which Jloula is part (parietal paintings) situated on the walls of caves and of) will in the very near future become a prime caverns. It represents, as far as we know to date, the destination for eco-tourism of that type. Its distinctive richest area of rock art in Tunisia. and precious art cannot be recreated, and is rapidly disappearing due to the course of nature. It is imperative There is a plethora of different styles and themes to be to find ways of protecting these petroglyphs in a form as found. Through these paintings and/or petroglyphs, close as possible to their original state prehistoric man demonstrates the earlier existence of flora and fauna that has today disappeared in Tunisia. Mohamed Rebai www.kairouan.org Thus the white rhinoceros, the great ancient buffalo, the [email protected] antelope, the giraffe, the hyena, and the ostrich once lived in our part of the world. Domesticated animals are also represented, some in fenced off pastures, such as cattle, goats, and sheep, the latter guarded by a well- known local domesticated dog –the ‘Sloughi’.

Invaluable details about prehistoric man's daily life at Jebel Ouesslat are thereby revealed. Other examples include the hunt (hunting scenes of Ain Khanfous) and family life (Dar Mellah). Other figures also appear,

3 Data provided by Néji Khammari, a Jloulian by birth, technician in the Kairouan Direcrorate for Agricultural Development, and correspondent of daily « Le Temps » newspaper. EUROMED Sustainable Connections: 4.3 Community Profile – Jlioula, Tunisia 2 Ajlon Community

Z.Alawneh

CBOs and NGOs y Charity 782 y Cooperative 1043 with a total number of 106919 members Constraints y Marketing y Capacity building y Training y Financial support y Policy support Means of marketing y Bazzars y National and local exhibitions y Direct sale in the places of production y Through distributers y Through commissioners y E-marketing y Contracted a company or a person

Ajlon

ƒ 73 Km north of Amman ƒ130,000 population surrounded by 10 villages ƒArea is 420 km2 ƒQala’at Al-Rabadh, an old castle built in 1184 by Izz Al-adin Usama ƒMountainy with 1250 the highest with thick green forest ( oak, Pine, Carob, and wild strawberry trees) Olive Oil Mills in the Governorates

Kar ak Tafela Maán 3% aqaba Madaba 2% 2% Balqa 2% 1% 7% Irbid 35%

Amman 11%

Zarqa 4%

Mafreq 7% Ajloun Jarash 13% 13%

Types of mills and their distribution in Jordan

Governorate Type Total % Three Stage Two Stage Conventional Irbid 28 9 3 40 35.70 Ajloun 12 0 3 15 13.40 Jarash 9 3 2 14 12.50 Mafreq 7 1 0 8 7.14 Zerqa 5 0 0 5 4.46 Amman 7 5 0 12 10.70 Balqa 5 3 0 8 7.14 Madaba 1 1 0 2 1.79 Karak 0 3 0 3 2.68 Tafelah 2 0 0 2 1.79 Ma'an 2 0 0 2 1.79 Aqaba 1 0 0 1 0.89 Total 79 25 8 112

% 70.54 22.32 7.14 100% EUROMED SUSTAINABLE CONNECTIONS ANNA LINDH FOUNDATION

BUSINESS ANALYSIS 5:1. EVALUATING FRANCE, UK AND USA CONSUMER MARKETS IN OLIVE OIL: A QUANTITATIVE ANALYSIS APPROACH TO SUPPORT MARKET ENTRY SELECTION PROCESS WITH FAIR TRADE PRODUCTS May, 2008

Abstract 1

In this report the France, UK and USA markets are evaluated in relation to olive oil exporting possibilities. The main purpose of this research is to present the market and evaluate the markets in order to investigate the possibility of exporting and promoting olive oil with fair trade procedures. Essentially, this report is a consumer market analysis built for export decision making purposes.

Definitions and analysis

Sustainable development supports meeting human needs while preserving the environment so that these needs can be met not only in the present, but also in the future. The term was used by the Brundtland Commission that gave the most popular definition of sustainable development that is; development that "meets the needs of the present without compromising the ability of future generations to meet their own needs.

The field of sustainable development can be divided to 3 categories: environmental sustainability, economic sustainability and sociopolitical sustainability. Sustainable development entails also many issues such as the interdependent and mutually reinforcing pillars of sustainable development as economic development, social development, and environmental protection according to the United Nations 2005 World Summit Outcome Document.

According to other opinions, there is also a cultural pillar of sustainable development.

The United Nations Division for Sustainable Development lists the following areas as coming within the scope of sustainable development:

• Agriculture • Atmosphere • Biodiversity • Biotechnology • Capacity-building • Climate Change • Consumption & Production Patterns • Demographics • Desertification & Drought • Disaster Reduction & Management • Education & Awareness • Energy • Finance • Forests

1 Research investigation prepared by By Kalizou G, Stavrakis D and Wojciech D, Hellenic American University in Athens

EUROMED Sustainable Connections: Evaluating EU & US Olive Oil Consumer Markets 1 • Fresh Water • Health • Human Settlements • Indicators • Industry • Information for Decision Making & Participation • Integrated Decision Making • International Law • International Cooperation for Enabling Environment • Institutional Arrangements • Land management • Major Groups • Mountains • National Sustainable Development Strategies • Oceans and Seas • Poverty • Sanitation • Science • SIDS • Sustainable tourism • Technology • Toxic Chemicals • Trade & Environment • Transport • Waste (Hazardous) • Waste (Radioactive) • Waste (Solid)

During the last ten years, different organizations have tried to measure and monitor the proximity to what they consider sustainability by implementing what has been called sustainability metric and indices. Environmental sustainability is the process of making sure current processes of interaction with the environment are pursued by making sure that the environment stays as natural as possible.

In Relation with the Euromed project In the research, the export possibilities of olive oil and its products are studied. The purpose is to help specific regions to begin the production and packaging of these products in order to make profit that will return to their villages in other forms; such as schools, buildings, hospitals and that will, in the long run, produce job positions. So, the research of data is very important because it will define the possibilities of the project in general and at the same time it is a small part at the greater project.

The olive oil The data are based on recourses that are concerning olive oil and specific categories. This market report covers olive oils combined under the following Harmonised System1 (HS) classification:

Product Description

15.09.10 Virgin Olive Oil • Common virgin olive oil2 Virgin olive oil with free acidity, expressed as oleic acid, no higher than 3.3 gr/100 gr and with taste mark above 3.5

EUROMED Sustainable Connections: Evaluating EU & US Olive Oil Consumer Markets 2 • Virgin olive oil Virgin olive oil with free acidity, expressed as oleic acid, no higher than 2.0 gr/100 gr and with taste mark at least 5.5 • Extra virgin olive oil Virgin olive oil with free acidity, expressed as oleic acid, no higher than 1.0 gr/100 gr and with taste mark above 6.5

15.09.90 Olive oil and its Fractions, refined or blend, but not chemically modified • Lampante virgin olive oil Virgin olive oil with free acidity, expressed as oleic acid, of more than 3.3 gr/100 gr. It is not fit for consumption and it is intended for refining or for technical use • Olive -pomace oil Olive-pomace oil is the oil comprising the blend of refined olive - pomace oil and virgin olive oils fit for consumption as they are. It has a free acidity of not more than 1 gr/100 gr • Refined olive- pomace oil Refined olive - pomace oil is the oil obtained from crude olive - pomace oil by refining methods which do not lead to alterations in the initial glyceridic structure. It has a free acidity, expressed as oleic acid, of not more than 0.3 gr/100 gr.

Methodology

The research was conducted using online recourses especially in official sites; for example, sites of companies that are involved in producing and exporting olive oil or the European Union official site.

Since the purpose of our research was to examine the possibility of exporting in specific markets, with fair trade procedures, we had to find the market factors that would clarify the possibilities.

In order to evaluate our markets and figure out whether virgin olive oil and its products could be a worthy investment, we had to collect data that could evaluate the present situation and the potential of any market.

Our methodology was based on statistical research of various factors of the market, such as:

• The volume of the market (the quantity of oil that is consumed) • The value of the consuming oil • The need for any oil • Oil Production • Value & volume of imports • The different categories of oils • The major brands of any category & their market shares • The main competitors

After finding the numbers, the markets had to be evaluated by some market factors such as production and consumption, which are the main tools of evaluation in our essay together with importing criteria and per capita analysis.

During our research we faced many challenges and limitations due to the specific nature of the subject; the main limitations were that most of the resources were not providing numbers but mostly results that were not

EUROMED Sustainable Connections: Evaluating EU & US Olive Oil Consumer Markets 3 based on charts or tables that would be useful. Other limitations were that we could find fair trade related material.

Analysis and Findings

Market Summary

The data structure is presented in the following manner: 1. World market 2. EU market 3. France market 4. UK market 5. USA market

World Market

A review of the World market will help to obtain information for the trends over last 10 years, and will offer the tools for comparison between different markets and quantities. Global Production (,000 Tonnes)

3640 0 3174.0 3013.0 0.1 3120 2825.5 2859.02820.5 2595.0 2565.5 2572.0 0.2 2465.52402.5 2495.5 2600 2374.5 0.3 2463.5 2448 2357 0.4 2080 1735.5 2116.5 2142 2135.5 0.5 1940.5 1942.5 1928.5 1560 1878.5 1754.5 1707 0.6 1040 1403.5 0.7 67.60% 71.10% 0.8 75.60% 75.00%74.90%75.70% 520 79.10% 77.80%77.10%78.20% 80.90% 0.9 85.80% 87.20% 0 1 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 World Production EU Production EU/World %

EUROMED Sustainable Connections: Evaluating EU & US Olive Oil Consumer Markets 4 2006/7 Production of Olive Oil for Major World Producers (,000 Tonnes)

Spain 1108,7 Italy 603,0 Greece 370,0 Tunisia 170,0 Turkey 166,0 Syria 154,0 Morocco 75,0 Portugal 48,0 Jordan 37,0 Algeria 21,5 Palestine 16,0 Argentina 14,5 Libya 11,0 Israel 8,5 Cyprus 8,3 Australia 8,0

0 200 400 600 800 1.000 1.200

Global Consumption (,000 Tonnes)

3120 0 2882,5 2923,5 2907,5 2926,5 2677,5 2690,5 2590,5 2606,5 0,1 2600 2413,0 2442,5 2381,5 0,2 2241,5 0,3 2080 1888,5 2078,9 1997,3 2035,5 2046,6 0,4 1918,6 1917,9 1835,1 1894,4 1560 1705,2 1708,9 1728 0,5 1566,7 1387 0,6 1040 0,7 69% 70% 71% 71% 71% 71% 71% 70% 70% 73% 72% 73% 72% 0,8 520 0,9

0 1 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08

World Consumption EU Consumption EU/World %

EUROMED Sustainable Connections: Evaluating EU & US Olive Oil Consumer Markets 5 2006/7 Consumption of Olive Oil for Major World Consumers (,000 Tonnes)

Italy 852,4 Spain 570,0 Greece 284,0 USA 251,0 Syria 110,0 France 100,5 Portugal 75,0 Turkey 70,0 Morocco 55,0 Germany 54,0 Tunisia 45,0 Australia 40,0 Brazil 33,0 Japan 31,0 Canada 30,5 UK 28,9

0 100 200 300 400 500 600 700 800 900

2006/7 Major World Exporters (,000 Tonnes)

Tunisia 185,0

Italy 184,0

Spain 110,0

Turkey 75,0

Syria 40,0

Portugal 24,8

Morocco 15,0

Argentina 14,5

Jordan 14,0

USA 10,0

Greece 10,0

0 20 40 60 80 100 120 140 160 180 200

EUROMED Sustainable Connections: Evaluating EU & US Olive Oil Consumer Markets 6 2006/7 Per-Capita Consumption of Olive Oil for Major World Consumers (lt)

Greece 25,533 Italy 14,502 Spain 12,988 Portugal 7,090 Syria 5,668 Tunisia 4,405 Australia 1,948 Morocco 1,783 France 1,639 Turkey 0,947 Canada 0,936 USA 0,829 Germany 0,653 UK 0,478 Japan 0,242 Brazil 0,174

0 5 10 15 20 25 30

Early Conclusions: Production: during the last years EU contribution stabilized at 75% Major producers: Spain, Italy Greece (EU), Tunisia, Turkey, Syria. It is worth mentioning that Argentina and Australia are the leading non Mediterranean producers. Consumption: EU consumes, on a steady base, the 70% of the total production Major consumers: Italy, Spain, Greece (EU), Syria, Turkey, Morocco and Australia, from non Mediterranean countries. It is clear that USA, France, Germany, Brazil, Japan, Canada and UK are large consumers with not particular domestic contribution to their consumption, which means that they are open to imports, thus possible target markets Exportations: Italy and Spain, as well as Tunisia and Turkey are the leading exporters exporting together the 79% of the total amount.

EU Market

A review of the EU market will help in the full understanding of the differences and the similarities of the countries in relation to production, consumption of olive oil, but also concerning imports.

EUROMED Sustainable Connections: Evaluating EU & US Olive Oil Consumer Markets 7 2007 Production of Olive Oil for major EU Producers (,000 Tons)

Spain 1228,1

Italy 500,0

Greece 360,0

Portugal 36,0

Cyprus 6,5

France 4,5

Slovenia 0,5

0 200 400 600 800 1.000 1.200 1.400

EUROMED Sustainable Connections: Evaluating EU & US Olive Oil Consumer Markets 8 2007 EU Consumption of Olive Oil (,000 Tonnes)

Italy 810,5 625,0 Greece 284,0 104,0 Portugal 66,0 56,0 United Kingdom 28,9 14,5 Belgium 12,1 7,2 Austria 7,2 6,8 Poland 5,2 3,4 Czech Republic 3,1 2,7 Romania 1,8 1,6 Hungary 1,4 1,2 Luxemburg 0,9 0,8 Malta 0,8 0,7 Estonia 0,3 0,3 Lithuania 0,2

0 100 200 300 400 500 600 700 800 900

EUROMED Sustainable Connections: Evaluating EU & US Olive Oil Consumer Markets 9 2008 Population (,000,000 inhabitants)

Germany 82.641 61.330 United Kingdom 60.512 58.779 Spain 43.887 38.140 Romania 21.532 16.379 Greece 11.123 10.579 Belgium 10.430 10.189 Hungary 10.058 9.078 Austria 8.327 7.693 Denmark 5.430 5.388 Finland 5.261 4.221 Lithuania 3.408 2.289 Slovenia 2.001 1.340 Cyprus 846 461 Malta 405

0 10.000 20.000 30.000 40.000 50.000 60.000 70.000 80.000 90.000

EUROMED Sustainable Connections: Evaluating EU & US Olive Oil Consumer Markets 10 2007 Per-Capita Consumption of Olive Oil (lt)

Greece 25,533 14,241 Italy 13,789 8,038 Portugal 6,239 1,975 Luxemburg 1,952 1,696 Belgium 1,160 0,885 Austria 0,865 0,800 Sweden 0,793 0,678 Ireland 0,640 0,626 United Kingdom 0,478 0,306 Czech Republic 0,304 0,228 Estonia 0,224 0,148 Hungary 0,139 0,136 Romania 0,084 0,059 Bulgaria 0,039

0 5 10 15 20 25 30

Conclusions • EU market is dominated by Spain and Italy, being the main producers and exporters • The largest consumers are also the main producers with Greece having the highest per-capita consumption worldwide! • France and UK are of the countries with the highest population (higher than any other olive oil producing country), they are developed with strong economies and established trade structures. They cover characteristic geographical locations over Europe (Northern Island and central Europe). • France and UK have still low per - capita consumption, but not the lowest compared to other consumers, including olive oil producing countries. This would give another motive to examine these markets.

