Required Report - public distribution

**Date:** 6/6/2005

**GAIN Report Number:** GR5015

GR5015

**Greece**

**Asparagus**

**Voluntary**

**2005**

**Approved by:**

![](media/image1.wmf)Ann Murphy

U.S. Embassy Rome

**Prepared by:**

Stamatis Sekliziotis

**Report Highlights:**

Asparagus production in Greece became significant in the 1980s when 600
hectares were cultivated and production reached 1,200 tons. By 1997
cultivated area peaked at 7,330 hectares with an output of 26,500 tons.
In 2000 output peaked at 35,520 tons. In recent years there has been a
drop in acreage but yields have almost doubled since the crop was
introduced. Production in the last five years has been on the order of
20,000 to 22,000 tons annually. Greece's major market for asparagus is
Germany.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Rome \[IT1\]

\[GR\]

Table of Contents

[**Executive Summary 3**](#executive-summary)

[Production 3](#production)

[Trade 4](#trade)

[Integrated Crop Management (ICM) & Organic Production of Asparagus in
Greece
7](#integrated-crop-management-icm-organic-production-of-asparagus-in-greece)

[Asparagus Market structure in Greece and Policies
7](#asparagus-market-structure-in-greece-and-policies)

[Conclusion 9](#conclusion)

# Executive Summary

# 

# Production

Asparagus (*Asparagus officinalis*) is grown systematically in Greece
since the early 80s, mostly in central Macedonia (prefectures of
Thessaloniki, Pella, Imathia & Serres), some in Thrace (Northeast), in
Thessaly plain (prefecture of Larissa) and some in the Southwest in the
region of Agrinion (prefecture of Aitoloakarnania). The cultivation of
asparagus started experimentally in the early 70s. A significant area of
600 hectares was reported cultivated in 1982 with an output of 1,230
tons. By the year 1997 area cultivated in asparagus reached 7,330
hectares with an output of 26,500 tons (average yield at 3,590 kg/Ha).
In 2000, an area of 6,248 Ha was cultivated with an output of 35,520
tons and an average yield of 5,690 kg/Ha. Although a drop in acreage is
observed, yields have almost doubled since the crop was introduced,
thanks to better varieties and better practices applied in farming.
Recorded yields fluctuate significantly due to weather conditions and
the fact that the varieties used are sensitive to extreme low
temperatures. Planted acreage in Greece is directly dependent on
predictions of planted acreage in competitive countries like Spain,
France and the Netherlands and their plans and tactics to increase their
presence in the German market. Germany has shown continuous imports
since 1975.

Greek farmers became more familiar with the crop over the past two
decades and have learned better practices for asparagus cultivation and
handling. Since 2001, total acreage has dropped further and today does
not exceed 4,000 Ha, but with relatively higher yields (3,450 -- 5,250
kg/Ha). Annual production from 2001 to date has fluctuated between
20,000 and 22,000 tons, except for 2003, unusually low temperatures and
long lasting frost damaged the crop which consequently reached only
12,000 tons. This year's output will be in the neighborhood of 21,000
tons, a relatively late harvest due to wet weather in the spring and
delays in harvesting due to a late Greek Orthodox Easter which kept
workers away for many days.

**Acreage and Production of Asparagus in Greece 1/**

  -------------- ----------- ----------- ----------- ----------- -----------
  Crop Year      2001        **2002**    **2003**    **2004**    **2005**

  **Acreage      5,800       5,300       5,000       4,500       4,000
  (Ha)**                                                         

  **Production   20,000      20,000      12,000      22,000      21,000
  (tons)**                               **2/**                  **3/**

  **Average      3,448       3,774       2,400       4,889       5,250
  Yield                                                          
  (kg/Ha)**                                                      
  -------------- ----------- ----------- ----------- ----------- -----------

**1/** Source***: Ministry of Agricultural development and Food & Trade
sources***

***2/ Low output due to adverse weather conditions***

***3/ Preliminary estimates, subject to further revision***

This drop in acreage took place following significant increases in
production costs that have adversely affected farmer's incomes and
processors' demand for lower farmer prices. There has been stiff
competition in the European markets particularly after the accession of
the Czech Republic, Hungary and Poland to the EU.

