Argentina Makes Olive Oil a ‘National Food’ to Lift Home Sales
Argentina’s Congress passed a law on November 29 declaring Argentine olive oil a “national food” and telling the government to promote it at home. The aim is to get Argentines, who eat about 125 grams of olive oil a head a year, to use the oil their own groves produce. Here is what the short law says, why a big olive country needs it, and what the definition means for buyers.
What the law says
The text runs to four articles. The first declares Argentine olive oil a national food. The second defines it: oil made in Argentina exclusively from olives harvested in Argentina, meeting article 535 of the national food code. The third tells the executive branch to promote the oil at official cultural, social and sporting events, with a “national food” logo, and sets the main goal of raising domestic consumption and bringing olive oil into the everyday Argentine food basket. The fourth sends it to the executive.
The bill came from Javier Tineo, a deputy for La Rioja, one of the western provinces where Argentina’s olive industry is concentrated. Olive Oil Times, citing the local news agency ANDigital, reports that the vote came in the Chamber of Deputies. After the vote Tineo went home to Aimogasta, in La Rioja’s Arauco department, to tell growers about it.
| Argentina and olive oil | Figure |
|---|---|
| Olive oil eaten per person, per year | About 125 grams (El Sol, citing the bill’s backers) |
| Olive oil production | About 15,000 tons (El Sol); 17,000 tons forecast for 2012/13 (IOC) |
| Table olive production, 2012/13 forecast | 60,000 tons (IOC) |
| Share of the oil Argentines consume themselves | About one liter in four, according to Tineo |
| National olive plan target area | 120,000 hectares |
Why a producing country needs a law to eat its own oil
Argentina planted olives on a large scale in the 1990s and 2000s, mostly in the dry, irrigated valleys of La Rioja, Catamarca, San Juan and Mendoza, and built an industry around exports (see Argentina’s olive exports set new record). The home market never followed. When the bill surfaced in October, the Mendoza newspaper El Sol noted that even if Argentines ate the country’s entire output they would get through only a little over half a kilo each a year, and that olive oil is still seen as an elite product.
The export side has been getting harder. Tineo’s backers point to trouble selling to Brazil, the main customer, along with low world prices and rising costs. “Due to successive crises, investment in the sector has slowed and many farms have stopped expanding for financial reasons, low competitiveness and low prices internationally,” Tineo said when he presented the bill in October, as quoted by El Sol and Olive Oil Times. After the vote he put it more simply: Argentines consume just one of every four liters the country makes, and the rest is sold abroad.
What it means for growers and buyers
- The law spends no money by itself. It gives the government a duty to promote, and the industry a logo.
- The definition is the useful part. “Argentine olive oil” in this law means oil from Argentine olives only, so a blend with imported oil cannot claim it.
- If promotion works, more of the harvest stays home, which gives growers a second market when Brazil or Europe gets difficult.
Brazil’s appetite for imported olive oil has been growing for years (Brazil Discovers Olive Oil), and Argentina’s growers have depended on it. A domestic market of 40 million people eating more than a few spoonfuls a year would be a real cushion.
Producer countries often eat surprisingly little of their own oil, because the good stuff earns more abroad and the local shopper buys the cheap seed oil. Promotion campaigns rarely change that on their own. What changes it is a decent local oil at a price close to sunflower, and that depends on the growers’ costs, not on a law.
Sources
- Argentina.gob.ar: Ley 26.839, text of the law (in Spanish)
- Olive Oil Times: Argentina Declares Olive Oil a ‘National Food’
- El Sol: La Rioja intenta que el aceite de oliva sea declarado alimento nacional (in Spanish)
- International Olive Council: Market Newsletter No 66, November 2012 (PDF)