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Managing risk

® Best Practice Series

Michael Southan, AOA OliveCare® Administrator

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The OliveCare® program is all about helping olive producers achieve quality. With that aim, the Best Practice Series of articles discusses how to increase the yield of premium EVOO through best practice management strategies from the grove to the consumer.

Managing risk

Olive producers face many kinds of risk that need to be managed at an enterprise level. They range across most aspects of an olive business, including:

Productivity: the inability to harvest or process the crop; reduced crop load; reduced crop value; high costs of production – resulting in declining enterprise profitability.

Product quality: downgraded quality; defective products – resulting in loss of consumer demand, confidence and reputational damage.

Food safety: exceeding pesticide maximum residue levels (MRLs); physical, chemical and biological contamination; product adulteration – requiring product recall, and results as above.

Biosecurity: incursion of endemic (established), and exotic (not yet here) pests, diseases and weeds – resulting in higher production costs, reduced yields and low profitability, or worse (e.g. tree removal and destruction, in the case of Xylella fastidiosa).

Environmental: managing waste including processing waste discharge; adapting to increasing climate variability – resulting in higher production costs, reduced yields and profitability.

Regulatory: Occupational Health & Safety (OH&S) issues such as unsafe workplaces, employment of illegal workers - resulting in prosecution and reputational damage.

OliveCare® checklist for ‘Enterprise Sustainability Best Practice’. *Note: several of these are critical items that have caused many growers grief during the 2021 season.

Productive and profitable farms

Implement world best practice business management: • Participate in the OliveCare® Best Practice Program • Build skills, capacity, knowledge, leadership and professionalism in the industry: » train staff to lift productivity, comply with OH&S practices, meet food safety and food quality requirements. • Benchmark grove performance - set KPIs for grove productivity and profitability: » grove productivity KPIs: kg/tree, tonnes/ha; » cost of production - cost $/tonne; » gross margin - $/ha. • Benchmark processing performance - set KPIs for processing productivity: » processing efficiency KPIs: L oil/tonne; » cost of production - cost $/L or $/kg. • Benchmark product quality - enter olive products in the AIOA and other competitions: » shoot for Gold. • Invest in your business to manage risk, including capacity to protect, harvest and process your crop. • Ensure written commercial service and supply contractual arrangements are in place. • Keep your business cybersecurity safe. • Deploy innovative technologies to increase competitive advantage and profitability for olive growers, including plant breeding, tree physiology and best practice management. • Explore value-adding opportunities - olive crop and by-products. • Prepare business development and succession plans, and explore alternative business models for small producers.

Learning from experience

During the 2021 olive harvest/processing season, due to the extra-large crops in many groves, harvesting and processing supply constraints were unfortunately experienced. These resulted in many

Minimise the risk of theft and operational shutdown by keeping your business cybersecurity safe. Image: FLY-D-unsplash

growers being unable to harvest or process their crops at the optimal time, and for some growers not at all, highlighting the importance of these two OliveCare® checklist items in the list above: • Invest in your business to manage risk, including capacity to protect, harvest and process your crop. • Ensure written commercial service and supply contractual arrangements are in place.

While most growers have invested heavily in grove production equipment - tractors, mulchers, sprayers, drip irrigation, fertigation etc, many continue to rely on contract harvesters and contract processors. Unfortunately, these are sometimes unreliable.

If you are a grower who is currently reliant on contractors, a decision needs to be made to either: » have your legal advisers prepare a contract document that includes penalty clauses for failure to deliver timely services; or » consider investing in your own harvesting and processing equipment, perhaps in partnership with neighbouring properties.

After-all, what is the point of investing in producing a crop if you can’t harvest or process it? Minimising climate risks

Another area of investment in risk management is in climate adaptation, by adopting grove monitoring technology – e.g. weather stations that include temperature and soil moisture monitoring for frost risk and potential water stress – particularly around flowering and fruit set.

Many grape producers and some olive producers have now invested in frost fans to minimise the risk of crop damage – perhaps more olive growers need to do likewise?

Invest to protect

Just as apple and cherry growers in hail-prone areas have had to invest in hail netting, and soft and tropical fruit growers have had to invest in bird/bat protection netting, olive growers need to consider investing in their businesses to manage risk including capacity to protect, harvest and process their crops.

More information

There’s more on this topic in the following articles published in previous editions of Olivegrower & Processor:

OliveCare® Best Practice Series - Climate adaptation and environmental best practice: pages 41-42, September 2021 edition;

Cyber security is your business: pages 43-45, December 2020.

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