Home > Market Structures, Supply & Demand, Trade > If only the Greeks could be like the Dutch at growing tomatoes.

If only the Greeks could be like the Dutch at growing tomatoes.

Time magazine ran an interesting article on the tomato market in the Holland and Greece. The Greeks produces twice as many tomatoes than the Dutch but very little of it is sold in export markets. This is a concern in that it is a missed opportunity for the Greeks to earn income. What is more ironic is the fact that in the summer imports of tomatoes come in from Holland because the Greek farmers are still struggling to grow a crop during the hottest time of the year – Holland employs high-tech green houses and is able to produce significantly more during the summer months than Greece.
Tomato Production

However, Greece has the potential to produce tomatoes for domestic consumption as well as for export but only has two harvests a year and is at the mercy of the elements – poor weather = poor harvest. The Dutch in contrast have temperature controlled greenhouses helping to create ideal growing conditions and they can produce 70kg of tomatoes in a square metre of his greenhouse whilst the Mediterranean grower gets approximately 7kg. They can also produce all year round.

Single Currency and Productivity

With the introduction of the euro in 2002 Greece could no longer devalue its currency to control the price of its products. With a weaker currency their exports were much more competitive but this had the effect of making the Dutch work even harder to achieve more efficiency and greater economies of scale. Therefore the only way that the Greeks can now compete is by cutting costs and embracing technology.

Tomato ExportsBut it is not just the tomato market that has been hard hit. Greece’s agricultural sector’s productivity levels are 44% below the European average and labour costs have increased by approximately 90% and this is in contrast to Germany where unions agreed to a 3% rise. What is more concerning is that the acreage given over to growing tomatoes in Greece is 10 times that in Holland but they hardly export any of them. The Dutch have seen their exports increase by 30% since 2005. Some economists have laid the blame on the oligopoly market structure that controls the distribution. These middlemen pay farmers low prices and take a big mark-up on tomatoes even as they have failed to put in place a more efficient distribution system, including for exports.

The Greeks could become a thriving exporter of tomatoes once again but will need to embrace the Dutch technology and make use of its natural conditions – sunshine.

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  1. Artemis
    August 14, 2013 at 6:30 am

    You’re missing the point. Greeks don’t want to export their tomatoes and do not want to grow them in unnatural circumstances. Similar to their olives and olive oil. They only export the lower quality grades and consume the best for themselves. This is why the food in Greece, especially in the villages, is better than anywhere else in Europe or the World for that matter. Also why Greeks live well into their 90’s with little disease such as heart disease, cancer and diabetes. They don’t make the money and that part is not good, as their economy has proven…but their foods are 2nd to NONE!

  2. October 25, 2013 at 10:01 pm

    You are so wrong about export quality of olive, olive oil and other products.
    There is no low or high olive oil quality .
    Every place of Greece has different quality. Depends on where you purchase
    The quality of life in Greece has to do with the climate if you have heard of it. Like italy

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