Organic farming in Italy - INEA

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BIOREPORT 2013 Organic farming in Italy

ISBN 9788-88145-4464

BIOREPORT 2013 ORGANIC FARMING IN ITALY

National Rural Network – Italy 2007-2013 Rome, 2014

This work was carried out as part of the National Rural Network Programme – Italy 2007-2013, Work Group for the Integration of Rural Development and Other Policies – Director Graziella Romito, and in collaboration with MIPAAF, INEA, ISMEA and SINAB IAM.B.

Coordination: Francesca Marras (INEA). Coordinating Committee: Carla Abitabile, Francesca Marras, Laura Viganò. Technical and Scientific Committee: Carla Abitabile (INEA), Giovanna Carlini (MIPAAF-ICQRF), Paolo Carnemolla (FederBio), Enrico De Ruvo (ISMEA), Vincenzo Ferrentino (MIPAAF – DISR IV), Francesco Giardina (SINAB-IAM.B), Giuseppina Iamarino (MIPAAF – PQA V), Francesca Marras (INEA), Cristina Micheloni (AIAB), Giacomo Mocciaro (MIPAAF-PQA V), Leonardo Pugliese (FederBio), Serenella Puliga (MIPAAF-DISR IV), Marta Romeo (SINAB-IAM.B), Caterina Santori (AIAB), Lorena Timi (MIPAAF-ICQRF), Laura Viganò (INEA), Massimiliano Vilardi (MIPAAF-ICQRF), Christian Vincentini (MIPAAF-DISR II). INEA Publishing Committee: Carla Abitabile, Francesca Giarè, Sabrina Giuca, Francesca Marras, Gaetana Petriccione, Antonella Trisorio, Laura Viganò, Raffaella Zucaro. Texts by: Chapter 1: Laura Viganò (INEA) Chapter 2: Marta Romeo (SINAB), Stefano Trione e Alberto Sturla (INEA) Chapter 3: Simonetta De Leo, Stefano Trione e Alberto Sturla (INEA) Chapter 4: Enrico De Ruvo (ISMEA) Chapter 5: Enrico De Ruvo (ISMEA) Chapter 6: Andrea Arzeni (INEA) Chapter 7: Sabrina Giuca (INEA) Chapter 8: Simonetta De Leo (INEA) Chapter 9: Roberto Henke (INEA) Chapter 10: Ines Di Paolo (INEA), Serenella Puliga (MIPAAF) Chapter 11: Marcello De Maria (INEA) Chapter 12: Carla Agricoli e Placido Mario Iudicello (MIPAAF) Chapter 13: Emanuele Benetto, Renato Pieri, Daniele Rama (SMEA - Università Cattolica del S. Cuore) Chapter 14: Alba Pietromarchi (AIAB) Chapter 15: Antonella Finizia (ISMEA) Chapter 16: Giovanni Dara Guccione (INEA) Chapter 17: Sabrina Giuca (INEA) Processing and technical support: Marco Amato, Anna Lapoli, Stefano Tomassini Technical Secretary: Isabella Brandi Editorial Coordination: Benedetto Venuto Editorial Secretary: Roberta Capretti Graphic design and layout: Jacopo Barone,Sofia Mannozzi Translated by : Studio Moretto Group srl, Barbara Perna Cover photo: Giuseppe Argiolas Photos used: MIPAAF archive. Photos on pages 40, 60, 72, 80, 122, 148: Giuseppe Argiolas; photos on page 132: Pascal06 –Fotolia.com Reproduction admitted if the source is cited.

CONTENTS

Presentation

SECTION I: Organic farming data 1. Profile of the Italian organic farms according to the census 9 2. Structure of the farms 19 3. Economic situation of the farms 27 4. The market 35 5. Prices 41 6. Technical inputs 53 SECTION II: Organic farming policies 7. Standards in this sector 8. Support to the organic sector 9. New additions to the CAP reform 10. Research and innovation

63 75 79 83

SECTION III: Sector organisation and characteristics 11. The environmental sustainability of organic farming 93 12. Control 103 13. The dairy sector 109 14. The short supply chain of organic products 124 15. Medicinal plants 134 16. A regional case study: Sicily 142 17. An international case study: Denmark 150

Preface BIOREPORT 2013 continues in its efforts to offer an updated overview of organic farming in Italy, both presenting and commenting on the available economic data and examining further a number of aspects using ad-hoc surveys. The data of this edition confirm the increasingly important role of the sector within the context of Italian agriculture: no longer just a niche sector but an innovative production model that is highly attractive in financial, social and environmental terms. According to the last Agricultural Census, organic farms are mainly situated in the mountainous and hilly areas. This shows how the farms located in the disadvantaged areas are more inclined to enhance their products, also via organic certification, in order to counterbalance the effects on the revenue of the most difficult pedoclimatic conditions. The organic farms are on average larger than the traditional ones (27.7 ha of UAA compared to 7.9 ha of UAA of the total farms) and also differ in other characteristics. These farms are less labour-intensive and are managed by young, educated and innovative entrepreneurs who achieve interesting economic results. According to the SINAB data, Italy is confirmed as one of the first ten countries in the world for the surface area used for organic farming, for the number of farms and for the highest incidence of organic UAA with respect to the total (over 9%). In 2012, growth indicators were noted both at the level of production (after the decline in the last few years, there are now more producers and therefore an increase in UAA) and also for the market, despite the fact that the economic crisis has also affected food expenditure. The organic sector, at least for the moment, does not seem to be affected by the crisis due to the intrinsically positive values linked to its products – protecting health, respecting the environment and greater equality between the various stakeholders of the supply chain -, and consumers have become increasingly aware of these values.

Aware of the importance of correctly informing the consumer about the organic values and in particular the environmental sustainability of the organic techniques, this document also includes a detailed assessment of the influence exerted by agricultural production on various elements of the ecosystem; soil, water, biodiversity, landscape, atmosphere and energy. This analysis confirms the organic approach as an example of good practice and as a method capable of making a positive contribution to reducing the negative effects on ecosystems and on the environment, though still with some aspects that need improving. This edition provides an in-depth study of some organic supply chains in the milk-dairy and medicinal plant sector. The analysis of the milk-dairy sector focuses particularly on the stages of agricultural production and the processing of organic milk, and confirms the vocation of organic farms, and more specifically livestock farms, for diversification of their activities and the choice of production strategies aimed not at the intensification but rather the growth of farm area and the direct processing of the milk produced, also increasing the portfolio of the by-products. The focus on organic medicinal plants resides in the particular characteristics of this sector, which, as a niche activity, offers significant development prospects, both because it leads to the possibility of cultivating minor agricultural products with very interesting market outlets, and because it can constitute a valid production alternative for marginal and disadvantaged land such as that in the mountains and hills. The overview of the sector continues with the evolution of the policies and the support that up until now has played an essential role in the expansion of organic farming in many parts of Italy, particularly in the South, albeit with various problems and delays. The year 2013 and particularly 2014 represent authentic turning points in this

sector, with a revision of all the main policies to the benefit of the sector: ranging from the revision of EC Regulation 834/2007 to those of both the pillars of the CAP. Only over the next years will it be possible to assess whether the changes introduced by these policies are able to impact with greater efficiency on the actual needs of the farms and on the organic supply chain.

Lastly, aware that an overview of the Italian organic sector also requires an external comparison, a chapter has been added for further examination of how the sector works in a foreign country, where organic farming plays a significant part in production or the organization of the supply chain or market. This edition is particularly focused on Denmark.

The Coordinating Committee

PARTE I: ORGANIC FARMING DATA

1. Profile of the Italian organic farms according to the census The 2010 General Census of Agriculture reveals detailed data on Italian organic farms for the first time, responding to the statistical objectives of this survey. Therefore, for informative purposes the census data represents a significant source on the structure of the organic farms and should be considered complementary to those of MIPAAF-SINAB, thanks to some new informative details that enhance the cognitive framework provided each year by MIPAAF-SINAB. Fig. 1 – Number of organic farms per municipality (n.), 2010

The distribution of the number of organic farms per municipality on the national territory indicates that, of the 8,077 municipalities in Italy, 61.8% have at least one organic farm on their land. The greater concentration in the central and southern regions is evident, while in the North, Emilia-Romagna stands out along with Alto Adige to a lesser extent. With regard to municipalities with organic farms, those having between 2 and 5 units (37.7%) lead, followed by those with a single organic farm (27.8%). Lastly, there are 41 municipalities with over 100 organic farms, and in particular: Noto (Syracuse), with 446 units, Corigliano Calabro (Cosenza; 242) and Poggio Moiano (Rieti; 241). When considering the distribution of the percentage of organic UAA with respect to the total UAA per municipality, it can be noticed that in 30.6% of the municipalities with organic UAA, the incidence of the latter ranges between 1% and 5%. The remaining distribution proves to be rather balanced, increasing from a minimum of 16.1% in the case of municipalities with organic UAA of over 20% up to a maximum of 18.2% for those falling within the class immediately below. There are respectively 55 and 15 municipalities with an incidence of at least 60% and 80% , 10 of which have a single farm representing the entire municipal organic UAA. The municipalities with a percentage of organic UAA of at least 80% are located in the North, particularly in Lombardy, with the exception of Vejano (Viterbo) and Terravecchia (Cosenza). These include the municipalities of Rhêmes Notre-Dame (Aosta) with an entirely organic municipal UAA, Lardirago (Pavia; 99.5%), Veddasca (Varese; 98.8%) and Introbio (Lecco; 95.4%), the only one featuring 10 organic farms rather than a single unit.

over 100 fron 26 to 100 fron 6 to 25 from 2 to 5 1 0

Source: Data processing from the 6th General Agricultural Census

9

Fig. 2 – Incidence of the total organic UAA by municipality (%), 2010

Almost 61% of the organic farms are located on hillsides, with a UAA that represents 12.7% of the total UAA in hilly areas and a smaller average farm size compared to the plains and mountain organic farms. Nevertheless, the distribution of the organic farms by altitude in northern Italy is characterised by a greater number of farms located in the mountain areas (38%), whereas those of the plains and the hills in both cases constitute around 30% of the northern organic farms. In fact, the farms located in the areas subject to less tendency for intensive farming often see organic certification as a way to enhance their products and thus make up for the negative effects on the revenue of the more difficult pedoclimatic conditions. The distribution of the organic farms by class of UAA is very different to that of the total farms considered. Only 9.6% of the first, in fact, fall within the class relating to a UAA of less than 2 hectares, compared to 50.9% of the other. However, considering the class of UAA ranging between 5 and 30 hectares, the organic farms always show a greater incidence with respect to that of the total farms. Therefore, the average UAA of the organic farms, equal to 27.7 ha, is much higher than that of the total farms (7.9 ha).


Table 1 - Organic farms and relative UAA by altitude zoe, 2010 Organic farms No. Mountain Hill Plains Total

Organic farm UAA

%

ha

%

Organic farms/farms

Organic farm UAA /UAA

Average organic UAA per farm

%

%

ha

9,384

20.8

265,664

21.2

3.4

9.4

28.3

27,398

60.7

730,270

58.3

3.3

12.7

26.7

8,385

18.6

255,798

20.4

1.6

6.0

30.5

45,167

100.0

1,251,732

100.0

2.8

9.7

27.7


10

Table 2 – Percentage distribution of the farms by class of UAA and average farm UAA by regional distribution, 2010 Class of UAA 0 – 1.99 ha

2 – 4.99 ha

5 – 19.99 ha

Average UAA 20 – 49.99 ha

≥ 50 ha

ha

Organic farms North

17.4

21.8

36.5

13.4

10.9

28.3

Centre

9.8

17.8

39.2

18.8

14.5

26.7

South

7.2

16.2

40.0

21.6

15.1

30.5

Italy

9.6

17.5

39.2

19.5

14.2

27.7

Total farms North

37.7

24.0

26.0

8.0

4.3

11.5

Centre

47.1

23.7

20.7

5.5

3.0

8.7

South

57.2

20.9

15.5

4.3

2.1

6.3

Italy

50.9

22.1

18.9

5.4

2.8

7.9


The highest concentration of organic farms in the largest size classes can be partly explained by the greater tendency to hire land. Overall, in fact 32.2% of these farms have land that is completely rented or partly rented and partly owned, compared to 14.5% of all surveyed farms. Moreover, the percentage of organic farms with land that is owned, rented or loaned free of charge (5.3%) greatly differs from that of the total farms surveyed (2.4%). In both cases there is a more widespread combination in the mountain, where the phenomena of abandonment makes the land more available for renting or loaning and is often used by bordering farms so as to extend their grazing areas. However, the organic farms differ from the total farms in many other characteristics and the subsequent economic results. These characteristics and results are often linked to the greater frequency of organic farms in the larger classes of UAA. In fact, in reference to the legal status, the corporate business entity is most spread among organic farms (8.3% compared to 3.6% of the total farms),

including cooperatives (excluding social cooperatives) and this gap is much more accentuated in the Centre than in other parts of Italy. The cooperative in particular constitutes a legal and organizational form particularly suited to the situation of organic farms, which are often subject to problems relating to processing – requiring dedicated plants or in any event systems that enable the timely separation of processing of organic product from that of conventional products and marketing, given that they are scattered over a vast territory. The cooperative status, thanks to shared decision-making systems enables farms to deliver products directly, thereby obtaining higher added value than when selling them to general processing companies and/or sales companies, thus solving problems of under-representation and production positioning, while facilitating diversification of the sales channels. Moreover, in the organic farms of the Centre and particularly the South there is a greater tendency to resort to salaried labour.

11

Table 3 – Percentage distribution of the farms by land possession, 2010 Only ownership

Only rent

Only free use

Ownership and rent

Ownership and free use

Rent and free use

Ownership, rent and free use

No land

Total (no.)

Organic farms Mountain

44.6

12.0

3.0

25.3

6.6

1.1

7.2

0.2

9,384

Hill

54.2

11.9

3.8

19.2

5.0

0.7

5.0

0.1

27,398

Flatland

54.5

11.8

4.8

18.2

5.5

0.8

4.3

0.1

8,385

Total

52.3

11.9

3.9

20.3

5.4

0.8

5.3

0.1

45,167

Total farms Mountain

68.3

4.7

3.8

12.1

6.7

0.6

3.5

0.2

275,950

Hill

76.0

4.5

3.6

8.1

5.2

0.3

2.2

0.1

833,317

Flatland

71.5

5.1

3.9

11.2

5.7

0.4

2.1

0.1

511,617

Total

73.3

4.7

3.8

9.8

5.6

0.4

2.4

0.1

1,620,884


The opposite occurs in the North of the country, although the difference between organic farms with paid labour out of the total is negligible. The organic farms are also less labour-intensive as one agricultural work unit (AWU) is 20.7 ha on average, compared to 14.4 ha of the total farms surveyed. This depends both on the lower intensity of the organic livestock, never in tie stalls, compared to the conventional sites, and on the high incidence of crops that do not require a relatively high use of workforce (fodder, meadows and pastures, legumes, potatoes, oil seeds, citrus fruit and fruit trees). Moreover, in the organic farms, the farm manager is on average younger. 22% of organic farms have a farm manager aged between 20 and 39 compared to 9% in the case of the total farms. A similar situation, but with a less marked difference, concerns the later age range, up to a maximum of 64 years. The youngest age category also corresponds to an educational qualification of the farm manager that is on average higher, particularly in the central regions. As regards the distribution of organic farms there is a relatively higher concentration of those with a farm

Fig 3 – Distribution of the farms by legal status (%), 2010 100.0 98.0 96.0 94.0 92.0 90.0 88.0 86.0

Organic farms

Total farms

Sole proprietor

shareholding company

simple company

cooperative

non-business association other forms of partnerships different

other legal status non-business associations


12

Table 4 – Distribution of the farms by type of land management (%), 2010

manager with educational qualifications at least equal to a school leaving diploma. Moreover, the differences between the organic and total farms in terms of percentage seem even more marked when considering a secondary school leaving certificate and even more so for a degree certificate. The size of the farm, its organisation, the age and educational qualification of the farm manager influence the degree of innovation of the farms, some aspects of which include the computerization of one or more business activities (management, administration, operation etc.), diversification of the production activities and active sales channels. Also in this case, there are significant differences with the entirety of farms subject to the census. In fact, the organic farms using IT systems represent 15.6% of the total, more than four times the value revealed for the overall farms, a particularly significant divide found in the South, although the highest incidence is shown in the Centre and particularly the North. The central regions are however distinguished by the greater frequency, among organic farms, of those that have a website and use e-commerce to sell their products.

Type of land management Directly managed by the farmer

with paid labour

Organic farms

Total farms

Organic farms

Total farms

North

93.3

92.2

6.2

7.1

Centre

90.2

96.4

9.0

3.1

South

89.4

96.5

10.1

3.2

Italy

90.3

95.4

9.2

4.1

Source: Data processing from the 6th Agricultural Census.

Table 5 – UAA available by AWU (ha), 2010 Organic farms

Total farms

North

14.4

13.0

Centre

23.2

16.2

South

22.5

14.9

Italy

20.7

14.4

Source: Data processing from the 6th Agricultural Census.

Fig. 4 - Distribution of the farms by age group of the farm manager, 2010 Total farms

Organic farms 19.1%

0.1%

0.0% 22.2%

9.9%

up to 19 years old

37.2%

20-39 years old 40-64 anni 52.8% 58.7% Source:Data processing from the 6th Agricultural Census.

13

65 years old

Fig 5. - Distribution of the farms by educational qualification of farm manager, 2010 Total farms

Organic farms 16.8%

1.6%

6.2%

15.1%

5.0%

17.8%

No qualification 34.5%

4.5% 32.2%

Primary school certificate Middle school certificate School leaving diploma High school diploma

28.8%

University degree or diploma 32.0%

5.5% Source: Data processing from the 6th General Agricultural Census

The ability to diversify business activities is also greater in organic farms, given that the activities related to agriculture and livestock are practiced by around 17% of the certified businesses, more than three times the value attributable to businesses overall. Nevertheless, while some related types of activities are more practised by organic farms, others are relatively more frequent among the overall farms considered. The organic farms in fact are distinguished for the activities more frequently associated with organic production – such as agri-tourism, social and recreational activities, educational farms, initial processing of agricultural products, the processing

of animal and vegetable products and the production of renewable energy – while the total farms surveyed are associated with the relatively more traditional activities, such as subcontracting with farm production equipment for agricultural and non-agricultural activities, livestock services, the rehabilitation of parks and gardens, forestry. On the other hand, crafts, wood working, aquaculture, and the production of complete and complementary animal feed show no or almost no difference between the general and organic farms in the census. It is interesting to note the significant number of organic farms selling their own produce with respect to the total

Table 6 – Farms using IT systems, with websites and using e-commerce (%), 2010 Farms using IT systems Organic farms

Total farms

With website Organic farms

E-commerce

Total farms

Organic farms

Total farms

North

27.9

9.1

17.7

3.5

7.3

1.1

Centre

21.4

4.0

20.7

3.2

9.3

1.2

South

10.2

1.5

5.6

0.7

3.3

0.3

Italy

15.6

3.8

10.7

1.8

5.2

0.7


14

Fig 6. - Farms by type of related activity (%), 2010 Agri-tourism Recreation and social activities Educational farms Crafts Initial processing of farm products Processing of vegetable products Processing of animal products Production of renewable energy Wood working (cutting, etc.) Aquaculture Subcontracting using farm production equipment for agricultural activity Subcontracting using farm production equipment for non-agricultural activities Breeding services Rehabilitation of parks and gardens Forestry Production of complete and complementary animal fodder Other remunerative activities related to the farm

0

5

10

15

20

25

Organic farms

30

35

40

45

50

Total farms

Table 7 – Farms by sales channel of products, 2010 Sales direct to the consumer

Sales direct to the consumer of which on-farm

Of which outside the farm

Other sales channels Other sales channels sales of which to other organic farms

of which to industrial businesses

of which to commercial businesses

of which sales or supply to associated organisations

%

Total farms with sale of their own products

No.

