Tunisia’s (olive) oil rush

Demand for north African oil is growing, much to the annoyance of the big players in Europe.

TEBOURBA, Tunisia — Hidden behind the Mahjoub olive press, a row of millstones traces the long history of olive oil production in this corner of northern Africa.

At one end, there are the stones used by five generations of the Mahjoub family: flat, heavy discs at least a meter across, made of granite or volcanic rock. At the other lie cylinders of rough-hewn rock, which crushed olives when Tunisia lay within the province of Africa in the Roman Empire.

By the time the millstones were used, olive oil was a major export product.

Today, Tunisia hopes to capitalize on this pedigree to boost its struggling economy, and the EU is eager to help — much to the chagrin of some in Rome today: politicians and farm union leaders who argue that a flood of cheap African oil will undercut the Italian market.

In spring this year, the European Parliament voted to waive taxes on olive oil imports from Tunisia, allowing Tunisian producers to export 35,000 tons tax-free in 2016 and 2017, part of its effort to stabilize the country’s economy at a time when the security of north Africa has become one of the European Union’s most pressing strategic concerns.

Brussels proposed the measures in the aftermath of a terror attack in the beach resort of Sousse in 2015, in which 38 people died. The EU’s foreign policy chief Federica Mogherini argued that “exceptional times call for exceptional measures.”

Despite its successful revolution and gradual transition to democracy, Tunisia has grappled with high unemployment rates and slow economic growth. Its struggles were exacerbated by deadly terror attacks on the coastal resort and national museum last year, which decimated the Tunisian tourism industry.

Olive oil, the World Bank noted, may have single-handedly saved the country’s economy from total collapse: Tunisia’s meager growth in 2015 was “only thanks to a strong performance in agricultural production, particularly olive production.”

Marielle de Sarnez, the French MEP who led the European Parliament’s work on the olive oil proposal, said the tax-free quota would “provide essential help for Tunisia, and is not likely to destabilize the European market.”

Italian politicians, however, feared that the measure would harm their own olive oil sector, which was badly affected by a disease causing trees to wither. Tunisian production levels, in turn, soared past Italy’s last year, making Tunisia the second-largest producer after Spain.

Beppe Grillo, founder of the anti-establishment 5Star movement, slammed imports of Tunisian oil as an invasion that was hauling down prices. “It’s no accident that farmers are on a war footing,” he said.

The tax break will “definitely help” Tunisia, Abdelwahab Mahjoub believes. Tunisia’s economy heavily depends on olive oil, which makes up 10 percent of the country’s exports. The olive oil sector employs an estimated 400,000 people — a significant number for the 11-million-strong nation.

In Tebourba, a town slightly northwest of Tunis where the Mahjoubs produce their oil, agriculture is the main source of employment. “But much work is seasonal,” Abdelwahab said. “The future is transformation, commercialization and distribution — too much is exported as a raw product.”

Made in Italy?

The majority of Tunisian olive oil is exported in bulk to Italy, where it is mixed and bottled, and sold as “made in Italy.” This exposes one of the great paradoxes of the Italian position. Despite the howls of protest from some quarters, Italian producers can make healthy profits by bottling and branding cheap imports from Tunisia and Greece.

But “made in Tunisia” exports are on the rise — some 20,000 tons of oil bottled in Tunisia were shipped across the world last year, compared to a mere 400 tons 10 years ago.

Les Moulins Mahjoub, the family business run by Abdelwahab and his two brothers, was one of the first to export under their own brand. Their olive oil is now found in the United States, Canada and the bakery restaurant chain Le Pain Quotidien. “We opened the door to others,” Abdelwahab said proudly. “Now 10 percent is exported under the producers’ own label.”

The government, too, is keen to put Tunisian olive oil on the map, though it still faces stiff competition from Italy, Greece and Spain. Tunisia’s advantage over the three giants is that the production process across the country is more or less organic: unlike in European countries, Tunisian growers use little machinery and rarely resort to pesticides.

“In theory, the whole production of Tunisia can be converted to organic,” said Walid Gaddas, who advises the Tunisian government on promoting locally made olive oils. “It is entirely natural. Even the harvest is collected by hand.”

Driving off the motorway and onto the Mahjoubs’ 200-hectare estate near Tebourba, a scene unfolds that would not look out of place in Roman times: beside rows upon rows of gnarled olive trees, women plant garlic in the midday sun, while a man and a donkey drive furrows into the russet-colored earth.

Some tasks, such as fertilizing the ground, are still carried out by machines. But Majid Mahjoub, Abdelwahab’s younger brother, has plans to rid the production of machinery entirely. The brothers employ 200 people — mostly women, often three generations of the same family — and even more during harvest season.

But when I asked Majid about this year’s harvest, his expression darkens. This year, Tunisia has experienced an unusually long summer with little rain, leaving reservoirs empty. The nationwide water shortage has led to protests.

“It’s a catastrophic drought,” Majid said. Usually the fields are irrigated 24 hours a day, seven days a week this time of year. Forced to conserve water, the Mahjoubs had to reduce it to half a day, twice a week. “We might lose half the harvest.”

The agricultural sector is at nature’s mercy by definition, but to Majid, this year’s drought is a sign of things to come. “You know, we are living climate change,” he said. “When China or the U.S. don’t accept a climate deal, it hits countries like ours hard.”

But Gaddas, the government consultant, described the lack of rain as a freak occurrence, even though a study has found that drought fueled by climate change could cut in half Tunisia’s olive oil production by 2030.

In any case, Gaddas said, production was expected to be low this year, as olive trees bear less fruit every other year.

“Last year we got 350,000 tons of olive oil” — a record high — “so this year we will have a maximum of 100,000,” he said. “Demand keeps increasing. I’m not concerned about the future of Tunisian olive oil.”

After all, he added, the region had been growing olives for millennia: “In Cape Bon, in the northeast of Tunisia, there is a tree believed to be 2,500 years old,” Gaddas said. “And it’s still producing olives.”

POLITICO – Zia Weise