The application in Italy of the EU directive 2019/633 on unfair commercial practices in the Italian agri-food chain, as we have seen, is still to come and presents serious problems. (1)
A brief scenario analysis can stimulate some reflections on the needs of farmers, breeders, food processing companies. As well as on the roles of trade unions and politics.
Agriculture in Italy, France, Spain. Macroeconomic scenario
Agriculture in Italy it is second in the EU in terms of turnover (€ 57,829 billion), after the French one (€ 77,024 billion) and before the Spanish one (€ 51,679 billion). And it ranks first in terms of gross value added (€ 32,928 billion), followed by France (€. 31,920 billion) and Spain (€ 28,066 billion. Eurostat, 2019 data. See note 2).
Agriculture, forestry and fishing in Italy they employ 1,103 million annual work units (854,7 thousand in Spain, 726,1 thousand in France). The 'young' farmers, of-40, represent approximately 7,9% of the total in Italy (8,6% in Spain, 10,7% the EU average, 15,6% in France. Eurostat, 2016 data). The income from agricultural factors per work unit recorded a general decline, already in 2019 compared to 2018 (Spain -3,3%, Italy -3,9%, France -6,4%). (2)
Food industry, scenery
The food industry Italian is in third place in the EU with approximately € 135 billion in turnover, after Germany and France, followed by Spain. The Italian industries of the first and second food processing are 56,3 thousand and employ about 473 thousand people (ISMEA-Federalimentare, data 2019). (3) At the European level,
- 290 thousand SMEs represent 99,2% of the food 'industries', 58,1% of employment, 42,8% of added value and 42,8% of turnover,
- micro-enterprises (0-9 employees) account for 79,8% of the total number of enterprises, 14,2% of employees, 6,8% of added value and 5,3% of turnover (Food Drink Europe, 2017 data). (4)
The average size of the Italian food industries - in the fragmented European context - is however much lower than that of the industries of the other countries at the top of the ranking. As can be seen from the added value produced on average by each individual industry (€ 460 thousand in Italy, vs. € 730 thousand in France and Spain, € 1,7 million in Germany). (3)
Agri-food production in Italy, basic criticality
Criticalities peculiarities of agri-food production in Italy reflect the other side of the coin of the 'small is beautiful', with the aggravation of the demographic factor:
- the productive fabric it is extremely fragmented, with 1,145 million farms according to Eurostat. (2) Of these, according to ISTAT, the 415 active farms are overwhelmingly individual enterprises (84%) and mostly (60,5%) without employees (5,6). A step downstream of the supply chain, 57 thousand companies and food processing industries are added,
- therelength of service of the company', in agriculture and food processing industry,'it positions itself in the danger zone'(ISMEA, 2020). (3) Coldiretti also boasts of being 'the largest association of agricultural pensioners in Europe', with 800 members in its Federpensionati,
- the value chain highlights'from year to year a reduced margin for farmers but also for Italian industrial producers'. With an estimated net operating margin of <2% for the agricultural entrepreneur, 2,3% for food processing, 12,6% for companies operating in the trade, distribution and transport sectors. (3)
Italian agriculture, further criticalities
Farmers Italians are plagued by further critical issues, both structural and contextual:
- logistics and transport suffer from atavistic infrastructural deficiencies. (7) Which increase costs, reduce commercial prospects and favor the intervention of intermediaries,
- access to credit is so problematic as to induce most operators to renounce it a priori. (8)
- European public funds do not reach the potential recipients as they are burned for over 4 billion euros by the bad management of the AGEA led by Gabriele Papa Pagliardini, business partner of the magic circle of Coldiretti (9,10),
- the burdens of bureaucracy and legal uncertainty, unparalleled in Europe, force companies to rely on organizations operating under substantial monopoly conditions, such as Coldiretti's CAA. With serious damage to the competitiveness of the sector, in the impossibility of making use of valid professionals. (11)
Unfair commercial practices and agreements between 'trade unions'. The ABC of the bin
The 'trade unions' who claim to represent agri-food production in Italy, Coldiretti (in primis), boast the authorship of article 7 of the 2021 European delegation law (L. 53/2021. See note 1). A belated rule that delegates the government to transpose de minimis of the EU directive 2019/633 on unfair commercial practices in the agri-food chain.
Farmers, ranchers (and the food processing SMEs) are however penalized by the aforementioned regulation - which reflects the agreements that have taken place in recent months between Coldiretti, Confindustria and Federdistribuzione (12) - under various aspects:
A) the terms of payment, established in the EU within 30-60 days from the date of delivery of the goods, are illegally extended to 30-60 days 'end of month from invoice date'. And so tripled on perishable goods (90 days), doubled on non-perishable goods (120 days). The public administration is then paid a 30-day delay on the payment of perishable goods,
B) is omitted to explicitly clarify the application of the rules
- to the operators of ecommerce everywhere established. Neglecting € 2,7 billion in sales food & grocery in 2020 (+ 70% on 2019, net growth of € 1 billion) and the tax exemption of foreign operators, (13)
- the provision of services in favor of operators and users of the food supply chain (e.g. para-subordinate workers and consultants in ra and VAT numbers, service cooperatives, catering). Taking into account the risks of circumvention of the rules through contractual changes (e.g. administration services rather than food supply),
C) sales below cost continue, in the soft belly of Presidential Decree 218/01, albeit with some limits on agricultural products to be defined. And we completely neglect the need to guarantee the constant balance of prices with respect to fluctuations - even significant ones, up or down - in production costs.
