From the pandemic to the war in Ukraine: the past three years have been intense. On the one hand, disruptions in logistics chains, on the other hand, high energy prices and some products linked to the dynamics of the war between Russia and Ukraine (for example, corn and sunflower oil) caused Italians to shop. their cars are high. But there is good news: Italians’ shopping baskets are lighter than those of our European neighbors. Although our food prices have increased significantly, they tend to grow less compared to the EU and other developed industrial countries.
Italy resists inflation but faces energy and income crisis compared to rest of Europe
The average increase in prices (measured by the Istat index adjusted for European comparisons for food, drink and tobacco products) reached 8.1%, but remained more limited than the EU average (10.2%) and the Eurozone (9%). France outperformed us, suffering less from international price increases thanks to its greater self-sufficiency in food and energy, and managing to contain food increases to +6%. The situation is different for local users; In Italy, growth of over 35% in 2022 is almost double the EU average (+18%), twice that of Germany and more than three times that of France. This is perhaps the most relevant data to emerge from the Ismea report on Italian agri-food, presented in Rome on Tuesday, October 17, 2023.
And the problem is that incomes are generally lower here than in the rest of Europe, which makes Italians even pull down their purchases of food products: in 2022 they fell by 3.7%. However, inflation does not affect everyone in the same way: Very large middle- and low-income families feel the effects the most. We’re turning to discount stores much more than in the past, but it’s certainly the low-priced supermarkets that have recorded the most significant increases
The food industry has grown but today’s problem is climate and low productivity
Between 2012 and 2022, the food industry grew in Europe and around the world. Exports increased by 7.6% (versus 5.5% of total goods exports during this period). Today, our agro-food exports are worth approximately 61 billion euros and have generally increased more than other European countries. Italy’s weight on EU agricultural production is generally equal to 14%, but for wine this rises to 37%, second only to France (43%), and for olive oil it comes after Spain with 33%. . Even in fruit, we are one of the leaders of the sector with 18% of EU production. However, as can be seen from the graph below, the weak productivity of some of our companies is still their Achilles heel.
Our agricultural enterprises are on average smaller in size than European enterprises and the price in terms of efficiency is tangible. We are also paying the price for the low presence of young entrepreneurs (only 9% compared to the EU average of 12%) and the low level of education of those who manage agricultural companies.
Increasingly, the problem is also climate-related. 2022 has been the hottest and least rainy year in Italy since weather and climate data have been monitored, and 2023 is proving to be even worse. Evidence that has pushed Italy to third place in the EU’s agricultural production rankings, after France and Germany (it was previously second to France); But most importantly, the added value record that our country has maintained almost uninterruptedly for ten years has passed to France since 2021.
The problem is particularly felt in some supply chains, such as oil. Its price has risen exponentially in recent months due to drought affecting Spain, the world’s largest producer.
Lollobrigida: “Defend Italian excellence, no to cellular meat”
“We have intervened in sectors threatened by climate change, such as the oil sector, by supporting oil factories with 100 million euros of financing for the reasons put forward to support the supply chain,” said the Minister of Agriculture and Food Sovereignty. Unfortunately, there are climatic fluctuations that create a critical problem with the amount of production, but this does not affect the quality and this aspect that we must insist on – Francesco Lollobrigida told Today.it in a press conference on the sidelines of the conference. “We must better explain that not all oils are the same, and that our oil is different from those coming from North Africa or other European countries.”
However, a clear closure on synthetic meat, which is one of the sectors that may constitute the real future of the agricultural-food industry for many in the coming years: “There is no step back regarding the import, production and marketing of meat. Products that have nothing to do with quality food and, in our opinion, do not even have guarantee conditions in terms of public health.” “We believe that Italy can be the first country to escape this risk and we hope that Europe will follow us,” he said. Press point where journalists are present.
A point that literally divides part of the public and experts. The risk is that in the coming years we will find ourselves lagging behind one of the most developing and high-tech sectors of the agri-food industry.
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Source: Today IT
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.