Asparagus in Greece is a labor-intensive crop and the cost of production
today is estimated at about 40 percent of the grower price received. The
work force in the fields is mainly Albanian and Bulgarian immigrant
labor.

According to the Fresh Fruit & Vegetable trade associations, it is very
probable that asparagus acreage will recover in the next decade by
shifting to varieties in higher demand and by shifting cultivation to
different regions in the country. Southwestern Greece with a milder
climate (a little warmer from that in Central Macedonia) may be the new
areas of asparagus expansion in the years to come. These regions would
permit early harvest and will certainly contribute to the prolongation
of the trading season for the Greek product and its longer presence in
international markets. Reportedly, this expansion southwest becomes a
necessity for the asparagus industry in Greece, not only due to better
bioclimatic conditions, but also due to land availability with better
soils. Central Macedonia, and particularly the prefecture of Pella where
most of asparagus is currently produced, is a saturated region with
leading traditional crops like peaches, pears, irrigated cereals and
cotton.

Asparagus harvesting starts at the end of February in the south and
lasts until mid June in the north. According to farmer groups, this
year's grower price will not exceed €1.5 /kg, which is reported to be
equal to that paid a year earlier (2004), but the product is of very
good quality. This price is not a farm gate price, but a processor's
price. Most processors pay for transportation expenses.

The area left over after the recent asparagus crop acreage reduction, is
cultivated mostly to corn, cotton, irrigated cereals and forage plants
and many field vegetables. The acreage devoted to asparagus was taken
over gradually by peaches, nectarines, pears or other fruit crops in
central Macedonia.

The varieties of asparagus grown in Greece are both white (ALEXANDRE
MARIONETTE, DARBONE) and green (LORELLA, JACQ.MAVERTE) and hybrids
(LARAC, ANETO, DESTO). The largest proportion of production is of white
asparagus and it is questionable for how long this type will be produced
in Greece, taking into consideration that green varieties are showing in
growing demand in the European markets.

The value of a crop of 22,000 tons (2004 crop), is roughly calculated at
35 million Euros. The advantages of Greek asparagus are the growing
conditions (abundant sun after cold winters) and the high quality of the
product. Attention is given to high yields and better quality. Packers
and processors cooperate closely with farmer groups in their regions and
provide technical assistance and knowledge to farmers.

# Trade

Most Greek asparagus is exported to central Europe. The Munich Central
Vegetable Market Grossmarkthale absorbs the bulk, almost 90 percent of
the total exported volume. About 87 percent of production is sold out of
Greece. Greeks do not consume a lot of asparagus, compared to the size
of the crop and the population. Exports take place as fresh and
processed (frozen and canned). Fresh asparagus is transported by air,
mainly to German fresh markets.

Seven countries buy almost all of Greek asparagus (Germany, Spain,
France, Holland, Italy, Austria and the UK). Spain buys second quality
fresh product to be processed (for canning). The main competitors of
Greece in the EU markets are Spain, France and Holland. However, Greece
is the leading exporter to Germany and covers 48.7 percent of total
German imports in volume terms and 36.7 percent in value terms.
According to FAO statistics (Food and Ag products export trade
statistics of 2002), Greece was the fifth largest asparagus exporter in
the world for fresh product and second in Europe after Spain. Among
Greek fresh produce exports, asparagus is ranked forth after citrus,
grapes peaches and nectarines, and sixteenth among all Greek exported
products.

Prospects for Greek asparagus exports to Europe are highly dependent on
the supply and demand developments in the main producing and importing
countries. France, after a long domination of the markets has
considerably reduced activity, but recently has shown signs to regain
lost ground in the EU markets. Spain is the most important competitor of
Greece with promising prospects for further market expansion. Spain's
quantity and quality are high, seriously threatening Greece's presence
in central Europe (Germany in particular) and after expansion of the
crop in Andalusia (with early harvest possibilities, due to favorable
climate) and with a parallel reduction of acreage in the north. Holland
has stabilized its production, and dominates on quality, but does not
offer early harvested product. Germany is the largest asparagus market
in the world, but with its continuing increase in production, German
domestic production may threaten Greece's share in this important
market. Switzerland is a good and highly demanding market, where the
French - Spanish competition dominate.

