Spanish Olive Growers Contest Attribution of Olive Growers' Subsidies to Olive Processors

A Spanish olive growers industry group, Asociacion de Exportadores e Industriales de Aceitunas de Mesa, along with Agro Sevilla Aceitunas and Angel Camacho Alimentacion, brought suit at the Court of International Trade to contest the Commerce Department's finding that demand for the "prior stage product" is "substantially dependent" on demand for the "latter stage product," in the 2021 review of the countervailing duty order on ripe olives from Spain (Asociacion de Exportadores e Industriales de Aceitunas de Mesa v. United States, CIT # 24-00078).

The industry group currently is litigating an identical challenge in the underlying CVD investigation at the U.S. Court of Appeals for the Federal Circuit, after the trade court sustained Commerce's approach (see 2403070070).

Underlying that and the present suit is the notion that Commerce can attribute subsidies received by raw agricultural product growers to the producers of the processed product if the demand for the prior stage good is substantially dependent on the demand for the latter stage product and the processing operation "adds only limited value to the raw commodity."

In the present review, Commerce said that demand for the prior stage product was "substantially dependent" on demand for the latter stage product because 59.09% of manzanilla, gordal, carrasquena and hojiblanca olive varietals were processed into table olives.

The agency said that while the cacerena varietal "is one of the five biologically distinct varietals included in the prior stage product, it was not included in the analysis based on a purported lack of information regarding the total production volumes, mill production volumes, or the total hectares dedicated to the production of cacerena that would permit its inclusion."

The olive trade group said that "Commerce applied an erroneous standard for determining that demand for the prior stage product" was "substantially dependent" on the latter stage product's demand.

Even assuming the correct standard was used, the agency's decision wasn't backed by substantial evidence since the "exclusion of cacerena from its analysis is incomplete and disproportionately impacts Commerce’s denominator that in turn inflates the consumption ratio."

The olive growers added that Commerce "mischaracterized data placed on the record by ASEMESA from the Agencia de Información y Control Alimentarios (AICA) to represent harvest volume, ignoring numerous pieces of evidence in the record showing that it refers to consumption of specific olive varietals for table olives, permitting it to ignore 9 years of data from 2012 to 2021 demonstrating no substantial dependence even under the Department’s erroneous standard."