MADRID, Oct 10 (Reuters) - Thousands of Spanish olive oil farmers staged a protest in Madrid on Thursday calling for a fairer pricing system for their produce as they fear a recent slump could be exacerbated by impending U.S. tariffs.
After a record harvest last season, farmers now receive less than two euros ($2.20) per litre for their oil, down from 3.5-3.75 euros a year ago, said Reyes Alarcon, an olive oil producer who joined the march. Yet Spanish olive oil can fetch double that price once it is exported, she said.
"In our hands it is worth nothing, then it is taken by distributors and governments and they make gold out of it," another producer Antonio Ramirez said.
They were among thousands of oil olive workers from southern Spain who marched across central Madrid from the Puerta de Alcala monument to the ministry of agriculture. Many carried olive branches or placards with slogans such as "Fair prices", "The U.S. abuses" and "Defend the olive farmers".
As well as an oversupplied domestic market, Spanish producers are now grappling with another threat: a looming 25% tariff on European olive oil exports to the United States as part of the Trump administration's retaliation in a row over European Union subsidies on large aircraft.
"It's another blow. We've been hit by tariffs when we're not even part of this war," Alarcon said.
The United States is the world's biggest consumer of olive oil outside of the EU, to the tune of around 320,000 tonnes annually, according to Asoliva, the Spanish association of olive oil exporters. Of that, 120,000 tonnes or 37% comes from Spain.
U.S. tariffs are due to come into effect on Oct. 18, although the World Trade Organization has said it will hold an arbitration meeting on Oct. 14 to discuss the aircraft subsidies case.
Spain's Acting Minister of Agriculture, Fisheries and Food Luis Planas says Spanish agriculture is being caught up in a trade row that it has nothing to do with.
"It seems to us particularly unjustified and the government sees it as unacceptable that the application of these tariffs drags our agriculture and food industry into the centre of a battle that has nothing to do with the sector," Planas told Reuters on Wednesday.
He travelled to Brussels this week to discuss a response to the proposed tariffs with European trade and agricultural commissioners.
Unless things change, the outlook for Spain's olive growers appears bleak, Ramirez said.
A farmer needs to earn at least 3 euros a litre on his output of oil to make it viable, as the cost of production is about 2.75 euros a litre, according to the farmers association.
"I plan to hire seven workers for the harvest (this season), if the olives are worth it," said Ramirez. "If not, I'll leave them to the birds."
($1 = 0.9073 euros) (Reporting by Elena Rodriguez, Emma Pinedo and Sonya Dowsett, editing by Ashifa Kassam and Susan Fenton)