%

Organic farms North

41.9

35.5

17.1

87.9

25.4

13.6

46.4

42.7

8,157

94.8

Centre

53.1

45.4

17.9

79.1

20.6

13.2

41.8

33.3

7,032

84.3

South

35.9

27.0

14.3

84.7

13.3

17.7

55.2

22.6

25,054

88.8

Italy

40.1

31.9

15.5

84.4

17.0

16.1

51.1

28.5

40,243

89.1

Total farms North

17.7

14.4

6.0

93.2

22.1

12.2

41.5

44.1

339,087

85.4

Centre

34.6

28.5

9.9

80.8

16.7

8.9

36.5

34.7

131,579

52.2

South

29.1

21.9

10.0

81.4

12.0

14.0

45.5

23.2

566,545

58.3

Italy

26.1

20.3

8.6

85.2

15.9

12.7

43.0

31.5

1,037,211

64.0


15

(89.1%), considerably higher than that of the overall surveyed farms (64%), indicating their greater inclination and ability to organise their supply from a sales point of view, also supported by certification, mainly requested by the farms where only part of or none of their own produce is destined for self-consumption. The distinctive element between these and the total farms surveyed is the direct sale to the consumer, both at the farm and elsewhere. This channel is particularly used in the organic sector – and especially in the central regions – where the direct relation between the producer and consumer is prioritised so as to increase the consumer’s trust in the producers themselves. However, as regards the other sales channels, the organic farms are above all distinguished for the sale of their own products to the industrial processing and commercial businesses,

while they constitute a smaller number compared to the total farms that send their products on to associations. The distribution of organic farms by economic size class highlights a greater concentration in the classes related to standard production1 of between 8,000 and 100,000 euros. Moreover, the incidence of the number of organic farms out of the national total is greater in the case of the larger economic categories (at least 50,000 euros), thanks to the higher overall standard production level obtained by organic farms compared to that of the total farms, a phenomenon related to the average UAA per farm, which is relatively larger for organic farms than for total farms. The scarcity of the organic farms in the economic class below 8,000 euros could indicate, among other things, a reduced cost effectiveness for the farms to be certified if sufficiently high production levels have

Table 8 – Organic farms and relative UAA by economic size class, 2010 Economic Size Class

Organic farms no.

< 8,000 euros


%

%

ha

SAU biologica media per azienda ha

6,963

15.4

25,650

2.0

3.7

From 8,000 to less than 25,00 euros

11,972

26.5

114,579

9.2

9.6


9,365

20.7

166,901

13.3

17.8


8,183

18.1

251,080

20.1

30.7


6,157

13.6

352,944

28.2

57,3


1,667

3.7

164,337

13.1

98.6

860

1.9

176,241

14.1

204.9

45,167

100.0

1,251,732

100.0

27.7

≥ 500,000 euros Total


The farm production standard is the sum of the standard production of each agricultural activity multiplied by the number of units of hectares of land or animals at the farm for each of the aforementioned activities. The standard production of a specific agricultural product, whether vegetable or animal, is the monetary value of the production, which includes the sales, the reuse, self-consumption and the changes in the stock of the products. The standard productions are calculated at the regional level (referring to the geographical units used for the RICA and SPA surveys) as a five-year average. The standard production of the data relating to the 6th Agriculture Census is determined via the coefficients of the 2007 production standard calculated on the basis of the average values of the production and prices referring to the years 2005 to 2009.

1

16

not been reached, due to the cost of certification and bureaucratic charges. The organic farms with ‘permanent crop’ type of farming (TF) represent over half of those surveyed, but the relative UAA exceeds just 24%, with a situation diametrically opposed to those farms with ‘grazing’ TF. The average UAA of the grazing farms amounts to 62 ha, given the need to arrange larger areas for the livestock

grazing land and the production of fodder. A similar but more balanced situation in terms of farms and relative UAA is that of the ‘arable’ TF. Among the TF that show the lowest incidence of organic farms with respect to the total, ‘mixed livestock breeding’ and ‘crops-breeding’ stand out when compared to the total number of agricultural farms, both in terms of number and above all of UAA, of 7% and 17% respectively.

Table 9 – Organic farms and relative UAA by TF, 2010

Type of farming

Organic farms

no.

Organic farms UAA

Organic farms/ Farms

Organic farms UAA/ UAA


%

ha

%

%

%

ha

7,458

16.5

296,619

23.7

1.9

6.0

39.8

Horti-floriculture

703

1.6

8,602

0.7

1.9

5.8

12.2

Permanent crops

23,141

51.2

302,256

24.1

2.6

11.3

13.1

7,058

15.6

438,980

35.1

5.5

12.9

62.2

Arable land

Grazing Granivores Mixed crops Mixed livestock Crops - breeding

328

0.7

8,269

0.7

3.5

4.6

25.2

3,615

8.0

90,737

7.2

3.4

11.4

25.1

326

0.7

13,559

1.1

7.7

16.5

41.6

2,536

5.6

92,711

7.4

7.1

17.0

36.6


17

2. Structure of the farms The international context The overall profile of the diffusion of organic farming worldwide has been quite stable now for approximately three years, following the sustained growth in the previous three-year period (FiBL – IFOAM DATA 1). The global area in question is arranged over 37.2 million hectares of which 81%

is concentrated in Oceania, Europe and Latin America. Italy remains among the top ten countries in the world for areas cultivated using the organic method, and among these it is the one with the highest percentage of UAA compared to the total UAA. Moreover, Italy is top in Europe for number of producers and in general, for certified operators (including processers and importers).

Table 1 – The first ten countries in the world for areas cultivated with the organic method, 2010

Table 2 – The first ten countries in the world by number of organic farms, 2010

Organic area Million ha

Organic area / total UAA

Organic farms

%

Million ha

Australia

12.0

2.9

India

547,591

Argentina

3.8

2.7

Uganda

188,625

United States of America

1.9

0.6

Mexico

169,570

China

1.9

0.4

Tanzania

145,430

Spain

1.6

6.5

Ethiopia

122,359

Italy

1.1

8.7

Turkey

43,716

India

1.1

0.6

Peru

43,661

Germany

1.0

6.1

Italy

42,041

France

1.0

3.6

Spain

32,195

0.9 37.2

6.3 0.9

Dominican Republic

24,161

Uruguay World

World

Source FiBL –IFOAM (2013)

Source: FiBL – IFOAM (2013)

FIBL-IFOAM, The world of organic agriculture. Statistics and emerging trends 2013.

1

19

1,798,359

Fig. 1 – Organic operators in the main European countries (no.)

Fig 2. - Organic areas in the main European countries (ha)

50,000

2,000,000

45,000

1,800,000

40,000

1,600,000

35,000

1,400,000

30,000

1,200,000

25,000

1,000,000

20,000

800,000

15,000

600,000

10,000

400,000

5,000

200,000 0

0 Italy

France

2011 Operators

Germany

Spain

Spain

2012 Operators

Italy

2011 area

Germany

France

2012 area

Source: SINAB (IT), Agence Bio (FR), Bundesministerium für Ernährung (DE), Ministerio de Agricultura, Alimentación y Medio Ambiente (ES).

Source: SINAB (IT), Agence Bio (FR), Bundesministerium für Ernährung (DE), Ministerio de Agricultura, Alimentación y Medio Ambiente (ES).

Organic farming in Italy

followed by Veneto. There is a significant increase in organic production in Puglia, both in terms of number of farms and cultivated hectares. This was also by virtue of a call for financial aid applications, in April 2012, in the name of the Organic Farming Action of the Agro-Environmental Measure of the RDP. The organic surface area is, at a national level, equal to 1,167,362 hectares, with a 6.4% increase compared to the previous year. The main production areas are fodder, cereal and grazing land. The area invested in olive growing follows in order of importance. The data on the sector’s trend certainly demonstrates its substantial strength: it is not just the number of operators and the area that is on the increase, but also the percentage of the organic UAA on the total UAA, which is higher than 9%.

SINAB produces an annual report Bio in cifre/Organic numbers with which MIPAAF issues official data on Italian organic farming as of 31st December of the previous year, gathered by inspection bodies. This data reveals that there are 49,709 sector operators of which around 81% are exclusive producers, followed after a large gap by the preparers, which include farms carrying out retail sale activities (11.3%), mixed preparers or also producers (7.4%) and importers (0.6%). In comparison to the data of 2011, a 3% increase in the number of operators is shown. The distribution of the organic operators throughout the national territory shows that there is a greater presence of organic farms in Sicily and Calabria, in line with the previous years. However, the leader in terms of the number of processing farms is Emilia-Romagna,

20

Table 3 – Organic operators by type and region (no.) 2012 Exclusive producers

Exclusive preparers

Producers/ Prepares

Importers*

Total operators on 31/12/2012

1,282

354

225

38

1,899

1,977

-3.9

74

7

9

0

90

86

4.7

Liguria

219

94

57

9

379

389

-2.6

Lombardy

873

605

173

46

1,697

1,506

12.7

1,091

288

144

9

1,532

1,459

5.0

Veneto

960

518

216

52

1,746

1,811

-3.6

Friuli –Venezia Giulia

269

100

43

4

416

432

-3.7

Emilia-Romagna

2,555

692

301

56

3,604

3,602

0.1

Marche

1,668

192

141

6

2,007

2,127

-5.6

Tuscany

2,344

442

722

22

3,530

3,536

-0.2

Umbria

960

121

127

7

1,215

1,318

-7.8

Lazio

2,764

327

205

6

3,302

3,001

10.0

Abruzzo

1,246

191

110

4

1,551

1,612

-3.8

182

35

18

1

236

232

1.7

Campania

1,454

303

134

5

1,896

1,896

0.0

Puglia

5,377

462

262

10

6,111

5,081

20.3

Basilicata

1,033

77

70

0

1,180

1,348

-12.5

Piedmont Valle d’Aosta

Trentino Alto Adige

Molise

Total on 31/12/2011

% Variation 2012/2011

Calabria

6,691

213

292

5

7,201

7,115

1.2

Sicily

7,056

510

339

13

7,918

7,469

6.0

Sardinia

2,048

66

81

4

2,199

2,272

-3.2

40,146

5,597

3,669

297

49,709

48,269

3.0

Italy

* this item includes both the exclusive importers and the importers that also perform production and preparation activities Source: SINAB

21

Table 4 – Organic areas by type of crop (ha) Conversion areas 2011 Cereal Protein, legume and grain crops

2012

Organic areas

TOTAL

2011

2012

2011

2012

35,654

36,175

148,456

174,368

184,111

210,543

3,867

2,907

17,577

17,930

21,445

20,837

Root vegetables

393

239

1,445

936

1,838

1,175

Industrial crops

1,899

1,658

14,126

11,910

16,024

13,567

50,567

39,160

200,016

215,844

250,583

255,003

Other arable crops

2,239

1,198

8,314

3,833

10,553

5,031

Vegetables

4,464

3,457

18,942

17,879

23,405

21,336

Fruit

6,011

6,387

17,226

16,645

23,237

23,033

Nuts

6,949

7,108

20,890

22,963

27,839

30,071

Citrus fruits

6,097

6,048

15,843

19,292

21,940

25,340

Vines

18,735

20,410

34,077

36,937

52,812

57,347

Olive

41,980

46,935

99,588

117,553

141,568

164,488

776

1,323

6,768

5,062

7,543

6,386

Fields and pastures (excluding rough grazing)

40,408

39,781

141,652

165,375

182,060

205,156

Rough grazing

29,987

20,273

63,544

65,272

93,531

85,545

Fodder crops

Other permanent crops

Fallow land

9,756

10,516

28,644

31,988

38,400

42,504

Total crops

259,782

243,575

837,107

923,786

1,096,889

1,167,362

4,886

4,211

10,082

13,847

14,968

18,058

Other categories to exclude from the total: forest areas and/or areas of wild harvesting; other Source: SINAB.

22

number of operators

Thousands of hectares

0

2012

2011

2010

2009

2008

2007

2006

2005

0

2004

200 2003

10,000 2002

400

2001

20,000

2000

600

1999

30,000

1998

800

1997

40,000

1996

1.000

1995

50,000

1994

1.200

1993

60,000

1992

1.400

1991

70,000

1990

Number of operators

Graph 3 – Evolution of the number of operators and of the Italian organic area

UAA

Source: SINAB.

Organic livestock breeding

Graph 4 – Organic livestock farms by region, 2012

In Italy there are 7,700 agricultural livestock farms managed using organic farming methods, around 12% more than the previous year. A substantial part of the organic livestock is concentrated on the larger islands (42% of the total), but there are also several hundred organic livestock farms in various central and northern regions. Moreover, the organic livestock tends to be concentrated in specific areas as in the case of the Val di Vara in the province of La Spezia and of Val d’Ayas in Valle d’Aosta. In the case of all animals in livestock production, the trend shows an increase in the number of organic livestock compared to 2011, and this trend is particularly marked in relation to pigs (+32.2%), while the increase of cattle (+5.2%), and sheep and goats (+1.2%) is more contained. Lastly, there was also an increase of around 19,500 hectares compared to 2011 in the fodder areas, the produce of which support the breeding of cattle, sheep and goats (+3.7%). As regards the increase of small ruminants, organic farming techniques show a

Piedmont Valle d’Aosta Lombardy Trentino Alto Adige Veneto Friuli –Venezia Giulia Liguria Emilia-Romagna Tuscany Umbria Marche Lazio Abruzzo Molise Campania Puglia Basilicata Calabria Sicily Sardinia

338 54 230 436 180 42 102 662 474 130 311 766 54 2 58 117 185 328 1,735 1,510 0

Source: SINAB.

23

500

1,000

1,500

2,000

different distribution, as they correspond to 10% of the national sheep livestock and 9% of the goat livestock. The organic methods amount only to 2.3% compared to that of the total livestock in Italy.

3,000,000

250,000

2,500,000

200,000

2,000,000 150,000 1,500,000 100,000 1,000,000 50,000

Table 5 – Organic livestock population by species, 2012

No. of heads (poultry)

No. of heads (cattle, pigs, sheep and goats)

Graph 5 –Organic livestock population, by species bred

500,000

LSU

Cattle

203,823

169,466

2.3

Sheep

707,623

70,579

10.1

Goats

79,683

7,234

8.9

Pigs

42,872

11,677

0.5

2,824,978

29,545

-

128,241

-

-

Poultry 0

2008 Cattle

2009

2010

Pigs

2011

Poultry

2012

0

Bees (no. of hives)

Sheep and goats

Imports Each year SINAB processes the data gathered on the basis of the information that organic product importers from non-EU countries not restricted by import equivalency are required to submit to MIPAAF every year (Ministerial Decree no. 700/2011 and no. 18378/2012). For the first time, in addition to the operations carried out under the so-called transitional regime, the data relating to 2012 also includes the imports under the equivalence regime2 or assessed as equivalent by inspection bodies authorised by the European Commission. In any event, the intra-EU trade activity is not recorded and consequently the import data do not include organic products that enter Italy from non-EU countries via other EU countries. Overall, in 2012, a sharp reduction by 57% was noted in total imports, over the previous year; this reduction is more significant when considering the fact that the SINAB data from last year regarded exclusively imports

Graph 6 - Organic fodder area and grazing animal numbers 1,400,000

1,307,492

1,200,000

991,129

954,888

1,000,000

971,804

918,722

800,000 600,000

% of total livestock

Source: SINAB, ISTAT.

Source: SINAB.

Surface area (ha)

Number of animals

430,358

400,000

455,568

480,353

2009

2010

526,174

545,704

2011

2012

200,000 0 2008

Fodder area

Grazing animals (no.)

Source: SINAB.

The transitional regime is that provided by article 19 of regulation (EC) 1235/08; the equivalence regime is defined by article 33 of the same regulation.

2

24

Europe have decreased considerably. In more detail, for the cereal imports with a 74% decrease compared to 2011, trade is concentrated on three products: soft wheat from North America and Non-EU Europe, rice from Asia and corn from Non-EU Europe. Imports of durum wheat have all but disappeared, in line with the trend of recent years. As regards the industrial crops with an 83% decrease in imports compared to 2011, only soya from Asia is imported in large quantities. On the other hand fresh fruit imports increase to around 82% and mainly regard bananas from South America, as well as kiwis and pears. A reduction is noted of around 5% in the quantity imported compared to 2011 for vegetables, mainly potatoes from North Africa, followed by beans and lentils. Among the processed products imported in 2012, the

authorised by MIPAAF. The application of the new EU legislation, which in 2014 abolished the possibility of importing on authorization of the Member State (i.e. the elimination of the transitional regime), is in fact causing an increase in the imports carried out under the equivalence regime. In the specific case of 2012, the imports under the equivalence regime, to the detriment of those under the transitional regime, relate above all to the processed food, fresh and dry fruit and industrial crops. Industrial crops and cereals are the products that suffered the greatest reduction in quantity imported, with a particularly significant drop in some geographical areas such as non-EU Europe. On the other hand, an increase in the imports was noted above all for fruit, where trade is particularly intense in South America, while the purchases from non-EU

Graph 7 – Quantity of organic product imported in Italy by geographical area of origin (t) Africa Central America North America South America Asia

2009

2010

Source: SINAB.

25

2011

2012

100,000

95,000

90,000

85,000

80,000

75,000

70,000

65,000

60,000

55,000

50,000

45,000

40,000

35,000

30,000

25,000

20,000

15,000

10,000

5,000

0

Non-EU Europe

increase of 35% compared to the previous year is linked essentially to the imports of extra-virgin olive oil from North Africa. It should therefore be highlighted that this increase is strongly affected by the variation in the type of data processed compared to the previous year. In fact,

the imports of extra-virgin olive oil from North Africa were presumably already substantial over the last year, but were not included in notification by the importers and therefore not counted in the MIPAAF data under import equivalency.

Table 6 – Imports of organic products by category (t) Type of crop

% Var. 2008-2012

2008

2009

2010

2011

2012

44,378.0

23,269.3

43,142.2

50,697.2

13,074.3

-70.5

Industrial crops

8,811.5

426.4

9,437.1

45,832.2

7,783.6

-11.7

Fresh and dry fruit

8,814.0

7,245.2

3,479.4

5,558.6

10,140.4

15.0

240.5

139.1

701.4

1,041.7

1,333.2

454.3

Cereal

Natural extracts Vegetables Processed food Aquaculture Total

9,435.7

8,165.3

7,639.7

5,303.6

5,007.3

-46.9

18,179.3

10,264.3

9,502.9

10,558.4

14,327.8

-21.2

-

-

-

2.1

-

-

89,859.1

49,509.6

73,902.7

118,993.7

51,666.5

-42.5

Source: SINAB

26

3. Economic situation of the farms Among the organic farms included in the 2011 national register, 863 farms are also listed via the FADN, with part of the 2011 Italian accountancy sample that overall accounts for 11,204 farms including both conventional and organic. In order to analyse their structural profile and the economic results, the subsample of FADN

organic farms was compared with a subsample of 6,280 conventional FADN farms, which proved similar to the first in terms of economic size, production orientation and geographical location. The FADN organic farms are mainly concentrated in the central and southern regions of the peninsula (77%) and almost half (48%) are

Table 1 – Structural comparison of the FADN organic and conventional farms, 2011 Indicators

Organic

Conventional Average farm data

Utilised Agricultural Area - UAA (ha)

47.5

33.2

Livestock unit – LSU (no.)