**Asparagus**

**Total Greek Exports (2001 -- 2004)**

+------------------------------------+------+------+------+------------+
| Calendar Year                      | **20 | **20 | **20 | **2004**   |
|                                    | 01** | 02** | 03** |            |
+------------------------------------+------+------+------+------------+
| Total exports by Volume, fresh and | 23   | 22   | 15   | 15,957     |
| processed                          | ,000 | ,987 | ,977 |            |
|                                    |      |      |      |            |
| (000 Tons)                         |      |      |      |            |
+------------------------------------+------+------+------+------------+
| Exports by Value (Million USD)     | 44.0 | 46.8 | 33.8 | 31.0 mil   |
|                                    |      |      |      | Euros      |
+------------------------------------+------+------+------+------------+

Analytically for Greece, asparagus export/import trade data (volume &
value), as provided by the GOG National Statistical Service, are as
follows by type, country of destination and origin (2002 -- 2004):

**2002 Greek Exports of fresh or chilled asparagus**

**(Combined Nomenclature 07.09.20.00)**

**(January -- December 2002, 1 USD = 1.0649 Euro)**

  --------------------------- --------------------- ---------------------
  **Country of Destination**  **Quantity in Tons**  **Value (000' USD)**

  Germany                     15,932                33, 265

  **Netherlands**             2,156                 3,590

  **France**                  712                   941

  **Switzerland**             188                   645

  **Spain**                   129                   148

  **All other**               139                   202

  **TOTAL**                   19,256                38,791
  --------------------------- --------------------- ---------------------

2002 Greek Exports of Asparagus, whether or not cooked

by boiling in water or by steaming, frozen

(Combined nomenclature: 07.10.80.85)

  ---------------------------- ------------------- ----------------------
  Country of destination       Volume (tons)       Value (000' USD)

  Germany                      2,648               5,740

  Netherlands                  1,083               2,273

  TOTAL                        3,731               8,013
  ---------------------------- ------------------- ----------------------

**2003 Greek Exports of fresh or chilled asparagus**

**(Combined Nomenclature 07.09.20.00)**

**(January -- December 2003, 1 USD = 0.8831 Euro)**

  --------------------------- --------------------- ---------------------
  **Country of Destination**  **Quantity in Tons**  **Value (000' USD)**

  Germany                     12,296                25,684

  **Netherlands**             1,502                 3,135

  **France**                  310                   475

  **Switzerland**             20                    82

  **Spain**                   184                   245

  **All other**               106                   316

  **TOTAL**                   14,418                29,937
  --------------------------- --------------------- ---------------------

2003 Greek Exports of Asparagus, whether or not cooked

By boiling in water or by steaming, frozen

(Combined nomenclature: 07.10.80.85)

  ---------------------------- ------------------- ----------------------
  Country of destination       Volume (tons)       Value (000' USD)

  Germany                      1,558               3,887.1

  Bulgaria                     1                   0.5

  TOTAL                        1,559               3,887.6
  ---------------------------- ------------------- ----------------------

**2004 Greek Exports of fresh or chilled asparagus**

**(Combined Nomenclature 07.09.20.00)**

**(January -- December 2004, VALUE: in Euros)**

  -------------------------- -------------------- -----------------------
  **Country of Destination** **Quantity in Tons** **Value (000' EUROS)**

  Germany                    12,110               22,869

  **Netherlands**            1,069                2,416

  **France**                 408                  658

  **Switzerland**            131                  452

  **Austria**                179                  355

  **Italy**                  220                  294

  **Belgium & Lux**          14                   16

  **Spain**                  35                   15

  **All other**              22                   20

  **TOTAL**                  14,188               27,095
  -------------------------- -------------------- -----------------------

2004 Greek Exports of Asparagus, whether or not cooked

by boiling in water or by steaming, frozen

(Combined nomenclature: 07.10.80.85)

  ---------------------------- ------------------ -----------------------
  Country of destination       Volume (tons)      Value (000' Euros)