EUROMED Sustainable Connections: Evaluating EU & US Olive Oil Consumer Markets 11 French market

In order to evaluate the French market, we had to use statistical data on the market size and the population habits. To estimate the market size we have used data for the consumption and imports of olive oil. In addition, the population buying behaviour and the food market structure gave details for the extraction of trends in food market in general and in olive oil market especially.

Production

French Production (,000 Tons) 6 4.7 4.7 5 4.6 4.4 4.5 4.1 4 3.6 3.4 3.2 3.4 2.7 3 2.3 2.5 2

1

0 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08

In 2007, the French output was about 4.500 tonnes, holding the 6th place amongst European producers. Although output has doubled since 1995, France still has a very small contribution to the European production; just 0.21%. This quantity is not enough to cover the needs of the French market. The 2007 production managed to cover only the 4.3% of total demand for olive oil, making imports the only solution.

Consumption

French Consumption (,000 Tonnes) 120 104.0 99.5 100.5 95.1 97.0 94.0 97.1 100 92.0 81.5 75.6 78.6 80 58.8 60 48.5

40

20

0 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08

With a volume of 104,000 tonnes during 2007/08 season and a share of 5.08% of the total European (EU-27) olive oil consumption France is Europe’s 4th largest consumer of olive oil.

EUROMED Sustainable Connections: Evaluating EU & US Olive Oil Consumer Markets 12 From 1995 to 2007 the consumption has been in constant rise leading the market to an impressive growth of Consumption Growth Rate

1.4

1.3

1.2

1.1

1

0.9

0.8 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 World Growth Rate EU Growth Rate France Growth Rate 114%.

Consumption growth rate is an indicator that allows comparison between markets of different sizes, giving a picture of the dynamic of every market during specific time periods. Comparing the French consumption growth rate, from 1995 to 2007, with world and EU growth rates, we understand that French consumption was having a decreasing rate until it stabilized to the level of 3% annual growth, while in the world and the EU markets there are still significant fluctuations.

If we combine the consumption growth rate with the average per-capita consumption we will have a serious indicator of the consuming behavior of the market.

%Growth Average per-capita Consumption (Liters) Countries 1998- 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2007 Spain 13,925 13,333 12,627 14,502 15,594 14,435 14,735 14,540 11,102 13,026 -6,46 France 1,266 1,315 1,355 1,520 1,560 1,580 1,520 1,560 1,589 1,595 26,03 Greece 22,337 22,668 24,398 24,762 24,700 24,615 24,531 25,633 23,911 25,528 14,29 Italy 12,272 12,389 12,546 12,807 12,904 13,510 13,695 14,511 14,508 14,509 18,22 Portugal 6,880 6,538 6,552 5,934 5,996 6,283 6,438 7,112 6,800 7,096 3,14 Germany 0,288 0,369 0,396 0,442 0,469 0,485 0,466 0,561 0,549 0,655 127,63 Austria 0,339 0,364 0,489 0,512 0,486 0,570 0,741 0,897 0,853 0,871 156,96 Netherlands 0,257 0,377 0,247 0,366 0,569 0,577 0,685 0,824 0,871 0,882 243,09 United Kingdom 0,440 0,512 0,683 0,575 0,432 0,794 1,205 1,007 0,813 0,479 8,86 Belgium NA NA NA 1,211 1,237 1,145 1,101 1,183 1,120 1,161 -4,16 Sweden 0,305 0,328 0,316 0,530 0,597 0,595 0,425 0,479 0,477 0,785 157,06 EU (27 countries) 3,563 3,553 3,588 3,801 3,916 3,959 4,104 4,253 3,906 4,129 15,90

The table shows that although French consumption had recorded an impressive 114% growth, the average per- capita consumption didn’t follow at the same rate. It still scores the higher growth rate of 26%, among the rest major olive oil producing countries, but it is certainly not the most rapidly expanding market. We can see that no traditionally olive oil consuming countries, like Sweden, Austria and Netherlands have doubled or even tripled their average per-capita consumption. Even if their absolute numbers still remain at low level (below 1 liter) there is an obvious trend for Europe to adopt elements of the Mediterranean diet.

EUROMED Sustainable Connections: Evaluating EU & US Olive Oil Consumer Markets 13

Imports

The imports section in every country’s economy is unbreakably bonded with the needs of the market; thus a glance on the course of French imports for the last years could be useful to recognize some market trends.

Fats & Oils Imported Values (,000,000 1800 Euro) 1630.223 1470.644 1500 1235.865 1200 1108.739 1073.219 1093.386 961.435 900

600 380.093 330.087 255.019 291.516 300 196.179 221.654 234.554 360.353 180.516 204.937 217.635 240.207 276.411 314.15 0 2001 2002 2003 2004 2005 2006 2007 Animal,vegetable fats and oils, cleavage products, etc

Value Share of Imports of Vegetable Oils 30%

25.85%

25% 23.32% 23.59% 21.86% 20.40% 19.99% 20.25% 20%

15% 14.25% 12.81% 11.88% 12.22% 12.19% 11.27% 11.67% 11.29% 11.42% 10.72% 10.79% 10.87% 10% 9.29% 8.94% 8.30% 8.72% 8.59% 8.64% 7.32% 7.48% 6.56% 6.51% 5.71% 5.83% 5.56% 4.47% 3.96% 5% 4.88% 5.19% 4.43% 4.28% 3.94% 3.05% 3.37% 2.49% 2.85% 3.24% 2.57% 2.12% 2.51% 2.44% 2.87% 0% 2001Soya-bean 2002 Oils 2003 & Fractions 2004 2005 2006 2007 Ground-nut Oils & Fractions Olive Oil & Fractions Palm Oil & Fractions

EUROMED Sustainable Connections: Evaluating EU & US Olive Oil Consumer Markets 14 2007 Share Value of Imports of Animal, Vegetable Fats & Oils

3,07% 7,32% 8,94% 14,50% 2,87%

7,11% 20,25%

9,29% 3,05% 11,42% 12,19%

Animal Fats & Oils Soya-bean oil&its fractions Ground-nut oil&its fractions Olive oil and its fractions Palm oil & its fraction Safflower,sunflower/cotton-seed oil&fractions Coconut (copra),palm kernel/babassu oil & their fractions Rape,colza or mustard oil & their fractions Fixed vegetable fats&oils & their fractions Margarine Other

2007 Imports of Animal, Vegetable Fats & Oils (,000 Euro)

Olive oil and its fractions 330.087

Margarine 236.388

Safflower,sunflower/cotton-seed oil&fractions 198.763

Palm oil & its fraction 186.106

Rape,colza or mustard oil & their fractions 151.411

Soya-bean oil&its fractions 145.784

Other 119.311

Fixed vegetable fats&oils & their fractions 115.882

Animal Fats & Oils 49.986

Coconut (copra),palm kernel/babassu oil & their fractions 49.777

Ground-nut oil&its fractions 46.727

0 50.000 100.000 150.000 200.000 250.000 300.000 350.000

From 2001 to 2007 imports of Animal, vegetable fats and oils, cleavage products, etc have increased by 70% to the amount of 1,630,223 Euro. This category includes most kinds of animal and vegetable fats and oils, edible or not. They have totally different pricing and in some cases packaging and tonnage, but each product’s market behavior affects the others’. Possible share changes for every product label illustrate changes in the consumer behavior and could be regarded as a market trend. Having a look on the value share of the major categories of

EUROMED Sustainable Connections: Evaluating EU & US Olive Oil Consumer Markets 15 vegetable oils, through last years, we can see that high quality (edible) oils, like olive, sunflower and soya oil hold the higher amount of importing investments. Olive oil & its fractions hold, by far, the bigger share in value of imports, with an average percentage of 22%. But although that in absolute numbers the amount of money invested on olive oil imports has increased, it doesn’t seem that this increase has followed by a growth in the value share. Imports of Olive oil and its fractions have grown at the same rate with the main category of fats and oils; about 70%. This gives them a steady share of 20% of the whole category.

Imported unit value (Euro/Ton) %Growth Exporters 2001 2002 2003 2004 2005 2006 2007 2001-2007 World 1.982 2.271 2.398 2.574 2.995 3.809 3.096 56,21 Spain 1.909 2.137 2.273 2.507 2.885 3.812 2.993 56,73 Italy 2.388 2.718 2.806 2.838 3.334 3.997 3.437 43,93 Belgium 2.202 2.455 2.486 2.792 3.235 3.198 2.906 31,99 Tunisia 2.707 4.380 3.559 3.032 3.356 3.942 2.865 5,82 Greece 3.197 3.257 3.149 3.673 4.116 4.528 4.234 32,47 Portugal 3.352 2.736 2.500 1.650 2.333 3.347 3.142 -6,26 Germany 243 809 651 749 2.690 3.735 2.686 1.004,27

Since 2001, the average world price per ton of olive oil has risen by 56% and as a result the almost steady amount of importing volume costs more and more.

2007 Imports of Olive Oil from Supplying Markets (Tonnes)

Spain 69.335

Italy 23.687

Belgium 4.183

Tunisia 2.450

Other 535

Greece 486

Portugal 453

Germany 333

0 10.000 20.000 30.000 40.000 50.000 60.000 70.000 80.000

EUROMED Sustainable Connections: Evaluating EU & US Olive Oil Consumer Markets 16 2007 Share of Imported Virgin Olive Oil

Spain

23,35% Italy 68,34% Belgium Tunisia Portugal 4,12% 0,53% Greece Germany 0,33% 2,41% Other 0,48% 0,45%

The 98% of French olive oil imports comes from EU and more specifically from the 4 major producing countries, Spain, Italy, Greece and Portugal. Spain is, by far, the leading country of origin for imported Virgin olive oil, accounting 69.355 tons in 2007, which is the 68% of the French market. Italy is in second place with a volume of 23.687 and market share of 23%, having less than half the Spanish share, but much more than every other supplier’s. The major non-European supplier is Tunisia with a rising share 2.4%. The amounts imported from Belgium and Germany, are actually re-exports, since those countries do not grow olives.

In summary, the French olive oil market is extremely interesting, thanks to its growth and its future consumption potential. During last decade, consumption has grown about 114%, while in the world and EU 55% and 48% respectively. This is strong evidence that the French market grows more than average. In addition, the steady growth rate represents a mature behaviour of the market, which allows us to make reliable estimations for the next year’s consumption. According to this pattern, it could be about 3% higher than today’s. So, we can safely assume that French market will keep on being in strong need of olive oil. Moreover, France with average per-capita consumption around 1.6 liters a year, versus 14.5 liters in Italy and 13 liters in Spain still remains in lower level than its neighbor olive oil producing countries, making it obvious that French market has the potential for further expansion.

In 2006, French market invested more than 380.000.000 Euro on olive oil imports; on 2007 more than 330.000.000 Euro, recording the highest turnovers. We can understand that French market has become a positive importing environment for any kind of edible oil and especially for olive oil, showing the will to keep its share in value at high levels.

There is strong competition among the major European olive oil producers with Spain to dominate the market and this makes difficult any non-European penetration, except from Tunisia, which has a noticeable presence during last years. Olive oil products from Spain, Italy and Greece have already established their reputation in the market and they are the main competitors for higher share, with different dynamic for each country.

Virgin olive oil is a quality product and in a low olive oil producing country, like France, could be a luxury. In addition, it has to face alternative cheaper nutritional substitutes; such are sunflower and soya oils, which have extremely competitive prices. This could be a disadvantage for olive oil, but looking over the years we find out that olive oil always had higher price than any other oil, and still keeps on increasing its imports even with lower rate. This is perhaps a strong

EUROMED Sustainable Connections: Evaluating EU & US Olive Oil Consumer Markets 17 point rather than a weakness, because the French market seems ready to accept expensive olive oil. Besides, it is already established as a quality product, with high nutritional value and recognized origin. In our case, markets that already are willing to pay for quality products, will probably be ready to accept the concept of “fair trade” and combine the right quality with the right purpose. France is a market where investments in olive oil imports will find fertile ground and it is worthwhile in being at least one of the options.

Competitor Analysis

2008 French Market Major Suppliers

Saipol Grupo SOS 48,30% 6,10% Reitzel Unilever 5,50% Wessanen A L'Olivier Barral

3,50% Codefa-Orca Costa d'Oro 3,20% 3,00% Delverde 22,40% Other 2,00% 2,00% 2,00% 2,00%

The French olive oil market is dominated by the French company Saipol, with key subsidiary the firm Lesieur. It is the bigger olive oil supplier of the French market, with a share of 48% in value and about 40% in volume. In the 2nd and 3rd place are respectively the Grupo SOS, with Carapelli and a share of 6.1%, and Reitzel with 5.5%. The rest is shared to other companies including Unilever and Wessanen with Greek brands Gaea and Liohori being among its major brands.

The weak Greek presence is quite obvious. There are only two eponymous brands in the market, and their products are imported by a company which holds only the 3.2% of the market. Of course, other companies as well import Greek olive oil products, but in bulk; so, they reach the French market not as an imported autonomous, eponymous product with a name of origin, but as a variety or specialty under the name of a domestic brand. This could be important for the promotion of the Greek olive oil, because it affects its own identity. It is an opportunity, that eventually can allow to the Greek olive oil to establish it’s position with the consumers and raise the imports of Greek olive oil.

Market Segmentation

French market is divided to two main categories; Retail market and Foodservice market (or catering). Retailing consists of the sale of goods or merchandise from a fixed location, such as a department store, in small or individual lots for direct consumption by the purchaser. The foodservice industry encompasses those places,

EUROMED Sustainable Connections: Evaluating EU & US Olive Oil Consumer Markets 18 institutions, and companies responsible for any meal eaten away from home. This industry includes restaurants, school and hospital cafeterias, catering operations, and other formats.

Demanded Value (,000,000 Euro) Demanded Volume (,000 Tonnes)

71,9 18,6

420,1 89,4

Retail Foodservice Retail Foodservice

In 2007, Retail had a share of 82.8% in volume and 85.4% in value of the total market, which could possibly mean that this is the main target market for our products. During the same year, the total demanded value was estimated to be around 492.000.000 Euro, distributed to Branded and Own label (including various retail distributors’ brands) products. Unbranded and Artisan (craft sales; independent producers or sellers considered to be a single competitive entity/company). This is Market Products Share Value another sign that French market supports product with known label; thus, high quality products with distinct identity, such as Virgin olive oil, could have a lot of possibilities to be consumers’ choice.

