One Line in the Farm Bill Puts Olive Oil Under Import Controls
One line on page 505 of the new U.S. farm bill would add olive oil to the list of commodities whose imports must meet the same standards as the domestic crop. The House Agriculture Committee approved the bill this week by 36 votes to 10. Here is what that line does, what it does not do yet, and why American producers and importers are on opposite sides of it.
What happened
The Federal Agriculture Reform and Risk Management Act, H.R. 1947, was introduced on May 13 by Agriculture Committee chairman Frank Lucas and cleared the committee days later. Tucked into its 576 pages is Section 10010, headed “Inclusion of olive oil in import controls under the Agricultural Adjustment Act”. The text is a single sentence: Section 8e(a) of that act is amended by inserting “olive oil,” after “olives (other than Spanish-style green olives),”.
Section 8e is the provision that says imports of listed commodities have to meet the grade, size, quality and maturity requirements that American growers of the same commodity must meet. Tomatoes, avocados, table olives and a handful of other crops are on that list. Olive oil is not, and this would add it.
The catch
Section 8e only bites when there is a federal marketing order setting standards for the commodity in question. There is no marketing order for olive oil in the United States, and, as Alexander Ott of the American Olive Oil Producers Association points out, not even a draft of one exists. Writing one is a long process with hearings and a producer vote.
So the amendment is best read as a placeholder: it puts olive oil in the right place in the law so that, if a marketing order is ever adopted, imported oil would have to meet the same requirements as oil made in California, Texas or Georgia. The same language was in last year’s farm bill, H.R. 6083, which never became law.
| Step | Status |
|---|---|
| Olive oil added to Section 8e list | In the bill approved by the House committee |
| Federal marketing order for olive oil | Does not exist, no draft |
| Practical effect today | None until both are in place |
| Next stages | House floor, then the Senate bill and a conference |
Why both sides care so much about a placeholder
American producers, who make a small share of the oil sold in the country, argue that a marketing order would simply mean everyone plays by the same rules. Ott calls it an equalizer, no different from the commodity provisions other industries live with.
The importers see a trade barrier waiting to be built. John Sessler, chairman of the North American Olive Oil Association, said in his annual report that the association will keep opposing any marketing order because of the trade disruption one would cause. Their members buy most of the oil Americans consume, and any extra testing at the border is cost and delay.
The politics may decide it anyway. Ranking member Collin Peterson said he expects the bill on the House floor in June, a conference with the Senate in July and a new five-year farm bill before the August recess. Farm bills are enormous, and single lines like this one are exactly what gets traded away in the final negotiation.
Both camps are arguing about testing because testing is where the money is. Chemical and sensory analysis of every lot costs real money and takes days, which matters when the oil is already on a ship and the supermarket wants it on a promotion. An importer that tests properly and rejects what fails is carrying a cost its cheapest competitor is not. That, rather than any grand principle about free trade, is what the fight over a marketing order is really about.
Sources
- U.S. Government Publishing Office: H.R. 1947, Federal Agriculture Reform and Risk Management Act of 2013, Section 10010 (introduced May 13, 2013)
- U.S. Government Publishing Office: H.R. 6083 (2012), which carried the same olive oil provision
- Olive Oil Times: New U.S. Farm Bill Includes Olive Oil Controls