Armed with pincers, a small tractor grabs the trunk of an olive tree in southern Spain and shakes loose its fruit, which will be pressed in a few hours. Olive oil production in the Andalusia region reigns supreme, but farmers are beginning to worry about growing competition from Morocco. Spanish producers\' concerns focus on a European Union agricultural free trade accord signed in February with the north African country. \"The agreement with Morocco is a step towards ruin for Spanish olive oil producers,\" said farmer Lope Ruiz Lopez, who under a bright sun collects olives that have fallen into a net on the ground, then to be poured into a trailer. \"We have gone from a quota of 52,000 tonnes (of oil) that Morocco could export to the whole of the European Union to allowing them to export their entire production,\" said Ruiz Lopez, who manages a 40-hectare (100-acre) farm in Iznajar, a village surrounded by olive-tree hills between Cordoba and Grenada. For now, Spain has nothing to fear: it is the world champion olive oil producer producing 50 percent of the global total and output is set to grow this year to a record 1.6 million tonnes. Morocco only produces 130,000-140,000 tonnes a year. But \"in the medium and long term it puts Spanish production at risk,\" said Miguel Cobos Garcia, secretary general of the Union of Small Farmers in Cordoba. \"They are going to plant 700,000 hectares of olive trees -- that is double what there is around Cordoba!\" In a few years, the oil produced by the new plantation \"will be in direct competition with Andalusian production,\" Cobos Garcia added. \"Morocco has a climate very similar to that of Andalusia, it is just on the other side of the Mediterranean,\" he noted. \"They are targetting the same European market.\" Above all, labour work conditions are very different. \"In Morocco, an employee\'s salary is six to eight euros ($8 to $10) a day for eight-nine hours\' work. But in Spain the salary is 45 euros, plus another 14 or 15 euros for social security, or a cost of 60 euros a day for six hours of work.\" Moroccan competition is unwelcome in a sector already complaining about slumping prices under pressure from big retailers. \"In better years, four or five years ago, it was more than three euros a litre (13.60 euros a gallon), said Cobos Garcia. \"Today we are at 1.80 euros (8.20 euros a gallon).\" \"The price they pay for a high quality product, extra virgin olive oil, barely covers the production costs,\" said Lope Ruiz Lopez, whose farm has about 3,000 trees including some more than 200 years old. The region makes 80 percent of the country\'s olive oil and the industry is crucial, giving a livelihood to 200,000 producers and 300 towns and villages. Andalusia, which holds regional elections on March 25, is the region hardest hit by unemployment in the whole of Spain, with a jobless rate of 31.23 percent. \"Here everyone lives directly or indirectly from oil,\" said Lope Ruiz Lopez. \"If the problems affecting the industry now are not resolved in the short term it will be very difficult for Iznajar and other surrounding villages to survive the next years,\" he said. \"If the olive oil culture disappears the residents here will have to go to the city or a bigger town,\" warned the small farmers\' representative, Cobos Garcia. For him, the solution is to modernise production methods and \"compete on the basis of quality\".