21.3

15.5

Farm work unit TWU (no.)

2.3

1.7

Land capital – KF (euros)

556,927

440,382 Structural indicators

UAA/TWU (ha)

21.1

19.6

LSU/TWU(ha)

9.4

9.2

LSU/UAA(no.)

0.4

0.5

11,723

13,249

Land capital/UAA (euros) Source: INEA, FADN database

What is FADN?

The Farm Accountancy Data Network (FADN*) is an EU tool aimed at monitoring the economic situation of farms in Europe. In Italy, the FADN provides annual economic data of a representative sample of commercial farms, i.e. farms whose production is market-oriented, with economic size greater than 4,000 euros gross standard production. The farm production standard is equivalent to the amount of standard production values of each agricultural activity multiplied by the number of units of hectares of land or animals at the farm for each of the aforementioned activities. The standard production of a specific agricultural product, whether vegetable or animal, is the monetary value of the production, which includes the sales, reuse, self-consumption and the changes in the stock of the products. The standard productions are calculated at the regional level as a five-year average. detailed information on FADN is available on the website www.rica.it

*

27

specialised in permanent crops, compared to 38% of the conventional sample. Moreover, the farms with a non-specialised production orientation are more greatly represented in the organic sample with respect to the conventional farms (18% compared to 13%). In fact the mixed systems suit well with the organic set-ups in terms of rotations, organic fertilization and the presence of pioneer crops. The organic farms are on average greater in size than the same conventional versions: its average farm area exceeds 14.3 hectares (47.5 hectares compared to 33.2 for conventional farms); the average number of livestock

units – the presence of which plays an important role in the recovery of the fertility of the land as well as creating a source of revenue – is greater than 5.7 LSU (21.3 LSU compared to 15.5 for the conventional farms). The greater use of labour (2.3 AWU compared to 1.7 for the conventional farms) and of capital (the average land capital is equal to 556,972 euros, significantly higher than the value 440,382 euros indicated for conventional farms) is related to the greater physical size. The organic farms show smaller production intensity compared to the conventional ones, confirmed by a greater availability of utilised agricultural area by work

Table 2 –Economic results of the FADN organic and conventional farms (euros), 2011 Organic farms GSP of which connected activities

% of GSP

136,194

Conventional farms

% of GSP

104,090

4,546

3.3

2,425

2.3

Current costs

43,702

32.1

39,797

38.2

Added value

92,493

67.9

64,293

61.8

Long-term costs

11,355

8.3

8,285

8.0

Labour and passive rent

22,957

16.9

15,066

14.5

Operating profits

58,180

42.7

40,942

39.3

Net profits

64,660

47.5

42,330

40.7

Source: INEA, FADN database.

Table 3 – Productivity and profitability of the land and labour (euros), 2011 Organic farms

Conventional farms

% Variation

GSP/UAA

2,867

3,132

-9.2

GSP/AWU

60,414

61,474

-1.8

Current costs/UAA

920

1,197

-30.2

Long-term costs/UAA

239

249

-4.3

Net profit/UAA

1,361

1,273

6.4

Net profit/FWU

51,478

34,294

33.4

Net profit/GSP

47

41

14.3


28

unit (21.1 hectares/AWU compared to 19.6 hectares/AWU in the conventional farms) and by a smaller livestock density per hectare of UAA (0.4 LSU/ha compared to 0.5 LSU/ha for conventional farms). Moreover, the lower value of land capital per hectare of agricultural area is also often linked to the more extensive production processes (11,723 euros/ha in organic farms and 13,249 euros/ha in conventional farms). The largest physical dimensions are also accompanied by the best economic results. At organic FADN farms, the gross saleable product3 is on average 136,194 euros compared to 104,090 euros recorded in the conventional farms, while the net profit, intended as compensation for all the factors produced by the entrepreneur, is equal to 60,910 euros in the organic farms and 41,066 euros in the conventional ones. The economic results correspond to both the sale of products and agriculturerelated activities (agri-tourism, farm contractors, education farms etc.), which on organic farms have slightly more impact than on the conventional ones

(3% and 2% respectively on the GSP) demonstrating a greater tendency of the first to diversify their activities. In addition to generating economic values above those of the conventional farms, organic farms proved to be more efficient. In fact, the added value represents 68% of the GSP in the organic farms compared to 62% in the conventional farms, with a subsequent reduction of ongoing costs (technical methods, services loaned by third parties and other direct expenditures), the main item of holding expenditure. This is the result of adopting less intensive production processes, in which a lesser quantity of outsourced farm technical production methods is used. By contrast, the cost of labour impacts greatly on the production of the organic farms, probably as a result of a greater tendency to use external labour, with farm sizes larger on average in terms of area than those of the conventional farms, where there is more family labour. The family work units constitute 72.9% of the total farms compared to 55.7% in relation to the organic farms.

90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0

Net profit

% Current Costs/GSP

60 50 40 %

euros

Graph 1 – Economic results by main production types, 2011

30 20 10 0

Vegetable types

Organic

Livestock types

Vegetable types

Mixed types

Conventional

Livestock types

Organic

Mixed types

Conventional

Source: INEA, FDNA database

In addition to proceeds from sales of the products, gross saleable product also includes those agriculture-related activities as well as subsidies of the First CAP pillar. The operating profits are obtained by subtracting the current costs from this value (consumption; other expenses and subcontracting services), the long-term costs (depreciations and allocations), the distributed revenue (labour, salaries, social security contributions and passive rents).

3

29

The best results in organic farming have also been achieved thanks to EU contributions and in particular, specific aid for the sector, received by virtue of the agro-environmental measure for rural development, contributing by 15% to the revenue of beneficiary farms compared to 12% on conventional farms. The analysis of the production indexes by land and labour shows the extensive character of the organic production techniques: here the production value is less both in terms of hectares and unit of labour. Nevertheless, the profitability of land and labour remains in favour of organic farms. The economic results vary depending on the production systems, but profitability of organic production remains on average higher in the macro sections of vegetables, livestock and mixed products (crops and livestock).

orientation given that the farms with permanent crops prevail. The farms with vegetable product 4 groups have a large UAA and, particularly in the South and the islands, there is a tendency towards a significant number of extra-family labour that is especially employed in the harvesting work. The indexes that express the productivity of the land and the profitability of labour have clearly higher values for farms located in northern Italy, especially in the case of the North-East regions where the crops, even if managed according to the organic farming methods, have a more intensive character compared to the situation in the other geographical areas. The organic farms that practice livestock breeding are well represented in the FADN sample: in fact, there are around 140 livestock businesses specialised in the breeding of grazing animals and 90 mixed farms cultivating arable crops and breeding grazing livestock. On average, this regards farms with extended fodder area and in general a very low number of livestock, particularly in the regions of the North-West, also due to the availability of extended alpine grazing areas

Result for the main organic production sections The FADN organic farms are strongly concentrated both in terms of territory, being largely located in CentralSouthern Italy and on the islands, and in terms of crop

Table 4 – Structural parameters of FADN organic farms specialised in vegetable produce and mixed farming, 2011 Farms

UAA

LSU

FWU

TWU

UAA/TWU

FWU/TWU

UAA Land capital

n.

ha

n.

n.

n.

ha

%

€

North-West

54

50.7

0.9

1.6

2.3

22.2

70.0

7,755

North-East

60

38.8

3.6

1.4

2.3

17.2

62.8

34,632

Centre

162

40.5

0.7

1.3

2.0

20.4

65.3

14,821

South

273

29.9

0.3

1.0

2.4

12.6

40.0

13,060

75

41.8

0.2

0.9

2.8

15.1

31.2

11,685

Islands Source: INEA FADN database.

4

TF 1 “Farms specialised in arable crops”, TF 3 “Farms specialised in permanent crops” and TF 6 “Mixed cultivation farms”. TF is an acronym Type of Farming.

30

Table 5 – Economic results of FADN organic farms specialised in vegetable produce and mixed crops, 2011 Farms

GSP/UAA

Current costs/UAA

Long-term costs/UAA

Operating profit/UAA

Net profit/ FWU

Net profit/ GSP

n.

€

€

€

€

€

€

North-West

54

5,082

1,675

288

2,506

77,597

48.0

North-East

60

5,790

1,565

388

3,093

91,232

57.7

Centre

162

2,719

779

336

1,171

41,254

48.5

South

273

3,131

818

215

1,287

47,061

47.9

Islands

75

3,237

1,064

167

1,156

55,550

35.5

UAA/ TWU

FWU/ TWU

UAA land capital

ha

%

€


Table 6 – Structural parameters of the FADN organic livestock farms, 2011 Farms

UAA

of which UAA for fodder

LSU

FWU

TWU

n.

ha

ha

n.

n.

n.

LSU/UAA

Organic farms specialised in the breeding of grazing animals North-West

13

56.1

55.6

40.1

1.6

1.8

0.7

31.4

91.1

4,655

North-East

32

58.6

48.3

92.1

2.0

2.5

1.6

23.3

78.6

11,227

Centre

40

96.8

77.9

92.7

1.6

2.3

1.0

42.1

70.2

6,905

South

23

64.0

49.2

77.7

1.6

2.3

1.2

28.1

68.4

6,512

Islands

35

104.8

91.2

84.0

1.4

1.7

0.8

61.4

80.7

4,685

North-West

20

35.0

30.7

35.7

1.2

1.4

1.0

24.9

88.9

9,771

North-East

11

21.8

15.8

43.5

1.9

1.9

2.0

11.2

100.0

12,593

Centre

36

76.5

60.0

52.5

1.7

2.0

0.7

38.6

83.8

10,420

South

13

119.1

62.2

52.5

1.3

2.4

0.4

48.8

51.5

5,087

Islands

10

86.5

83.6

49.1

1.0

1.7

0.6

50.6

58.7

8,780

Organic farms of mixed crops-breeding


31

Tab. 7 – Risultati economici delle aziende biologiche zootecniche RICA, per ripartizione geografica, 2011 Farms

GSP/UAA

n.

€

Current costs/ LSU

Long-term costs/LSU

€

€

Operating pro- Net profit/LSU fit/LSU €

Net profit/ GSP

€

%

Organic farms specialised in livestock North-West

13

1,093

497

337

510

21,266

56.4

North-East

32

4,668

1,466

181

987

53,107

38.3

Centre

40

1,661

523

238

751

49,639

49.8

South

23

2,125

665

194

672

37,301

42.8

Islands

35

795

323

130

421

36,120

59.7

Mixed organic farms crops-livestock North-West

20

1,951

586

273

801

26,022

47.6

North-East

11

7,199

2,412

173

863

20,370

25.2

Centre

36

1,760

936

267

1,130

39,576

48.8

South

13

957

744

274

765

33,339

36.8

Islands

10

749

269

147

601

42,229

65.4


and in the islands, where sheep-goat breeding is also notably widespread. A greater herd density is observed in the North-East regions (especially in the Veneto and Emilia-Romagna Po Valley), because of the presence of livestock businesses that are large in size and strongly capitalised, as can be inferred from the high value of the land capital/UAA index. Breeding according to the organic methods guarantees satisfying economic results, although heterogeneous in reference to the various geographical areas. The profitability of labour is greater in the case of the specialised livestock farms of the North-East and Centre while in the case of non-specialised farms, the best performance in terms of NI/FWU can be observed for organic farming in central Italy and the Islands. The North-East farms are distinguished by the greater intensity of the production processes, testimony both to the greater productivity of the land, expressed by the GSP/UAA ratio, and by the high current costs with LSU,

and a greater tendency to outsource farm production such as animal feed.

Public support for FADN organic farms The information in the FADN confirms how the support envisaged by the Common Agricultural Policy (CAP) considered overall, significantly influences the revenue of the farmers. In both the subsamples in question (organic and conventional), the majority of farms receive a total CAP contribution (EU, national and regional share) which accounts on average for 40% of the net profit on beneficiary organic farms and 37% on conventional farms. In particular, the support from the first CAP pillar in both production systems represents the greatest amount of overall CAP aid received by the agricultural holdings, even if it has a smaller relative impact on organic farms (63% of the total CAP aid compared to 83% of the conventional farms). The greater inclination of organic farms to multi-

32

functionality, which enables compliance with a greater number of rural development measures, along with specific support aimed at the organic production system, explains the diverse distributions of CAP aid between the first and second pillar in the two production systems. Moreover, production orientations also influence aid distribution, as in the case of arable crops where a particularly predominant contribution of the first pillar is shown in both the production models. The aid related to the first pillar on average influences the net profit of conventional farms more than that of organic farms (32% compared to 27%). On the other hand, the support related to the second pillar accounts for 25% of the net profit of the organic farms compared to 20% of the conventional farms.

The organic farms greatly benefit from EU aid, both in relation to the first and second pillar. In particular, the percentage of organic farms that receive aid of the second pillar amounts to 67%, compared to 26% of the conventional farms. This can be mainly explained by the agro-environmental measures, including specific support for organic farming. However, it must be said that not all organic farms considered in the FADN sample receive this aid, for two reasons: the available funds are limited and therefore do not allow all requests for aid from farms to be accepted, furthermore the bureaucratic difficulties in requesting the aid discourage the farmers from applying, and the level of payment is not always deemed sufficient for the heavy costs involved in organic production methods.

Graph 2 – Incidence of farms receiving EU aid by type of contribution received (%) - 2011

Graph 3- Incidence of EU subsidies on the net profit of farms (%) – 2011 45 40 35 30 25 20 15 10 5 0

120 100 80 60 40 20 0

CAP subsidies

1st pillar subsidies

Organic

2nd pillar Agro-environmental subsidies subsidies

Conventional

CAP/RN

1st pillar/RN

Organic

Source: INEA, FADN database


33

2nd pillar Agro-environmental/RN subsidies

Conventional

Graph 4 – Distribution of CAP subsidies between first and second pillars, 2011 Organic farms

Conventional farms

All

All

Mixed

Mixed

Grazing

Grazing

Permanent Crops

Permanent Crops

Arable crops 0%

Arable crops

20%

40%


60%

80%

100%

0%

2nd pillar subsidies

20%

40%



34

60%

80%

100%

2nd pillar subsidies

4. The market Despite a general reduction in the consumption of farm food products, the global turnover of organic products and foods continues to grow. Organic Monitor estimates a total turnover of 63 billion dollars in 2011 (equal to 47.8 billion euros), showing a 6.3% increase on 2010. The demand is mainly concentrated in North America and Europe which together represent 96% of the sales. The countries to record the highest turnover on the domestic market are the United States with 21 billion euros, Germany (6.6 billion euros) and France (3.8 billion euros). Italy is in sixth place after Canada and the United Kingdom with a domestic market value of 1.7 billion euros. The market value is therefore concentrated in North America and Europe, while the organically farmed areas are not always located in these same zones. For example, North America represents around 50% of the total market

value compared to its rating of just 7.5% in terms of area. On the other hand, in other continents such as Asia, Oceania and Latin America, the amount of surface area is much higher compared to that of the market. As regards the European market, in 2011 it was estimated at 21.5 billion euro (19.7 billion in the EU) by FIBL-IFOAM , with an increase of 9% compared to 2010. In 2011, the market grew more than the surface areas and at higher rates compared to those of the previous six-month period. The country with the most significant turnover was Germany (6.6 billion euros in 2011) followed by France (3.8 billion) and the United Kingdom (1.9 billion). Italy is ranked in fourth place with 1.7 billion euros and a rating of 8% on the total EU market value. A remarkable seven European countries are included among the first ten in the world for national turnover.

Graph 1 – Comparison between the % weight on total surface areas and value of the organic market in various continents, 2011

Graph 2 – The top ten countries in the world by national turnover (million euros), 2011

Other continents

Asia

2,1

9,9

46,0

Canada*

1.904

United Kingdom

1.882

Italy

1.720 1.411

Switzerland

1.065

Austria

7,5

10

3.756

France

28,5

0

6.590

Germany

Europe

North America

21.038

Usa

54,0

1,9

50,0 20

30

40

50

1.000

japan*

965

Spain

60

0

surface area % share

% market share

*Data refers to 2010. Source: FIBL-IFOAM

Source: FIBL-IFOAM.

35

5.000

10.000

15.000

20.000

25.000

Italy is also the fourth European country by greatest increase on the market in 2011 (+11%), after Croatia (+20%), Holland (+15%) and Denmark (+13%). Many of these large markets depend even more on imports, such as France, for example, which imports around 30% of its organic products. The countries with an organic sector that is higher compared to the total food market are Denmark, Austria and Switzerland, with an incidence of no less than 5%. Moreover, the annual per capita expenses are concentrated above all in these countries; Switzerland is in first place with 177 euros followed by Denmark with 162 euros and Luxembourg (134 euros). However this mainly regards small and medium sized markets.

vegetables (+7.8%). There was a more contained increase in organic milk and dairy products (+4.5%) while eggs were the only sector that showed a slight fall in price (-1.9%). A large part of the consumption of organic products is concentrated in just a few categories: the first four (fresh and processed vegetables, milk-dairy, egg, biscuits,

Tab. 1 - Acquisti domestici in valore di prodotti bio confezionati, 2012

The household purchases of packaged organic products in large-scale retail in Italy The Italian market of organic products is recording a growth in all channels. In particular, according to ISMEA findings, the trend of domestic consumption of packaged organic products in large-scale retail has been continually increasing since 2005. On analysis of the most recent data, it can be observed that also in 2012, the purchases of packaged organic products continued to grow (+7.3%1 in value) in contrast to farm food purchasing that has remained stationary. The organic sector does not seem to be affected by the crisis, probably due to the growth in consumer awareness of safeguarding health and respecting the environment. Moreover, in 2012 the consumer prices of organic products (see Chapter 5) grew less than the conventional prices, possibly influencing the consumer’s choice of purchase. This dynamic depended greatly on the two-figure increases shown for purchases of organic biscuits, confectionery and snacks (+22.9%) and non-alcoholic drinks (+16.5%) and to a lesser extent on increases of pasta, rise, bread substitutions (+8.9%) and fresh and processed fruit and

Var. % 2012/11

% impact on total, 2012

Total packaged organic products of which:

7.3

100.0

Fresh and processed vegetables

7.8

30.5

Milk and dairy

4.5

22.6

Eggs

-1.9

12.5

Biscuits, confectionery and snacks

22.9

9.4

5.5

2.4

Rice and bread substitutes

10.3

6.1

Non-alcoholic drunks

16.5

6.5

Sugar, coffee, tea

0.4

3.2

Fresh and processed meat

4.8

2.0

Pasta

Source: ISMEA, Panel Famiglie GFK – Eurisko

confectionery and snacks) covered three quarters of the total spending on organic products by Italian families at large-scale retail in 2012. The optimal performance of the organic sector is highlighted further when compared with relative trends of quality certified products and the entire farm food sector in general. In fact, as in the case of the last five years, 2012 also saw improved performance in the purchase of organic products with respect to those for PDO and PGI wine and produce, and for farm food in general.

Also in consideration of exports, a value of around 3.1 billion euros is estimated.

1

Source. ISMEA Panel Famiglie GFK-Eurisko

36

Graph 3 – Trend in purchases of organic packaged products and other quality sections and of farm foods in general* (% variation on the previous year) 11,7% 12% 10% 8,5% 8,8% 8% 9,2% 7,3% 5,2% 6,7% 6% 4% 2% 1,2% 0% -2% -4% -4,1% -6% -8% -10% -12% 2004 2005 2006 2007 2008 2009 2010 2011 2012 Doc-DOCG Wines

PDO and PGI products

Total farm foods

Organic packaged products (large-scale retail)

*The data include the 87-90% of the total value of packaged organic products purchased for domestic consumption. % Variation on the previous year. Source. ISMEA Panel Famiglie GFK-Eurisko..

