Stories about the Olive, part IV: Oiling the Wheels

olivemosaic

I have heard this informal transaction described independently by more than one person, leading me to believe that it is not apocryphal:

Around late October/early November you are trying to progress some business with a government office – it could be a tax registration or a planning application, or something along these lines. You have the name of the official responsible for your application, but they are proving very hard to get hold of. Each time you call the office, you will get the same response: “Mr Táde (So-and-so) is not in the office today. He is at his village gathering the olives. I’m sorry but we don’t know when he will be back.”

To the uninitiated, this is an annoyance, but not a deterrent. They will keep trying, hitting their head against a brick wall, cursing all the way at the [expletive] civil service culture of absenteeism.

However, those in the know recognise this line as a coded invitation to tender, to which there is a proper response: “Oh, that is so nice. I hear Mr Táde’s trees produce very good oil. Would you be so kind as to ask him to reserve some for me?” And very soon they will find that Mr Táde has returned from leave, and can be found promptly behind his desk with a couple of five-litre tins of olive oil. They will pay Mr Táde a highly inflated price for the oil (which may be good, but not that good) submit their application, and find it dealt with with great efficiency – the efficiency of a well-oiled machine…

The transaction described above is an inventive riff on the twin themes of the family olive grove as hobby for city-dwellers, and olive oil as a buffer against hardship, which we alluded to in a previous post.

When the Greek government recently looked into the impact of withdrawing some of the generous tax breaks for farmers, one of the patterns that emerged was that, according to one newspaper report,

Only about 350,000 of the 850,000 Greeks involved in farming are full-time farmers, said an agriculture ministry official, adding that a third of agricultural output is sold or traded illegally without receipts.

Olive farming in Greece is largely a family business, with small units predominating. Greek agricultural units overall are roughly one fifth the size of the European average. What they do with their output often blurs the lines between different types of economic activity, several of which are not tracked by EUROSTAT or the OECD.

While the ‘grey’ market for olive oil may be thriving, Greece finds it harder to make a success of the ‘white’ market. In the case of olive oil, although the oil produced is very high quality (80% of Greek olive oil is extra virgin, compared to 65% of that produced in Italy and 30% in Spain), those countries have a much more valuable export market because they tend to standardise and package their product themselves, rather than loading it into tankers and exporting it in bulk (Greece only standardises 27% of its oil, compared to 80% in Italy and 50% in Spain). 60% of Greek olive oil is shipped to Italy, where it is bottled as Italian, and the Italian middle-men pocket an extra 50% premium on the price.

The theme of this story is a familiar one – a true Greek paradox. We seem to be blessed with some enviable natural resources (there is no other elegant word for it without resorting to statistical jargon, since their presence is clearly down to luck, not skill or hard work). We are clearly not lacking in the ingenuity to make a market in them. And yet, it is not a market that connects well with the wider world, and it is questionable whether it benefits anyone beyond the atomistic units that practice it (the individual, the family). Trying to imagine what might happen if that ingenuity were channeled from the ‘grey’ or ‘black’ economy into the ‘white’ is a an exercise at once hopeful and depressing. Figuring out how to achieve it is surely the €100 billion challenge behind the resurrection of the Greek economy.

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Stories about the Olive, part IV: Oiling the Wheels

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