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Agro-industry and its challenges: investments, skills and technologies

Hybrid format - Rome, 26/05/2022, National Roundtable

The global food supply troubles did not start with Russia’s invasion of Ukraine; there were numerous warnings over the two years of the pandemic, and even before that with the food crisis of 2008. Europe today is particularly exposed due to the “political” decision by some key members to cut back on those agricultural activities that would have made it possible to maintain a solid domestic supply chain and to delegate production – notably of cereals – to the lesser developed areas of the planet. The geopolitical situation has now combined with long-term trends that point to major changes in the demographic composition and size of the world population, along with significant accelerations in climate change. This in turn is having a serious impact on the ability to protect the environment and preserve arable lands.

From the economic standpoint, the main problems triggering a vicious supply chain cycle include the increased cost of energy and of the means for working the land. Additionally, Europe – and Italy even more so given its geographic position – risks very soon having to confront the migratory consequences of what promises to be a full-blown food emergency in the countries of North Africa. An example of this is the “bomb” of 80 million Egyptians in the heart of the Mediterranean; not to mention the inhabitants of those nations defined “bread democracies” where subsidies for buying bread are crucial to maintaining political consensus and social cohesion.

If nothing else, awareness of these problems is bringing issues such as the health of the planet, food security and food self-sufficiency back to the center of the debate. It is now up to policy makers to be receptive to these concerns and transform that into concrete action, as has already begun to happen in France, for instance. The trend of recent decades to push agriculture increasingly to the margins of the economic system must be inverted, in terms of both its specific weight as well as a social consideration. Italy has some formidable and unique assets, on the one hand being a biodiversity leader and, on the other, the excellence of its agri-food products and their ability to cement social relations and promote the country around the world.

Technological innovation, and the scientific research that goes into developing it, play a decisive role in restoring centrality to the agro-industry sector. Notwithstanding the reduction by half of cultivated lands between 1960 and 2020, Italy witnessed an increase in its production, at least up until 2000, thanks to the development of new technologies and the expertise of sector operators. The slump in production in the first 20 years of this century was mainly due to having reached the upper limit of the available technologies and to EU agricultural policies that imposed a reduction in national production. This trend could be inverted today through the use of digital technologies, especially the “Internet of Things”, and Big Data analysis. This latter, in particular, allows for the creation of forecast models (not least regarding meteorological developments) thanks to which it is possible to produce more with fewer resources and, consequently, in a more sustainable way. New technologies thus make possible the marriage of productivity with defense of the environment and preservation of the fertility of the soil to be handed down to the next generations.

Naturally, all this new technology needs the proper infrastructure, which means, most importantly, broadband networks at the service of rural areas; the entire nation was to have coverage by the end of 2022, but efforts have stalled at approximately 40%. The evolution of technologies and digitalization calls for building skills from school age onward so as to be ready to meet the requirements of new job descriptions. The most versatile professional profiles emerging today are well suited to the younger generations, who are the most likely candidates for jobs in the agricultural sector.

Promoting and supporting the national value chain to increase productivity means avoiding falling back into old autocratic patterns and establishing a new position on the global scenario, which will very probably see changes in international trade rules and mechanisms on the way to a “selective globalization” based on a combination of geography and values. Hence, the need on the one hand to draft new open market rules, and on the other to reflect on how it is possible to increase productive capacities within national borders. It is going to be essential to adopt a long-range perspective of at least a decade as well as to generate a dialogue involving all the parties concerned, together with the awareness that no one country is going to be able to confront future challenges on its own.