Spain plans olive oil withdrawal if 2025/26 harvest surges

Spain plans olive oil withdrawal if 2025/26 harvest surges

The Ministry of Agriculture, Fisheries and Food (MAPA) has launched a prior public consultation on the order establishing the marketing standard for olive oil for the 2025/26 campaign. The stated goal: to enable, for the first time, a mandatory and temporary withdrawal of a percentage of the product if the next harvest turns out significantly more abundant than the current one. The consultation will remain open until July 2, according to the ministry's announcement.

The paradox is textbook. When olive oil prices skyrocketed, there was no talk of intervention: it was the market. Now that a good harvest is forecast, the State is preparing the machinery to remove product from circulation and prevent prices from collapsing. The question hovering over this issue is not technical, but one of consistency: why do supply and demand only govern when they push prices up?

What Article 167 bis allows and why it is being activated now

The mechanism is not a Spanish invention. It relies on Article 167 bis of Community Regulation 1308/2013 on the common organization of agricultural markets (CMO), which empowers Member States to establish marketing standards to regulate olive oil supply. The legal framework for its application in Spain was published in February 2021, via Royal Decree 84/2021 signed by Minister Luis Planas.

Until now, it had not been necessary. Agricultural organizations Asaja, COAG, UPA, and UDU, along with Cooperativas Agro-alimentarias, applaud the initiative. The sector recalls that Spain had been "fighting for many years" for the inclusion of that article in the CMO, because Brussels' aid for voluntary private storage operates at unattractive prices, described as "excessively low."

The official argument is simple: with a likely good harvest, it is advisable to have the mechanism ready, as simple as possible, to avoid price collapse. Mandatory withdrawal of oil from mills, the sector argues, will benefit producers. "We are willing to make a sacrifice because it is much better than doing nothing and letting prices sink," summarizes Rafael Sánchez de Puerta, CEO of Dcoop.

The double standard criticized

The most repeated criticism does not target the mechanism itself, but the narrative accompanying it. During the price escalation, the dominant discourse was that the market regulated itself. Now, with rising harvests, the public hand appears to support the quotation. The conclusion drawn from this contrast is uncomfortable: free market is invoked when convenient and suspended when inconvenient.

Some put it more bluntly: if there is little, prices rise; if there is much, product is withdrawn to generate artificial scarcity. And then they speak of market freedom only when it favors the supplier. The calculation is simple: intervention, when it arrives, almost never protects the consumer.

The olive oil sector also carries a demand problem that withdrawal does not solve. After the price surge, part of consumption has shifted to other oils or simply disappeared. Some argue that the disproportionate price hike killed part of the golden goose: the consumer who got used to cooking without olive oil does not return by decree.

Withdraw, store, or destroy: the missing fine print

The text is still in public consultation, so operational questions remain without an official answer. Does withdrawal miccionan buying with public money, confiscating, or simply prohibiting commercialization? Is the product stored for the next campaign, with the loss of value that implies, or destroyed? Each of those options has a different cost and a different winner.

Comparison with other sectors comes naturally. Bananas, for instance, accumulate a similar scheme: money for planting, money for harvesting, and money for destroying part of the crop to sustain the price. A round business where the taxpayer bears the uncomfortable part.

The effect on the territory is also pointed out. The province of Jaén, the main production area, depends on olive oil, and some antiestéticar that a poorly designed intervention could end up damaging the local economy instead of protecting it. The mandatory withdrawal, if applied, will be an unprecedented experiment in Spain.

Is intervening in olive oil prices legal?

Yes, within the Community framework. Article 167 bis of Regulation 1308/2013 expressly enables Member States to set marketing standards to regulate supply. It is not a price intervention in the strict sense, but a temporary withdrawal of product that reduces available supply. Royal Decree 84/2021 developed that framework in Spain, and now the order that will make it operational for the 2025/26 campaign is being processed.

What happens if the harvest is not as good as expected

The mechanism is designed to be activated only if the next campaign turns out significantly more abundant than the current one. If production does not meet expectations, the withdrawal would not be triggered and everything would remain a prepared but unused legal framework. The prior public consultation is the first step of a procedure that still needs to be finalized in the definitive text of the order.

What is clear is the precedent being set. For the first time, Spain will have a tool ready to take product off the market when there is surplus. The unanswered question is whether that tool will also be used when the problem is the opposite, or if free market will remain just something for others.