27,3 UK market

72,7 UK market has many similarities but also some important differences compared to the French market. UK has different nutritional habits and consumer behaviour, although the market structure and segmentation is similar to French.

Branded Own Label Production UK is not an olive oil producing country; it has not any domestic production and has to satisfy its needs based exclusively on imports. This also means that UK market isn’t familiar with olive oil. This could be a great opportunity, combining the introduction of olive oil with “fair trade”. It will be important to connect the unfamiliar, to the British, product with a more common term.

Consumption

EUROMED Sustainable Connections: Evaluating EU & US Olive Oil Consumer Markets 19 UK Consumption (,000 Tonnes)

80 71,6

60,1 60

47,0 48,8 40,0 40 33,8 29,9 28,9 28,9 25,1 25,6 25,5

20 15,0

0 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08

Consuming about 29,000 tonnes during last two seasons, UK consumes the 1.41% of the total European (EU- 27) olive oil, which is the 7th highest consumption in Europe. From 1995 to 2007 the consumption has been characterized from periodical ups and downs scoring on 2003/4 the highest value of 71,600 tonnes. Since then there is a constant decrease of the consumptions, with prediction to stabilize at 30,000 tonnes. In the last decade, consumption had doubled and in analogy the market too; 92.67% growth. Consumption Growth Rate 2 1.8 1.6 1.4 1.2 1 0.8 0.6 0.4 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 World Growth Rate EU Growth Rate UK Growth Rate

The consumption growth rate does not allow us to conclude to optimistic results. UK consumption is characterized from extremes and has a different behaviour compared to the global rate. There seems to be a periodicity that shows that every couple of years there is a diversification to the growth rate of consumption. According to this and keeping in mind the last signs of stabilization, we can assume that at least for the next 2 years we can wait positive rate meaning increase in consumption.

EUROMED Sustainable Connections: Evaluating EU & US Olive Oil Consumer Markets 20 Average per-capita Consumption (Liters) %Growth Countries 1998- 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2007 Spain 13,925 13,333 12,627 14,502 15,594 14,435 14,735 14,540 11,102 13,026 -6,46 France 1,266 1,315 1,355 1,520 1,560 1,580 1,520 1,560 1,589 1,595 26,03 Greece 22,337 22,668 24,398 24,762 24,700 24,615 24,531 25,633 23,911 25,528 14,29 Italy 12,272 12,389 12,546 12,807 12,904 13,510 13,695 14,511 14,508 14,509 18,22 Portugal 6,880 6,538 6,552 5,934 5,996 6,283 6,438 7,112 6,800 7,096 3,14 Germany 0,288 0,369 0,396 0,442 0,469 0,485 0,466 0,561 0,549 0,655 127,63 Austria 0,339 0,364 0,489 0,512 0,486 0,570 0,741 0,897 0,853 0,871 156,96 Netherlands 0,257 0,377 0,247 0,366 0,569 0,577 0,685 0,824 0,871 0,882 243,09 United Kingdom 0,440 0,512 0,683 0,575 0,432 0,794 1,205 1,007 0,813 0,479 8,86 Belgium NA NA NA 1,211 1,237 1,145 1,101 1,183 1,120 1,161 -4,16 Sweden 0,305 0,328 0,316 0,530 0,597 0,595 0,425 0,479 0,477 0,785 157,06 EU (27 countries) 3,563 3,553 3,588 3,801 3,916 3,959 4,104 4,253 3,906 4,129 15,90 Data show that British are not very familiar with olive oil. During the last decade, although significant ups and downs, the average per-capita consumption stayed at the same level.

Even with a total consumption growth of 92.67%, UK per-capita consumption is the lowest amongst north- central European countries.

Imports

In a non olive oil producing country like UK, imports are the only way to supply its market. Thus, analyzing the importing value and volume of olive oil is a reliable way to evaluate the UK market.

Fats & Oils Imported Values (,000,000 1500 Euro) 1318.801 1194.447 1200 988.59 943.831 966.126 868.747 901.066 900

600

300 213.981 148.672 166.87 168.962 89.55 89.651 115.419 60.552 64.652 80.803 114.535 119.664 142.266 122.726 0 2001 2002 2003 2004 2005 2006 2007 Animal,vegetable fats and oils, cleavage products, etc

EUROMED Sustainable Connections: Evaluating EU & US Olive Oil Consumer Markets 21 Value Share of Imports of Vegetable Oils

30% 29,94% 29,28% 28,51% 25% 22,33% 24,78% 25,13%

19,68% 20% 17,91% 16,88% 15,39% 16,78% 15% 12,81% 12,23%

11,80% 10,31% 11,37% 11,27% 10,57% 10% 10,09% 10,40% 9,95% 9,19% 7,28% 8,40% 7,53% 6,97% 7,57% 6,89% 6,92% 5,70% 5,13% 5,38% 5,43% 5% 4,65% 4,97% 4,98% 5,09% 3,83% 4,28% 3,51% 3,29% 2,18% 1,10% 0,73% 0% 0,54% 0,60% 0,57% 0,49% 0,50% 2001 2002 2003 2004 2005 2006 2007 Soya-bean Oils & Fractions Ground-nut Oils & Fractions Olive Oil & Fractions Palm Oil & Fractions Safflower,sunflower/cotton-seed Oil & Fractions Coconut (copra),palm kernel/babassu Oil & Fractions Rape,colza or mustard Oil & Fractions

2007 Share Value of Imports of Animal, Vegetable Fats & Oils

11,92% 10,42% 4,35% 4,17% 11,80% 4,28% 0,50% 3,29% 12,81% 16,78% 19,68%

Animal Fats & Oils Soya-bean oil&its fractions Ground-nut oil&its fractions Olive oil and its fractions Palm oil & its fraction Safflower,sunflower/cotton-seed oil&fractions Coconut (copra),palm kernel/babassu oil & their fractions Rape,colza or mustard oil & their fractions Fixed vegetable fats&oils & their fractions Margarine Other

EUROMED Sustainable Connections: Evaluating EU & US Olive Oil Consumer Markets 22 2007 Imports of Animal, Vegetable Fats & Oils (,000 Euro)

Palm oil & its fraction 259,57

Safflower,sunflower/cotton-seed oil&fractions 221,26

Olive oil and its fractions 168,96

Other 157,17

Soya-bean oil&its fractions 155,68

Animal Fats & Oils 137,43

Margarine 57,36

Rape,colza or mustard oil & their fractions 56,42

Fixed vegetable fats&oils & their fractions 54,97

Coconut (copra),palm kernel/babassu oil & their fractions 43,42

Ground-nut oil&its fractions 6,56

0 50 100 150 200 250 300

%Growth Imported unit value (Euro/Ton) 2001- Exporters 2001 2002 2003 2004 2005 2006 2007 2007 World 2,757 2,888 2,267 1,839 3,055 3,979 3,271 18,64% Spain 2,121 2,415 2,458 2,154 2,793 3,869 2,900 36,73% Italy 3,639 3,331 1,912 1,511 3,654 4,543 4,127 13,41% Greece 2,925 4,175 4,205 3,474 3,111 3,638 2,748 -6,05% Belgium 1,791 2,878 1,317 2,663 1,695 2,662 2,363 31,94% Germany 2,323 2,545 2,630 3,109 3,617 4,537 3,574 53,85% Netherlands 3,167 3,410 2,990 3,744 4,474 6,722 3,165 -0,06% France 2,065 2,355 3,009 2,964 3,365 3,044 6,023 191,67% Portugal 3,346 1,653 3,533 2,412 2,8 2,913 2,416 -27,79%

From 2001 to 2007 imports of Animal, vegetable fats and oils, cleavage products, etc have increased by 51.8% to the amount of 1,318,801 Euro.

Olive oil and its fractions hold the 3rd bigger share in value of imports, with an average percentage of 14%. Palm Oil is the traditional leader of the market, while Sunflower Oil is in constant rise since 2004, having the dynamic to become the leading choice of the UK market.

EUROMED Sustainable Connections: Evaluating EU & US Olive Oil Consumer Markets 23 2007 Imports of Olive Oil from Supplying Markets (Tonnes)

Spain 17.267

Italy 11.626

Greece 3.121

Belgium 3.020

Germany 995

Netherlands 829

Other 377

France 156

Portugal 125

0 2.000 4.000 6.000 8.000 10.000 12.000 14.000 16.000 18.000 20.000

2007 Share of Imported Virgin Olive Oil

Spain 30,99% 8,32% Italy Greece 46,03% Belgium Germany 8,05% Netherlands 0,42% Other 0,33% 2,65% 2,21% 1,00% France Portugal

The 85% of UK olive oil imports comes from EU and more specifically from the 3 major producing countries, Spain, Italy and Greece. Spain is, by far, the leading country of origin for imported Virgin olive oil, accounting 17,267 tons in 2007, which is the 46% of the UK market. Italy with a volume of 11.626 and market share of 31% is in second place, while Greece has a share of 8% with 3,121 tons. The amounts imported from Belgium, Germany and Netherlands, are actually re-exports, since those countries do not grow olives. Summarizing, UK olive oil market doesn’t seem mature and stable enough to allow us to make certain conclusions.

EUROMED Sustainable Connections: Evaluating EU & US Olive Oil Consumer Markets 24 Olive oil consumption has grown at faster rate than in the rest of the world, but the average per-capita consumption still remains in low level, with every British to consume averagely less than half a litter per year. In 2006, the market invested about 142.000.000 Euro on olive oil imports; in 2007 less than 123.000.000 Euro.

We cannot see a trend that future investments in olive oil are about to be made, because other kinds of vegetable oil look more attractive. Of course, the population of the UK and the high value per unit that British pay to purchase olive oil offer us elements for future improvement of this situation. According to Mitsubishi Co (UK), British media claim that “consumers are set to spend more than 2 billion pounds this year on free-range, fair-trade and organic products. British shoppers are choosing to buy food that is sourced ethically".

Competitor Analysis

2008 UK Market Major Suppliers

Mitsubishi 29,00% Bunge 15,00% Unilever Grupo SOS Vandermoortele 9,00% Aarhus United Odyssea

1,00% Trustin 41,00% Other

2,00% 0,50% 0,50% 2,00%

The UK Food branch of the Mitsubishi Co, with key subsidiary the firm Frenkel is the leading olive oil supplier of the UK market with a share of 41%. On the 2nd and 3rd place are respectively the Bunge, with Cereol and a share of 29%, and Unilever with 15%. The rest 15% is shared to other companies including Grupo SOS with a share of 9%, the Greek company Odysea with the brand Karyatis and a share of 0.5%, and Trustin with Gaea.

Market Segmentation

EUROMED Sustainable Connections: Evaluating EU & US Olive Oil Consumer Markets 25 Demanded Value (,000,000 Euro) Demanded Volume (,000 Tonnes)

24,4 3,6

186,3 22,7

Retail Foodservice Retail Foodservice

In 2007, Retail had a share of 86.4% in volume and 88.4% in value of the total market. In the same year, the total demanded value was estimated to be around 211.000.000 Euro, distributed to Branded and Own label (including various retail distributors’ brands) products.

Compared to French market, the UK market has a significant lower size, as its demand is almost the half than French. It is also impressive that the market is divided evenly Market Products Share between branded and own labeled products. Own labeled products Value are by definition cheaper than branded and sometimes have not the same high quality. On the other hand own labeled products in large retail stores are promoting better and their competitive prices make 50.4 49.6 them more attractive. But when the half of the market is consisted of own labeled products, it is more difficult to be found places and means to promote products under the label of “fair trade product from specific origin”.

Branded Own Label USA market

The US market has many particularities compared to European markets, but also to any other market worldwide. In order to evaluate the USA market, we had to compare it with the more familiar European behaviour and to distinguish it from any other market. We found some impressive evident, that helped us to make some results.

Production

EUROMED Sustainable Connections: Evaluating EU & US Olive Oil Consumer Markets 26 USA Production (,000 Tons) 4

3

2 1.5 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1 0.5 0.5

0 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08

USA olive oil production is quite restricted, so domestic output stays in extremely low levels. Last year’s output was about 1,000 tonnes. Production is stabilized on about 1.000 tonnes per year, being of the lowest in the world and much below the needs of the market for olive oil.

Consumption

USA Consumption (,000 Tonnes) 280 251.0 251.0 260 240 216.5 215.5 223.0 220 194.5 188.5 184.0 200 169.5 180 142.5 151.0 160 130.5 140 120 101.0 100 80 60 40 20 0 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08

From 1995 to 2007 the consumption has scored an impressive growth of 149%. With a volume of 251.000 tonnes during 2007/08 season USA market is world’s 4th largest consumer, with a share of 8.57% of the total World olive oil consumption. It is also the first non-European consumer and by far with the largest consumption amongst all non olive oil producer countries.

EUROMED Sustainable Connections: Evaluating EU & US Olive Oil Consumer Markets 27 Consumption Growth Rate

1.4

1.3

1.2

1.1

1

0.9

0.8 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 World Growth Rate EU Growth Rate US Growth Rate

In general, the consumption growth rate follows the world’s rate with a small divergence. In the last 4 years, USA consumption grows with higher rate than the rest of the world and 3 times faster than the mature French market. The average per-capita consumption fluctuates at high levels too, increasing more than 52% through last ten years, with Americans to consume on about 830 ml during 2007.

%Growth Average per-capita Consumption (Liters) 1998- Countries 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2007 Spain 13,925 13,333 12,627 14,502 15,594 14,435 14,735 14,540 11,102 13,026 -6,46 France 1,266 1,315 1,355 1,520 1,560 1,580 1,520 1,560 1,589 1,595 26,03 Greece 22,337 22,668 24,398 24,762 24,700 24,615 24,531 25,633 23,911 25,528 14,29 Italy 12,272 12,389 12,546 12,807 12,904 13,510 13,695 14,511 14,508 14,509 18,22 Portugal 6,880 6,538 6,552 5,934 5,996 6,283 6,438 7,112 6,800 7,096 3,14 Germany 0,288 0,369 0,396 0,442 0,469 0,485 0,466 0,561 0,549 0,655 127,63 UK 0,440 0,512 0,683 0,575 0,432 0,794 1,205 1,007 0,813 0,479 8,86 USA 0,547 0,607 0,689 0,661 0,640 0,746 0,735 0,754 0,841 0,833 52,41 Australia 1,289 1,354 1,627 1,425 1,612 1,745 1,625 1,705 1,952 1,976 53,31 Brazil 0,137 0,144 0,142 0,126 0,116 0,128 0,142 0,138 0,172 0,175 27,73 Canada 0,606 0,746 0,788 0,765 0,790 0,815 0,996 0,926 0,934 0,926 52,93 Japan 0,226 0,213 0,237 0,248 0,240 0,251 0,251 0,235 0,243 0,247 9,50

We can see that the enormous increase of 149% of the consumption has followed by a lower but significant increase in the per-capita consumption, making USA market one of the most rapidly expanding markets. On the other hand, Americans still consume lower than 1 lt of olive oil per year, which is considerably lower than major European markets, but also than other non producing countries like Australia and Canada. Combined to the large population of the USA, there are clear margins for further increase and expansion of the market.

