Rep. Grimm Stops Olive Oil Price Hikes and Safeguards Jobs with Farm Bill Amendment

Jun 20, 2013 Issues: Sponsored Legislation

WASHINGTON, DC - Today, Rep. Michael Grimm (R-SI/Brooklyn) teamed up with Rep. Chris Gibson (R-NY) in introducing the Gibson-Grimm Olive Oil Import Tax Repeal Amendment to the Farm Bill, which would strike the olive oil tax and prevent costly regulations. Without this amendment, New Yorkers, and all Americans, will be hit with higher prices everywhere - whether they’re buying olive oil for their small business, shopping at the grocery store, or eating at a restaurant. In addition to keeping prices stable for consumers, the Gibson-Grimm amendment will protect local jobs and an historic New York industry. The amendment passed 343-81-1.

“This provision in the Farm Bill is nothing more than an attempt to allow 2% of the domestic olive oil market to impose a hidden tax on the remaining 98% – raising the cost of olive oil for consumers and costing New York jobs. If this tax is not repealed, the effects will be felt throughout New York, in stores like Pastosa Ravioli and Gino’s restaurant in Brooklyn. I applaud my colleagues for supporting the Gibson-Grimm amendment which repeals this burdensome tax and protects the olive oil industry that is crucial to New York’s economy,” said Rep. Grimm.

“This olive oil tax is ludicrous! Given all the taxes and fees New Yorkers have to deal with every day, it’s adding insult to injury to increase the cost of imported olive oil. The vast majority of my customers want olive oil from Italy, and I know they will be outraged to learn of a new tax on something that is so important to their daily diet. It’s just another way the government is trying to stick its hands in our pocket,” said Vincent D’Antuono Sr., owner of Pastosa Ravioli at 764 Forest Avenue.

“This tax is going to kill whatever olive oil business we have. It’s going to hurt our business,” said Leonard Pesce, owner of La Bella Marketplace, which has locations in Staten Island and Dyker Heights.

New York is a leader in olive oil imports. In 2011, 135,571 tons of olive oil were imported into New York out of the approximately 300,000 tons imported into the United States that year. That’s almost half in New York alone.

The Gibson-Grimm Amendment strikes Section 10010 of the Farm Bill, which allows a marketing order on olive oil to be applied to imports.  The proponents argue the marketing order is necessary to impose quality standards and police fraud on imported olive oil, but a marketing order would be incredibly expensive and utterly ineffective at imposing quality controls.  Instead, it would act as a steep tax on olive oil imports, hurting small olive oil importing businesses and jeopardizing thousands of jobs all over the country while raising the price of olive oil for consumers.

As applied to imports, a marketing order requires every lot of the imported product to be inspected for fidelity to the marketing order standard.  That is perhaps reasonable when the imported product is something like a fruit or vegetable, where the United States imports far less than it produces domestically, and a quick inspection could reveal the variety of fruit and ensure the product is in proper condition for sale.

For olive oil, however, the United States imports between 98 and 99 percent of the olive oil Americans consume.  In its official score, CBO identifies the private sector mandate and states: “Imports would have to be inspected to ensure compliance with the standards of such a marketing order. Because 15,000 to 20,000 lots of olive oil are imported annually, the costs of those inspections could amount to tens of millions of dollars per year, if a marketing order is established.”

Section 10010 would be completely ineffective at policing fraud and mislabeling, as it does not address any activity that occurs domestically or past the point of inspection

Watch Rep. Grimm’s floor speech here.