The most purchased products in 2012 were eggs (around 13% of the overall expenditure on packaged organic products), maintaining its ranking of 2011. Nevertheless, eggs showed a 1.9% decrease compared to 2011 as was also the case of yoghurt (-4.1%). However, positive trends were seen for jam and marmalade (+15.7%) and for drinking milk (+8.6%), which account for more than 8% of consumption in both cases. Moreover there were significant increases for the bread substitutes, fruit juices and soya drinks with only a very slight increase for organic biscuits. The sector of organic products includes food with a high penetration potential with respect to the overall consumption of food products (organic and non-organic). This regards for the most part high consumption articles, where evidently the consumer’s awareness of the method of organic production is more marked (salads, eggs, stock) but also products of mass consumption (milk,

Table 2 – Trends of household purchases in value of main packaged organic products, 2012 Var. % 2012/11

Peso % sul tot. 2012

7.3

100.0

Eggs

-1.9

12.5

Jam and marmalade

15.7

8.8

8.6

8.6

Yogurt

-4.1

8.2

Bread substitutes

14.5

5.6

Fruit Juice

19.2

3.0

Soya non-alcoholic drinks

55.8

3.0

1.9

3.0

Total organic which:

packaged

of

Milk

Biscuits Source: ISMEA, Panel Famiglie GFK-Eurisko.

37

Table 4 – Trends of household purchases of organic packaged products by distribution channel, 2012

yogurt, pasta, jam), offered in a wide range in the organic sector. Household consumption of packaged organic products continues to grow in value in all the geographical areas with the exception of the South. In particular, purchases in the Centre (+15%) increase while the increase in the North is more contained (+10.2% in the North-East and +1.9% in the North-West), still maintaining the highest number in value of organic purchases (70.8%). However, spending in the South has decreased (-7.1%) where the market values were already rather limited (around 7% of the total).

Var. % 2012/11 Total packaged organic products Super and Hypermarkets

7.3

100.0

North West

1.9

36.8

North East

10.2

34.0

Center

15.0

22.3

-7.1

6.9

Of which:

1

South

2

Traditional shops

10.7

1 Including Sardinia 2 Including Sicily Source: ISMEA, Panel Famiglie GFK-Eurisko

2

6.7

According to the Bio Bank, the number of specialised shops in Italy amounts to 1,270 units in 2012 (4.8% compared to 2011). 65% of these shops are located in the North, 21.2% in the Centre and 13.8% in the South (including the Islands). Besides the important channel of specialised shops, there is a constant growth in other forms of sale that, even if still presenting limited market shares, attract a growing interest from the consumer. This refers to direct sale, Ethical Purchasing Groups (EPG) and organic markets. The number of sales points, monitored by Bio Bank, is constantly increasing in relation to almost all the channels, at a more sustained pace in the case of Ethical Purchasing Groups and direct sales. On the other hand, the organic markets have shown a renewed increase after two years of slight decline. In recent years there have also been significant increases in terms of units in the non-household channels (organic school canteens, restaurants, agri-tourisms), particularly for agri-tourisms and canteens. The latter of these generates significant market values.

Table 3 – Trends of household purchases in value of packaged organic products in 2012 by geographic area

Total Italy

25.5

Source: ISMEA, Panel Famiglie GFK-Eurisko

ISMEA monitors the data relating to household consumption in the non-specialised channels for which the statistics relating to the purchases in the large-scale retail channel are examined in detail. There are no official quantitative statistics relating to the sales2 trends on the other channels, including that of the specialised shops, although some information is available from the Bio Bank data.

% incidence on the total, 2012

5.5

Discount stores Mobile vendors

The other channels

% variation 2012/2011

7.3

Of which:

Nevertheless, according to AssoBio estimations, the specialised shops should show an 11.9% growth in sales in 2011..

38

Table 5. – The evolution of the number of some organic product distribution channels 2005

2006

2007

2008

2009

2010

2011

2012

1,199

1,324

1,645

1,943

2,176

2,421

2,535

2,795

Organic markets

185

193

204

208

225

222

213

234

Ethical Purchasing Groups

222

288

356

479

598

742

861

891

Organic farms with direct sale

Source: Bio Bank

Table 6 – The evolution of the number of some non-household channels of organic products 2011

2012

School canteens*

2005 647

2006 658

2007 683

2008 791

2009 837

2010 872

1,116

1,196

Agri-tourisms

804

839

1,002

1,178

1,222

1,302

1,349

1,541

Restaurants

171

177

174

199

228

246

267

301

* The number refers to the municipalities in which there are organic school canteens. Source: Bio Bank

Graph 4 – Evolution of the number of sales points in some organic channels (index-linked data, 2005=100)

Graph 5 – Evolution of the number of sales points in some extra-household organic channels (index-linked data, 2005 = 100) 200 190 180 170 160 150 140 130 120 110 100

450 400 350 300 250 200 150 100

2005 2006 2007 2008 2009 2010 2011 2012

2005 2006 2007 2008 2009 2010 2011 2012 Organic farms with direct sales

Organic markets

Ethical Purchasing Groups

School canteens

Agri-tourisms

Source: Processing on Bio Bank Data

Source: Processing on Bio Bank Data

39

Restaurants

5. Prices The price analysis was carried out on a standard basket of products subject to the most widespread distribution and consumption1 and representative of the main organic supply chains

such as durum wheat and lemons, while the prices of rice, extra-virgin olive oil and onions fell slightly. In the conventional sector, on the other hand, the prices of durum wheat indicate a fall, while the lemons experienced a slightly more substantial increase. For the products that showed a decrease in the organic sector, the decline is even greater. Overall the organic basket showed a more inflationary trend compared to conventional products. In the first quarter of 2013, the original prices of organic products indicated a weighed average increase above that of 2012, compared to a less

The production prices In 2012, the production prices of the standard basket of food products examined resulted in an increase for organic and a slight decrease for conventional products. The overall increase of the original prices of organic products can be attributed to a few products

Table 1 – Trends of original prices of organic and conventional products (% var.) 2012/2011

I trim 2013/I trim. 2013

biologico

convenzionale

biologico

convenzionale

Lemons

17.6

18.1

25.8

4.9

Onions

-13.3

-14.9

2.8

64.4

Egg

6.4

31.8

28.5

13.6

Raw milk

5.1

-3.8

-0.7

-0.4

Soft wheat

4.9

-0.1

22.2

17.7

22.0

-1.9

8.2

2.7

Rice

-16.5

-31.8

0.0

-21.5

Extra-virgin olive oil

-13.3

-19.9

26.0

32.7

5.8

-0.9

13.5

7.8

Durum wheat

Average basket Source: processing on ISMEA data.

1

The following products were selected in the basket: lemons, onions, egg, raw milk, fresh milk, yogurt, soft wheat, biscuits, durum wheat, pasta, rise and extra-virgin olive oil. In order to obtain an average indicator of the basket trend, the weighed average (for the weight in terms of household consumption in the various periods examined) of the variation in prices of every product belonging to the basket, for the purposes of obtaining an average “weighed” variation of the organic products examined both at the source and at the consumption. The indicator obtained for the organic products for each type of price was compared with that relative to the basket of the same conventional products. Although the comparison of the two baskets and the different stages of the supply chain aimed to find the criteria of maximum homogeneity, it should be highlighted that in some cases the available information only allowed the identification of the aggregate characteristics of the products belonging to the baskets; it should be said that in some cases the comparison is intended as guideline only.

41

consistent increase in prices of the corresponding conventional products.It was mainly eggs, lemons, extra-virgin olive oil and wheat that contributed to the price increase of organic products in the first

three months of 2013, with less increases in virtually all cases of the corresponding conventional products. Here again the organic sector appears to be more inflationary than the conventional.

2011

2012

organic soft whe

March

February

January

December

November

October

August

September

July

June

May

April

March

February

January

December

November

October

September

August

July

June

May

April

March

February

0,40 0,35 0,30 0,25 0,20 0,15 0,10 0,05 0,00 January

euro /kg

Graph 1a – Evolution of original prices of organic and conventional soft wheat

2013

non-organic soft wh

Source: ISMEA.

Graf. 1b – Evolution of original prices of organic and conventional durum wheat 0,40 euro /kg

0,35 0,30 0,25 0,20 0,15

2011

2012

Organic durum wheat

Non organic durum wheat

Source: ISMEA.

42

2013

March

February

January

December

November

October

September

August

July

June

May

April

March

February

January

December

November

October

September

August

July

June

May

April

March

February

January

0,10

2011

2012

March

February

January

December

November

October

September

August

July

June

May

April

March

February

January

December

November

October

September

August

July

May

June

April

March

February

1,60 1,40 1,20 1,00 0,80 0,60 0,40 0,20 0,10 January

euro /kg

Graph 1c – Evolution of original prices of organic and conventional rice

2013

Non-organic rice

Organic rice

Source: ISMEA.

2011

2012

Non-organic extra-virgin oil

Organic extra-virgin oil

Source: ISMEA

43

2013

March

February

January

December

November

October

September

August

July

June

May

April

March

February

January

December

November

October

September

August

July

May

June

April

March

February

4,50 4,00 3,50 3,00 2,50 2,00 1,50 1,00 0,50 0,00

January

euro/kg

Graph 1d – Evolution of original prices of organic and conventional extra-virgin olive oil

2011

Source: ISMEA.

organic raw milk

44 2012

non-organic raw milk 2013

March

February

2012

January

December

November

October

September

August

July

2011

June

Organic consumer eggs

May

April

March

February

January

December

November

October

September

August

July

June

May

April

March

March

February

January

December

November

October

September

August

July

June

May

April

March

February

January

December

November

October

September

August

July

June

May

April

March

February

January

0,15

February

January

euro/litre

euro/6 packs

Graph 1e – Evolution of original prices of organic and conventional eggs 2,65

2,15

1,65

1,15

0,65

2013

Non-organic consumer eggs

Source: ISMEA.

Graph 1f – Evolution of original prices of organic and conventional raw milk 0,55

0,50

0,45

0,40

0,35

0,30

0,25

0,20

The price differential at source

those of the 2012 quarter, it can be observed that the corresponding percentages related to the organicconventional differential were respectively of around 30% and 21%. Therefore, at the start of 2013, a more marked difference between the prices of organic and conventional products is noted, in relation to the events of the same period of 2012 (as well as a tendency to increase with respect to the first three months of the previous year.) By analysing the individual products, it can be observed that in the case of rice, eggs and soft wheat, the price differential at source is the highest, while raw milk and lemons show lower price differentials. .

The percentage price differential at source between organic and conventional products, which amounted to 24% on average in 2011, fell to 19.6% in 2012. This is mainly attributable to the price differential of eggs because they affected the whole basket due to their significant weight. However, for some products, an increase of the respective price differentials is recorded, such as for durum wheat, rice and, to a lesser extent, raw milk and extra-virgin olive oil. Comparing the data of the first quarter of 2013 with

Graph 2 – Evolution of the price differential at source between some organic and conventional products (%)

2012

Rice

Durum wheat


2011

Soft wheat

Raw milk

Lemons

-2

45

31 17

12 14

1st quarter 2012

Source: ISMEA.

36 23

2 nd quarter 2012

25

19


3

13

31

Rice

1,9 1,5

6

36

Durum wheat

13

22

Soft wheat

30 22

21

53

Raw milk

27

29

67

Eggs

80 70 60 50 40 30 20 10 0

59

Eggs

70 60 50 40 30 20 10 0 -10

Consumer prices

negative variation is recorded at source. In the first three months of 2013 consumer prices of the organic products surveyed remained considerably stable in comparison to greater increases (+4.4%) in the corresponding conventional products. The start of 2013 therefore led to a less inflationary trend of the consumer prices of organic products compared to 2012, which however was not the case for organic prices at source, subject to greater increases compared to the previous year. Considering the basket in more detail, it can be observed a price increase of around 3% for eggs and 2.2% for onions, while the price of biscuits shows a 7.4% drop. Increases in prices were recorded in the corresponding conventional sector for lemons, eggs, extra-virgin olive oil, onions and yogurt while the price of rice fell.

In 2012 the consumer prices of the basket of organic products examined increased by 2.1% compared to 2011, while those of the corresponding basket of conventional products indicated a slightly lower increase The increase of consumer prices in organic products is due to the increase for lemons, eggs, fresh milk and pasta. Moreover, the prices of eggs and fresh milk increased more in the conventional section, while those of lemons and pasta were more contained. On analysing the data it can be therefore observed that the overall increase in prices is higher at source than at consumption. However, the reverse occurs in the conventional sector where, among other things, a

Table 2 – Consumer price trends for organic and conventional products (% variation) 2012/2011

1st quarter 2013/1st quarter 2012

organic

conventional

Lemons

7.8

2.0

0.1

16.9

Onions

-0.6

-4.1

2.2

8.0

Eggs

4.1

9.4

2.7

11.7

Fresh milk

1.8

2.5

-0.9

0.3

Yogurt

1.1

1.4

0.7

5.9

-2.0

1.0

-7.4

-1.0

1.7

1.3

-1.5

-1.6

Biscuits Pasta Rice Extra-virgin olive oil Average baskets

organic

conventional

1.3

-2.2

0.0

-5.2

-1.6

-1.1

0.4

9.0

2.1

1.9

0.3

4.4

Source: ISMEA.

46

0,10

2011

organic fresh milk

Source: ISMEA.

47 2012

non-organic fresh milk 2013

March

2012

February

January

December

November

October

September

August

July

2011

June

organic consumer eggs

May

April

March

February

January

December

November

October

September

August

July

June

May

April

March

February

March

February

January

December

November

October

September

August

July

June

May

April

March

February

January

December

November

October

September

August

July

June

May

April

March

February

January

0,15

January

euro per litre

euro/6 pack

Graph 3a – Evolution of consumer prices for organic and conventional eggs 2,65

2,15

1,65

1,15

0,65

2013

Source: ISMEA.

non-organic consumer eggs

Graph 3b– Evolution of consumer prices for organic and conventional fresh milk 1,70

1,60

1,50

1,40

1,30

1,20

1,15

1,00

2011

organic consumer pasta

Source: ISMEA

48 2012

non-organic consumer pasta 2013

March

2012

February

January

December

November

October

September

August

2011

July

June

organic biscuits

May

April

March

February

January

December

November

October

September

August

July

June

May

April

March

February

euro per kg

March

February

January

December

November

October

September

August

July

June

May

April

March

February

January

December

November

October

September

August

July

June

May

April

March

February

January

10,00 9,00 8,00 7,00 6,00 5,00 4,00 3,00 2,00 1,00

January

euro per kg

Graph 3c– Evolution of consumer prices for organic and conventional biscuits

2013

non-organic biscuits

Source: ISMEA.

Graph 3d– Evolution of consumer prices for organic and conventional pasta 3,50

3,00

2,50

2,00

1,50

Graph 3e– Evolution of consumer prices for organic and conventional rice

euros per kg

4,00 3,50 3,00 2,50 2,00

2011

2012

organic consumer rice

March

February

January

December

November

October

September

August

July

June

May

April

March

February

January

December

November

October

September

August

July

June

May

April

March

February

1,00

January

1,50

2013

non-organic consumer rice

Source: ISMEA

Graph 3f– Evolution of consumer prices for organic and conventional extra-virgin olive oil

euros per kg

13,00 11,00 9,00 7,00 5,00

2011

2012

non-organic extra-virgin olive oil

organic extra-virgin olive oil Source: ISMEA

49

2013

March

February

January

December

November

October

September

August

July

June

May

April

March

February

January

December

November

October

September

August

July

June

May

April

March

February

1,00

January

3,00

The consumer price differential

conclusion, in the periods examined, it can be noted that the prices of organic products at source grew more compared to those at consumer price. Moreover, the trend of the original prices of organic products was almost always more inflationary than that of the original prices of conventional products. The consumer prices of the organic products also increase less for the packaged product than for the fresh and loose products (such as lemons), probably due to a greater oscillation and variability of the prices of fruit and vegetable products. The analysis carried out thus shows a weak link between the trends and the behaviour of the prices at source and of those at consumption of the organic products, which seem to move in parallel and depend on different phenomena. In the case of original prices, these phenomena appear to depend more on production, while in the case of consumer prices are less dependent on these factors.

In reference to the percentage differential of the consumer price between organic and conventional, in the periods examined rather large differentials were found compared to those of prices at source, revealing a greater difference for loose products than for packaged ones. In 2012 the organic-conventional differential decreased with respect to 2011, accounting for around 38% (-3.4 points in absolute value). In the first quarter of 2013, the consumer price differential amounted to 41%, dropping by almost 8 percentage points compared to the same period in 2012. By analysing the individual products, it can be observed that in 2012 the consumer price differential for lemons, onions, pasta and rice is higher, while in the case of some milk and dairy products and eggs, it is lower. In

Graph 4 – Evolution of the consumer price differential for some organic and conventional products (%) 120 96

100 80 72

103

101 100

81 58

60 40

51 26

20

100

109

104 97

80

74

60

49

88 69

60 47

40

25 29 20

19 24

24 25 22

20

58 63 63 22

14

28

Source: ISMEA.

50

rice

pasta

biscuits

1st quarter 2013

extra-virgin olive oil

1st quarter 2012

yogurt

fresh milk

eggs

onions

lemons

rice

biscuits

yogurt

pasta 2012

extra-virgin olive oil

2011

fresh milk

eggs

onions

0 lemons

0

66 65 64 65

120

With reference to the organic-conventional price differentials, a lower percentage is found at source than at consumption, of around 25% in the first case and 40% in the second. This aspect could impact on the choices the consumer makes during a crisis period such as the current one. If the organic price is much

higher than the conventional one, the consumer may opt for less expensive products given that the demand for organic goods is rather flexible with regard to price. In any event, the organic-conventional price differential in 2012 was over 3 % lower than that of 2011 (the variation is also similar for that at source). .

51

6. Technical inputs Fertilizers

Graph 1 – Fertilizers distributed by type 1.600

Over recent years the fertilizer market has been characterized by an increase in the types of product, leading to a series of problems for the selection of those allowed in organic farming. Over the course of 2012, the new guidelines containing the eligibility criteria in compliance with the European EC Regulation no. 889/2008 were published. These criteria are aimed at checking that the raw materials used for the production of fertilizers and the processing processes respect the substances of organic agriculture and their useful effect is demonstrated in terms of agronomic and innocuity of the formula. The adaptation of the selection procedures is part of the wider EU process of revision of the formula and not only of those allowed in organic farming. It will lead to a harmonization of the European markets, introducing high standards of quality and safety of the products.

millions of tonnes

1.400 1.200 1.000 800 600 400 200 0

2003 2004 2005 2006 2007 2008 2009 2010 2011 Mineral Organic-mineral

Organic Soil conditioners and improvers

Source: ISTAT..

Graph 2 – Fertilizers distributed by region (millions of tonnes), 2011 Piedmont Valle d'Aosta Lombardy Trentino Alto Adige Veneto Friuli-Venezia Giulia Liguria Emilia-Romagna Tuscany Umbria Marche Lazio Abruzzo Molise Campania Puglia Basilicata Calabria Sicily Sardinia

Permitted Non permitted

0

200

400

600

Source: ISTAT.