Imports Importing is the only way for USA to cover the domestic need for olive oil and according to the previous indexes there is an expected increase on olive oil imports. We have to note that USA imports olive oil from much more countries covering the areas of Europe, North Africa, Middle East, South America and Australia.

EUROMED Sustainable Connections: Evaluating EU & US Olive Oil Consumer Markets 28 Fats & Oils Imported Values (,000,000 Euro) 3600 3300 3189.720 3000 2895.510 2700 2588.000 2400 2100 1894.190 1746.180 1800 1694.230 1500 1200 808.366 900 719.167 600.662 685.891 600 468.450 487.358 481.551 446.564 300 252.488 277.657 298.653 362.691 477.479 544.709 495.019 0 2001 2002 2003 2004 2005 2006 2007 Animal,vegetable fats and oils, cleavage products, etc

Value Share of Imports of Vegetable Oils

35% 36.53% 34.87% 33.59% 32.68% 30% 31.64% 31.91%

25% 27.48%

20% 19.54% 19.79% 19.56% 18.66% 17.90% 18.27% 16.49% 17.07% 15% 15.30% 15.27% 15.49% 14.41% 14.20% 14.10% 12.72% 10% 10.62% 7.76% 6.07% 5% 5.40% 5.50% 3.06% 4.64% 3.21% 2.40% 1.47% 1.85% 3.81% 3.33% 1.92% 2.09% 1.88% 1.85% 1.17% 1.57% 1.20% 0% 0.81% 0.38% 0.31% 0.67% 0.29% 0.46% 0.50% Soya-bean Oils & Fractions 2001 2002Ground-nut 2003 Oils & Fractions 2004 2005 2006 2007 Olive Oil & Fractions Palm Oil & Fractions

EUROMED Sustainable Connections: Evaluating EU & US Olive Oil Consumer Markets 29 2007 Share Value of Imports of Animal, Vegetable Fats & Oils

3,06% 17,07% 15,49% 19,56%

5,36% 27,48% 3,25% 5,73% 0,50%

0,46% 2,04%

Soya-bean oil&its fractions Ground-nut oil&its fractions Olive oil and its fractions Palm oil & its fraction Safflower,sunflower/cotton-seed oil&fractions Coconut (copra),palm kernel/babassu oil & their fractions Rape,colza or mustard oil & their fractions Animal or veg fats, oils&fract, hydrogenated Fixed vegetable fats&oils & their fractions Margarine Other

2007 Imports of Animal, Vegetable Fats & Oils (,000 Euro)

Olive oil and its fractions 685.891

Rape,colza or mustard oil & their fractions 488.136

Coconut (copra),palm kernel/babassu oil & their fractions 425.897

Palm oil & its fraction 386.704

Other 143.008

Fixed vegetable fats&oils & their fractions 133.697

Margarine 81.025

Safflower,sunflower/cotton-seed oil&fractions 76.375

Animal or veg fats, oils&fract, hydrogenated 50.910

Ground-nut oil&its fractions 12.553

Soya-bean oil&its fractions 11.476

0 100.000 200.000 300.000 400.000 500.000 600.000 700.000 800.000

From 2001 to 2007, imports of Animal, vegetable fats and oils, cleavage products, etc have increased averagely by 96%, to the amount of 2.895,510 Euro. Olive oil and its fractions hold, by far, the bigger share in value of imports, with an average percentage of 33%, following exactly the same growth of 96% in consumption, which could explain why the USA imports are proportional to the consumption. Even after last year’s decrease, olive oil is the dominant of the vegetable oils market.

EUROMED Sustainable Connections: Evaluating EU & US Olive Oil Consumer Markets 30 %Growth Imported unit value (Euro/Ton) 2001- Exporters 2001 2002 2003 2004 2005 2006 2007 2007 World 2,333 2,449 2,512 2,683 3,067 3,696 2,875 23,23% Italy 2,411 2,482 2,590 2,803 3,148 3,799 3,040 26,09% Spain 2,227 2,293 2,414 2,548 2,983 3,539 2,766 24,20% Tunisia 1,781 2,870 2,286 2,357 2,572 3,716 2,418 35,77% Argentina 4,956 2,703 2,076 2,551 3,069 3,025 2,394 -51,69% Turkey 1,772 2,094 2,052 2,368 2,719 3,533 2,323 31,09% Greece 2,854 3,003 2,820 3,357 3,634 4,157 3,320 16,33% Australia 6,448 4,522 3,556 3,760 3,389 -47,44% Morocco 1,848 2,338 2,037 3,389 3,067 2,457 32,95% Portugal 1,934 2,257 2,226 2,870 3,053 3,399 2,828 46,23% Syrian Arab Republic 1,726 1,576 1,844 2,452 2,563 3,447 2,242 29,90% Lebanon 3,481 2,769 2,197 2,292 2,668 3,367 2,444 -29,79% Egypt 2,042 1,708 2,318 2,470 3,699 2,260 10,68% Israel 2,644 3,096 3,386 3,371 2,833 5,503 4,827 82,56% France 4,720 2,975 3,440 3,398 4,176 5,152 3,383 -28,33% Chile 3,754 6,395 3,879 4,406 4,335 15,48% Mexico 1,994 1,989 1,900 1,454 2,632 2,085 2,869 43,88%

2007 Imports of Olive Oil from Supplying Markets (Tonnes) Italy 98,090 Spain 31,329 Tunisia 14,613 Argentina 9,056 Turkey 7,084 Greece 4,961 Australia 1,263 Morocco 1,199 Portugal 1,191 Syria 868 Lebanon 845 Egypt 555 Israel 289 France 278 Other 241 Chile 224 Mexico 120

0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000

EUROMED Sustainable Connections: Evaluating EU & US Olive Oil Consumer Markets 31

2007 Share of Imported Virgin Olive Oil

Italy Spain 18.19% Tunisia 8.49% Argentina Turkey 56.96% Greece 5.26% Australia 0.49% Morocco 0.69% 0.73% 4.11% Portugal 0.50% 2.88% 0.70% Syria Lebanon

The 79% of the USA olive oil imports comes from EU and more specifically from the 4 major producing countries, Spain, Italy, Greece and Portugal. Italy is the leading country of origin for imported Virgin olive oil, accounting 98,090 tonnes in 2007, which is the 57% of the US market. Spain follows with a volume of 31,329 and market share of 18. The major non-European supplier is Tunisia with a share of 8.5%. We have to mention the Middle East presence with share more than 1%, while Argentina and Australia contribute with 5% and 0.7% respectively.

In summary, the US olive oil market shows great potential. During the last ten years, US consumption has grown almost 3 times faster than the rest of the world. In 2006, the market invested about 545,000,000 Euro on olive oil imports; in 2007 more than 495.000.000 Euro, which is more than the sum of French and UK markets. This underlines the size of USA market and how much positive environment for future investments is.

The consumption growth rate follows the global pattern and in combination with extremely high percentages of increase of the consumption and the per-capita consumption, allows us to make future predictions with increased certainty. The steady growth rate represents a mature behaviour of the market, which allows us to exaggerate reliable estimations for the next year’s consumption. According to this pattern, it could be about 3% higher than today’s. So, we can safely assume that US market will keep on being in strong need of olive oil.

The US market purchases olive oil with averagely lower prices than the French and UK markets do. This could possibly mean that here will be satisfactory profit margins to future sales of olive oil under the label of “fair trade”.

Competitor Analysis

EUROMED Sustainable Connections: Evaluating EU & US Olive Oil Consumer Markets 32 2008 US Market Major Suppliers

Unilever 15.00% 9.00% Salov Delmaine Trading 28.00% 8.00% Grupo SOS Borges Pont 6.00% Rizzoli Emanuelli Fedeoliva Sapio Ron-Son 4.00% Hojiblanca Other 21.50% 3.00% 3.00% 5.00% 2.00%

In contrast with the European markets,that we have examined, there is much competition in the US market. Unilever is the leader of the Category with a share of 28% and key subsidiary the brand Bertolli Lucca. Salov follows with 15%, Delmaine Trading with 9% and Grupo SOS with 8%. Several companies are coming after with lower shares. The majority of above companies import olive oil under Italian labels.

Market Segmentation

Demanded Value (,000,000 Euro) Demanded Volume (,000 Tonnes)

481 607,2 127,4 117,6

Retail Foodservice Retail Foodservice

We can find another difference compared to European markets; the USA market is almost equally divided to retail Market Products Share Value and foodservice markets. In 2007, Retail had a share of 55.8% in volume and 48% in value of the total market, which says that prices are lower significantly lower in retail market. In the same year, the total demanded value was 10,2 estimated to be around 1,088,200,000 Euro, distributed mainly to Branded and Own label (including various retail distributors’ brands) products. Unbranded and Artisan 89,8 (craft sales; independent producers or sellers considered here to be a single competitive entity/company). This is another sign that US market supports product with known

EUROMED Sustainable Connections: Evaluating EU & US Olive Oil Consumer Markets 33

Branded Own Label label; thus, high quality products with distinct identity, such as Virgin olive oil, could have a lot of possibilities to be consumers’ choice.

REFERENCES

• Eurostat, http://epp.eurostat.ec.europa.eu • World Customs Organization, www.wcoomd.org • Food and Agriculture Organization of the United Nations (FAOSTAT) http://faostat.fao.org/ • International olive Oil Council (IOOC), http://www.internationaloliveoil.org/ • Food For Thought (FFT) Real-time Food & Drink Market Data Provider), http://www.fft.com • Institut National de la Statistique et des Etudes (INSEE), National Institute for Statistics and Economic Studies, http://www.insee.fr/french_population.html • Trade Map, Trade Statistics for international business development, http://www.trademap.org

EUROMED Sustainable Connections: Evaluating EU & US Olive Oil Consumer Markets 34 APPENDICES

Market Owners Company Key Subsidiaries Major Brands Share Origin

A L'Olivier 3,0% France A L'Olivier Barral 2,0% France Barral Terroir Borges Pont 1,0% Spain Borges Pont Borges Codefa-Orca 2,0% France Codefa-Orca Costa d'Oro 2,0% Italy Costa d'Oro Costa d'Oro, Regioni Verdi Delverde 2,0% Italy Delverde Delverde Europeenne de France, Europeepnne de 2,0% Condiments Germany Condiments Bornier, Senteurs d'Olivier Grupo SOS 6,1% Spain Carapelli Italy) Carapelli Nyons Baux 2,0% France Nyons Baux

Reitzel 5,5% Swiss, France Reitzel Le Jardin d"Orante, Oli Carte d"Or, Oli Provence Sadipal 2,0% France Caserta Salvi Fleur d'Olivier, Gallo, Il Numerato, Lesieur Olive, Saipol 48,3% France, USA Lesieur Puget, Puget Héritage, Puget Primeur, Sélection Douce UK, Unilever 3,5% Astra-Calve (France) Netherlands Bertolli, Maille Bjorg, Gaea, Guasco, Liohori, Wessanen 3,2% Netherlands Distriborg (France) Pietrabruna

1

Food (excluding Non-food tobacco) % products % Forms of sale (1) 200 20 1999 1999 6 06 Food, beverages, and tobacco in specialized stores (2) 17,7 16,8 0,3 0,9 Bread, cakes, flour confectionery, and sugar confectionery 6,7 6,4 /// ///

Meat and meat products 6,3 5,4 /// ///

Other retail sale of food, beverages, and 4,7 5,0 /// ///

EUROMED Sustainable Connections: Evaluating EU & US Olive Oil Consumer Markets 35

General food retail stores and mini-markets (3) 8,6 8,7 0,8 0,6 Supermarkets, neighborhood stores, and 17, hypermarkets 67,1 67,3 19,9 9

Supermarkets 30,8 33,0 6,1 4,4

Neighborhood stores 1,0 1,4 0,4 0,3 13, Hypermarkets 35,4 32,9 13,4 2

Department stores (4) 0,1 0,1 2,2 2,0 Pharmaceutical and medical products, 10, cosmetic and toilet articles 0,2 0,3 9,4 5 Other retail sale of new goods in specialized 42, stores 0,2 0,3 41,1 3

Retail sale not in stores 4,0 3,7 4,6 4,3

Retail sale via mail order houses 0,2 0,3 3,2 3,2

Other 3,7 3,4 1,4 1,0

Repair of personal and household goods (3) /// /// 0,8 0,6 78, Retail sale and craft shops 97,9 97,2 79,0 5 15, Retail sale of motor vehicles (4) 0,2 0,5 14,1 2

Other retail sale (5) 1,9 2,3 6,9 6,3 100, 10 Total retail sale 100,0 0 100,0 0,0 (1): excluding motor vehicles. (2): including craft shops.

(3): for their retail sale and repair services.

(4): excluding sale, maintenance, and repair of motor vehicles.

(5): sales by other sectors: services such as bars/tobacco retailers, wholesalers, and direct sales by producers.

