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Innovation to boost competitiveness in agriculture

Rome, 12/07/2018, National Roundtable

The participants at this national roundtable described Italian agriculture as a sector which, although growing, is still replete with shortcomings. The industry has shown that it can shift exports of over 41 billion euro, but this is still not in the league of Germany’s 80 billion euro figure. It was felt that the sector continues to suffer from insufficient competitiveness, due mainly to a lack of investment and innovation. During the years of the crisis, when commodity prices were fluctuating and impacted on the costs of an entrepreneurial landscape that is predominantly processing-oriented, firms invested little and proved to be reluctant to innovate. In addition, weak infrastructure remains a penalizing factor – for products to be taken to Dubai, for instance, they have to go via Amsterdam – and energy costs are much higher than in neighboring Spain, which effectively derives a substantial competitive advantage from this. 

It was suggested that what matters is safeguarding the economic sustainability of Italian agricultural enterprises, while creating cost-saving mechanisms and monitoring environmental practices. In this regard, mention was made of the Umbrian firms that, by banding together, have been able to use meteorological detection tools to implement the right measures in vineyards at the right time.  However, it was stressed that innovation plays a particularly key role, and in this respect much remains to be done. Indeed, while American farming operations already benefit from 5G technology, in Italy this has yet to arrive in the major cities. The same is the case for the use of drones, satellites, and big data: for now, rural areas are having to wait their turn.

On the political front, it was pointed out that the new EU budget is cutting back on agriculture and that the sector is, in any case, also having to contend with a reform of the common agricultural policy. Given this, it becomes pivotal to change the image of a European agricultural sector reliant on subsidies and instead revive a sense of agricultural entrepreneurship that is innovative and in step with the times – this, regrettably, while bearing in mind the probable effects of Trump’s tariff policies, which are expected to be devastating for the Italian market, including and especially because they will penalize precisely those high value-added processed products that Italy excels in.

It was then commented that without the common agricultural policy, the cost of basic food products would be higher. In future, better use will need to be made of European funds and the State will have to reduce, and eventually eliminate, the interminable waiting times for payments by public authorities to farming enterprises. This latter point was held up as an issue that has long and constantly threatened the survival of farm holdings, also taking into account that the average annual amount that farmers have to put by just to cover bureaucratic compliance costs is 7,600 euro.  

At a global level, it was observed that the development of the agricultural sector has led to a decrease in world malnutrition, due in part to the important efforts of the World Food Program.  The challenge for the future was characterized as complex but not impossible, with the hope being that by 2030 global production will have tripled and international trade will have increased by 70%.

Also viewed as key to boosting the sector’s fortunes were research and the establishment in earnest of a relationship with the academic world. It was noted that there are those who have proposed an important objective, namely that of turning photosynthesis – which is the least efficient process in the world, since only 1% of light is retained by plants – into a more effective process that retains at least 2%.

In this regard, it was stressed that the environmental and social challenges remain strategic: it is not just a question of quantity, but also of quality. Technology could make an invaluable contribution: for the moment the examples are few and far between, but in future there will be more and more drones flying low over cornfields dispersing products for ailing plants, smart farms will grow in number and improve in standard, and alternative proteins are set to emerge. Indeed, clean meat already abounds in the American market, and a strong surge in probiotics is predicted.

In conclusion, it was emphasized that while dreaming may cost nothing, it can certainly help to shape the future. The time cannot be far off when Italy, a country of culinary excellence – the most replicated in the world and still with great potential to exploit – could truly become the Silicon Valley of food, a challenge to rise to by combining innovation with the time-honored tradition of local products for which Italy is renowned throughout the world.