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Italy’s food and agriculture industry: a key sector for global markets

    • Milan
    • 20 May 2013

          Discussions at this National Conference hinged on the central observation that the Italian economy can only be revived by capitalizing on the country’s flagship production sectors, with the food and agricultural industry singled out as being of prime importance. Indeed, it was noted that the sector has continued to be a standard-bearer for “Made in Italy” excellence even amid the economic downturn. Not only has the industry’s domestic production withstood international competition, but it also continues to show positive export growth (up 8% in 2012), as well as representing one of the few vibrant sectors in Italy’s southern regions.

          Nevertheless, the participants acknowledged the widespread perception, both among industry operators and the general public, that this valuable resource is not being exploited to its fullest, and that its enormous potential remains largely untapped. Most importantly, opportunities for economic development and for fostering the emergence of new businesses – stemming from the happy conjunction of the country’s diverse food and wine tradition, its culture, and its tourist trade – are too often overlooked. In this regard, it was felt that efforts should be focused more on conducting a state-of-the-art marketing drive targeting countries from which tourists can be “imported”, than on exporting food products. The target group of this drive need not be confined to the tens of millions of new high-net-worth individuals in emerging countries, but could also extend to developed markets, such as the United States, where, despite their secure market hold in large urban centers, Italian agro-food products have far from tapped into potential demand.

          It was also suggested that insufficient heed is paid by central government and local administrations in Italy to the relationship between agro-food industry development and the rehabilitation (and conservation) of the country’s natural landscape. Italy boasts a climatic and geographic diversity which – from the Alps to Sicily – translates into a rich variety of produce that is perhaps unique in the world. At the same time, however, agro-food production levels are not sufficient to cover domestic demand, making imports increasingly indispensable. Some rapid and clear decisions therefore need to be taken to set priorities, particularly as regards the allocation of the country’s limited agricultural resources, with a strategy that, on the one hand, protects and optimizes the natural landscape, while on the other, secures a rating of excellence for Italian products to be pursued and defended.

          Key to preserving the association between local areas in Italy and their quality products is brand protection, which the participants stressed cannot be confined to controlled designations of origin protected at a European level, but calls for appropriate mechanisms and policies at an international level, aimed at combating both product piracy, and, which is perhaps even more of a threat, the proliferation of foreign products passed off as Italian (so-called “Italian-sounding products”). Defending against these threats requires a greater level of engagement on the part of institutions, by, for instance, strengthening their antipiracy teams, or by concluding bilateral agreements for the protection of genuine products. National supply chains must also evolve to make their forays into export markets more effective, by instilling and cementing an appreciation of Italian quality standards, which once ingrained in people’s consciousness, will ensure the such quality will be difficult to imitate or counterfeit.

          Hence, it was suggested that agro-food industry operators must serve as agents of change, by putting into effect new export-sustaining distribution models, and by moving beyond the traditionally limited size of Italian businesses, which, as in other sectors, prevent firms from competing effectively in global markets. While tax incentives aimed at encouraging businesses to grow by opening up to external investors may not overcome the typical reluctance of Italian entrepreneurs to relinquish independence, the state could nevertheless support their growth via internal means, by supporting the engagement of managerial and financial expertise within firms in the sector, and especially by ensuring regulatory and fiscal frameworks are put in place that are more stable over the long term and reduce bureaucratic costs to businesses.

          In conclusion, it was highlighted that the appeal which the Italian way of life continues to hold for an increasingly wider international audience is at once both a valuable and fragile resource. With respect to the agro-food sector in particular, one way of maintaining and capitalizing on this appeal is by improving the nutritional awareness of consumers. Italian institutions need to work towards this goal, by uniting the interests (wherever divergent) of the various links in the agro-food supply chain.