EUROMED Sustainable Connections: Evaluating EU & US Olive Oil Consumer Markets 36 EUROMED SUSTAINABLE CONNECTIONS ANNA LINDH FOUNDATION

POLICY ANALYSIS 5:2. IMPORT REGULATIONS OF OLIVE OIL FOR THE US, FRANCE AND THE UK May, 2008

Introduction1 Kefalonia, the famous island in Greece, who has been hit by a tremendous earthquake back in While in some areas of the world the economy is 1953, has Villages who ever since that unfortunate growing and the purchasing power of its population event have not been properly reconstructed, despite increases day by day, in some other areas the the fact that they have a great potential for olive oil situation is not quite similar: people are really poor, production, but also to be a high touristic attraction. and in some cases, have great difficulty in surviving. In other words, they have the ability to offer great That is how the capitalistic regime affects the global revenue to the people of the Villages, making their economy: the rich tends to become richer while the lives sustainable economically. poorer unfortunately usually becomes poorer. It’s also sad to know that within one country there Greece is not the only country who has such areas. are regions that are very rich and in fast growth, Italy, Jordan, Tunisia, and Palestine, all have Villages while some other regions are neglected and almost that can offer economic sustainability to its habitants, completely abandoned by the government, while without harming either the environment, nor creating they have the potential to grow and to produce in a inequalities on the social aspect. And this is why way that would both benefit the people in these these areas should highly consider entering a areas but also the country itself. sustainable community development program, For this reason and for many others it’s important to throughout which they would produce olive oil and find a way through which areas that have the products based on olive oil (like soap for instance), potential to produce can do so without having to rely and export them towards countries that have a big on the bureaucratic system that not only leaves them market and a highly developed economy, in which aside, but also complicates things unnecessarily. One consumer have a rather strong purchasing power. of the possible ideas would be the Sustainable The US, France and the UK are by far from the Community Development. biggest markets in the world, thus making them a The Sustainable Community Development (SCD) good target market. seeks to cover three aspects: the economic, the environmental, but also the social. More specifically, Knowing that the Villages need a good incentive in when looking at the economic aspect of the SCD, the order to enter a program like the SCD, perhaps a concept is that the “community members make local deal with the targeted countries that would import capital investments that will sustain local human and their products (the US, France, and the UK) would be natural resources and yield adequate financial returns a good idea. A possibility would be that they could be to those investments”, while the environmental treated favorably for being self-sustainable: working aspect of the SCD focuses on “reducing the impacts on a basis similar to the Fair Trade (“a trading of population growth and development on natural process that involves a cooperative association that resources and the environment.” Finally, the social ensures that marginalized and disadvantaged world aspect of the SCD seeks to offer “equitable access to producers and farmers receive sufficient resources and decision-making processes foster the compensation for goods and produce.” distribution of foods and benefits across all sectors to (http://www.foodshedproject.ca/glossary.html)) the Community” (Swisher et al., Sustainable higher prices in the market could be offered, always Community Development, 2003). In other words the however with the objective to sustain the Villages SCD seeks to provide an adequate repartition of the and its people so that they can cover their expenses. human, natural and financial capital without Evidently, in order to make sure that consumers are neglecting or negatively affecting any of them. not appalled by the prices, a notification on the packaging of the product that the prices are higher for the sustainability of the Village would probably help and even possibly increase sales.

1 Research investigation prepared by Lara Mourad & Miriam Siwale, Hellenic American University

EUROMED Sustainable Connections: Olive Oil import Regulations for EU & US Markets 1 The purpose of this paper is to find out what the asked were straight-forward and only dealt with olive regulations for exporting olive oil and its byproducts oil import policies towards France and the Fair towards the US, France and the UK are, considering Trade), and only included some contact numbers in the customs and the classification of the products, France of importers. We did not lose hope, and but also the quality standards of the products. This contacted the importers, some of them via email (we should help the communities in question from the are still waiting for a reply) and some of them over respective countries to have an approximate idea of the phone, where, as usual, bureaucracy rules, and how things work, and how to proceed with the we kept on being balanced from a person to the exporting of their products. It is one thing to have an other, ending up in the middle of nowhere and with idea and believe in it, and it is a totally different thing no information at all. to actually implement it and complete it. This is why, The other contact we had was with the US Embassy. we hope that this paper shall resolve and simplify a We met with a person from the Agricultural number of complications that could come up when Department, hoping that he could help us understand the Communities of the Villages start exporting their the system of importing products like the olive oil products. towards the US. Instead, the main points we were agricultural communities to become economically provided with had to do with the quality of the autonomous while fostering principles of sustainable product, the safety standards and the process of the agriculture. Policies are now designed to fund small application of the safety standards. When asked producers whose practices will preserve the about the Fair Trade, there didn’t seem to be a environment and rural communities in order to build realization of what exactly that was. their capacity to survive in the market. After having gone through the US and the French Embassies, we realized that the UK representatives in Methodology Greece would provide us with more or less the same results, so we didn’t bother, especially considering In order to obtain information regarding import the fact that we were not in possession of enough policies for the US and the European countries slack time which we could waste. (France and the UK), we first performed a rather brief and superficial research over the internet, in Basically, after all this non-beneficiary research, we order to get acquainted with the subject, the realized that the only way we could find the terminology that would come up in the import necessary information was to find data over the policies, and to obtain a general idea of what was internet. We were lucky enough to find some great really needed for us to be able to come up with the official documents that dealt with the exact same necessary data. Our main objective was to formulate subject we were looking for. We compared the data the necessary questionnaires in order to get in touch that we found in order to increase the probability of with the representative embassies of the countries having valid information between our hands and then we were dealing with, since we thought that this used it. would be the most reliable source of information. One actually wonders what would have happened if Little did we know, embassies were not quite the we weren’t in the digital age. Would we have been right way to go. able to access the necessary information to cover the One of the first contacts we had was with the French needs of this project? We’re not quite sure about Embassy. When told what type of information we that. were looking for, they suggested that we contact the French Economic Mission, so they gave us their Analysis phone number. When we contacted the Mission, they said that we had to send an e-mail in which we’d The US market include our inquiries. And so we did, and received a US market is considered to be one of the most reply 48 hours later. The reply however was rather important target markets when it comes to promotion irrelevant (despite the fact that the questions we and distribution of olive oil according to research by

EUROMED Sustainable Connections: Olive Oil import Regulations for EU & US Markets 2 the US Department of Agriculture (2007).Therefore, identical to the imported goods cannot be found or it is logical that we consider the US market as an acceptable transaction value for such merchandise possible target for promoting and distributing our does not exist, then the value is the transaction value olive oil. of similar merchandise. Similar merchandise means The procedures as mentioned in our merchandise that is produced in the same country methodology in order to obtain all the information and by the same person as the merchandise being needed concerning the US market were rather vague. appraised. It must be commercially interchangeable However, we did manage to get some important with the merchandise being appraised. The identical information about the procedure of importing our or similar merchandise must have been exported to product into the United States of America, which is as the United States at or about the same time the follows according to the indications made by the US merchandise being appraised is exported to the government, the USDA and the US Customs: United States.

US Import Requirements The importer must determine the classification (http://www.americanimporters.org/pages/marketing number of the merchandise being imported. The /USimportrequirements.html) Harmonized Tariff Schedule of the United States (HTSUS), issued by the United States International An individual may make his/her own Customs Trade Commission, prescribes the classification of clearance of goods imported for personal use or merchandise by type of product; e.g., animal and business. All merchandise coming into the United vegetable products, textile fibers and textile States must clear Customs and is subject to a products. Customs duty unless specifically exempted by law. Clearance involves a number of steps: entry, The importer must pay estimated duties and inspection, appraisement, classification and processing fees if applicable. Customs makes the liquidation. final determination of the correct rate of duty. The duty rate of an item is tied to its classification The U.S. Customs Service does not require an number. The HTSUS provides several rates of duty importer to have a license or permit. Other agencies for each item: general rates for countries with which may require a permit, license, or other certification, we maintain normal trade relations (NTR); special depending on what is being imported. Customs entry rates for special programs (free, or lower than the forms do ask for your importer number. This is either rates currently accorded NTR countries); and column your IRS business registration number, or if your 2 rates for imports not eligible for either general or business is not registered with the IRS or you do not special rates. Customs duties are generally assessed have a business, your social security number. at ad valorem rates, a percentage of which is applied to the dutiable value of the imported goods. Some The importer must declare the dutiable value of articles, however, are dutiable at a specific rate (so merchandise. The final appraisement is fixed by much per piece, liter, kilo, etc); others at a Customs. Several appraisement methods are used to compound rate of duty (i.e., combination of both ad arrive at this value. The transaction value serves as valorem and specific rates). the primary basis of appraisement. Transaction value is the price actually paid or payable by the buyer to If formal entry is required - the importer may have to the seller for the goods imported. Other factors may post a surety bond. also add to the dutiable value of merchandise, such as packing costs, selling commissions, royalty or It is the importers responsibility to ensure that his or licensing fees, etc. When the transaction value her goods being imported meet admissibility cannot be determined, then the value of the requirements - such as proper marking, safety imported goods being appraised is the transaction standards, etc. - and that the proper permits, if value of identical merchandise. If merchandise

EUROMED Sustainable Connections: Olive Oil import Regulations for EU & US Markets 3 required, have been obtained in advance of the In the case of a single noncommercial shipment, a goods arriving in the United States. relative or other individual may act as the importer's Arrival of Goods agent for customs purposes. This person must know the facts pertaining to the shipment and must be Imported goods may not legally enter U.S. commerce authorized in writing to act for the importer. until the shipment has arrived within the port of entry and Customs has authorized delivery of the Customs employees are prohibited by law and merchandise. This is normally accomplished by filing American Importers Association employees are the appropriate documents, either by the importer or prohibited by by-laws from performing these tasks by the importer's agent. To expedite this process, for the importing public. However, US customs Customs entry papers may be presented before the employees will advise and give information to merchandise arrives, but entry will not take place importers about Customs requirements. until the merchandise arrives within the port limits. Formal vs. Informal Entry The Customs Service does not notify the importer of Informal entries cover personal shipments, the arrival of the shipment. The carrier of the goods commercial shipments and mail shipments that are usually makes notification of arrival. Arrangements being entered for consumption, i.e. for use or sale. In should be made to ensure that the importer or their most cases informal entry can be used if the agent is informed immediately of arrival so that the merchandise is valued at $2000 or less. There are entry can be filed and delays in obtaining the goods some exceptions such as textiles, certain types of avoided. footwear and other goods subject to quota/visa restrictions. Personal shipments valued over $2000 The Customs Service defines "entry" not merely as will also require a formal entry. The difference the arrival of goods at a port, but as the process of between an informal entry and a formal entry is the presenting documentation for clearing goods through bond requirement and the liquidation process. Customs. Imported merchandise not entered through Liquidation is the final computation of duties or Customs in a timely manner (within 15 calendar days drawback accruing to an entry and is the final step in of arrival) is sent by Customs to a general order the entry process. warehouse to be held as unclaimed. The importer is responsible for paying storage charges while Formal entries are generally commercial shipments unclaimed merchandise is held at the warehouse. If it supported by a surety bond to ensure payment of remains unclaimed at the end of six months, the duties and compliance with Customs requirements. A merchandise is sold at auction. bond is like an insurance policy that is payable to Customs in the event that the importer does not Some types of Customs entry must be made at the comply with import requirements. Having a bond on first port of arrival. Ordinarily entry is made there for file, allows an importer to take possession of his consumption, for entry into a bonded warehouse, or merchandise before the payment of duties, taxes and for transportation in bond to another port where a fees. Bonds can be obtained from a surety, which is consumption or warehouse entry will be made. If an an insurance company that has been authorized by importer is unable to be there to prepare and file the the Treasury Department to write Customs bonds. entry, commercial brokers, known as customs brokers and licensed by the Customs Service, may A port director can require a formal entry for any act as an agent for the importer. These brokers importation if he or she deems it necessary for the charge a fee for their services. A list of customs protection of the revenue or for admissibility or brokers may be obtained from the local Customs enforcement issues. office or found in the yellow pages of the local telephone directory. Goods admitted as informal entries do not require the posting of a bond and goods are liquidated on

EUROMED Sustainable Connections: Olive Oil import Regulations for EU & US Markets 4 the spot. After the importer receives notification of Imported merchandise may also be sent to a bonded the arrival of merchandise from the carrier and it is warehouse under a warehouse entry. Duties and determined that all shipping charges are satisfied an processing fees are not paid on warehoused invoice is presented to Customs. When an informal merchandise until the goods are withdrawn for entry is being made, the inspector, not the importer, consumption. Storage fees are paid to the warehouse is responsible for determining the classification proprietor by the importer. number of the goods being imported. The inspector also completes the Customs forms used for informal Classification entry. All goods that enter the United States are categorized according to the Harmonized Tariff Formal Entry of Goods Schedule. The act of placing goods into the correct To make or file a consumption entry (for imported category is called classification. goods going directly into the commerce of the United States without any time or use restrictions placed on Classification determines how much duty will be them) the following documents are generally collected. Classification is more than simply looking required: up an item in an index. It is a very complicated process requiring the application of the General Rules 1. A bill of lading, airway bill, or carrier's of Interpretation; the section, chapter and certificate (naming the consignee for subheading notes; and the Explanatory Notes. The customs purposes) as evidence of the importer is responsible for properly classifying his consignee's right to make entry. merchandise before entry. If he is not sure how to 2. A commercial invoice obtained from the properly classify an item, he can submit a request, in seller, which shows the value and description writing, for a binding classification ruling to the of the merchandise. National Commodity Specialist Division, U.S. 3. Entry manifest (Customs Form 7533) or Customs, Attn: Classification Ruling Requests, New 4. Entry/Immediate Delivery (Customs Form York, NY 10048. The rulings will be binding at all 3461) ports of entry unless revoked by the Headquarters' 5. Packing lists, if appropriate, and other Office of Regulations and Rulings. If an importer is documents necessary to determine whether not satisfied with the binding ruling received from the merchandise may be admitted. New York, he or she can appeal it to the Headquarters' Office of Regulations and Rulings, When a consumption entry is filed, the importer Washington, DC 20229. The Customs Service will not indicates the tariff classification and pays any issue binding rulings in response to oral requests. estimated duty and processing fee. A surety bond Import Specialists can give oral advisory rulings but containing various conditions, including a provision the classification-related opinions or advice of for paying any increased duty that may be found to Customs Service personnel at one port are not be owed at a later date, may also be required. binding on the Customs ports elsewhere. Oral inquiries may be made to Customs offices regarding Other Types of Entry existing binding rulings that might cover your Imported goods may be sent in-bond from the first importation. Binding rulings may also be researched port of arrival to another Customs port. In-bond on the Customs web site at www.customs.gov. entries postpone final Customs formalities including payment of duty and processing fees, until the goods Determining Admissibility/Customs arrive at the final port. Arrangements for in-bond Examination of Goods shipments should be made before the goods leave In simple cases involving small shipments or certain the country of export. classes of goods such as bulk shipments, examination may be made on the docks, at container stations, cargo terminals, or the importers premises. The