53

800

1000

The ISTAT statistics on the distribution of fertilizers are available up to 2011, the year when there was a considerable increase in the use of products permitted in organic farming (+21%) compared to 2010, caused particularly by the doubling in the amount of organicmineral fertilizers (+132%) and by the increase in soil conditioners and improvers (+24%). This growth follows the positive trend of the section over recent years, in contrast to the 17% decrease of the total fertilizers recorded between 2010 and 2011, of which those permitted in organic farming make up 30% of the fertilisers marketed in Italy in 2011. The increase in the use of permitted fertilizers applied to all regions with the exception of Trentino Alto Adige where there was a slight fall of 3%. On the other hand, in Valle d’Aosta the volumes distributed increased ten-fold but this was a result caused by the modest quantities surveyed in 2010. Veneto, Emilia-Romagna, Lombardy, Lazio, Piedmont and Tuscany absorb three quarters of the volumes distributed over Italy. In particular, a 50% increase in the quantities in Tuscany and 144% increase in Liguria were detected. The exceptional nature of Valle d’Aosta is also noted in terms of amount of fertilizers permitted out of the total number of distributed fertilizers, which in this region amounts to 92%, followed by Liguria with 49%. However, these are regions in which the distributed volumes are modest compared to those of the aforementioned regions. Among the less ‘virtuous’ regions in terms of use of permitted organic products, Friuli Venezia Giulia stands out with only 11% compared to a significant total quantity that exceeds 1.6 million quintals.

competent authorities, a restriction already introduced for durum wheat starting with the 2013 campaign for access to contributions, ex article 68 in the central and southern regions. However, the organic farmers are exempt from this obligation as they can declare the areas in question on application for support in two-yearly crop rotation. The general obligation to use seeds certified for organic farming is a much-debated issue since it can be avoided in all those cases in which there is not an adequate supply of seeds (request for waiver). In perspective, the use of genetic material of clear origin would provide a greater guarantee in product quality even if this implies a further commitment by the seed sector for the production of varieties suited to the specific agronomical conditions of this cultivation method. However, the modest impact of the quantities of seeds required by organic farming compared to the total seed production does not make the development of such a diversified supply cost effective.

Seeds

14

5,6

12

5,4

10

5,2

8

5

6

4,8

4

4,6

2

4,4

0

The Italian seed sector is following a path of standard harmonization that will lead to a single legislative framework for the 27 countries of the European Union by 2014. This will probably confirm the obligation to use seeds that are certified and controlled by the

2008

2009

Percentage out of total area Source: INRAN-ENSE.

54

2010 Areas

2011

4,2

%

Thousands of hectares

Graph 3 – Controlled areas by seed type

In 2011, the cultivations for the propagation of certified organic seeds1 covered a surface area of around 7,600 hectares, accounting for 4.8% of the total seeds. With respect to the previous year, there has been a 10% reduction of the organic surface area, less than that of the total seed-bearing areas, showing a fall of 14%. Among the 51 seed varieties checked by the former ENSE, the hard wheat surfaces account for 25% of the total organic area, followed by alfalfa (18.6%) and field beans (11.2%). The most significant annual variation regarded the reduction in the hard wheat surface areas (-45.2%) and soft wheat (-29.3%) and the expansion of alfalfa (+40.6%) barley (+61.4%) and soya (+28.8%), for the increasing demand in protein crops aimed at animal fodder. In general, the surfaces used for the propagation of organic seeds have seen a downward trend since 2008, but their incidence with respect to the total seeds began to increase again after reaching the lowest point in 2010. While on the one hand the possibility of a waiver for the use of conventional seeds instead of organic ones allows farms a great deal of room for manoeuvre, it nevertheless reduces the consumer’s guarantee of quality and restricts the development of this sector. A sign of progress in the new direction can be attributed to the fact that in 2012 the quantity of seeds authorised by way of derogation is half that of 2011.

using the European denomination in the commercial brands of feed only if all the ingredients of animal and vegetable origin are of organic origin (95% limit for dry substance). The new standard seems more flexible than the previous one, providing for the possibility for livestock farmers, in some situations where raw organic materials are lacking, to use conventional products such as protein feed.

Graph 4 – Production, distribution and exchange of animal feed (000 tons), 2011 5,0 4,5

120

4,0

100

3,5

80

3,0

60

2,0

2,5 1,5

40

1,0

20 0

Import-export

Production and distribution

140

0,5 2003 2004 2005 2006 2007 2008 2009 2010 2011 Importation

Exportation

Production

0,0

Distribution

Source: ISTAT.

Animal feed

The statistics provided by ISTAT on animal feed distributed in Italy indicate that over time more farms are resorting to this type of animal feed, a sign that the livestock production system is becoming less and less self-sufficient. This also depends on a trend for increases in the production costs of self-produced feed, which are not competitive with respect to those of industrial origin. The increase in the quantities of feed permitted on organic farms applies to both production and distribution since the import-export flows balance themselves out

During 2012, EU regulation no. 505/2012 was approved, amending the EC reg. no. 889/2008 and introducing some new aspects including the observance of two minimum thresholds for the on-farm production of feed aimed at organic breeding (60% for grazing animals and 20% for pigs and poultry) and the possibility of these thresholds may be reached in cooperation with other organic companies of the same region. Another limit is that of

As the ISTAT figures on the quantities distributed in 2011 are not yet available, this document refers to the data produced by the seed sector of INRAN (ex-ENSE) on the controlled areas for the production of organic seeds.

1

55

Graph 5 – Animal feed produced and distributed by region (000 tons), 2011 Piedmont Valle d'Aosta Lombardy, Trentino Alto Adige Veneto Friuli-Venezia Giulia Liguria Emilia-Romagna Tuscany Umbria Marche Lazio Abruzzo Molise Campania Puglia Basilicata Calabria Sicily Sardinia

Production Distribution

0

5

10

15

20

25

30

35

40

45

50

Source: ISTAT

and have maintained the same levels as 2009. It should be highlighted how despite this growth, the amount of feed admitted on organic farms does not reach 1% of the total volume distributed in Italy. In some regions the incidence is greater, such as in Sicily , Friuli Venezia Giulia (11%) and in Lazio (5%). The larger production regions are concentrated in the Centre and North, Emilia-Romagna and Piedmont in particular, while Sicily stands out in the south, exceeding 300,000 quintals in 2011 also in terms of volumes distributed, thus achieving food self-sufficiency. A food deficit is indicated in Lombardy, Veneto and Marche where the productions are well below the quantities distributed.

(PAN) for which the consultation phase was completed, leading to some concern among the many parties involved in the sector (farmers, chemical industry, inspection bodies), due to the complexity of measures to be applied and their consequences in economic and financial terms. The more sustainable use of pesticides is an indispensable process that is already underway and has led to a decrease both of the dosages - thanks to innovation in technology and chemical products – and of residue contained in the food products (Legambiente 2012). However, the reduced amount of chemical product residues does present problems due to the fact that the control system is dissimilar across the national territory and above all because the range of different active ingredients used by the farmers would also require an evaluation of the combined effects of the residues and not only the observance of individual hazard thresholds. The use of synthetic products permitted in organic farming does not only concern the farms that adhere to the production discipline, as the amount of active

Pesticides The sustainable use of pesticides is one of the supporting strategies of the VI European action plan for the environment and is a key element of the legislative decree 150/2012 that implements the directive 2009/128/EC. The interventions envisaged outlined by the standard have been organized in an Action Plan

56

Table 1 – The main active ingredients permitted in organic farming, distributed by type (t) Fungicides

Insecticides and acaracides

Organic

Other

Total

2003

43,076

9,610

47

43

52,777

2004

41,185

9,233

84

50

50,551

2005

41,892

8,050

135

71

50,149

2006

39,663

7,593

116

55

47,426

2007

39,031

7,071

119

61

46,283

2008

38,506

5,822

206

44

44,579

2009

35,834

5,371

342

59

41,606

2010

31,642

5,747

420

79

37,888

2011

32,632

5,140

385

97

38,255

Fonte: ISTAT

Graph 6 – Active ingredients distributed by region (000 tons), 2011 Piedmont Valle d'Aosta Lombardy Trentino Alto Adige Veneto Friuli-Venezia Giulia Liguria Emilia-Romagna Tuscany Umbria Marche Lazio Abruzzo Molise Campania Puglia Basilicata Calabria Sicily Sardinia

Permitted Not permitted

0

1,5

3,0

4,5

6,0

7,5

Source: ISTAT

57

9,0

10,5

12,0

13,5

15,0

ingredients permitted out of the total on average exceeds 50%, a much higher figure than the incidence of organic farms with respect to the total number of farms.There are no consolidated statistics on the use of pesticides on organic farms; the data presented below refers to the overall distribution of products permitted. The fact that around half of the active ingredients distributed are permitted for the organic method is therefore a good indication of the attention and awareness of farmers with regard to the issues of the danger and harmfulness of these products. The

situation however differs significantly from region to region, in that the amount of the substances permitted in 2011 out of the total of those distributed ranges from 28% in Lazio to 81% in Sardinia. Over the years, a decreasing trend of the total distributed quantities of active ingredients has been noted, reversing slightly in 2011. Most of these are fungicides, also cause of a slight recovery last year. The insecticides and acaracides are on the decrease, as are the active ingredients of organic origin characterized, though subject to strong variations over time.

Bibliographic references ISTAT (2003-2010), Mezzi di produzione, agri.istat.it portal ISTAT (2012), La distribuzione per uso agricolo dei fertilizzanti. 2010, Statistics Report ISTAT (2011), La distribuzione per uso agricolo dei prodotti fitosanitari, 2010, Statistics Report SINAB (2012), Importazioni di prodotti biologici da Paesi terzi, Legambiente Organic statistics (2012), Pesticidi nel piatto, 2012 Report

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59

60

PART II: ORGANIC FARMING POLICIES

62

7. Standards in this sector EU farming systems

Though the benefits anticipated by the recent standard framework are not yet quantifiable, with the intent of giving the sector a new impetus, the European Commission promoted a public consultation between 15th January and 10th April 2013, for the re-examination of legislation governing organic farming and at the same time the adoption of a new European action plan for organic farming that reflects the development and the future of the sector. The online questionnaire was completed by 44,190 people, the majority of whom were private citizens (96%), but also associations, public bodies and farms of 13 EU countries, with the majority of responses from France (56%), Italy (15%) and Belgium (10%)2. According to the emerging trends, the hypothetical revisions to the standard, which the Commission plans to present to the Council in February 2014 in order to achieve a possible application of new regulations in 2016, could develop in various directions with various alternatives. The first hypothesis envisages a reinforcement of the status quo via a partial extension of the field of application of the standards, the acknowledgement of the work of an expert group (Expert Group on Technical Advice on Organic Production – EGTOP) in relation to the approval, inclusion or elimination of various substances, improvements to the harmonisation of the standards, the adaptation of the rules for organic labelling with horizontal regulations , the reinforcement of controls, elimination of the regime for conformity of the inspection bodies to the standard UNI EN ISO 45011 (IB) and the introduction of electronic certification

Already in consideration of point 39 of EC regulation no. 834/2007 which relates to organic production and the labelling of organic products, replacing the regulations that had been implemented for almost twenty years, the Council underlined the dynamic evolution of the organic sector and hope for a future revision of certain aspects – the need to standardise catering, the tolerance threshold for the accidental presence of GMO (currently set at 0.9%), functioning of the domestic market and of the controls system - all of which needed to take into account the experience acquired through the application of new standards. The subsequent regulations therefore integrated and completed the regulations of 2007, regarding the regime of importing organic products from non-EU countries and the same field of application1 extending the discipline of the sector to aquaculture products, yeast and marine algae, organic winemaking and the production of organic animal feed. In any case, some standards have only recently entered into force and others are still awaiting implementation. The transitory period ended a short time ago (1st July 2012) by which time the organic food sector should have complied with the EU regulations in the field of labelling, which envisage the obligation of affixing the EU logo (Euro Leaf), along with the indication of the origin of the raw materials, on the packaging of the pre-packed food of which at least 95% of the ingredients of agricultural origin have been produced using an organic method. 1

The field of application of the regulation concerns fresh or non-processed agricultural products designed to be used as food from agriculture and from aquaculture, including animal feed, vegetative propagation material, seeds for cultivation and yeast used as food or as animal feed.

see:http://ec.europa.eu/agriculture/newsroom/113_en.htm;

2

www.sinab.it/index.php?mod=news&m2id=184&navId=184&pg=2&start=10&idp=4098.

63

(EU database). The second revision hypothesis for the standard is aimed at expanding the market of organic products, with the intention of welcoming into the new regulation the exemptions until now permitted for the Member States, introducing numerical thresholds to enable the use of some substances currently not admitted, and self-regulation for the authorisation of new non-organic substances and ingredients, simplifying indications of the production location on the label, specifying the country of production of the main raw materials, promoting group certification and reviewing the rules of equivalence agreements with respect to non-EU countries and relative IB. Finally, the third hypothesis is focussed on the quality of the organic farming and on the founding principles. It therefore excludes the possibility of making exceptional rules for the Member States and derogations for the use of non-organic ingredients, admitting only farms entirely managed by the organic method, and simplifies the requirements for small producers, gradually eliminates the use of national logos in labelling, it reinforces controls on risk assessment and modifies the import system regime (reciprocal acknowledgement of

equivalence with non-EU countries only if surveillance is performed according to EU standards). In a document of intent3 addressed to the Commission and presented in May 2013 the European Council of agricultural ministers specified a number of precise guidelines to follow for the formulation of new standards for the organic sector: simplification and flexibility in the application of production standards, strengthening and improving the controls which should include a harmonised sanctions procedure agreed on a European level, the revision of the import regulations with the introduction of the electronic system of import certificates in order to ensure fair competition throughout Europe and international commerce based on reciprocal relations and transparency in trade agreements. Moreover, the European ministers consider the support for research and innovation as essential, particularly within the European Innovation Partnerships framework (EIP) and the support for the sector via the new CAP, as well as the promotion for increasing the consumption of organic products also via online information and the creation of specific campaigns aimed at harmonisation and at guaranteeing

The main results emerging from public consultation

By combining the responses to the questionnaire with the comments sent it is possible to confirm that European citizens believe that organic agriculture is more advantageous than conventional agriculture in terms of sustainability, and in general show more interest in natural, local and seasonal products and an agricultural and food sector that does not use or contain GMO or residues of pesticides or chemical substances. In particular, the questionnaire revealed that 81% of the interviewees believe that the absence of GMO is a very important reason for the consumption of organic products and 77% are prepared to pay a higher price to purchase them. 74% of the interviewees believed in the need for a reinforcement of organic farming standards and 86% agreed that no exceptions should be permitted in the production method and that the rules should be the same for all the Member States. 93% believe more information on organic farming is required and 79% declared that they recognized the EU logo (Euro Leaf). 71% confirmed that they trusted the certification system and 49% are aware of the fact that this system envisages at least one inspection per year at the sector operators' premises. In particular, among those who are aware of the methods of control on organic products, 58% are in favour of reinforcing the production controls and 73% want greater control on the imports while 70% declare that they are in favour of introducing group certification in the EU.

3

www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/agricult/137095.pdf. www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/agricult/137076.pdf.

64

the application of the EU logo. All this takes into account that the amendment of the EU legislation on pesticides, which from 2014 imposes the conversion of all conventional farms to integrated plant protection, will increase the agricultural production standards, moving increasingly closer towards the environmental sustainability model proposed by the organic production method. The latter, therefore, should be effectively outlined, improving and protecting its reputation in order to maintain the loyalty and inclination to buy of their appraisers.

requirements are set out for control and supervision, allowing the Member states the option of implementing additional measures. Moreover, in order to adopt timely and effective interventions at a EU level in the event that a Member State shows irregularities or infringement relating to the conformity of the imported products, the regulation envisages the exchange of information – and relative publication – both internally and between the Member States, and between the latter and the commission, inviting them to adopt minimum uniform prescriptions in relation to this.

Control systems: updates On the basis of the experience acquired, the European Commission has set themselves the task of reinforcing the system of control on organic production at an EU level and the labelling, which as established by EC regulation no. 889/2008, concerns all the operators that produce, prepare, store, launch on the market, import and export products obtained in compliance with production standards. With the EU implementation regulation no. 392/2013, the standards of which will be applied from 1st January 2014, some minimum

Importing System from Non-EU countries: updates The list of non-EU countries from which the importing of pre-packed agricultural and food products according to the equivalency regime, i.e. where a production and control system equivalent to the one in force in the EU exists, is included in Appendix III to EC regulations no. 1238/08 and subsequent amendments and insertions. It involves 11 countries - United States, Argentina, Australia, Canada, Costa Rica, Japan, India, Israel, New Zealand, Switzerland and Tunisia –each with a defined category of products applicable in the

The recent EU regulations for organic production (July 2012 – June 2013) Control system

• Commission implementing EU regulation EU regulation no. 392/2013 of 29th April 2013 that amends the EC regulation EC regulation no. 889/2008 as regards the control system for organic production. Importation of organic products from Non EU countries • Commission Implementing EU regulation EU regulation no. 586/2013 of 20th June 2013 amending EC regulation EC regulation no. 1235/2008 establishing methods of application of the EC regulation EC regulation no. 834/2007 as regards the provisions for imports of organic products from Non EU countries and derogating from EC regulation EC regulation no. 1235/2008 as regards the date of submission of the annual report; • Commission Implementing EU regulation EU regulation no. 567/2013 of the Commission of 18th June 2013 correcting EC regulation EC regulation no. 1235/2008 establishing methods for the application of EC regulation EC regulation no. 834/2007 as regards the arrangements for imports of organic products from Non EU countries; • Commission Implementing EU regulation EU regulation no. 125/2013 of the Commission of 13th February 2013 amending EC regulation EC regulation no. 1235/2008 establishing methods for application of EC regulation EC regulation no. 834/2007 of the Council as regards the arrangement for imports of organic products from Non EU countries; • Commission Implementing EU regulation EU regulation no. 751/2012 of 16th August 2012 correcting EC regulation EC regulation no. 1235/2008 establishing methods of application of EC regulation EC regulation no. 834/2007 as regards the arrangement for the import of organic products from Non EU countries.

65

equivalency regime, and references of the competent authority and the control organisms recognised in the relative country. Authorisation is not required for the import of organic products from Iceland, Liechtenstein and Norway or from the countries of the European Economic Area. The list of certification bodies and inspection authorities recognised for the purposes of equivalence with the European standard is however contained in Appendix IV of EC regulation no. 1235/08 and subsequent amendments and insertions. It involves 61 bodies of which five are Italian (‘Bioagricert s.r.l.’, ‘CCPB s.r.l.’, ‘ICEA’, ‘IMC s.r.l.’ and ‘Suolo e salute s.r.l.’), for each of which a table is shown specifying the countries and product categories with which they can operate. Overall, the organic products belonging to specific categories and certified by the bodies present in Appendix IV, which can be imported without needing to request authorisation from the competent authority, all originate from 154 Non-EU countries. As From 1st July 2013, as established by art. 19.4 of EC regulation no. 1235/2008, the Member States can no longer grant authorisation for the import of organic products from Non-EU countries with the exception of organic products that do not originate from equivalent countries referred to in Appendix III or not certified by IB referred to in Appendix IV of EC regulation no. 1235/2008 and not belonging to specific assigned categories. Nevertheless, from 1st July 2014, no authorisations can be issued as exemptions by the Member states even for these exceptions. Moreover, substantial modifications were introduced both for the articles and the lists III and IV of EC regulation no. 1235/2008, with EU regulations no. 586/2013. The first specifies standards for the improvement of surveillance in Non-EU countries, to reinforce cooperation and enhance the exchange of information. Moreover, the regulation recognises 7 new IB for the purposes of equivalency, removes equivalency for India in the case of processed products, taking effect from 1st April 2013 and extends, from this date, the origin of products also to those that are cultivated and obtained

outside Japan and then imported to Japan according to standards equivalent to the Japanese versions. However, EU regulation no. 586/2013 envisages that the lists of operators to be provided by each IB on the website, are updated on the basis of their state of certification and the product categories; each IB should publish on the internet the production standards and control methods applied in the Non-EU countries in which it operates. Among the amendments that this regulation applies to the appendices of EC regulation no. 1235/2008, the more significant include, in the case of Appendix III, the extension of equivalency regime with Switzerland for wine and the deferred inclusion of Tunisia in the list to 30th June 2014, and in the case of Appendix IV, the insertion of a new IB in the list with headquarters in Serbia and recognised specifically for this country.

