Part of what has led to this production boom was the construction of the Alqueva dam, which has allowed super-intensive groves to proliferate. Prior to the construction of the dam, only traditional groves could survive in the region due to the prevalence of drought and wildfires.
Another driving factor has been the modernization of the country’s olive oil mills. As olive oil yields have continued to trend upwards, the number of mills in Portugal has steadily declined. Small traditional mills have quickly been replaced by larger, more modern ones.
“The region has invested in modern and efficient production processes which have significantly increased productivity, and invested in the installation of oil mills that are some of the most developed in the world,” the researchers wrote. “This has allowed Portugal to significantly improve the quality of its olive oils.”
The researchers also highlighted how the modernization and investment in Alentejo and Portugals’ olive groves have benefited the country’s economy. In the last three years, olive oil production in Portugal has generated a turnover of €620 million ($690 million), which is 2.5 times higher than the turnover recorded between 2010 and 2012.
Portugal’s olive oil exports have also grown rapidly and the researchers believe this trend will continue as more investments are made in high-density groves and modern mills. In 2017, Portugal exported €500 million ($555 million) of olive oil, making it the fifth-largest exporter of the product by value.
Overall, earnings from olive oil now make up nine percent of the value of all of Portugal’s annual agricultural production.
The researchers also said that the growth of the sector has created steady employment and investment in both Alentejo as well as the rest of Portugal, something that had been severely lacking prior to the construction of the Alqueva dam.
However, not everyone is celebrating the meteoric rise of Portugal’s olive oil production. Many traditional farmers, who either cannot afford to invest in super-intensive groves or do not want to, say their oils are being outcompeted and, as a result, their way of life is slowly beginning to disappear.
“Some old farmers are abandoning their olive groves because they don’t earn enough to produce the olives in the old groves,” Ana Carrilho, a local olive oil producer and the director of the Center for the Study and Promotion of Alentejo Olive Oils (CEPAAL), told Olive Oil Times. “Some of them have abandoned their groves, while others sell their land to the bigger companies.”
Carrilho added that since super-intensive groves operate with lower production costs per kilogram of oil produced, they can greatly reduce their prices; a luxury that traditional producers do not enjoy.
Still, the researchers and Carrilho believe that the modernization of Portugal’s olive groves will continue to benefit the entire sector, especially as locals begin to take the reigns.
“The Spanish were the main drivers of the first phase of modern olive groves in the region,” the researchers wrote. “[But] with the expansion of the Alqueva irrigation and the increased experience of those in the region, investment is now led by local entrepreneurs.”