EUROMED Sustainable Connections: Olive Oil import Regulations for EU & US Markets 5 goods are then released to the importer. In other laboratory report, if required, a final determination of shipments, sample packages of the merchandise may duty is made and the entry is liquidated. At this time, be retained by Customs for appraisal or classification any overpayment of duty is returned or under- purposes and the remainder of the shipment payments billed. released. These sample packages will also be released to the importer after examination. Protest Within 90 days after the date of liquidation or other Examination of goods is necessary to determine: decision, an importer or consignee may protest the decision and receive an administrative review. The protest is filed with the port director whose decision 1. The value of the goods for Customs purposes and is being protested. At the time the initial protest is their dutiable status. filed, the importer or consignee must make a request 2. Whether the goods are properly marked with the for further review if one is desired. Review of the country of their origin. Special marking or labeling port director's decision by the Customs Service may apply. Generally, imported merchandise must Center or Headquarters is then automatic. Notice of be legibly marked in a conspicuous place and with the denial of all or part of the protest will be mailed the English name of the country of origin. Certain to the person filing the protest or to his agent. Any specific articles are exempt from this requirement. person whose protest has been denied may contest (For further information see Customs Publication the denial by filing a civil action in the United States No. 539 Marking of Country of Origin on U.S. Court of International Trade. Imports.) 3. Whether the goods have been correctly invoiced. Mail Shipments 4. Whether the shipment contains prohibited articles. Shipments by mail which do not exceed $2000 in 5. Whether the requirements of other federal value, whether commercial or noncommercial agencies have been met. importations (except for commercial shipments of 6. Whether the amount of goods listed on the textiles from all countries and made-to-measure suits invoice is correct, and no shortage or overage from Hong Kong, regardless of value), are entered exists. under a mail entry prepared by a Customs officer after the Postal Service submits the package for If necessary, goods may be analyzed by a Customs Customs examination. The parcel is delivered to the laboratory to determine proper classification and addressee by the Postal Service and is released upon appraisal, to determine that the goods meet safety the payment of duty, which is shown on the mail requirements, or to ensure that they are not entry accompanying the package. A postal handling counterfeit or otherwise in violation of U.S. laws. fee will also be collected from the addressee at the time the package is delivered. This handling fee is If Customs determines that the goods are different not charged on packages sent through military mail from the entered descriptions in quantity or value, channels. that the classification of the goods is incorrect, or that a different rate of duty than the one indicated by A formal entry is required for any mail shipment the importer applies, an increase in duties may be exceeding $2000 in value. Formal entry is also assessed. If Customs determines that the importer required, regardless of value, for commercial has deliberately failed to properly classify and value shipments of textiles from all countries and made-to- his goods, he may be liable for a fine, or other measure suits from Hong Kong. Certain other articles penalty. valued over $250 require a formal entry (billfolds, footwear, fur, gloves, handbags, leather, luggage, When all the information has been acquired, plastics, rubber, textiles, toys, games and sports including the report of the Customs import specialist equipment, etc.) If formal entry is required on a as to the customs value of the goods, and the parcel, the parcel is held at the Customs international

EUROMED Sustainable Connections: Olive Oil import Regulations for EU & US Markets 6 mail branch and notice is sent to the addressee of Customs Entry and Valuation the package's arrival. The addressee can then go to U.S. Custom's Entry and Valuation Procedures must the nearest Customs office to file the formal entry on be fully adhered to in order for merchandise to clear the package. An entry must be filed in the same entry into the U.S. By law, goods arriving by manner as for shipments arriving by vessel or commercial carrier have to be cleared for entry into airfreight. Once the mail branch has been notified the U.S. by the owner, purchaser, or a licensed that entry has been filed, the package will be customs broker who is designated by the owner, released to the postal service and forwarded to its purchaser, or consignee. Imported goods are either final destination. considered dutiable or duty free, in accordance with their classification in the Harmonized Tariff Schedule U.S. Import Regulations of the United States (HTS). Guide to Exporting to the U.S. (http://www.us- Customs Documentation sabc.org/i4a/pages/index.cfm?pageid=3319) U.S. Customs requires a series of documents to be filed within five working days of the date of arrival of As a WTO signatory, the U.S. has sought to gradually the shipment to the U.S. port of entry. It is essential reduce barriers to trade. Imports into the U.S., that all Required Documents are accurate and however, are still restricted by rules and regulations submitted on time. from various governmental agencies, most of which are enforced by the Department of Homeland U.S. Government Agency Requirements Security. Be aware that it is ultimately the Apart from the U.S. Customs’ own documentation responsibility of the exporter to seek the advice of requirements, the product may also be subject to knowledgeable U.S. Customs brokers or international Specific Government Agency Requirements, which trade consultants in order to avoid unnecessary are enforced by the U.S. Customs. These regulations complications with shipments. may prohibit entry or restrict shipment routing or storage. They may also limit the product’s entry to Import Licensing certain U.S. ports, require specific labeling, or special Despite its liberal trade policies, the U.S. still imposes treatment, as a condition of their release by import licenses on a number of items in order to Customs. protect local producers from fierce competition. Import licensing can also be used to send a political Intellectual Property Rights Regulations signal, as in the case of the Cuban and North Korean The U.S. is a member of the Paris Convention for the import bans. Protection of Industrial Property. Nationals of member countries enjoy national treatment in the Import Quotas U.S. regarding patent and trademark protection. The There are two types of import quotas in the U.S., the U.S. Customs is in charge of protecting trademarks, majority of which are administered by the Customs trade names, and copyrights, which have been Service. Absolute Quotas specify a maximum quantity recorded with the Intellectual Property Rights Branch. of goods allowed into the U.S. for a particular period The rights granted under U.S. Patent, Trademark, or of time, whereas Tariff-rate Quotas allow for the Copyright Law is only enforceable in the U.S. and its entry of a specified quantity of imported goods at a territories. reduced customs duty during a quota period. Commodities subject to import quotas are classified Antidumping, Subsidy, and Countervailing in accordance with the Harmonized Tariff Schedule of Regulations the United States (HTS). The extensive quota list is Under the General Agreement on Trade and Tariffs continuously updated, as are the quota periods and (GATT) Article 6, the U.S. is permitted to take the countries affected by them. measures against countries “dumping” goods, or exporting them to the U.S. at a price lower than it

EUROMED Sustainable Connections: Olive Oil import Regulations for EU & US Markets 7 charges in its own home market or lower than the exporters need to be aware of the U.S. marking, cost of production. When this occurs, the U.S. may labeling, and packing requirements. Containers that take action in the form of Countervailable Subsidies arrive at U.S. ports without proper markings and or Anti-dumping and Countervailing Duties to defend labels may be denied entry. It is recommended that its domestic industries and offset the unfair trade care be taken in packaging products so as to avoid practice. any damage to the shipment. It should be noted that the U.S. buyer may also have specific packaging Government Procurement and the “Buy requirements. America” Legislation About 10 to 15 percent of the U.S. government Product Standards procurement is covered by the WTO Government The U.S. adheres to the WTO “Standards Code.” Procurement code. Besides the procurement Product standards are also regulated on the federal operations covered by U.S. Free Trade Agreements and state levels. U.S. Customs is in charge of (NAFTA and Israel), the Buy America Act of 1933 is enforcing the federal standards and regulations, and the most significant legislation covering the may refuse entry to any product that fails a particular remaining government procurement operations. The standard. Although not mandatory, the ISO 9000 “Buy America” restrictions contained in the 1933 Act standards allow manufacturers to certify that their pertain to government-funded purchases. The production processes are in conformity with legislation includes the prohibition of goods and published quality standards. services purchased from foreign suppliers and the extension of preferential pricing to domestic Safety and Product Liability Regulations suppliers. The U.S. has a complex body of State and Federal legislation designed to protect the consumer and New regulations for government bidding were supervise product quality and labeling requirements. adopted in 1997, to clarify the bidding process, Four main agencies are in charge of this mission on improve the communication between industry and the Federal level. These are the Department of government, and shorten the cycle time for awarding Agriculture, the Consumer Product Safety contracts. Besides the national government Commission, the Food and Drug Administration, and procurement restrictions, over 40 U.S. states the Department of Transportation. By meeting maintain their own “Buy America” legislation, set established safety requirements, products can receive aside contracts for their minority-owned programs, the certification mark of Underwriters Laboratory, and give preferential treatment to local companies. Inc. (UL), the leading third party product-safety certification organization in the U.S. Foreign Trade Zones and Warehousing Regulations UL’s mission is to provide proof of safety in products, Foreign Trade Zones are secure areas that are legally systems, materials, and components, including outside a nation’s customs territory. They usually lie building materials, chemicals, and mechanical in or near customs ports of entry, at terminal products. In the U.S., product liability law addresses warehouse facilities, or at industrial parks. Dutiable the issue of allocation of losses resulting from defects imported merchandise may be placed in a Customs in products, by considering the liability of a Bonded Warehouse, where it may be stored or manufacturer or any other entity in the distribution further processed without being subject to Customs chain, for property damage, economic loss, or duties. personal injury resulting from the sale or use of the defective product. In U.S. product liability law, “the Country of Origin Marking, Labeling, and product” is the finished product, but it is also the Packaging owner’s manual, the product warranty, the spare parts, the product package, the product When preparing to ship a product to the U.S., advertisement, and the product labels. For example,

EUROMED Sustainable Connections: Olive Oil import Regulations for EU & US Markets 8 product liability could result from the poor drafting or • Prepare clearly-printed or typed invoices, translation of the owner’s manual. Proper care needs with information matching that on the to be exercised in following proper labeling and packing lists packaging procedures. Plaintiffs may sue the • Mark and number each package in such a manufacturer for negligent manufacturing, where the way that it can be identified with the marks product was properly designed, but was not in on the invoice conformity with product specifications. Manufacturers • Provide a detailed description of each may be sued for a number of aspects of product product in each package negligence, including use of parts that do not • Mark the goods with the appropriate country conform to technical specifications, use of defective of origin, unless a prior exception has been parts produced by third parties, and failure to granted, and ascertain that all other required conduct quality control testing on the finished markings are present and properly displayed product. • Comply with all agency requirements regarding specific products Manufacturers can also be found liable for marketing- • Follow sound security procedures to avoid related negligence, such as failing to give the the illicit introduction of forbidden materials appropriate warning about potential hazards caused in the shipment by misuse of the product, or failing to provide proper instructions for proper use of the product. Product Generalized System of Preferences (GSP) liability suits in the U.S. are costly. If successful in their claims, plaintiffs could be awarded The Generalized System of Preferences is a program compensatory damages, including, but not limited to, that confers a duty-free status on merchandise coverage of medical expenses, pain and suffering, imported from beneficiary developing countries, disability, emotional distress, and potential lost independent countries, as well as dependent earnings. In addition, several states have set up their countries and territories, in order to foster their own consumer-protection legal apparatus. Some economic development. The GSP eligibility list states have passed what is commonly referred to as currently covers a wide range of products classifiable “lemon laws,” whereby consumers are empowered to under approximately 4,000 subheadings. GSP seek reimbursement and limited damages when a merchandise may qualify for duty-free status if product fails in its intended use continuously. Other imported directly from the designated countries. lemon laws also allow the consumer to recover Saudi Arabia is not a beneficiary of the GSP program. attorney fees from the defendant if they prevail on The GSP, the Caribbean Basin Initiative, as well as the claim. treaties such as NAFTA, the U.S.-Israel Free Trade Agreement, and the U.S.-E.U. Transatlantic Economic Guidelines for Faster Customs Clearance Partnership, all confer a preferential duty status on The U.S. Customs provides a series of Customs products from specific regions and countries. Saudi Clearance Guidelines to ensure a timely and hassle- exporters need to be aware of the existence of such free customs clearance. It is to the benefit of the treaties as they provide a competitive advantage to Saudi exporter to closely adhere to these goods from certain countries over Saudi products. recommendations in order to facilitate the clearance process. This section provides information about:

Guidelines Olive Import Requirements (http://www.ams.usda.gov/AMSv1.0/ams.fetchTempl • Provide all required information on Customs ateData.do?template=TemplateN&navID=Olives&righ invoices tNav1=Olives&topNav=&leftNav=&page=8eolives&re sultType=&acct=fvgeninfo)

EUROMED Sustainable Connections: Olive Oil import Regulations for EU & US Markets 9 INSPECTION REQUIRED - All canned ripe olives for the purpose of certifying the quality and size of are required to be inspected and certified prior to the olives imported into the United States. importation including a release from custody of the US Customs and Border Protection (CBP). Also, bulk USDA inspection and certification services will be olives for processing into canned ripe olives must be available upon application, in accordance with the inspected and certified prior to canning. rules and regulations governing the inspection and certification of processed fruits and vegetables, Conditions for the Importation of Commodities processed products thereof, and certain other exempt from import requirements processed food products [7 CFR Part 52]. The cost of inspection and certification shall be borne by the The Importer's Exempt Commodity Form (FV-6) is applicant. Inspection applications should be used for olives destined for consumption in exempt accompanied by either, (1) an "On Board" bill of outlets such as charitable organizations or lading designating the lots to be entered as canned commercial processing into oil. ripe olives, (2) a list of such lots by variety and their identifying marks, or (3) a list identifying lots by The white copy of the FV-6 must be presented to variety of imported bulk olives. CBP at the Port of Entry. The yellow copy of the form must be mailed to the Marketing Order Olive importers should make arrangements at the Administration Branch (MOAB) within two days after Western Regional Office for inspection and the commodity enters the United States. The certification at least 10 days prior to the time when importer must send the pink copy of the FV-6 form canned ripe olives will be imported, or apply for with the exempt shipment to the receiver. The inspection of bulk olives at the Eastern and Western receiver must complete Section II of the FV-6, Regional Offices at least three days prior to their use certifying the amount of commodity received and in the production of canned olives. that the commodity will be used for an exempt purpose, and mail it to MOAB within two days after Arrival taking possession of the exempt commodity. The blue copy should be retained by the importer. Customs Approval Disposition of Olives Failing Inspection Examination Olives failing to meet the above import requirements may be: (1) exported; (2) disposed of under Federal Disapproval Protest or Federal-State Inspection Service supervision with the importer bearing the costs of certifying the disposal of such olives; (3) diverted to an exempt Graph 1.1 outlet using the FV-6 form (see various approved outlets and procedures listed above); or (4) re- France and the UK inspected with failed portion disposed of under the One of the positive things concerning the regulations procedures of number (2) or (3) above. in countries that are within the European Union is that they are uniform. Therefore, when it comes to dealing with the import regulations towards France Instructions for Obtaining USDA Inspection and and the UK, the same rules apply. The difference is Certification from the other side of the coin: it actually depends The Processed Products Branch, Fruit and Vegetable on the country of origin of the olive oil on how Programs, Agricultural Marketing Service, United regulations apply. In other words, the import States Department of Agriculture (USDA), is hereby regulations that Tunisia is supposed to conform with designated as the governmental inspection agency are different than the regulations Jordan complies with, and so on and so forth.