The entry of Croatia to the EU Among the newly introduced standards, EU regulations no. 571 and 519 of 2013 must be mentioned, which establish, with reference to the entry of Croatia to the EU with effect from 1st July 2013, amendments to regulations and general decisions on the subjects of the free movement of goods, agriculture and other acts, also including the specific organic regulations in force for which the term ecological – to use in labelling – is introduced in the appendix of the EC regulation no. 834/2007) in the Croatian language; the same amendment is made to the appendix XII ter of the EC regulation no. 889/2008 as regards the wording relating to animal products obtained without the use of antibiotics. Moreover, for all the IB for which the Commission allowed the recognition of activities abroad conducted in Croatian – appendix IV of EC regulation no. 1235/2008 – this recognition was revoked with effect from 1st July 2013, given that from this date the National Control System is officially recognised and established in compliance with art. 27 of EC regulation no. 834/2007, based on 7 private IB.

66

Italian national policies and standards

entrusted with the task of promoting both the organic catering, with direct effects on primary producers and with the purpose of raising awareness both in schools and among citizens-consumers of organic production, through local promotional initiatives and themes of healthy eating and the culture of sustainability. Recent actions implemented in the two-year period 20082009 include the national competition ‘Stars of the Organic’ held by MIPAAF in collaboration with ISMEA. Taking place in May 2013, this competition awarded the communication initiatives of national operators in the organic agri-food sector that stood out in the promotion and dissemination of environmental, cultural and socioeconomic values expressed by organic production5. The national regulatory framework relating to the production and labelling of organic products is set out by legislative decree no. 220/1995, which continues to be applied through the implementation of articles 27-

The 2000 budget established the Fund for the development of high quality organic farming, which since 2004 funds the national action plan for organic farming and organic products (PAN), established with the aim of developing the sector, increasing product competitiveness and promoting awareness of the latter on domestic and foreign markets. With the total resources allocated in the five-year period 2005-2009, equal to 35 million euros, a series of actions were implemented via the institutions, research and inter-professional organisations including those aimed at improving product quality, training operators, and developing a network among regional supply chains for sales and reinforcement of the communication4. From an institutional point of view, in particular, with a further allocation of 4.7 million euros, the regions were

The axes and actions of the National Action Plan for the two-year period 2008-2009 Axis 1 – Penetration on global markets

Axis 3 – Increase in domestic demand and institutional communication 1.1. Promotion on the international markets 3.1 Promotion of organic products in organic catering 1.2 Creation and reinforcement of networks at an internatio- 3.2 Promotion of organic products to the citizen-consumer nal level 3.3. Training courses on subjects of strategic interest Axis 2 – Organisation of the supply chain and trade

Axis 4 – Reinforcement and improvement of the institutional and services system 2.1. National organic seed plan 4.1. Institutional disclosure of the sector information 2.2. Scientific support for processing and implementation of 4.2. Technical and administrative support of the competent office the EU standard for organic farming 2.3. Support for the interprofessional organisation 4.3. Computerized management of the data of the sector 2.4. Initiatives in support of the production organisations 4.4. Management of data on technical inputs 4.5. Expanding analytical controls

4

The data sheets of the initiatives produced with the four axes of the PAN in the three-year period 2005-2007 and in the two-year period 20082009, with details of the beneficiaries and of the allocated resources, are available on the SINAB site: www.sinab.it/index.php?mod=documenti_ utili&m2id=195&navId=1591.

5

All information on the competition is available on the site: http://lestelledelbio.ismea.it.

67

31 of EC regulation no. 834/2007, unless incompatible with subsequent EU regulations in the field of organic production. In addition to the MIPAAF decree no. 18354/2009, this is applied in parallel to numerous decrees of implementation, memoranda and explanatory or prescriptive ministerial communications. At the same time as EU regulation no. 426/2011 and the applicable decrees (ministerial decree 31st July 2012 and ministerial decree 9th August 2012, no. 18321), from 1st October 2012 all the organic operators – including distributors, traders, small shops selling loose products, preparers and importers – are obliged to report their

activities and any relevant variations to the latter, via the national organic information system (OIS), contained on the website of the national agriculture information system. Once the transitory period for fulfilling this obligation was completed, initially set for 31st December 2012, MIPAAF allowed operators to settle their position within the strict deadline of 10th May 2013 (Ministerial Decree no. 5337/2013) and at the same time provided clarifications on the obligations imposed on the operators that have a registered office and structures in several regions and independent provinces (memorandum no. 4784/2013). In the previous months the Ministry issued

Recent national standards for organic production: ministerial decrees (July 2012-June 2013)

• Ministerial decree no. 18180 of 12th June – establishment of an expert group for technical consultancy on organic production; • Ministerial decree no. 5424 of 17th May 2013 – operating procedures of the type of subjects, projects and expenses of admissible research of the “Fund for research in the high quality and organic farming sector”; • Ministerial decree no. 4416 of 22nd April 2013 – establishment of a Technical Committee for the updating of the list of products used as strengtheners, boosters of the natural defences of the plants, referred to in annex 1 of the ministerial decree of 27th November 2009, 18354; • Ministerial decree no. 631 of 9th April 2013 - establishment of a permanent technical committee on organic farming with consultancy roles; • Ministerial decree no. 5337 of 28th March 2013 – extension on 10th May 2013 of the term required by art. 2 of ministerial decree no. 6561 of 27th December 2013 for the computerized management of the notification of activities using the organic method; • Ministerial decree no. 6561 of 27th December – extension of 31st March 2013 of the term required by art. 2 of ministerial decree no. 6561 of 27th December 2012 for the computerized management of the notification of activities using the organic method; • Ministerial decree no. 24019 of 17th December 2012 – authorization of “Valor Italia srl” to carry out the control activities on both the fresh and processed organic plant products included in the winemaking sector; • Ministerial decree no. 18378 of 9th August 2012 – measures for implementing EC regulation no. 1235/2008, establishing methods of application of the EC regulation no. 834/2007 as regards the provisions for importing organic products from non EU countries; • Ministerial decree no. 18321 of 9th August 2012 – measures for the computerized management of annual programmes of plant, livestock, aquaculture, preparation and imports with organic methods and for the computerized management of the supporting documents and of the certificate of conformity pursuant to the regulation no. 834/2007 (EC) and subsequent modifications and insertions; • Ministerial decree of 31st July 2012 – transitional measures of ministerial decree no. 2049 of 1st February 2013, containing measures for the implementation of EU regulation no. 426/11 and the computerized management of the notification of activities using the organic method, pursuant to art. 28 of EC regulation no. 834/2007 and subsequent amendments and insertions

68

a long series of notes on compiling the notification and all the duties of the operators, with the publication of the user manual and the operation guide on the site of the national information system on organic farming (SINAB). MIPAAF grants free operative access to the SIB to the importers, while for other operators this access is permitted at the discretion of the regions , either directly or via third parties (CAA or freelance professionals). In each case, all management of data and the procedures by all the involved parties (operators, delegated parties, IB and Regions) must be performed on the SIB. In September 2012 a new IB was authorised to perform control activities exclusively on all vegetable agricultural produce both fresh and processed, bringing the number of IB authorised to operate in Italy up to 16, 3 of which are in the province of Bolzano alone. In November 2012, all 13 IB authorised to operate within the national territory had obtained approval for the control of organic products in the winemaking sector; half of these are also authorised to carry out controls on organic aquaculture. Between August and November 2012, various explanatory notes were published by MIPAAF as regards specific duties following the entry in force, on 1st August 2012, of decree no. 15992/2012 applied to the regulations on organic wine, governed by EU regulation no. 203/2012. Further clarifications of the Ministry were provided on the basis of other important issues: the import system of organic products in the equivalency regime (memorandum no. 5448/2012), also following the decree no. 18378/2012 applied by the EU regulations on the system for importing organic products from non-EU countries; the use of logos and markings on the labelling in relation to the brand of the distributor and the location of the IB code with respect to the EU logo (memoranda nos. 2557 and 1225 of 2013); access to historical data of an organic business also in the case of termination of the activity of organic production and of operators leaving the control system temporarily or permanently (memorandum no. 20128/2012); the regional duties regarding annual production schedules

(memorandum no. 1228/2013); the specifications of admissible fertilizers (memorandum no. 3504/2012) and on the contamination of phytosanitary products (memorandum no. 3366/2012); and packaging material waste (memorandum no. 18909/2012). In addition to the private national standards governing the production, preparation, marketing and labelling of organic ostrich meat and organic spirulina algae, the Ministry also approved that of organic rabbit (memoranda nos. 6477 and 2771/2013); pursuant to art. 42 of EC regulation no. 834/07. In fact, in the case of some species of animals, aquatic plant, microalgae, for the production of pet food and for catering, the Member States, while awaiting detailed EU production standards, have the option of applying national standards or, lacking these, private standards accepted or recognised by the other Member States. In May 2013, the European Commission provided Italy with the response to two clarifications on the basis of the correct interpretation of the EC Regulations no. 834/07 and 889/08; the first concerns organic operators that intend to label their product as ‘100% organic’ for the purposes of marketing in the USA, a term envisaged by the American NOP regulation, in which operators should provide their IB with evidence that no nonorganic products have been used in the preparation of the product, additives included. The second clarification concerns the forbidden use of sodium hydroxide and sulphuric acid for the preparation of organic starch, specifying that the term ‘starch’ is different from ‘sugar’. From 17th June 2013, in line with the measures of MIPAAF and of the Customs and Excise Office aimed at simplifying controls (memorandum no. 18741/2013), there is an obligation to specifically trace the most important raw materials of organic import (olive oil, wheat, rice, corn, buckwheat, soya, sunflower oil). In fact, the indication of a specific additional code on the act of customs declaration is envisaged (SAD – single administrative document) for all imports of organic products belonging to the categories of cereals,

69

milled products, oil seeds and oleaginous fruit, animal or vegetable fats. The specifications of many EU regulations, with manifold provisions, often complex,

with differing dates for the application of specific standards, have led to the set-up, between April and June 2013, of the permanent technical committee on

Recent national laws and regulations for organic food production: ministerial memoranda (July 2012 – June 2013)

• MIPAAF Memorandum no. 18741 of 13th June 2013, - introduction of an additional code for the import of organic products; • MIPAAF Circular of 30th April 2013 – imposing of the date of 10th May 2013 as final deadline for the presentation of the computerized notification of the activities carried out using the organic method, according to Ministerial Decree no. 5337 of 28th March 2013; • MIPAAF Memorandum no. 7276 of 23rd April 2013 – indications in relation to the computerization of the notification on the SIB Organic Information System (possibility of correcting the notification deed) and revision of the indications for the compilation of the notification via the SIB; • MIPAAF Memorandum no. 5448 of 29th March 2013- clarification on imports of processed organic products from India, in the light of the updates introduced by EU regulation no. 125/2013; • MIPAAF Memorandum no. 4784 of 22nd March 2013 – clarification on duties for organic sector operators with registered offices and facilities in more than one Region; • MIPAAF Memorandum no. 4143 of 13th March 2013 – useful indications on the filling out of the SIB notification: themed definitions relating to the presentation and delivery dates of the notification; cause of variation; definition of ‘Production Unit’ and ‘Exclusive Importer’; aspects relating to the cancellation, waiver and withdrawal of the notification and use of the control panel with the “User Manual” and the “Assembly tools operating guide” attached. • MIPAAF Memorandum no. 2771 of 20th February – additional indications in reference to the national legislation for production, preparation, marketing and labelling of organic rabbit (art. 42 of Regulation (EC) no. 834/07); • MIPAAF Memorandum no. 2674 of 19th February – updated instructions for filling in the notification following the upgrade of the SIB; • MIPAAF Memorandum no. 2557 of 18th February 2013 – clarification on the labelling of organic products with the brand of the distributor or for which one or more phases of the work are subcontracted; • MIPAAF Memorandum no. 1927 of 7th February 2013 – indications for filling in the SIB notification; • MIPAAF Memorandum no. 1228 of 28th January 2013 – specifications on the regional fulfilments related to annual production programmes; • MIPAAF Memorandum no. 1225 of 28th January 2013 – clarifications on the labelling of organic products (positioning of the IB code with respect to the logo, specific wording requested when the organic logo is shown several times on the packaging); • MIPAAF Memorandum no. 6477 of 24th December 2012 – national standard for the production, preparation, marketing and labelling of organic rabbit pursuant to art. 42 of Regulation (EC) no. 834/0; • MIPAAF Memorandum no. 6467 of 24th December 2012 – sending the paper copies of the notification of activities with the organic method provided with a revenue stamp; • MIPAAF Memorandum no. 3504 of 13th November 2012 – clarification relating to the type of fertilizers allowed in organic farming, and in detail, in the use of organic farming of water for plants and of olive mill pomace as fertilizers; • MIPAAF Memorandum no. 3377 of 12th November 2012 – clarification on the correct nomenclature of ‘Diammonium Phosphate’, a substance mentioned in Annex VII bis of the EU Implementing Regulation no. 203/12 that lists all the products and substances which are authorised for use or addition to the organic products of the winemaking sector pursuant to Article 29 quarter;

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• MIPAAF Memorandum no. 3366 of 12th November 2012 – clarification on the contamination of phytosanitary products in organic farming; • MIPAAF Memorandum no. 28887 of 8th November 2012 – updates of the list of the IB authorised to operate in the winemaking sector; • MIPAAF Circular of 18th October 2012 – availability of products and substances marked with an asterisk in Annex VIII-bis of the EC Regulation no. 889/2008 for the production of organic winemaking; • MIPAAF Memorandum no. 989 of 10th October – definition of information contained in the EU Implementing Regulation no. 203/2012 which regulates the production of organic wine and in the MIPAAF Decree no. 15992 of 12th July 2012 which contains the implementing rules; • MIPAAF Memorandum no. 525 of 4th October 2012 – clarification on the measures of EU Regulation no. 203/2012 on organic wine and the possibility that these standards should apply also to winemaking products used as ingredients of balsamic vinegar; • MIPAAF Memorandum of no. 214 of 1st October 2012 – indications on Ministerial Decree no. 2049 of 1st February 2012 which entered into force on 1st October 2012 and established the Organic Information System (SIB) for the computerized management of administrative procedures relating to the notification of the activities carried out with the organic method; • MIPAAF Memorandum of 1st October 2012 – substances marked with an asterisk in Annex VIII bis of the EC Regulation no. 889/2008 for the production of organic winemaking products; • MIPAAF memorandum no. 20128 of 13th September 2012 – judgement: points 7 and 8 of art. 2 of Ministerial Decree no. 10071 of 3rd May 2012, relative to the control system are applied in all cases of withdrawal of an operator from the organic control system and not only when the withdrawal is followed by adhesion to other IB. • MIPAAF Memorandum no. 18909 of 31st August 2012 – further clarification on the MIPAAF Memorandum no. 14017 of 20th June 2012 relating to the stock of packaging materials; • MIPAAF circular of 23rd August 2012 – rules for the implementation of the EU Regulation no. 203/2012 amending the EC Regulation no. 889/2008 laying down methods of implementation of EC Regulation no. 834/2007 of the Council with regard to the method of implementation relating to organic wine (entering into force on 1st August 2012 by Ministerial Decree no. 15992 of 12th July 2012); • MIPAAF Memorandum no. 17469 of 31st July 2012 – indication relating to the detail of the territorial component of the online notification with reference to Ministerial Decree no. 2049 of 1st February 2012

organic agriculture, with consultancy roles on this subject, an expert group for technical advice on organic production and a technical committee for updating the list of products used as boosters to strengthen the natural defences of plants. In the schedule set by the EU, it should be noted that, as specified by art. 20 of EC regulation no. 843/2007 on 31st December 2013, the yeast and yeast-based products are considered, in the preparation of organic food, as ingredients of agricultural origin, with significant practical repercussions on the production of many organic processed products and in the amendment of labels for the purposes of marketing. Moreover, also

on 31st December 2013, the articles 25 sexies and 25 sexdecies of EU regulation no. 889/2008 established that, in aquaculture, the maximum percentage of alevins and non-organic molluscs introduced in breeding in both cases must be reduced from 80 to 50%.

The regional legislation The regional initiatives that regulate, support and promote the production, processing, conservation and marketing of organic products in many cases derive from a more than ten years old legislation that translated into multi-year plans for the local development of 71

The regional standards for the development of organic farming Piedmont

Regional Law no. 13 of 25/06/1999. Standards for the development of organic farming and subsequent amendments and additions Valle d’Aosta Regional Law no. 8 of 17/04/2001, Provisions relating to cattle, sheep and goat breeding and derived products obtained by organic methods (replaces Regional Law no. 36 of 16/11/1999) Lombardy Regional Law no. 7 of 07/02/2000, Standards for the regional measures in agriculture, Regional Government Resolution no. 15533 of 12/12/2003, Approval of the programme of measures for the development of organic farming AP. Bolzano Provincial Law no. 3 of 20/01/2003, Standards for organic farming (replaces Provincial Law no. 12 of 30/4/1991) A.P. Trento Provincial Law no. 4 of 28/03/2003, Support of the agricultural economy, regulation of organic farming and labelling of non-genetically modified products and subsequent implementing rules (replaces Provincial Law no. 13 of 10/06/1991) Friuli Venezia Regional Law no. 32 of 24/07/1995, Regulation and promotion of organic farming (replaces Regional Law no. Giulia 59 of 29/12/1990) Liguria Regional Law no. 66 of 28/12/2009, Regulation and promotion of the measures for development, protection, qualification and enhancement of organic products from Liguria (replaces Regional Law no. 36 of 6th December 1999, repealing Regional Law no. 5 of 01/02/1994 Emilia-Romagna Regional Law no. 28 of 02/08/1997, Standards for the organic agri-food sector (replaces Regional Law no. 36 of 26/10/1993 and subsequent amendments and additions) Tuscany Regional Law no. 49 of 16/07/1997, Provisions on controls for the agricultural productions obtained by organic methods (replaces Regional Law no. 31 of 19/04/1994 and Regional Law no. 54 of 12/04/1995) Umbria Regional Law no. 21 of 20/08/2001, Provisions on cultivation, breeding, experimentation, marketing and consumption of genetically modified organisms and for the promotion of organic and typical products; Regional Law no. 39 of 28/08/1995, Rules for the production and control of organic products (replaces Regional Law no. 46 of 28/12/1990) Marche Regional Law no. 5 of 4/3/2004, Provisions on protection of agricultural, typical, high quality and organic production; Regional Law no. 4 of 3/4/2002, Regulation of organic farming (amending Regional Law no. 76 of 29/12/1997, replacing Regional Law no. 44 of 4/09/1992, repealing Regional Law no. 57 of 13/12/1990) Lazio Regional Law no. 21 of 20/08/2001, Standards for organic farming (replaces Regional Law no. 51 of 27/07/1989) Abruzzo Regional Law no. 53 of 30/05/1997, Measures for the agricultural agri-food, sea fisheries and aquaculture sectors. Molise Regional Law no. 38 of 11/11/2005, Standards for organic farming (replaces Regional Law no. 16 of 13/03/1996) Campania Regional Law no. 24 of 12/8/1993, Regulation, promotion and development of organic farming Basilicata Regional Law no. 14 of 12/8/1993, Regulation, promotion and development of organic farming Sardegna Regional Law no. 9 of 04/03/1994, Standards for the promotion and development of organic farming

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the agri-food sector and the objectives of which are currently acknowledged by the Regional Development Plans (RDPs), which outline specific measures in support of organic agriculture. Nevertheless, the majority of regional laws, via the issuing of calls with periodic expiry, provide for the granting of subsidies to regional associations of organic operators to create specific programmes aimed at providing farms with technical support and advisory services as well as for the processing, promotion and marketing of organic products and food education for the youngest (visits to the educational farms’, the creation of educational vegetable patches in schools, etc.). Some Regions structured their initiatives on a provincial and municipal level, with the consolidation of agreements and advisory services involving associations of farmers and professional organisations via the activation of networks on the territory and the participation in territorial and supply chain projects. In some cases

particular focus was put on promotional activities aimed at the internationalisation of organic farms and businesses. Moreover, organic products, along with the PDO/PGI products and the regional specialities in the MIPAAF list of traditional products, have been used for years as part of the daily diet of public canteens of the Regions that have legislated on the subject, as required by the Financial Act of 2000. Many municipalities have introduced organic food into school and public hospital meals, although in different percentage quantities, using organic produce either for just a few basic foods or the whole meal. Among the most recent initiatives is the agreement signed in February 2013 by Milano Ristorazione, the municipal businesses that manages school meals (80,000 meals per day) and AIAB for supplying the school canteens with certified organic fruit compliant with the requirements of the specific production rules to be applied for obtaining the AIAB guarantee mark.

