REPORT NUMBER 11 ON THE COMPETITIVENESS OF ITALIAN AGRICULTURE IN THE FACE OF NEW SCENARIOS

In a scenario of strong and unexpected changes, the theme of the competitiveness of Italian agricultural enterprises in not just “in fashion” but undoubtedly represents a factor with which predictions are made for the future development of the entire national food and agriculture system.
The choice of this theme for the XI Report on Italian Agriculture by Confagricoltura (and the sponsorship of VeronaFiere and its Fieragricola fair (4-7 February 2010), Federchimica, Mps, Gruppo Sai La Fondiaria), is thus even more relevant, above all, in the wake of the sudden and unexpected changes that have occurred in the agriculture sector. An evolution that, between the CAP reform ‘Health Check’ (which took place last November 20), verification of the EU balance (which has just begun), the extreme volatility of agricultural product prices (after the sharp rise in 2007-2008, the quotes for corn and grain have, today, returned close to prices in 2006), and the current global financial and economic crisis, has made strategy for the productive function of agriculture re-emerge and, therefore, the central role of the agricultural enterprise within the economic system.



The “Structural” Delays of Italian Agriculture

The analysis conducted on the complexity of factors for competitiveness has, however, brought to light the delays that have long distinguished the Italian sector in respect to its main European competitors. As opposed to the EU average of 12 hectares of agricultural area utilized per company, Italy continues to hold a much lower average, equal to about 7 hectares, versus that of 49 in France and 44 in Germany. The “nucleus” of the larger enterprises (those that have more than 50 hectares) makes up only 2% of the entire Italian sector, while they make up 35% in France and 22% in Germany.

This elevated number of fragmentation does not allow Italy to best exploit new technologies and innovation, bringing productivity to values inferior to those of its competitors (18,200 euros of added value per operator, compared to almost 30,000 in France, 22,300 in Spain, and 20,000 in Germany). This has caused Italian companies to move at a slower pace, not allowing the country to take advantage of a good competitive positioning held by Italian food products on the international market.



Competitiveness and the Importance of Foreign Markets for Italian Production

It is enough to think that during the past ten years (1999-2007), the quota for Italian food and agriculture on world commerce has gone from 2.8% to 3.1%, making it the 10th most important exporting country in the world. The data signifies an increase in Italian agricultural products of +104%, versus a global average of 89%, but which has also meant growth for Brazil, China, Germany, and Spain at superior rates and, the contrary diminishing of the U.S. market, one of the top three agricultural export markets for Italy, which in 2007 represented 35% of the entire value of sales abroad (23.7 billion euros).
Each Italian product, however, shows different competitive positions, above all, in terms of price (the average price of exported wine is inferior by 20% in respect to the rest of the world, while that for fresh fruit is 28% higher), while it denotes a productive surplus in respect to internal consumption (measured by the level of self sufficiency) equal to 167% for wine, 110% for fruit (and even 150% for apples), and a high 274% for preserved tomatoes.