Unions and conflicts of interest
The 'double-discount agreements' between Coldiretti's magic circle, industry and large-scale distribution instead express the conflicts of interest of a self-styled 'agricultural union' which cultivates business relationships with:
- big industry (in Italian Agricultural Supply Chain SpA),
- high finance (in CAI SpA e CAI Real Estate Srl,, besides in Nextalia SGR),
- banks and insurance companies (Nextalia, Green Insurance Srl).
ad memoriam
'The costs of production are high in some sectors, due in particular to high labor and land costs, as well as environmental and health standards. EU farmers face higher costs than third country competitors for complying with environmental, animal welfare and food safety legislation. While this represents a small part of the total cost of production, it still affects the profitability of farmers. The sector is also threatened by high price volatility resulting from world prices and market uncertainty. ' (8)
#Clean shovels, more and more necessary.
Dario Dongo
Footnotes
(1) Dario Dongo. Unfair commercial practices and European delegation law, critical analysis. GIFT (Great Italian Food Trade). 24.4.21/XNUMX/XNUMX, https://www.greatitalianfoodtrade.it/pratiche-commerciali-sleali-e-legge-di-delegazione-europea-analisi-critica
(2) Eurostat. Agriculture, forestry and fishery statistics. 2020 edition. ISBN 978-92-76-21522-6. https://ec.europa.eu/eurostat/documents/3217494/12069644/KS-FK-20-001-EN-N.pdf/a7439b01-671b-80ce-85e4-4d803c44340a?t=1608139005821
(3) ISMEA, Federalimentare (2020). The food industry in Italy. The performance of companies to the test of Covid-19. http://www.ismeamercati.it/flex/cm/pages/ServeAttachment.php/L/IT/D/1%252F1%252F7%252FD.d228540cc46a1044693c/P/BLOB%3AID%3D10917/E/pdf
(4) Food Drink Europe. EU Food & Drink Industry. Data & Trends. 2020 edition. https://www.fooddrinkeurope.eu/uploads/publications_documents/FoodDrinkEurope_-_Data__Trends_2020_digital.pdf
(5) ISTAT (2021). 7th general census of agriculture, information on the survey. https://www.istat.it/it/archivio/252629
(6) ISTAT (2020). Italian agricultural enterprises in the Asia register. https://www.istat.it/it/archivio/250113
(7) Infrastructure and logistics: inefficiencies weigh up to 35 billion a year. The role of ports is decisive. Digital 4. 23.4.19, https://www.digital4.biz/supply-chain/logistica-e-trasporti/infrastrutture-e-logistica-inefficienze-ruolo-porti/
(8) DG Agri (European Commission), EIB (European Investment Bank). (2018). Survey on financial needs and access to finance of EU agricultural enterprises. https://www.fi-compass.eu/sites/default/files/publications/Survey_on_financial_needs_and_access_to_finance_of_EU_agricultural_enterprises_0.pdf. Country Sheet Italy, https://www.fi-compass.eu/sites/default/files/Annex_III_ITALY.pdf
(9) Dario Dongo. Report of the Court of Auditors on AGEA directed by Gabriele Papa Pagliardini. #Clean shovels. GIFTS (Great Italian Food Trade). 12.3.21/XNUMX/XNUMX, https://www.greatitalianfoodtrade.it/mercati/relazione-della-corte-dei-conti-sull-agea-diretta-da-gabriele-papa-pagliardini-vanghepulite
(10) Dario Dongo. AGEA - Coldiretti, the European Commission rejects the conflict of interest. GIFT (Great Italian Food Trade). 24.3.21/XNUMX/XNUMX, https://www.greatitalianfoodtrade.it/progresso/agea-coldiretti-la-commissione-europea-boccia-il-conflitto-d-interessi
(11) Dario Dongo. Conflict of interest AGEA - Pagliardini - Coldiretti, questions to the European Parliament. GIFT (Great Italian Food Trade). 30.1.21/XNUMX/XNUMX, https://www.greatitalianfoodtrade.it/idee/conflitto-d-interessi-agea-pagliardini-coldiretti-interrogazioni-al-parlamento-europeo
(12) Dario Dongo. Unfair commercial practices, double-discount supply chain agreement. GIFT (Great Italian Food Trade). 7.3.21/XNUMX/XNUMX, https://www.greatitalianfoodtrade.it/mercati/pratiche-commerciali-sleali-accordo-di-filiera-al-doppio-ribasso
(13) Simone Fraternali. E-commerce and Food: shopping online in Italy. Observatories.Net. 1.2.21, https://blog.osservatori.net/it_it/food-ecommerce-italia
Dario Dongo, lawyer and journalist, PhD in international food law, founder of WIISE (FARE - GIFT - Food Times) and Égalité.