  Germany                      1,643              3,762

  France                       67                 112

  Netherlands                  35                 51

  Italy                        18                 26

  Spain                        5                  3

  Belgium & Lux                1                  3

  TOTAL                        1,769              3,957
  ---------------------------- ------------------ -----------------------

Imports into Greece are of negligible importance. For the period under
discussion (2002 --2004), they were as follows:

**Asparagus**

**Total Greek Imports by volume and value**

+-----------------+-----+----------+-----+----------+-----+----------+
| Year            | 2   | 2002     | 2   | 2003     | 2   | 2004     |
|                 | 002 |          | 003 |          | 004 |          |
|                 |     | Value    |     | Value    |     | Value    |
|                 | T   |          | T   |          | T   |          |
|                 | ons | (000'    | ons | (000'    | ons | (000'    |
|                 |     | USD)     |     | USD)     |     | Euro)    |
+-----------------+-----+----------+-----+----------+-----+----------+
| Fresh & Chilled | 30  | 119      | 151 | 323      | 673 | 1,054    |
+-----------------+-----+----------+-----+----------+-----+----------+
| Processed &     | 77  | 172      | 643 | 1,113    | 27  | 85.0     |
| Frozen          |     |          |     |          |     |          |
+-----------------+-----+----------+-----+----------+-----+----------+

# Integrated Crop Management (ICM) & Organic Production of Asparagus in Greece

In 2003 there was a certified acreage of 201 Hectares in Greece where
asparagus is cultivated under the requirements of integrated management.
This area represents 45 percent of total vegetable cultivation in Greece
registered under the Integrated Management System. The certification of
farms takes place according to protocols of EUREPGAP and AGRO 2.1 and
2.2 by EUROCERT, CHECKMATE INTERNATIONAL PLC and AGROCERT. In 2002, the
certified asparagus acreage for Organic cultivation was only 20
Hectares, certified according to relevant EU regulations in effect.
Organic crop certification is provided by one of the three accredited
organizations in Greece (DIO, BioHellas and Physiologiki).

# Asparagus Market structure in Greece and Policies

The most known and well-organized asparagus Farmer Groups in Greece are:
"FILIPPOS", HELIOS", "EUROSPARGEL", "NESTOS" and others. All together,
the farm groups dealing with asparagus in Greece are 40. The numbers of
associate members per group are between 100-150 growers. These
organizations provide sorting, packing and deep freeze facilities and
are becoming more interested in the technology, which permits their
asparagus harvest to arrive in prime condition on the EU markets. Greek
asparagus is an export-oriented sector and in order to fulfill this
objective, hydro cooler systems are also installed, which prevent
deterioration in the quality of the product, mainly its appearance. In
general, these partnerships are engaged in the packing distribution and
exporting of asparagus and are fully modernized.

Greek packers and processors are obliged to comply with EU Regulation
No. 183/64 which pertain quality grading of asparagus to be
commercialized within the EU. According to the regulation, there are
three categories based on color (white, violet and green asparagus). The
EXTRA II category requires a minimum diameter of 12 mm, while that of
Grade - 1, a diameter of 10 mm. EXTRA II grade is a secondary quality
grade with slightly blooming stalk tops and visible infections. Length
of stems is of two categories, long (17-22 cm) and short (12-17 cm). As
regards the uniformity of bundles, EU relevant regulation require 12-16
mm of stalk diameter for grade category No. 1 and 16-22 mm for grade
EXTRA II.

Asparagus production and processing in Greece is not a part of the EU
CMO system (Common Market Organization) and no price subsidies,
processing subsidies, export subsidies and/or income supports or
premiums are paid by the FEOGA fund.

Grower prices for asparagus delivered to private packing and processing
industries are a product of long lasting negotiations between the two
parties. In years of sufficient or excess production, processors offer
very low prices to farmers. It is reported that there is no good
coordination among farmer groups in achieving better prices and
developing market policies to the common interest. This year, farmer
Organizations together with traders have decided to form an Asparagus
Management Organization until the end of 2005, which will handle
production and trading policies in a better coordinated way. One of the
problems Greek fruit and vegetables have faced in recent years, were the
long conflict in Yugoslavia which adversely affected the cost of
transport to central Europe. Asparagus and other products had to be
transported through Italy. This alternative route increased the
transport time for fresh products by 50 percent and the costs by 150
percent.