EUROMED Sustainable Connections: Olive Oil import Regulations for EU & US Markets 10 • Virgin Lampante: 15 09 10 10, at a price of 122.6€/100kg/net

When wanting to import towards countries of the EU, • Virgin Other: 15 09 10 90, at a price of there are custom regulations that need to apply: 124.5€/100kg/net products need to be classified according to the Combined Nomenclature. The Combined • Other: 15 09 90 00, at a price of Nomenclature (CN) is defined as a method for 134.6€/100kg/net designating goods and merchandise established to meet the requirements both of the Common Customs Tariff and of the external trade statistics of the Community Since the olive oil is for consumption purposes, the (http://ec.europa.eu/taxation_customs/customs/cust Lampante is not the category that applies, since it is oms_duties/tariff_aspects/combined_nomenclature/in mainly used for industrial purposes dex_en.htm). What this really means is that for every (http://www.thegiftofoil.co.uk/content.asp?oliveoil=1 product or merchandise that a country wants to 2). The category that is most probable to be the one penetrate within the countries of the European that suits us best is the Virgin other. Union, there should be a code that would designate what the product/merchandise is. This nomenclature has mainly been established to facilitate transactions with the Third countries (in other words the countries As far as the olive oil by-products are concerned, that are not members of the European Union). based on the TARIC Code, their classification number is 15 22, under the category of “Degras; residues The code that is used for the European Union is the resulting from the treatment of fatty substances or TARIC code, an abbreviation of the Integrated Tariff animal or vegetable waxes” of the European Communities. Its main objective is to “secure the uniform application by all Member The sub-category that applies in this case is: States and give all economic operators a clear view of all measures to be undertaken when importing or exporting goods.” • Residues resulting from the treatment of fatty (http://ec.europa.eu/taxation_customs/common/data substances or animal or vegetable waxes, with bases/taric/index_en.htm) the code of 1522 00 31, under which fall the categories: So the classification of the product/merchandise is • Containing oil having the characteristics of olive uniform across all the EU countries. oil: 1522 00 31 • Soapstocks: 1522 0031: 29.90€/100kg • Other: 1522 0039: 47.80€/100kg Since what we are interested in is importing olive oil and its by-products towards France and the UK, Those were the general rules and classifications that here’s how, according to the Combined Nomenclature apply for the olive oil and for its byproducts. the classification is done: However, as previously mentioned, each country wishing to import products in the countries of the EU • For the olive oil, classified in the category of Olive have different obligations: oil and its fractions, whether or not refined, but - Greece and Italy, who belong to the countries not chemically modified, the TARIC Code that of the EU, have no customs to pay when exporting applies is 15 09. towards other countries of the EU. They belong to • Within this main category, there are sub- the Free Trade zone, and can thereby export their categories: products to France and the UK without being charged

EUROMED Sustainable Connections: Olive Oil import Regulations for EU & US Markets 11 or having any quota in the quantity they wish to Palmitoleic acid 0,3-3,5 export. Heptadecanoic acid ≤ 0,3 Heptadecenoic acid ≤ 0,3 - Jordan, who has signed an agreement with the Stearic acid 0,5-5,0 European Community on the 24th of November, Oleic acid 55,0-83,0 1997, where the gradual deduction of the customs Linoleic acid 3,5-21,0 throughout a time frame of twelve years, until the Linolenic acid ≤ 1,0 existence of a free trade market between Jordan and Arachidic acid ≤ 0,6 the EU countries takes place, is now duty free from Eicosenoic acid ≤ 0,4 any tariff charges for the olive oil and its by-products Behenic acid (1) ≤ 0,3 for exports towards the EU (European Communities- Lignoceric acid ≤ 0,2 Jordan Euro-Mediterranean Agreement, November 24th, 1997) (1) ≤ 0,2 for oil under heading 1509.

- Palestine, who signed an agreement with the EU For the Sterol content as percentage of total sterols: in February 1997 (and was effective as of the 1st of July, 1997), was provided with a gradual reduction of Sterol Percentage the customs on the agricultural products they wished to export towards the EU countries. Nowadays, the Cholesterol ≤ 0,5 olive oil is custom-free. The olive-oil by-products, Brassicasterol ≤ 0,1 however, are not custom-free, so Palestine needs to Campesterol ≤ 4,0 pay the tariffs mentioned above concerning the Stigmasterol (1) < Campesterol soapstocks and the other products that fall in the Betasitosterol (2) ≥ 93,0 category of residues resulting from the treatment of Delta-7-Stigmasterol ≤ 0,5 fatty substances or animal or vegetable waxes (1522) http://trade.ec.europa.eu/doclib/html/136446.htm (1) Requirement not valid for virgin lampante oil (subheading 1509 10 10) - Tunisia, last but not least, is the country that has (2) Delta-5,23-stigmastadienol + chlerosterol + no tariff reductions, and is required to pay all the betasitosterol + sitostanol + delta- customs that are mentioned above in order to be 5-avenasterol + delta-5,24-stigmastadienol. able to import towards the countries of the European

Union. http://eur- http://ec.europa.eu/taxation_customs/dds/tarhome_ lex.europa.eu/JOHtml.do?uri=OJ:L:2007:286:SOM:E en.htm N:HTML

All this description had to do about how the By meeting these criteria, the olive oil can be products are classified. However, in order for the classified in one of the codes, and eventually be product to be classified in a specific category, it exported. needs to meet certain criteria. As far as the olive oil is concerned (any 15 09 code olive oil), the chemical These are more or less the results of the research requirements should be as follows: that has been conducted for the EU market, which

should help the Villages that seek to import their For the Fatty acid composition as percentage of total products towards France and the UK. fatty acids: Fatty acids Percentages

Myristic acid ≤ 0,05 Palmitic acid 7,5-20,0

EUROMED Sustainable Connections: Olive Oil import Regulations for EU & US Markets 12 Conclusions and recommendations procedures to import to France or UK. However, the results of the other group participating in this project, In our conclusion we would like to mention that focused on marketing issues, meaning which market significant differences where found concerning the is more profitable etc. The results do indicate that US market and EU (France, UK). the US market can be more profitable than the EU market. The first difference was found on issues concerning the requirements and regulations of France and UK in As a conclusion we propose that even more research contrast to USA, which furthermore led us to the is done on both markets so as to have a more clear discovery that different procedures are applied to the and distinguished picture that can lead us to making US as compared to the procedures implemented by a decision that inspires confidence for every nation nations within the European Union. Another that participates or nation that wishes to participate difference is the nature of information obtained for in the future. the US import policies in comparison to EU (France, UK) policies. References and Sources

The US policies, regulations and requirements are European Communities- Jordan Euro-Mediterranean rather general and apply to any product that any Agreement, November 24th, 1997 importer wishes to enter into the United States. The M. Swisher, S. Rezola & J. Sterns, Sustainable procedure even though it seems specific, lots of Community Development, bureaucracy is involved. The limitations in this case is University of Florida, IFAS extension, September 1st, that the information is general, and do not provide 2003 any numbers/figures so as to specify to any importer http://ec.europa.eu/taxation_customs/customs/custo the quantities and prices or tariffs needed to be paid. ms_duties/tariff_aspects/combined_nomenclature About EU policies, regulations and requirements what /index_en.htm has been discovered through our research is that http://ec.europa.eu/taxation_customs/dds/tarhome_ even though it is general, it does however provide en.htm valuable information about quantities, prices, tariffs; http://ec.europa.eu/trade/issues/bilateral/regions/eur generally anything involving indications so as to see omed/euromed_en.htm the economic perspective of this project. However, it http://eur- lacks what the research on US provides; information lex.europa.eu/JOHtml.do?uri=OJ:L:2007:286:SOM on procedures in order to enter the product to France :EN:HTML and the United Kingdom. http://www.foodshedproject.ca/glossary.html http://www- Some of the limitations mentioned also above are personal.umich.edu/~alandear/glossary/t.html that the information was rather general. Another http://www.thegiftofoil.co.uk/content.asp?oliveoil=12 limitation is that no regulations based on the Fair http://trade.ec.europa.eu/doclib/html/136446.htm Trade were found and there are very few Fair Trade http://www.fas.usda.gov/ustrade/pfood/PFoodCmdty foundations within Europe that would possibly help .asp?QI=&type=1&code=585 us implement this project. And last but not least we http://www.fas.usda.gov/ustrade/ustlists/ImCmdty.a discovered contrasting information in some sp regulating issues http://library.findlaw.com/1999/Mar/9/129440.html# Arrival%20of%20Goods As a group we would like to recommend that the http://www.fas.usda.gov/ustrade/ustlists/ImCmDetail focus falls on the EU market, due to the fact that .asp?QI=&code=M1510006000 because most countries involved in this project are http://www.ams.usda.gov/AMSv1.0/ams.fetchTempla within the European Union or are under a treaty with teData.do?template=TemplateN&navID=Olives&ri EU such as Palestine, it is easier in matters of

EUROMED Sustainable Connections: Olive Oil import Regulations for EU & US Markets 13 ghtNav1=Olives&topNav=&leftNav=&page=8eoliv http://ec.europa.eu/taxation_customs/customs/proce es&resultType=&acct=fvgeninfo dural_aspects/imports/free_circulation/index_en.h http://www.fas.usda.gov/search.asp?sort=date%3AD tm %3AL%3Ad1&output=xml_no_dtd&ie=UTF- http://ec.europa.eu/taxation_customs/customs/proce 8&mode=simple&client=usda&num=10&site=FAS dural_aspects/general/declaration/index_en.htm _MAIN&q=import+olive+oil+to+USA http://www.fas.usda.gov/ustrade/ustlists/ImCmDetail .asp?QI=&code=M1510006000 http://www.oliveoil.eu/website/product_info.php?tem plate_id=38&lang=en&cPah=&from=sitemap&pro ducts_id=1 http://economicsbulletin.vanderbilt.edu/2008/volume 13/EB-07M20003A.pdf http://www.agrovim.gr/importoliveoil.html http://www.defra.gov.uk/hort/olive-oil/faq.htm http://www.defra.gov.uk/hort/olive- oil/importing/index.htm http://tovima.dolnet.gr/print_article.php?e=B&f=145 04&m=D10&aa=1 http://page1.bhc.gr/bhc/periodiko-bhc/periodiko- 30/30_9.html http://www.agrotypos.gr/news/news_Show.asp?AA= 15527 http://www.wto.org/ http://www.fao.org/ http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L: 2005:002:0006:0011:EN:PDF http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L: 2007:286:0001:0894:EN:PDF http://ec.europa.eu/taxation_customs/dds/cgibin/tarc hap?Taric=1509100000&Download=0&Periodic=0 &ProdLine=80&Lang=EN&SimDate=20080525&C ountry=PS/0625&YesNo=1&Indent=1&Action=1# OK http://www.wto.org/English/thewto_e/whatis_e/tif_e /org6_e.htm http://www.hktdc.com/euguide/2-9.htm http://www.berr.gov.uk/europeandtrade/importing- into-uk/page9728.html http://www.berr.gov.uk/europeandtrade/importing- into-uk/import-tariffs/page11291.html http://ec.europa.eu/taxation_customs/customs/custo ms_duties/tariff_aspects/combined_nomenclature /index_en.htm

EUROMED Sustainable Connections: Olive Oil import Regulations for EU & US Markets 14 EUROMED SUSTAINABLE CONNECTIONS ANNA LINDH FOUNDATION Policy Analysis 5:3. Sustainable Community Development Business Model May, 2008

Introduction1 land where the olive grows”. Olive oil production2 is

a major component of the Mediterranean economy The aim of this paper is to put into an action mode representing a top priority for most countries of the the research findings, the workshops deliberations, region, including the ones represented by our and the dreams and hopes of every participant in this partners. project. We describe the economic activity linked to our effort for the creation of sustainable communities Therefore, we and present an approach with which the project may selected the be implemented. development of fair

In order to meet the sustainability criteria set forth in trade olive oil related the Bellagio Workshop, we emphasized reaching products, targeting specialized markets in the EU and agreement on the particular supporting economic the USA. This will establish a direct support for the activity for this project. This had to be also aligned producing local economies and at the same time with our wider aim which is to create stronger and promote cross country cultural understanding. closer relationships between Mediterranean cultures. To create a network of people who will collaborate, Secondary Area: As pointed out by the partners, exchange practices and promote cultural identities there is also a strong interest for focused sustainable and common cultural features in the broader context tourism development since the Mediterranean is of sustainable community development. attracting almost 1\3 of the total global tourism demand. However, we intend to diversify our

strategy for tourism Narrowing down from a wide range of potential development and link it to actions, we identified primary areas that should be fair trade actions with investigated at this initial stage, as well as secondary tourism as a areas of common development interest, which could complementary action at a be deployed following the implementation of the later stage. This will be primary area activity. investigated in a future

project phase. Primary Area: The demarcation of the Consequent planning for “Mediterranean” region has been presented as “the alternative forms of tourism, emphasizing agri- tourism, cultural tourism and Ecotourism is an

1 Research investigation prepared by Theodore Benetatos, Resident Faculty, AWISH Hellas. 2 And its deriving byproducts

EUROMED Sustainable Connections: Business Model 1 obvious next phase for this program. This should be first challenge was to find a form of economic activity focused on olive oil (and by-products) production that would promote the creation of a sustainable based on participative tourist-host community community and at the same time combine one or experience. We expect that this project will have a more preferred areas of economic development. significant contribution in strengthening the image of the Mediterranean region as a destination for healthy In this quest we discovered our solution through the food production which can, at a later stage, lead to emerging economic model of “fair trade”. Fair trade more responsible tourism. It can also provide a schemes use consumption and trade to promote the modern and practical planning tool for local economic inclusion of poor farmers in global markets through development (LED) through community long term relationships, and ongoing consultancy to empowerment for entrepreneurial actions and build producers’ capacity. business innovation for Small and Medium family owned enterprises. Fair trade is a strong movement growing with rates that reach 20% per year (Fair Trade Advocacy, Sustainable Community Development and Fair 2005). It has been argued that such ventures are Trade – A Responsive Business Model now viable due to their small scale and ability for small farmers to building local capacity with which to As clearly stated throughout this project, we aimed to implement cooperative production practices. create a Mediterranean-centered However, this is only partially true and depends sustainable community mostly on the ability of farmers to participate through development model that would collaborative schemes. For example in some cases address the needs and fair trade (FT) products achieve great market shares particularities of the participating (for example, the fair trade banana market in communities in the region. This Switzerland has attained a 49% market share, and requires a well designed business FT coffee has attained a 20% market share in the UK approach that will satisfy the (Bechetti, 2008). Furthermore, fair-trade principles sustainability criteria, as described are fully compatible with our core criteria for and adopted by the partners (see sustainable community development. Benchmarking Sustainability: The Use of Indicators report). Furthermore, the main interest of the To obtain a fair trade label, according to FLO (Fair- partners was identified as the olive oil production and trade Labeling Organization) organizations must: the agricultural tourism industry, two common economic activities in the Mediterranean region. The • To pay fare price in the local context.

EUROMED Sustainable Connections: Business Model 2 • Stabilize price fluctuations • FT Producers are significantly younger than Bio- • Offer employees opportunity for advancement production producers by almost 10 years • Provide equal employment opportunities • FT is not an exclusive channel for affiliated • Engage in environmentally sustainable practices farmers. In fact, they sell nearly 28% of their • Be open to public accountability products directly to local customers and another • Build long term trade relationships 12% to other distributors and intermediaries that • Provide healthy and safe working environment do not meet the profile of FT. within the local context • Premium pricing is generally achieved but the • Provide technical and financial assistance to main effect would be product diversification producers rather than price premium. • Affiliation with FT does not obtain bargaining Relevant studies on fair-trade (Castro, 2001a, 2001b, power when selling to local markets. Hopkings 2000; Nelson & Galvez, 2000;Oxford Policy Management, 2000; Ronchi, 2002, in Beccetti & Fair Trade Limitations Constantino 2008) show that FTs predominantly deal No development tool is ideal. There are always with first level producer organizations rather than the drawbacks to consider and in our case we identified individual producer. The fair trade premium is the following: managed by the organization to satisfy the • FT provides superior economic and social Individual’s well fare needs. The main role of fair capabilities that however may not be directly trade is capacity building which is deemed crucial to traced back to the FT as such. This means that it support inclusion of local producers in international may well be a vehicle for sustainable community trade. development but this will not be accomplished just by entering such a market or scheme. As quoted at the beginning of this paper, FT is a • FT related commerce produces high price fairly new business concept and therefore the satisfaction compared to domestic pricing. This available information reflecting the FT community’s however means that in our case FT would be overall social, economic and environmental impact is more effective if targeted to international market. still very limited. However, in anticipation of basic Nevertheless, this does not mean that we should outcomes in an indicative manner, we can draw upon exclude local markets since this would have an a large scale research on fair trade impacts on adverse social impact on the participating producing communities, conducted in Kenya. The community and this has been accounted for in results showed the following: our sustainability criteria.

