PRICE STANDSTILL FOR AGRICULTURAL LAND: A STUDY BY INEA ON THE STATE OF THE LAND MARKET IN ITALY IN 2005. A SLIGHT INCREASE OF 0.1% WAS REGISTERED FOR PRICES. THE SLOWDOWN AN INDICATION OF STABILITY OR WARNINGS OF A CRISIS?

A decisive stop in the increase in prices of the value of vineyard land according to a study conducted by INEA titled “The trends of the land market in Italy in 2005”. There are no doubts about the results of an inflation rate of just 1.9% national average, with the 2005/2004 variation expressed in real terms equal to 1.8%, thus resulting in a difference of just 0.1%. “Taking a long term perspective - commented INEA researchers, Andrea Povellato and Gianluca Santi - it appears that the tendency of price increases had been affirmed since 1996”.

The new European CAP (Common Agricultural Policy) program, which began precisely in 2005, has radically modified the support mechanisms for the agricultural world and is determining a climate of uncertainty as well as a certain prudence in negotiations for the exchange of lands, which will expand or diminish according to whether terrains are eligible for aid.

But alarmism aside, “there is always a hunger for land in Italy because there is so little”, according to agrarian Giorgio Amadei. Those who desire buying land in the most sought after DOC and DOCG vineyard zones will still find head spinning prices. According to the top five classification of most valuable areas, the Trentino Alto Adige region came in at first place with DOC vineyard lands in the province of Bolzano being sold for between 262 and 430,000 euros per hectare. Second place goes to Tuscany, where the value of DOCG vineyards on the hills of Montalcino (Siena) is going for 270 to 350,000 euros. Lombardy takes third place with vineyard lands in the DOC Valtellina and Bresciana areas selling for 150 to 190,000 euros. The Veneto, in fourth place, reached max quotas of 150 to 430,000 for the Trevigiano area and 77- 220,000 euros in the Lake Garda area. And, finally, in fifth place is Piedmont, with its DOC vineyards in the provinces of Turin, Cuneo, and Asti selling from anywhere between 36 and 70,000 euros per hectare.

Coming in just below the top five was Lazio, the region that can keep up with the big name areas with its DOC vineyard lands in the Castelli Romani area, where prices vary between 77 and 144,000 euros. The other wine regions that followed were the Friuli Venezia Giulia (35-94,000 euros per hectare), Umbria (60-75,000), Emilia Romagna (50-68,000), Liguria (36-52,000), Marche (25-50,000), who have all been regions with fluctuations and a slight tendency towards a decrease. Campania, Molise and Abruzzo all range between 28 and 46,000 euros per hectare. While the bottom ranking areas are Basilicata (18-36,000), Sicily (19-30,000), Calabria (16-26,000), Sardinia (15-19,000), Puglia (11-20,000), who have all, however, maintained an unchanged price range.

According to sector workers, the introduction of a “single payment scheme”, that protects the rights of farmers by giving direct aid rather than funds to landowners, should have significant effects on the land market, but there is no unanimous agreement on what these effects will be.

The fluctuations registered on the land market also derive from the economic trends in agriculture that have not been particularly brilliant. In recent years, climactic events have had serious adverse effects. The decrease in prices for agricultural products and the increase in production costs have greatly affected the expectations of potential investors. There is still a consistent demand for agricultural land by operators who are looking to expand the size of their enterprises in order to have more large scale production for economic recuperation, but for some, the higher land market prices together with not very reassuring prospects for agricultural earnings are inducing many of them to wait for better days.

Daniela Vidotto