In December 2004, GOG Ministry of National Economy has published the new
Development and Investment Law No. 3299/2004 in the Official Government
Gazette (FEK No 261/Vol A' /12.23.2004), which has not yet entered the
implementation stage. Reportedly, this law will be activated before the
end of May 2005 with interpretational Ministerial Decisions expected to
be published by then. The law sets the Incentives for Private
Investments in the country, per sector and geographical region, in the
framework of the EU Convergence Plan for the Economy, abolishing the old
Investment Laws No. 2601 and 1257. Article No 3 of the new Law talks
about the Primary Sector and the incentives provided for submitted
investment plans, concerning the Agricultural Processing Industry,
including the fruit and vegetable processing sub sector. The Law
provides four (4) types of support:

1.  A Subsidy (Part of the Investment according to type and Region)
    covering part of the total investment plan fluctuating from 50 --
    100% of the expenditure

2.  Lease subsidy (as above)

3.  Tax exemption (up to a certain percentage or the whole expenditure
    of the plan, fluctuating from 50% - 100% according to the case)

4.  Subsidization of the additional working force cost, resulting from
    the new investment (fluctuating from 18.5% - 45.5%, according to the
    case).

All the support provided by the Law is destined for activities such as
new buildings, modernization of production and packaging lines and
equipment, electronic infrastructure, other). The Greek asparagus
industry as a whole, although highly modernized, presently and under
this Law, any significant investments to be considered by the sector,
are not announced.

The law offers opportunities to the wider Agricultural sector like,
Organic Agricultural Activities, Aquaculture, Green house productions,
Purchase of Agricultural Machinery, Activities carried out only by Ag
Cooperatives and farming Groups (at Primary level: asparagus farmers and
other vegetable producers are included here) and provided that these
organizations were established according to EU Regulations. Energy
saving, Environmental friendly technologies and practices, Processing of
other Industry By-products and recycling and establishment of online
marketing and promotion activities, are activities under the new Law
which can qualify for financial support.

In addition, in the framework of the EU Structural programs under way
(3d Package -- Measure 2.1) an amount of 1,254 million Euros are
available for the fruit and vegetable sectors in Greece, specifically
for the processing sector and the marketing of processed agricultural
products. The asparagus sector is included in the program. Measure 2.1
offer 850 million from the EU fund and 404 million from the National
budget, just for the Ag Processing and Marketing sectors. It is reported
that a number of 801 investment applications under the above Structural
Plan were qualified by the Ministry of Agriculture in two phases
(Directorate of Planning and Agricultural Restructuring). A third phase
started in April 2005, with a total additional amount of 180 million
Euros. Most of vegetable processing sectors has applied. There is no
information if asparagus businesses have applied and/or qualified,
although it is reported that they are considering and/or have used this
investment opportunity.

A third support recently announced is that for new farmers under the age
of 40, who have entered farming in the period between 08.04.2004 and
06.10.2005. This plan operates under Measure 3.1 (New farmers -- Age
Improvement and Composition of the Rural population), again under the EU
3d Package Orientation plans. New qualified farmers receive varied
financial supports; according to the region they are located and size of
farm, the viability of their businesses in the overall market context
and the structure of the local population in the region they have
decided to farm. There are 90 million Euros available for this plan (of
which 59 million Euro, came from a recent 3d Package reform announced by
GOG). Financial supports vary from 15,000 Euros up to 25,000 Euros per
individual new farmer, according to the region. New farmers in less
favored and remote regions, receive the higher supports.

# Conclusion

Asparagus is a dynamic alternative crop for Greece and especially in
areas where crop restructuring becomes a necessity. Acreage is neither
critical nor a limiting factor, but yields per area unit show an
increase under new growing practices applied, with improved early
harvested varieties and the establishment of modern processing
facilities supported by investment laws for modernization and capacity
expansion. In recent years, shifts towards more green variety production
and cultivation in regions less susceptible to extreme low temperatures
are seriously considered as the means to gain larger market segments in
central Europe. The competition is dominated by French and Spanish
production. The competitive advantages for Greek asparagus are local
growing conditions and the high quality of the product.