EUROMED Sustainable Connections: Business Model 3 • There is also enough evidence to support that FT only the promotion of olive oil production and export still has not solved the issue of protecting the for the attainment of premium pricing that would human capital thus reinforcing the argument that benefit only the producers. Based on our participation in such a market is not a panacea to sustainability criteria, we also need to aim for a a community’s problems and requires ‘state of broader system that will enable the creation of the art’ organization and competitive business sustainable communities by emphasizing intercultural strategies. connections. This requires monitoring by the • It also seems that FT benefits are tightly linked coordinating organization that will provide continuous to the premium pricing and in-kind community support to participating communities and would benefits that derive from FT policies. This implies ensure the continuity and longevity of the project. that there is a supporting organizational structure Therefore, our project has recommended the to promote the broader goals initially sought creation of “modified” Fair Trade Community Based when entering to FT collaborations. Organization.

Our approach on Fair Trade Generally speaking Community-based organizations The principles of Fair Trade are very close to our (CBOs) play a crucial and relevant role in providing adopted project’s sustainability criteria however some services at the local level. Normally, they work in a further modifications are needed to our business variety of different fields, such as education, health, model. In FT organizations, most of the funds the rights of the disabled, gender issues, etc. If we deriving from the prevailing premium prices are were to describe the main attributes of such an returned to the producers. We have found that this organization we would say that usually they are non may not be sufficient to create a long term profit entities that act at a local level providing sustainable community and therefore have proposed supporting services to communities and relay to a to distribute earnings in such a manner that we can certain extend to voluntary work. assure adequate financial return for community reinvestment and long term support of the Our situation, however, requires certain cooperative infrastructure modifications due to the fact that we endeavor to operate under a network of communities located in It is evident that one critical component of success is different countries rather than in a fixed location. the management component. Our project involves Thus we propose the creation of a “NCBO” (Network several different participating communities, countries, Community Based Organization) that will act as CBO and numerous stakeholders. Our main concern is not and also as a producer-based cooperative. This

EUROMED Sustainable Connections: Business Model 4 could be considered as an expansion of the CBO responsible for: idea where the benefits are distributed locally but the strength is identified in international business • Supporting the communities through operations. The structure of such an organization education, business consultancy etc can be described as following: • Supporting cross cultural and regional communication. • Mediating in international markets. • Monitoring and forecasting through the board the use of returns in the each community • Monitoring production capacity • Implementing Strategic and Tactical NCBO development plans. • Serving as liaison to the local authorities.

Mar keting Plan Considerations Figure 1: (Fair trade NCBO) As suggested by our market research analysis, we

have elected to focus the NCBO activities on mature The NCBO is responsible to act as a mediator olive oil consumer markets. This will enable premium between the markets and the participating pricing strategies thus maximizing the effect of communities and is led by AWISH Hellas, the returns especially for the communities that are Project Leader. Under the NCBO model, we located outside the European Union. would identify local CBOs in each country which are represented by the network partners in the Based on our trend analysis and favorable elements project, who would act as a link with each local (direct market contacts by partners) we determined participating producing community. The that the best market, considering the significance of partners have already tentatively committed to market base volume, accessibility, lower barriers of supporting this project through the market entry and projected switching costs, would be memorandum attached in Appendix 1. The the US Market, followed by the UK and France. Our NCBO would have a board of directors main targets are the retail industry addressed to a comprised of a representative from each CBO range of branded products in order to maximize the and each participating producing community, branding effect on the origin destination.

EUROMED Sustainable Connections: Business Model 5 Positioning between cultures, religions and humans, can play an Understanding the consumers in the retail food important role in the marketing approach. industry is a rather complicated issue. Research has shown for example that French consumers are willing The pricing policy is an important component to the to use Fair Trade products because: (Ferran and marketing strategy, as is subject to production Grunert 2007) capacity as well as market conditions and price elasticity. However, through fair trade and high • Of the desire for equality between humans and quality positioning we believe that a high pricing through the participation in alternative economy approach is feasible and an illustrative cost structure • of a wish to protect oneself and the is summarized below environment…or just because • of the desire of hedonism by the consumption of Cooperative Initial Proforma In Euro

“good” products Wholesale sales per liter 15,00 Bulk product Cost: 4 ,00 Net revenue 11,00 Bottling & shipping 3,00 In any case we suggest that the products are Distribution and marketing 2,00 positioned in the market as “high quality, socially Administration 2,00 Net Profit 4,00 sensitive products” with premium pricing. Fair Trade Profit Distribution Scenario Wholesale revenue (10,000 liters) 150,000 Net Profit: 40,000 Farmer bonus incentive 25% 10,000 Marketing Approach community reinvestment 25% 10,000 coop reinvestment 50% 20,000 Based on the size of the network as well as the current capacity, we propose that we focus initially The above estimates assume the initial participat ion on extra virgin olive oil. Even though the product is of two communities with a limited production of unique, we propose the creation of a range of extra 5,000 liters each. This would take the initial cos t of virgin olive oil emphasizing “country of origin”. The investment up to 40,000 Euros. Based on this model, product line will be handled by the NCBO. The main other communities would be offered to option to join component of the product is the “image” depicting the cooperative as market demand expands for the the origin of product and the accompanying local unique product line. community history in producing the product. Marketing approaches should showcase the ‘face’ of Project Financing: At this point all our partners are the producing community along a descriptive account investigating financing through programs of the of community objectives for sustainability. A story of European Union (7th FP), national programs, and peace, a story of life that promotes understanding private investors. Regardless of these financing

EUROMED Sustainable Connections: Business Model 6 sources, we have agreed to proceed with a pilot empowerment of the youth and women that we project comprised initially of two partner expect to be the backbone of the local economies. communities, Kefalonia, Greece (represented by We aim to promote education and skills that will AWISH Hellas), and Azloun, Jordan (represented by enhance entrepreneurship and innovation in LHAP) with small sampling quantities in order to test production and management of local production the market. This venture would be managed by the activities. NCBO and other partners would be encouraged to join as funding becomes available and demonstrated Strategic Recommendations market demand is proven. Summing up the details of our implementation plan are the following major strategic business objectives: Distribution and Promotion: Based on market investigations by AWISH Hellas and its ability to • All development activities should comply with the reach out to the US retail Market through well sustainability criteria. established distributors in fair trade products, we • The central role of the NCBO is to ensure the propose to initially introduce the FT products within functionality of the partnership network and to US Metropolitan market areas. The target markets ensure that the sustainability criteria are met. focus on “consumer responsible” markets, This central organization assumes responsibility represented by Food Cooperatives of America – for the implementation of the project. consumer owned and managed food stores that • Initial project implementation would commence emphasize fair trade and organically grown products. with a testing of the market and the participation The product would be branded in a manner that of two communities, retaining however the emphasized its fair trade attributes. networks’ broader regional integrity. This will allow a testing period and enough time for other Mediterranean partners to identify future We have a twofold task in terms of promotion. On participating local community members. the one hand we have the consumers markets that • The tourism component should be incorporated will be reached through in-house marketing and at a later stage of development, as a educational-promotional materials as well electronic complementary adjunct activity to sustainable advertizing. On the other had we have the community development. participating communities that concurrently require education and close support as we engage the initiation of the cooperative business venture. A key aspect in the promotional effort is to the

EUROMED Sustainable Connections: Business Model 7 References APPENDIX I

Accord (2002) “Capacity Building for Community MEMORANDUM Based Organizations”. OF UNDERSTANDING Beccetti & Constantino (2008) “The effect of Fair FOR ESTABLISHING Trade on Affiliated producers” World Development THE EUROMED SUSTAINABLE COMMUNITY Clark, W (2006) “Partnerships in creating agile CONNECTIONS FAIR TRADE OLIVE OIL sustainable development communities” Journal of COOPERATIVE Cleaner Production, Vol 15, pp 294-302 Ferran & Grunert (2007) “French Fair Trade Coffee Between Buyers purchasing motives. An exploratory Study” Food Quality andPreference, Vol 18, pp 218-229 • Land and Human to Advocate Progress (LHAP), Hilson, G (2008) “Fair Trade Gold” Geoforum, pp386- Jordan 400 • Association for the Protection of Nature and Loureiro & Lotade (2005) “Do fair trade and Eco Environment, (APNEK), Tunisia Labels in Coffee wake up Consumer Conscience” • Association for Cooperation on Sustainable Ecological Economics, Vol 53, pp 129-138 Development and Construction in the Mann, S (2007) “Analysis Fair Trade in Economic Mediterranean (SD-MED), Greece Terms” The Journal of Socio Economics • Palestin e Hydrology Group (PHG), Palestine Renard (2005) “Quality certification, regulation and • Me.Dia.T.E., Italy Power in Fair Trade” Journal of Rural Studies • A World Institute for a Sustainable Humanity – Salles and Geyer (2006) “Community Based Hellas- Mesogeiou (AWISHhellas), Greece

Organizations Management” Handbook Series

WWF (2001) “Guidelines for Community Based Purpose Ecotourism” The purpose of this Memorandum of Understanding (MO U) is to advance the mutually beneficial and co o perative working relationship recently established between the parties above under the ALF Sustainable Community Connections Project, herein jointly “Parties”.

Background The Sustainable Community Connections Project was undertaken with funding through the Anna Lindh Foundation in order to bring together NGOs from participating Mediterranean communities in order to explore and establish new pathways for rural sustainable development throughout the Mediterranean region. The important outcomes from our series of workshops, which occurred between December 2007 and May 2008, was to identify the rural production of olive oil and an indicator product from our collective regional communities for development and export throughout the global marketplace. In order for such continued rural economic activities to ensure the attainment of the sustainability indicators and objectives, as formulated in the project workshops, the enterprise approach

EUROMED Sustainable Connections: Business Model 8 based on the ‘fair trade’ cooperative model was • Provision of relevant information to selected by the partners as the preferred model for Mediterranean local farming communities about enterprise development. global expertise in the area covered above and active contribution to comparative studies in this The partnering organizations have agreed to area. collaborate in order to enhance their ability to fulfill • Development and implementation of partnering their missions outlined in the ALF Sustainable organization and community stakeholder Community Connections Project in order to promote engagement strategies. the sustainable development in rural participating • Exchange of appropriate budgeting and program agricultural communities. The ultimate aim of the planning information. collaboration is to assist local communities in realizing sustainable development through the These efforts will be jointly chaired and administered practice of fair trade olive oil, with the ultimate by the Presidents of each of the Parties to this objective to reverse the chronic phenomenon of rural Memorandum of Understanding, should they wish to abandonment in rural communities. participate in the implementation of the Sustainable Community Connections project. There will be equal The parties will build on their knowledge and membership from the parties and members will have expertise and identify new opportunities to the authority to establish and direct subcommittees collaborate with one another in developing and and working groups to consider specific proposals or implementing sustainable fair trade olive oil problem areas as required. production and distribution in their own geographical areas with primary distribution to the USA market Conditions place as a first phase of implementation, following This MOU is not a contractual or financial obligation the completion of the ALF project. instrument and nothing in it obligates either of the parties to enter into any contracts or other financial Understandings obligations or to be cited as the basis for the promise The parties pledge to work together to advance triple of any transference of funds. Any reimbursements or bottom line practices in their working relationships in contribution of funds between the parties to this fair trade enterprise development through the MOU will be made in accordance with applicable laws application of, but not necessarily limited to, the and regulations. following: To facilitate the implementation of this MOU, the • Development of specific sustainable enterprise parties to this agreement shall communicate directly projects based on fair trade olive oil production with each other pursuant to agreed-upon cooperative and distribution. understandings. • Development and incorporation of sustainability objectives that address affordability and social In no way does this MOU restrict the parties from equity in sustainable enterprise activities in each participating in similar activities or arrangements with local participating community. other entities. • Establishment of appropriate financial support systems to meet the goals for an initial phase of This MOU does not create any right or benefit, oil production and distribution. substantive or procedural, enforceable by law or • Promotion of collaboration between the partners equity against the parties, their officers or employees in the fair trade cooperative with socially or any other person. responsible consumer markets in the USA and globally and with independent certification Nothing in this MOU shall be construed to authorize organizations for fair trade product certification. or permit any violation of any laws.

EUROMED Sustainable Connections: Business Model 9 Intellectual Property Rights relationships and communications between the two Each partner shall respect the intellectual property organizations. rights of any work and contributions put at its disposal by the other. This being so, each of them Signed by: shall be obliged to cite the source of any information received from the other which it may use in its own ______work and publications. The intellectual property Dr Stella KYVELOU, President SD-MED International Association, Greece rights of work done specifically in the context of this partnership shall accrue jointly to the partners. Date: ______

Agreements ______In order to foster the successful completion of this Ziyad Alawneh, President MOU, the Parties agree to the following terms and Land and Human to Advocate Progress (LHAP), conditions: Jordan

• Each Party pledges in good faith to go forward Date: ______with this MOU and to further its purpose subject to the terms and conditions of this MOU; ______Nicholas Zaferatos, Ph.D., AICP • Either party may at any time, unilaterally President and CEO withdraw from this MOU by transmitting a signed AWISHhellas writing to that effect to the other Party and shall be considered terminated sixty (60) days from Date: ______the date the non-withdrawing Party receives the notice of withdrawal from the withdrawing Party; Ameur Jeridi, Board of Directors • By mutual agreement, which may be either Association for the Protection of Nature and Environment informal or formal, the Parties may modify the (APNEK)

list of intended activities and /or determine the Date: ______manner in which they will be accomplished. However, any substantive modification to this MOU will be made in writing and signed by the Ayman Rabi, Director Parties for the purpose of clarity and to support Palestine Hydrology Group (PHG) the ongoing evolution of the relationship; Palestine

• As long as this MOU is valid, and without the Date: ______need of further transactions, the Parties shall

recognize each other as a ‘partner’ or ‘member’, ______according to their own internal bylaws; Cristina Sonzogni Me.Dia.T.E. • This agreement is subject to annual review and Italy recertification by both parties. Date: ______Effective Date and Administration This MOU shall become effective upon signature by the President of each Party. The Presidents may appoint representatives to coordinate the

EUROMED Sustainable Connections: Business Model 10