IENICA REPORT: ITALY

Executive summary

The knowledge of the state of the art and of the perspectives on non food industrial crops in the EU member states is a main factor in order to reach IENICA's goals.

This knowledge is necessary for the scientific and technological aspects either to be or already applied in the agricultural and industrial segments of the chain. At the same time information is needed on the market situations.

This paper on the state of the art and the perspectives of these crops in Italy will be part of IENICA's general report, and therefore it contributes in the realization of the prefixed goals.

First of all, the paper gives a general picture of the Italian agriculture enhancing those factors that may affect the introduction and the spread of non food crops now or in the future. It also deals with those subjective factors capable of an influence on the trends analysed.

Those general aspects either about agriculture, industry, economics, or non food crops without a strict connection to the Italian situation are not taken into consideration. They will be broadly analyzed in IENICA's general report.

Crops are divided into four big chains: industrial oils; fibres; carbohydrates; different and niche uses.

This paper considers from different points of view both those crops already used in Italy with a primary or secondary destination to non food industrial uses, and the ones only experimented in projects of research.

For all crops it is taken into consideration:

a) the state of the art with notes on the agricultural production, the industrial aspects, the market, and the impact on the environment.

b) barriers to the progress in the agricultural phase of the production concerning science, technology, environment, laws, economics.

c) comparative and perspective evaluations.

At the end, there are enclosed both tables with statistic data on the progress in time of the agricultural production, and a list of addresses of research Institutes, Institutions, Corporations and people already active or interested in the different sectors.

In writing this paper official data, unofficial sources and evaluations have been used.

Special thanks to all those contributing in different ways and times to the realization of this paper

Non food crops in the Italian agriculture

Non food crops in Italy

These crops received a different degree of attention respectively from the agricultural, industrial, and research sectors.

The agricultural world marked in new crops or in new uses of traditional crops important alternatives to be introduced in the farming systems of the different regions.

There were both economic and technical reasons because if compared to traditional crops prospects were higher not only as for gains, but also for the opening of new markets, and the sharing of risks. The opportunity to introduce new crops by widening rotations was pointed out as the possible solution to many problems arising from monosuccession or narrow rotations.

The agricultural world proved to be very willing to test and to introduce new crops in farms. Initiatives in this respect were manifold in many regions, but often disappointing.

Basically, the selling prices of new crops were little profitable. Sometimes, lacking a contract before sowing time, the product was not withdrawn by industries, or more often the qualitative characteristics determined rejections together with delays and cuts in payments.

Notwithstanding the strong interest industry has in new materials and in new uses of agricultural raw material, it has not been able to establish conditions proving profitable for the farmer and therefore enabling a continuity of the chain. Besides, industries are not really interested in a local production, as they can get supply from the world market.

The difficult relationship between agriculture and processing industry has given way to the alternation of surfaces assigned to alternative crops. A clear example is to be found in the most developed sector, the oil crops.

The research coped enthusiastically with the problems arising from alternative crops during the agricultural phase, especially thanks to the MiPA (Ministry for the Agricultural Politics)'s initiatives and to the commitment of both public and private groups. As for the processing phase, there were mainly private initiatives only in specific sectors. However, wide was the Italian participation to EU projects involving both the agricultural and the processing phases (Eurobiodiesel, Eurolino, Eurokenaf, etc.).

As for the agronomic research, connected somehow to the processing phase, in Italy PRisCA (Research Project of Alternative Crops) has been most active working with the commitment of 26 Institutions since 1993. The results of great interest are shown in the following tables. PRisCA has sometimes applied its investigation activity onto practice, hence placing its knowledge at disposal and collaborating actively to realize the chain.

Italian agriculture and non food perspectives

The development of a non food agriculture depends directly on the politics specifically determined for this producing sector. Indirectly, the role it might play is connected both to the structural elements typical of the agricultural sector, and to the kind of integration and developing conditions of each chain.

- The physic environment. In short, the Italian territory is characterized by hilly and mountainous grounds. On a territorial surface of about 30 million ha, only 23% of it is represented by level grounds, which come down to 18% and 9%, respectively in the South and in the Centre of the country.

Besides, the agricultural surface undergoes a progressive erosion because of the urbanization. The unproductive surface covered by the road network, settlements and infrastructures occupies almost 10% of the territory. According to other sources, between 1960 and 1990, the unproductive surface increased from 9.6% to 19.3%. Therefore, the Italian agricultural surface has been diminishing constantly as in all EU countries, however being the decrease rate relatively more marked. For example, between 1990 and the average of the three year period 1994/96, the average fall off per year of SAU (Useful Agricultural Surface) was by 1% as opposed to the 0.1% average in the other 15 EU countries.

