Let’s Get Down to Business

By Avery DavidsonBy Karl McDonald, LSU AgLeadership Class XV member

The building is gray, modest and obscured by trees. The marble dove sculpture sitting upon a pedestal at the entranceway has a broken olive branch in its mouth. This building lacks the grandeur and splendor of many in Madrid, but the people inside represent and work Spain’s number 1 export: Olives.

Catarina Bairrão Balula wears a sweater that matches the exterior of the building. Like the mosaic and marble spiral staircase which greets you when you walk into the International Olive Council’s building, Balula impresses not with the way she dresses, but with what’s inside. Her knowledge of the olive industry is impressive. As is the languages she speaks. More than once, Balula stumbled on her English because she’s been learning Arabic and kept wanting to speak in the Middle Eastern language. She already speaks Spanish and French, by the way. 

Seated at the end of a wooden table worthy of any Norseman’s longhouse, Balula tells LSU Ag Leadership Class XV about how the IOC formed in 1959, two years after the United Nations saw a need for the countries which grow olives to improve the olive and olive oil industries. 

Olive oil is big business. Processors around the world produce more than 3,000 million tons of olive oil, according to Balula. Despite what sounds like a large number in terms of production, olive oil only makes up about 4.5% of all fats consumed. 

The reason for the low percentage: price. Balula said, “Its not a low cost product and it’ll never be.” 

Even with the price challenge, the IOC is working to increase sales of olives and olive oil. The IOC has 14  members: Algeria, Argentina, the European Union, Iran, Israel, Jordan, Lebanon, Libya, Montenegro, Morocco, Palestine, Tunisia, Turkey and Uruguay. It’s on behalf of those countries that the IOC promotes the consumption of olive oil directly to customers in countries like the United States and China, and also funds research on the health benefits of olive oil. Balula says increased consumption is the best way to increase sales and spur trade.

Trade is a big deal in Europe. So is the guy who serves as the economic attaché at the British Embassy. He shares a name with an American actor known for his roles in Ghostbusters, Caddyshack and a handful of Wes Anderson films. He’s also just as funny as the American Bill Murray, just this Bill Murray has a Scottish accent and is very candid with his thoughts on Brexit. 

“It’s an absolute mess,” Murray said. Laughter erupted from the class, much the way movie theater audiences bellowed when Carl Spackler tried to blow up the gopher on the golf course. But the exit of the United Kingdom from the European Union is no laughing matter.

Murray said only 20% of the United Kingdom’s Gross Domestic Product is from actual production of goods. 80% of the county’s economy is service based. That puts the UK in a more awkward position than when Peter Venkman walked in the apartment to find Dana Barrett floating three feet above her bed. 

Unless something changes between now and March 29, 2019, the UK will have no trade agreement with the EU. Members of the EU want the UK to either sign a free trade agreement, much like the one it has with Canada, agree to allow free movement of people, much like the EU has with Norway, or have no agreement and follow the trade rules set by the World Trade Organization, which would be detrimental for both, according to Murray. 

Murray says the UK believes it should have a bespoke agreement tailored to the needs of both groups, one which limits immigration into the UK. The EU is not in favor of this kind of agreement and its members refuse to negotiate until after the UK is no longer a part of the EU. 

Currently, the UK contributes the largest amount of money to the EU’s budget: about €10 billion. That is 10% of the EU’s budget. That would be a big hit to the EU.

Here’s where the UK stands to lose. Murray said 45% of all trade with the UK is with the EU. The UK also has a £20 billion deficit in agricultural trade. The lack of a trade agreement with the EU could allow for other nations to move in and take markets away from the UK.

It may already be too late to fix the UK’s agricultural woes. Murray said that farming is no longer the top source of employment for people living in rural areas. Tourism has taken its place. In fact, agriculture makes up less than one half of one percent of the UK’s GDP. But just because it may be too late, does not mean the government in the UK will not try to turn things around. Murray said some of the first actions the UK would take would be to remove restrictive regulations on farmers and ranchers. The UK would also do away with subsidies, but find other ways to spur agricultural development.

From the outside, which is where most in the U.S. are in this discussion, it may look like a plain, easy separation. But once you get inside the issues and see that real jobs, real money and real futures are at stake, it becomes as ornate and complex as some of the most unassuming buildings in Madrid.