The regional standard for the use of organic products in the school canteens A.P. Trento Veneto Friuli Venezia Giulia Emilia-Romagna Tuscany Marche Lazio Basilicata Sardinia

Law A.P. Trento no. 13 of 13/11/2009 Regional Law no. 6 of 01/02/2002 Regional Law no. 25 of 17/10/2007 (amending regional law no. 15 of 08/08/2000) Regional Law no. 29 of 04/11/2002 Regional Law no. 18 of 27/05/2002; PGR (Decree of the Regional Council President) no. 11 of 23/02/2007 (amending Decree no. 2 of 07/01/2003, Implementation regulation of Regional Law 29/2002) Regional Law no. 4 of 03/04/2002 (amending Regional Law no. 76 of 29/12/1997) Regional Law no. 10 of 06/04/2009 Regional Law no. 18 of 20/05/2002 Regional Law no. 1 of 19/01/2010

73

74

8. Support to the organic sector The main financial support to the organic sector originates from the Rural Development Policy, essentially via the ‘organic agriculture' action, activated as part of the agrienvironmental measures by all the Regions. The data of the annual implementation reports (RAE) 2013 of the RDPs 2007-2013, for the period 2007-2013 show a total public spending of almost 1,200 million euros, representing around half (49%) of the payments made for the entire agri-environmental measure (around 2,500 million euros). In the southern regions, where the organic production

method is more widespread, the level of spending for organic farming is considerably higher than in the northern regions, and is a significant part of the overall national agrienvironmental spending. In fact Sicily is the region that contributes significantly to the total public spending in the organic sector, with 24% of the total amount distributed in the period 2007-2012. In Calabria and Puglia, regions that impact by 29% on the organic national payments, the agrienvironmental spending almost entirely derives from the organic agriculture action (respectively for 82% and 95%).

Graph 1 – Spending relating to the agri-environmental measure and organic agriculture action (000 euros) 2007-201212

Graph 2 – Distribution of spending by agrienvironmental action (%), 2007-2012 Piedmont Valle d’Aosta Lombardia A.P. Bolzano A.P. Trentino Veneto Friuli-Venezia Giulia Liguria Emilia-Romagna Tuscany Umbria Marche Lazio Abruzzo Molise Campania Puglia Basilicata Calabria Sicily Sardinia Italy

Piedmont Valle d’Aosta Lombardy A.P. Bolzano A.P. Trentino Veneto Friuli-Venezia Giulia Liguria Emilia-Romagna Tuscany Umbria Marche Lazio Abruzzo Molise Campania Puglia Basilicata Calabria Sicily Sardinia

0

0

20

40

60

80

100

Organic Incidence on the Agro - Environment Integrated Incidence on the Agro - Environment Incidence of other actions on Agro - Environment

100.000 200.000 300.000 400.000 500.000

Total agri-environmental spending Total organic agriculture spending Source: Annual implementation reports of the RDPs (2013)

Source: Annual implementation reports of the RDPs (2013).

75

Graph 3 – Distribution of total spending by organic agriculture action (000 euros)

spending), conservative agriculture, management of landscape and pastures with a high natural value and more extensive agricultural systems in the North-East. Observing the breakdown of the total spending for organic agriculture among the payments relating to the 2007-2013 programming and those relating to carryovers of the period 2000-2006, it is immediately clear that during the first years of the new programme the total spending derives mainly from the carryovers, whereas the delays in payments relative to the 20072013 programming are evident resulting from the implementing process of the new RDP. However, as of 2010, the organic agriculture spending related to the new programming has accelerated, while the carryovers are naturally disappearing. The amount supplied in 2010 for the organic payments relating to the new programming constituted 57% of the total organic spending of 2010, increasing to 84% in 2011 and to 91% in 2012. The Regions that, after Sicily, Calabria and Puglia, are distinguished for the greater increase of resources supplied for the benefit of organic agriculture in the period 2007-2012 are Lazio, EmiliaRomagna, Tuscany, Sardinia and Marche, all with an expenditure above 20 million euros.

200.000 150.000 100.000 50.000 0

2007

2008

2009

2010

2011

2012

2007-2013 planning Carryovers Source: Annual implementation reports of the RDPs (2013).

In the northern regions other actions outlined in the framework of the agri-environmental measures play a more significant role compared to that of organic agriculture actions, such as integrated agriculture in Piedmont (67% of the agri-environmental regional

76

Table 1 – Regional public spending for organic farming (000 euros) 2007

2008

2009

2010

2011

2012

2007- 2011

New program- Carryo- New pro- Carryo- New pro- Carryo- New pro- Carryo- New pro- Carryo- New pro- Carryo- New pro- Carryoming. vers gramvers gramvers gramvers gramvers gramvers gramvers ming. ming ming. ming. ming. ming.

Piedmont

0

3,670

1,218

645

3,846

1,416

1,587

262

4,313

140

3,904

14

14,869

6,147

Valle d'Aosta

0

289

0

0

2

28

293

48

653

12

48

0

997

377

Lombardy

0

3,197

0

607

2,222

328

2,971

25

0

6

1,809

0

7,001

4,162

A. P. Bolzano

0

1,288

49

126

12

935

114

235

197

956

1,767

0

9,689

1,453

A. P. Trento

0

1,446

645

7

3,071

0

1,558

0

2,649

0

912

0

1,874

462

Veneto

0

438

183

24

203

0

376

0

199

0

3,727

0

7,319

0

Friuli Venezia Giulia.

0

0

0

0

875

0

856

0

1,861

0

1,815

0

3,037

42

Liguria

0

42

0

0

253

0

328

0

641

0

575

57

947

3,597

EmiliaRomagna

0

15,338

0

7,615

5,311

4,498

12,997

5,804

7,365

2,259

11,970

365

37,643

35,879

Tuscany

0

13,425

0

2,934

5,118

6,345

5,682

1,656

7,467

734

18,277

127

36,544

25,220

Umbria

0

0

439

14,329

3,122

6,171

2,717

1,186

2,152

1,578

2,788

0

11,218

23,264

Marche

0

11,608

0

7,664

6,262

8,412

8,317

3,398

11,140

342

923

190

26,643

31,613

Lazio

0

9,207

2,852

1,002

11,260

2,292

22,256

77

19,113

29

16,351

0

71,831

12,607

Abruzzo

0

3,528

0

2,382

1,939

2,666

3,133

2,637

2,063

76

4,287

3

11,423

11,292

Molise

0

400

0

360

0

494

0

1,379

742

0

366

2,248

1,108

4,881

13,912

9,174

Campania

0

3,091

0

1,518

1,112

2,454

5,452

2,005

3,939

80

3,409

27

Puglia

0

24,485

0

16,154

0

24,364

18,315

53,681

26,654

0

27,010

0

Basilicata

0

6,585

0

25,787

0

15,893

0

12,641

3,300

11,719

0

9,162

3,300

81,787

Calabria

0

19,095

0

17,154

0

18,255

18,372

13,058

31,868

7,215

33,233

1,600

83,472

76,376

Sicily

0

50,995

0

12,768

0

46,222

53,339

24,165

48,066

6,347

44,770

2,017 146,176 142,515

Sardinia

0

0

2,658

24

4,191

7,354

1,446

5,665

198

14,963

1

Italy 1

8,511 176,639

5,385 113,732

44,632 144,964 166,018 123,702 180,048

The data relating to the carryovers for organic agriculture action for 2011 is not available..

Source: processing on data from RDP annual implementation reports (2008-2013).

77

31,690 192,904

143

71,979 118,684

28,006

17,147

15,953 588,987 606,680

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9. New additions to the CAP reform The policy agreement on the new CAP was finalized on 26th June 2013 . This is the result of the so-called ‘trialogue’, i.e. the joint decision process that involves the European Commission, Parliament and Council. The basis for writing new regulations that will represent the CAP legislation until 2020 was established with this agreement. Some financial aspects of the decisions reached are not yet known in that they were postponed until finalisation of the agreement on the EU financial report, but the reform unit is now clearly defined and enables evaluation of the individual elements. The main decisions of this reform in relation to the direct payments system are cited below, before considering greening in further detail and its potential impact on Italian farms. Direct payments, which currently make up the main support ensured to farmers via the CAP, shall be organised into seven components, according to the framework shown in table 1. From 1st January 2015, this composite structure will replace the current single payment system and concern the so-called ‘active farmers’ identified by each Member State within the limits defined at the EU level (the so-called ‘negative list’). The aids will be calculated on a regional basis (one Member State can also be indicated as a single region) and converge towards a single value by 2019 (flat rate). In any case, within its identified regions (one or more) a Member State can activate a ‘convergence’ process of the values of the aids that leads not to a uniform value but to a so-called ‘approach value’: the State ensures a minimum level of convergence seeing to it that by 2019 no farmer receives less than 60% of the average national/regional value. This recovery takes place via a progressive cut of aids to beneficiaries who are above the average regional aid. Nevertheless, it is possible to insert a minimum threshold thanks to which no historical beneficiary shall lose more than 30% of the initial value of their aid. In theory, this threshold becomes more

binding than that of 60%: the farmers who receive aids can obtain less than 60% of the average aid if the total cut for beneficiaries is above 30%. In reference to the single components of direct payments, the basic payment is an aid for all farmers and represents an actual form of income support. Its size varies according to the level of application of all the other components. Green payment is obligatory and requires the respect of some specific eco-compatible practices in order to have access to the premium. 30% of the national ceiling is allocated to this. The payment for young farmers ( < 40 year old) is mandatory and is funded using a maximum of 2% of the national ceiling. The payment for the disadvantaged areas is optional and can reach 5% of the national ceiling as a maximum. Coupled aids are funded to a maximum of 15% of the national ceiling. The philosophy underlying this component of the aid is very different with respect to past experiences (art. 60 of EC regulation no. 1782/2003 and then art. 68 of EC regulation no. 73/2009): previously this component was explicitly aimed at protecting special forms of agriculture and of quality products, including organic ones, but with the reform this component takes on the objective of opposing the potential negative effects of the convergence. In other words, this aid explicitly assumes the sense of compensation made available to some categories of farms that can be particularly penalised by the application of the reform. The scheme for small farmers remains a feasible option for Member States, with a lump-sum aid between 500 and 1,250 euros, without any other obligation weighing on the farmer that adheres to the scheme (green payment obligations). The seven elements that make up the new direct payments include all those already required by the original proposal of the Commission with the addition of a new optional component: the payment for the first hectares. This allows the increase of the premiums associated with the

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first 30 hectares of a farm up to 30% of the ceiling. This new component of direct payments, if applied, will have significant effects of redistribution of aids on a territorial basis. The table indicates the high flexibility of application allowed to the Member States: lots of the aids provided for are in fact optional, which is why the single EU partners shall decide not only whether to apply for some

revision can be interpreted as a softer approach with respect to the original proposals. These envisaged a farm size threshold of three hectares, the identification of an area of ecological interest, applied to all the types of farm (7% of the UAA), and crop diversification based on the co-existence of three types of crops in each arable crop farm. The organic farms were exempted from these obligations as they were considered ‘green by definition’. Following the agreement, for areas up to 10 hectares there is no obligatory greening practice. Beyond this threshold, the obligation only concerns the farms specialised in arable crops. The three modified practices of the agreement are shown below. 1. Diversification of crops. This only regards the arable crop farms over 10 hectares in size, excluding flooded crops (rice). If the surface area is between 10 and 30 hectares, the two crops must be diversified with one taking up no more than 75% of the total. If the surface area is over 30 hectares, diversification increases to three crops with the main one covering a maximum of 75% and the first two a maximum of 95%. 2. Maintenance of the permanent fields-pastures. This practice obliges the Member States to maintain the ratio between permanent field-pasture surfaces and total agricultural areas at a level no less than 5% with respect to the ratio existing in 2012. This obligation can be applied at a national, regional or sub-regional level, but the Member States can also fix the obligation at a farm level. 3. Areas of ecological interest. These become compulsory for farms with more than 15 hectares of arable land and should relate to at least 5% of the surface area. This threshold can reach 7% in subsequent CAP revisions. This includes fallow land, hedges and other landscape elements, buffer zones and areas subject to forestation. The obligation of the exclusive ecological area for the seed areas subsequently excludes not only the organic farms (already considered and known as ‘green by definition’ and therefore not subject to any obligation of greening for access to the green payment), but also all permanent crops, as well as fields-pastures.

Tab.1 - Implementation scheme for the new direct payments (2015-2020) Implementation

% of price ceiling

Basic payment

Mandatory

max 68%

Green payment

Mandatory

30%

Payment for the first hectares

Optional

max 30%

Payment for the young farmers

Mandatory

max 2%

Payment for the disadvantaged ares

Optional

max 5%

Coupled aid

Optional

max 15%

System for small farmers

Optional

max 10%

of the categories of aids outlined or not, but also the amount of their application (expressed as a percentage of the national ceiling). This increases the significance and impact of the national level policy decision with respect to farming, even if in a financial and regulatory framework that remains totally controlled on an EU level. A new element, widely announced starting from the first communications of the Commission on the setting of the reform, is the definition of a component of aid expressly indicated as ‘ecological’ (the green payment) This type of aid also represented one of the big talking points among the various parties involved in different ways in the decision-making process, and was subjected to many changes in opinion during the debate. As regards the obligations outlined by the green payment, the ‘trialogue’ led to a revision of the three practices previously indicated by the Commission; this

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The areas used for permanent crops essentially also become ‘green by definition’, not having to undergo any obligation to forfeit the green payment. The agreement also envisages the definition of the so-called equivalent practices or in other words, the actions that can be considered just as effective for a more correct environmental agricultural activity and that are carried out in line with agri-environmental programmes (reduction of the use of chemical products, rotations, etc.). This was aimed at recognising the efforts in favour of sustainable practices followed by farmers committed to agri-environmental programmes and also at introducing some flexibility in the identification of specific practices considered advantageous to the environment. For these, a revision of the aids of the second pillar will probably be stipulated in order to

avoid the phenomena of overcompensation via different support schemes in the two CAP pillars1. It is worth remembering that a green payment designed in this way has a very low impact on Italian farming: diversification basically regards around 60,000 arable crop farms, for a utilised agricultural area of around 2.4 million hectares, while areas of ecological interest concern little more than 80,000 farms, covering just under 4 million hectares. On the basis of these new additions to equivalent practices, the opinion is positive in that it recognises the commitment undertaken by the farmers to follow more eco-compatible practices as regards the agri-environmental programmes, even if it is hoped that this recognition does not lead to representing a form of indiscriminate "amnesty" for access to the green payment.

In practice, the explanatory document of the Commission ‘Methods on the rural development premia calculation to exclude double funding’ following the June agreement, envisages that also the payments relative to the future measure for organic farming are deducted by a lump-sum in relation to the greening commitments..

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10. Research and innovation In Italy, research in organic farming is supported by European, national and regional funds, reflecting all the complexity that characterises Italian agricultural research, with the involvement of several institutions that promote/fund research initiatives (Ministries and Regional Authorities) and the many parties implementing the relative activities. The latter are represented by universities (with the agriculture, veterinary and organic sciences faculties in the majority of cases), authorities supervised by MIPAAF (CRA-INRAN and INEA) and other public bodies (such as CNR, ENEA), as well as the regional centres or those of the autonomous provinces, private research associations and consortia that predominantly use public resources allocated via bids for tender. The need for a systematic approach to the various actions and to provide the farmers with solid instruments of knowledge and innovation has therefore already for several years favoured the foundation of groups of thematic interest at the universities and research organisations such as the Italian Network for Organic Farming Research (RIRAB) coordinated by the CNR. Another more general example and in institutional form is the Inter-regional Network of agricultural research representatives (structure recognised in 2001 by the Conference of Presidents of the Regions). The associations of organic farmers have also contributed to discussion and stimulus for organic farming research, including the Italian Foundation for Organic and Biodynamic agriculture (FIRAB).

Action Plan for organic farming and organic food (2004), with which the European Commission highlighted the need to reinforce research (in terms of the farm, territory and processing of organic products) as crucial in consolidating the sector and increasing its production capacity. Subsequently the Technology Platform tool was introduced in order to ensure consistent and convergent planning at the various levels concerned of the same strategic areas with the 7th Programme of the European Framework of Research and Development (FP 20072013). This concerns in particular an established method of discussion among research operators and numerous institutional, social and economic parties in order to favour the expression and combination of the relative demands of innovation. In relation to this, the Organics Technological Platform, set up in 2007, developed three products that act as the backdrop to the national and international research initiatives for organic farming over recent years. These are: a scenario document for research in the sector until 2025 (2008), a schedule of strategic research (2009) and an action plan for its effective implementation (2010). From January 2010, the PTBIO Italia was also set up, and identified the significant research lines for the development of the sector on a national level1, issuing – in June 2012 – a strategic research agenda that corresponds to the priorities defined at a European level, in order to foster sustainability (in terms of environment and health) and the competitiveness of organic Italian productions. The 7th FP, by now reaching its conclusion, represents one of the most important support tools for research also in the agricultural-food sector. In the specific work programme ‘Food, Agriculture, Fisheries and

Instruments for planning and funding A first important reference point for planning research in the organic sector is represented by the European For more details see www.ptbioitalia.it.

