Italy deals with down ag market

AgriNews photo/Karen Binder Government assistance for Italian and European ag enterprises in the form of rural development was announced during last month’s International Exhibition of Agricultural Machinery in Bologna, Italy.

BOLOGNA, Italy — Italy’s agricultural sector, like the United States, is suffering from the perils of a down market.

Of course, there are some large differences between the volumes and the market components between the two countries, but the measure of concern and reaction is the same.

AgriNews had the opportunity to attend one of Europe’s largest farm shows, the International Exhibition of Agricultural Machinery, in mid-November in Bologna, the heart of Italy’s farmland in Tuscany. It is hosted by FederUncoma, a European trade association for ag machinery manufacturers, and the Italian Trade Agency, a federal government department.

On display was every imaginable farm device for soil preparation, planting, protection and harvesting. While Europe is far from the largest corn-, soybean- or wheat-producing region, it does produce some of the world’s most diverse ag products — olives, grapes, mushrooms, cheese and more.

In Italy, especially with its reputation for world-class mechanics, a main indicator of its agriculture health is the country’s export rate of farm machinery. These sales over the first 10 months of the 2016 were in decline, confirming a negative trend in the sector persisting for years, show officials reported.

Specifically, statistics updated through October released at the show:

  • Combine harvesters sales, at 329 units, are down 2 percent.
  • Tractors sales, at 15,283 units, are down 1.2 percent.
  • Tractor registrations since 2006 have plunged 38 percent from 30,000 units in 2006 to 18,400 in 2015, and 2016 is forecast for fewer than 18,000 units.

“The ongoing market crisis does not mean a loss of interest in mechanization in Italian farming because such trade fairs as EIMA are always packed with farmers displaying extraordinary interest in innovations on offer by the mechanization industry,” FederUnacoma President Massimo Goldoni said at a press conference.

He went on to say, “The drastic reduction in sales is the result of the crisis of the agricultural sector, where there is a steady decline in the number of working farms, falling by 9 percent from 2010 to 2013, and scant production earnings due to the overly small size of farms, which fails to allow economies of scale.”

Agriculture Aid

In response to this continued negative market trend, the Italian government announced during the exhibition several rural development measures for farming enterprises.

One initiative includes the elimination of farmers’ personal income taxation and a set of tax breaks, especially for young farmers.

There’s also new legislation aimed at maintaining digital production processes, which will have significant fallout for the entire agricultural production supply chain and substantial impact on mechanization by helping the spread of machinery and support of precision farming.

On the side of direct support for the purchase of agricultural machinery, a new registration program for new equipment with high safety standards was launched this fall and offered the rough equivalent of $45 million in funding assistance.

In the European setting, Italy is the country prepared to take on the highest percentage of these funds, with expectations that they will generate positive developments over the 2014-2020 period of allocation.

Other initiatives included changes requiring funding applications to attach investment plans and statements of how property improvements will help operation growth for production properties, landed property improvements, operational/processing plants and investments in intangibles, as well as in machinery and equipment.

A final measure encourages innovation within the industry with what the government called “workshop networking.” The purpose is to spur collaboration between agricultural enterprises and research through the support and merits of innovation projects set up in farming and research and through technical events.

Karen Binder can be reached at 6148-534-0614 or kbinder@agrinews-pubs.com. Follow her on Twitter at: @AgNews_Binder.

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