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Biotechnology’, there was a significant emphasis on sustainable production and human health, allowing the funding of projects also in the organic field, as well as the activation of coordinated research actions (ERANET and ERANET plus) among funding associations participating voluntarily, including MIPAAF. Some of these actions, Core Organic (2004-2007) and Core Organic2 (20102013) have enabled research in organic farming at an international level, thanks to the joint funding by the participating countries. The implementation of another action (Core Organic plus) is envisaged by the end of 2013. With these activities, even if starting with specific demands of the sector on a national level, the research carried out is coordinated with that conducted by researchers of other countries, qualifying the scientific level and favouring an integrated approach in seeking solutions to the problems of organic farming in the various national contexts. Also in the next FP of 2014-2020, known as Horizon 2020, a thematic area for funding the research in the organic sector is outlined, focussed on the issues aimed at accelerating the transition towards a European ‘bioeconomy’, such as the provision of safe, healthy and high quality food products as well as no-food production via the development of efficient production systems based on the sustainable use of resources, the promotion of services connected to the ecosystems by launching competitive supply chains with low carbon emissions. In relation to this, there will therefore be plenty of space for research initiatives in the organic sector, focussed on and involved in the discussion under way on the future European planning for research. In fact the requirement is, also on the basis of the results emerging from the general States on organic farming of 2009/20103, a strategic cut pivoting on total sustainability of the agricultural production systems, via the application of agro-ecological models and the creation of ‘shared’ 2

research projects that take into account the social and environmental challenges of the future (population growth, quality food for everyone, climate change). Then on examination of the CAP and in particular the policy of European rural development (2nd pillar) with the communication of the European Commission no. 79/2012, the European Innovation Partnership (EIP) in farming was launched. This will lead to the set-up of concrete structures on a national and regional level with the institution of work groups. The establishment and functioning of the latter can be supported by the regional RDP with the resources of the new 20142020 plan. The work groups, which can be made up of producers, researchers, advisors and any other parties (institutions, NGOs etc.) will have the task of defining and carrying out actions of innovation (testing, dissemination etc.) also concerning the organic sector. This opportunity is founded on the first of six priorities of the proposal of the EU regulation in support of the rural development ‘promoting the transfer of knowledge and innovation in the agricultural and forestry sector in rural areas’. In order to outline the priorities and governance of the innovation initiatives to be implemented as part of the 2014-2020 planning phase, from the end of 2012, MIPAAF became the promoter of a public debate involving all the parties of the knowledge system in order to reach the definition of a shared strategy for the individual agricultural sectors and also for the organic sector. This strategy can act as a backdrop to the innovation and research initiatives that can be implemented both by means of the tools of the second pillar of the CAP and the FP Horizon 2020. Moreover, important tools for the promotion and funding of research also for the organic sector have been envisaged by some national standards such as the laws 499/99 and 38/03 (ref. BIOREPORT 2011). In general, the existing standards in this area have enabled the drafting of a number of plans on by MIPAAF (National

In the two-year period 2009-2010, MIPAAF promoted the general states as a timely moment of in-depth study and discussion among the various stakeholders on the main ‘open questions’ of the Italian organic agri-food system, from which analyses were made also useful in defining the research actions. For more details see the site http://www.sinab.it/index.php?mod=normative_politiche&m2id=189&navId=1666.

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action plan for organic farming and organic products 2008-2009; National plan for organic seeds, currently under implementation) or of the Ministry of Universities and Research (MIUR) - (National Research Plan 20112013) and have envisaged funding for organic farming research ( as in the specific case of law 38/03 )3, including international research co-funded by MIPAAF. Research for organic farming has become an increasingly topical subject, also thanks to the plans/programmes and in the bids for tender set up by the Regions. In addition, the periodic schedules arranged by the already mentioned network of regional referees constitute an important reference not only for initiatives of an inter-regional nature but also for national planning (PNR of the MIUR, programmes/bids for tender of MIPAAF). Thanks to the presence of a specific expert group on organic agriculture, the Network was able to define, in its planning document ‘Priority objectives and actions of research and experimentation identified by the interregional network for farm, forestry, aquaculture and fish research (three-year period 2010-2012)’, the strategic decisions also for research in the organic field, distinguishing livestock productions from crop productions (ref. BIOREPORT 2011).

directions of research on an international scale, in multi-player and multidisciplinary projects supported by the EU. From the analysis of the data available both on the FP 6 2002-2006 and on FP 7 2007-20135 and considering exclusively the projects that involve presence of Italian institutions (367 research projects in 2011, i.e. 60% of the total projects supported via the two tools), revealing for the organic sector: - 5 projects in the FP 6 (including one also coordinated by an Italian research institution), for a total value of around 17.5 million euros, aimed not only at improving the environmental sustainability and the quality/safety of organic produce, but also in providing scientific evidence in support of drafting specific regulations for the sector; - 4 projects in FP 7 (February 2011), for a total value of around 11.7 million euros, relating to the reduction of the production inputs and the protection of biodiversity in the organic systems as well as an economic analysis of organic certification. With specific reference to the ERANET Core Organic actions, these have allowed the issuing of specific bids for tender through which MIPAAF has been able to use their own resources to fund the Italian groups involved in successful research projects (in particular relating to cultivation techniques, quality and safety of organic products, health and animal wellbeing, innovative market strategies). However, in the period 2002-2013, MIPAAF provided funds for research projects in the organic field (including the ERANET actions) amounting to a total of approximately 26 million euros. More than half of these funds were allocated to studies on cultivation techniques, technical

Completed and ongoing research Italian research in organic farming The first evidence of Italian agricultural research4 shows that in recent years, the national institutions are revealing particular dynamics in the participation in EU projects funded by the FP, clearly also in response to the general reduction of resources available on a national/ regional level and with the purpose of experimenting

The Law 38/03 established the Fund for research in the organic and high quality farming sector. This fund can back research projects and experiments in the organic sector (validation of new production techniques, fine-tuning of eco-sustainable production models, introduction of innovative systems to improve the functionality of organic systems etc.) The relative work criteria are outlined with the MIPAAF decree no. 5424 of 17/05/2013.

3

An overview of the research projects on organic farming carried out in Italy is available on the website www.sinab.it.

4

Our thanks to François Constantin (Director-General for Research of the European Commission) for having made the basic implementable data available in relation to FP6 (finalised) and FP7 (currently in implementation).

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Table 1 – Implementation data relating to ERANET Core Organic I and II actions with the participation of MIPAAF ERANET reference action Core Organic I Core Organic II

No. of projects with Italian partners/total funded projects

Year of bid for tender issue

No. of partner countries (including Italy)

Total available budget (million euros)

MIPAAF Share (million euros)

2007

11

8.4

1.2

5/8

2010

21

8.8

1.2

9/12

2011

21

4.7

0.3

1/2

Source: data processing of MIPAAF data

inputs and defence (61%), a significant part to studies on the quality of the product and processes (19%), and another part for research for animal productions (9%). Small amounts remained for socio-economic studies on agri-environmental sustainability of the organic model and on organic aquaculture. The majority of projects are therefore oriented towards the development of innovative management techniques and of technical inputs to improve the productivity and stability of production, with an approach not only based on the farm but also on the system and territory, enhancing the use of natural resources.

Some of these projects have the primary purpose of identifying an effective strategy for the management of the adversity to crops. This presents a series of problems for organic producers. Moreover, this group includes research and experimentation activities envisaged in the current national plan for organic seeds, related to the cereals, vegetables and fodder, involving around 40 organisations. These activities are focussed on the identification of varieties suitable for use in organic farming, on the use of the main active ingredients of natural origin for seed treatment and for controlling the diseases transmitted by seed, on

Graph 1 – Breakdown of the resources by thematic area (2002-2013) 7%

4%

9%

1%

60% Cultivation techniques/technical inputs/defence Quality of processes and products, traceability and health aspects of the organic product Animal production: management, wellbeing and product quality Socio-economic studies of the farm and territorial systems and of consumption

19%

Agri-environmental sustainability Aquaculture and the quality of organic fish

Source: MIPAAF.

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genetic improvement and the extension of the genetic basis of the species cultivated in organic farming (also using the participatory breeding method with the direct involvement of the farmer), as well as the fine tuning of the guidelines and measures for the production of organic seeds. The projects relating to the theme of quality, which represent approximately 20% of the research funded by MIPAAF, concern the quality aspects of production and of the processes related to farming, as well as the definition of tools for assessing the quality of processed products, in line with the current European regulations and in response to the needs of the consumer, who want to know about the added health value of the organic product compared to conventional articles, supported by solid scientific evidence.The research relating to animal production looks into the aspects relating both to the quality of the products and the management of breeding, with particular attention to the reduction of animal diseases (infectious species). On the other hand, in addition to analysing the sustainability aspects of the organic system, the studies of a socio-economic nature are aimed at identifying the socio-economic and environmental characteristics of each of the various territories according to the organic district, with the general aim of increasing the market share of the local products, increasing the consumer’s perception of their value, quality and safety. Finally, with the recent EU regulation on organic aquaculture [EC regulation no. 834/2007 and 710/2009] this sector has also become the subject of research with the aim of defining the criteria of the production system, to offer the consumer a new product also in public catering and furthering the nutritional characterisation of fish species bred according to the organic method, highlighting the most important features. With financial instruments managed by the MIUR, in reference to the period 2000-2009, 70 research projects in the organic sector have been funded (almost all the Projects of significant national interest or PRIN), amounting to a total of around 7.7 million euros, which

represents around 7% of the total spending for MUIR agricultural research activities. In 2005, the launching of the SIMBIO-VEG project (for the improvement of organic systems and methods in arable and vegetable cropping and of the environment) should be highlighted, funded with the FISR fund, thanks to a bid for tender set up in 2002 for the so-called integrated special projects. In fact, on a national scale, this represented the first interdisciplinary project of a certain significance in the organic field (with a total cost of 2.1 million euros and over 1.4 million euros of public funding). The majority of MIUR projects (77%) concern vegetable production and focus on the technical aspects of production such as above all the defence of plants as well as the improvement and rationalisation of the production techniques, above all sanitary management. Other themes studied in the MIUR projects are those of the quality and food safety in production and, to a lesser extent, the environmental resources (in particular the soil) as well as economic aspects (above all microeconomics). The MIUR also promotes agro-industrial research via specific national laws and operative programmes of EU intervention (Laws 46/82 and 488/92, first, followed by Law 297/99, including the Research Facilitation Fund (FAR), which also finances the PON 2000-2006 and PON 2007-2013). Furthermore, in the specific case of the organic sector, this commitment is more substantial (albeit less constant) of that offered in the public research sector. In the period 2000-2011, in fact, the total funding (public-private) for organic agro-industrial research consisted in 11 major projects amounting to 18.6 million euros, of which over 62% was borne by the MUIR. Moreover, while the PON 2000-2006 supported some (if only a few) research projects of interest for the organic sector, the current PON 2007-2013 has not yet been used for this purpose. In particular, the organic projects of agro-industrial type funded up until now have dealt above all with organic production (with attention also to the post-harvesting stage) and of technologies for the quality control of the products.

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Research at a regional level From the processing of data and the information available in the organic field funded by the Regions and by the independent provinces5, a high number of projects are revealed, already completed since the second half of the nineties. There are 263 in total with an overall cost of almost 28 million euros and public funding amounting to over 24 million euros (over 87% of the total investment).

However, only six of the Regions listed envisaged cofunding by beneficiaries (to a greater extent in Campania, Lombardy, Emilia-Romagna and Piedmont). Although the periods for surveying the research projects are not the same for the various regions6, those that seem to stand out distinctly from the others – at least in financial terms – are Emilia-Romagna and A.P. Bolzano followed by Veneto, Piedmont and Lombardy. Moreover, while the regional institutions were active in Table 2 – Research on organic farming financed with regional funds1 Region Piedmont Valle D'Aosta Liguria Lombardy A,P, Bolzano (°) Veneto Friuli Venezia Giulia Emilia-Romagna Marche (*) Tuscany Umbria (*) Lazio Abruzzo Campania Puglia Basilicata Sicily Total 1

No, of organic projects 38 2 2 25 32 22 4 75 1 17 1 9 3 10 7 2 13 263

Year of project launch dal 2002 al 2009 1999, 2002 2005, 2010 dal 2001 al 2009 dal 1994 al 2011 dal 2001 al 2006 2003, 2006, 2011 dal 1994 al 2010 2005 dal 1995 al 2010 2005 dal 2000 al 2007 1999, 2009 dal 2003 al 2005 dal 1997 al 2002 1996, 2000 dal 1999 al 2006 -

Total cost of projects 2,593,955 48,537 93,000 2,516,159 3,861,550 2,673,013 790,000 6,949,245 900,000 2,030,911 921,300 773,408 492,247 558,273 1,133,526 56,878 1,582,982 27,974,985

% of total cost 9.3 0.2 0.3 9.0 13.8 9.6 2.8 24.8 3.2 7.3 3.3 2.8 1.8 2.0 4.1 0.2 5.7 100.0

Public contribution 2,197,607 48,537 93,000 1,892,467 3,861,550 2,584,730 790,000 5,266,346 675,000 1,879,096 730,000 773,408 492,247 411,871 1,133,526 56,878 1,582,982 24,469,245

The period surveyed varies according to the presence – in the sources examined (databases) – of research projects of the entire agricultural sector in general (and not only in the organic sector),

(*) Leading regions of an inter-regional project with research lines on organic farming (°) Data referring to the organic research of the main agricultural research body of A,P, Bolzano, or the Laimburg Centre where there is a specific sector dedicated to organic farming Source: data processing on INEA; SINAB and Emilia-Romagna Regional Authority data 5

INEA and SINAB database and some regional sources that essentially refer to competent councilors and regional management for agriculture matters.

6

Depending on the regions these start in years between 1994 and 2002 and finish in the period 2007-2012

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funding organic projects already by the second half of the nineties, the years in which new research projects were launched more frequently in favour of the organic sector were between 2002 and 2006. It should also be specified that, besides the research promoted singularly by the Regions, two interregional projects were also considered – due to the active role played by the Regions in the promotion and management of the initiatives and for their extended multi-regional nature –, realised with the help of the cofinancing of the funds as envisaged by Law no. 499/99. The first, coordinated by the Umbria Region concerns the production of organic seeds while the second, coordinated by the Marche Region concerns organic livestock. As regards the contents of research, almost 98% of the 263 projects concern the primary and/or processed agricultural/livestock productions (of which 84% are crops, 14% are animals and 2% crops and animals), while the remaining six are concentrated on other topics of agricultural interest, such as the study of the behaviour of consumers and the organic markets, of new laboratory formulations, of monitoring and evaluation methodologies of policies for the organic sector etc. With reference to the crop and animal productions, dealt with from a technical point of view, in 86% of the organic regional research, the studies are aimed at the improvement and rationalisation of production techniques and the relative inputs (including, even if less studied, the varieties most suited to the organic method, and to a very small extent, the animal species most adaptable to this method), as well as the fine tuning of defence techniques of the plants and the health of animals (including the methods using homeopathic remedies). The majority of regional organic research, amounting to approximately 78%, considers strategic aspects for organic farmers (e.g. economy) or for the

business as a whole (e.g. environment and quality), which usually accompany the aforementioned technical aspects. Considering the group of studies that respond to the objectives of strategic relevance and bearing in mind that the research is generally classified into several subgroups, on a regional level, the subjects most frequently studied regard environmental issues, occurring in 38% of the research. In contrast to the research in organic farming funded at a central level, in the case of the Regions, the economic aspects (26% of projects) – above all in ‘micro’ terms (evaluation of production costs of production processes, of business revenue, etc.) – prevail over those of quality (24% of research is based on product quality and health), while studies contributing to the definition of policies and standards in the sector (present in 8% of projects) play a minor role, in the same way as the topics of interest as concerns ethical and social issues (relating to 6% of the research)7.

Graph 2 – Regional research projects on the organic sector by strategic intervention areas 80 – no. of projects

70 60 50 40 30 20 10 0

Environment

Quality

Economy Social aspects Policies/standards

Source: MIPAAF.

In relation to this, the analyses and evaluations of the impacts on the environment connected to the production processes with particular focus on the themes of the protection of the earth (present in 24 research studies) and of biodiversity (present in 16 research studies) and an interest, even if smaller, in that of the water resources. The research studies that handle the topics relating to the air and energy resources are decidedly less frequent.

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PART III: SECTOR ORGANISATION AND CHARACTERISTICS

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11. The environmental sustainability of organic farming Introduction

The indicators included in the set were measured for various farm categories (organic, conventional and mixed) and on different levels of territorial disaggregation (North-West, North-East, Centre, South and the Islands). The base figures were taken from ISTAT’s 6th Agricultural Census. Such a wealth of information has allowed us to abandon the usual dichotomous representation of agriculture – where conventional farms are compared with organic farms – thanks to the introduction of a new category: mixed farms.

The approach used in this chapter for measuring the environmental sustainability of organic farming is made up of a set of indicators and indexes that provide an estimate of the incidence of agricultural production on various elements of the ecosystem: land, water, biodiversity, the landscape, atmosphere and energy. This method, now widely used in sustainability analysis, has the dual advantage of providing indications on numerous elements of environmental sustainability and also of facilitating reading of the results.

Graph 1 – The indicator framework Indicator

Application context

Description

Livestock density

Livestock production

This expresses the pressure livestock places on the environment by measuring the density of grazing livestock per hectare of fodder area.

Crop diversification

Biodiversity

Average number of crops per farm.

Land management

Land

Composite index that combines ploughing techniques, land cover systems and rotation. The index ranges from 0 (least sustainable land management) to 1 (most sustainable land management).

Irrigated area

Water

This is the ratio between the irrigated UAA and the irrigable UAA. The greater the irrigated portion, the greater the use of water tends to be.

Irrigated area

Water

Diffusion of various irrigation systems. Sprinkling and micro-irrigation are associated with greater water use efficiency, whereas surface irrigation and flood irrigation tend to be less efficient.

Renewable energy

Energy

Incidence of farms with renewable sources of energy out of the total number of farms belonging to each category (organic, mixed, conventional).

Renewable energy sources Energy

Incidence of various renewable energy sources in each farming category.

Semi-natural elements

Biodiversity / Landscape

Proportion of farms that have carried out maintenance to or have built new elements.

Atmosphere

Incidence of direct sales channels. The indicator is a “proxy” of the atmospheric emissions of greenhouse gases linked to transporting products. The higher the incidence of direct sales, the less impact in terms of greenhouse gases released during transport.

Direct sales

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In legal terms, these farms are defined in Reg. (EC) no. 834/20071. In quantitative terms, however, these farms have a biological surface area between 25% and 75% of total UAA, which extends over little less than 3% of the national UAA and represents almost a quarter of the total certified organic surface area. In Italy, there are over 10,000 farms that produce both conventional and organic crops, compared with over 34,000 completely organic farms.

pressure exerted by farming grazing livestock – the largest animal category in terms of environmental impact – on farmland specifically intended for grazing and foraging. An excessive quantity of livestock contributes to degrading the quality of the land and water, in addition to having a significant impact in terms of greenhouse gas emissions. In fact, cattle livestock are the main source of atmospheric emissions of methane (CH4), a

Tab. 2 – Conventional, mixed and organic farms Categories

Average UAA

Average Organic UAA

Total UAA

Total UAA

Organic UAA

Organic UAA

Farms

Farms

(ha)

(ha)

(mln di ha)

(%)

(ha)

(%)

(n.)

(%)

Conventional (Organic UAA UAA organic 80 ha

Source: processing by FederBio.

of overall farmland (over 27%) falls within the farmland classes between 1 and 10 hectares. Therefore, medicinal plants are produced both on small and very small areas of farmland, as well as on very large areas of farmland, from 20 hectares and upwards. The list of species grown by these farms also represents some very interesting information, again processed from figures from the 2011 APPs. The list includes over 200 species, among which those with the greatest invested surface area are lavender, coriander, psyllium and wild fennel, followed by camomile, oregano and passion flower. The figures for sweet clover require special consideration because it is a ‘pianta officinale’ and does not have a commercial outlet in the supply chain but is mainly grown for fodder, or for crop rotations, as it improves the land. The description ‘Various medicinal plants and aromatic plants’ is often used in compiling APPs for small surface areas, where multiple species are grown without

Surface area ha

% Share ha

3

681.9

30.6

20-80 ha

14

519.0

23.3

10-20 ha

24

326.1

14.6

3,6-10 ha

58

356.2

16.0

1-3,6 ha

130

253.8

11.4