- The Gross Added Value. In 1997, the Gross Added Value to the cost of the factors in the primary sector (returns for the farmers) - i.e. 30,883,614 ECU (ECU = 1,959 lire) - diminished by 1.6% compared to the previous year in current terms, but remained constant in real terms.

The contribution of agriculture to the growth of added value in the economy of the country was by 3.3%. With constant prices, the influence on the national total amount of the agricultural added value to the cost of the factors passed from 8.1% in 1970 to 6.2% in 1980, and to 3.8% in 1997.

- Employees. The effect of the agricultural sector on the Italian economy results higher than that of other industrialized countries, especially in terms of employment. This aspect is enhanced by strong regional differences. In the North, agriculture counts for 2.6% on added value and for 5.7% on employees, whereas such values soar respectively to 5.4% and 13% in the South.

In 1997, on a totality of 22,203,000 employees, 1,731,000 were in the agricultural sector, with a decrease by 1.4% compared to the previous year. This phenomenon characterizes both dependent (-1.9%) and independent (-1.1%) employees. In absolute terms, the former lowered of 11,000 units, the latter of 12,500 units.

In the same year, the role of the agricultural job on the total population was limited to 3% compared to a percentage of 7% in 1970.

As for the volume of agricultural employment, in Italy there are 9.1 employee for 100 ha of SAU, a value inferior only to Greece, Portugal and Holland. This value shows on the one hand a lower technological development in comparison with the agriculture of other countries; on the other it marks a higher farming intensity.

With constant 1990 prices, the Added Value for job unity was little less than 15,315 ECU, resulting by 44.4% in the industry and by 41.9% in the selling services. It has therefore become wider the gap of the preceding decade, when such values were respectively by 38% and 33%.

- The selling gross production. In 1996, on the total value of the agricultural selling gross production (35,694,000 ECU, i.e. 16.1% of the EU agricultural production), vegetables counted for 16.1%, nursery gardening for 7%, grapevine for 10.1%, fruit and citrus for 9.2%, whereas cereals, fodder plants, and fresh legumes counted only for 8.8% and industrial crops (sugar beet, tobacco, oil seeds, textile fibres) for 4.1%.

- Overall picture. The coming out picture is that of an agriculture strongly differentiated because of producing conditions, surface extension, development conditions, intensity of farming, and added value for job unity. Such conditions imply the possible development of productions assigned to a non food use in those areas offering the best conditions to practice an agriculture with a low use of productive inputs, or where these new crops do not compete with highly remunerative and specialized crops.

- Farms. Moreover, non food perspectives depend on the features of the agricultural structures.

Up to 1995, Italian farms were 2,482,095, covering a total surface of 20.5 million ha and a SAU of 14,685,448 ha. More than 78% of the farms belonged to the class SAU inferior to 5 ha, and only 0.5% to classes superior to 100 ha. The average SAU per farm was of 5.92 ha. More than 54% of the Italian farms were distributed in the southern regions, and 42% of them in only 4 regions: Campania (9.4%), Apulia (12.2%), Calabria (6.9%), Sicily (13.4%).

Due to this distribution, the SAU concentration was only by 47% in the southern regions. As a consequence, the average SAU per farm resulted higher in the northern regions (with a maximum of 7.9 ha in the North-West) and in the Centre, whereas it was remarkably lower in the South (4.4 ha).

- Arable lands. Arable lands cover over 40% of the SAU in almost all the areas of the country with the exception of the islands, where they decrease to about 34%. The spread of agricultural wood crops (grapevine, olive, fruit-bearing trees) appears on the contrary very diversified. It shifts from 5.1% in the North-West to 22.5% in the southern areas, excluding the islands where these crops cover only 15%.

It results that the most favourable conditions to the diffusion of non food crops are to be found in the north-western Italian plains and in the mild hills of the Centre of the country, that is in those areas with the highest concentration of zootechnical activity (62.9 % of the universe of zootechnical farms).

- Employees' age. Similar considerations seem possible as for the age of the manager-producer, considering the younger generations as those more sensitive to the introduction of innovations. If this is the case, aging in the management, i.e. the impact of entrepreneurs over 65, is a matter especially for the southern farms, involved in this phenomenon for the 38.4% against a percentage of 37.1% in the central regions, and of 34% in the northern farms, where there is the highest percentage of entrepreneurs under 45.

- Specialization. The specialized Italian farms represent about 83% on the totality and yield about 83% of the Gross Standard Income. It is important to stress on the one hand how the arable lands realize only 25.1% of the GSA, even if they involve 27% of the farms and 32.8% of the SAU; on the other hand horticulture and flower growing as much as permanent crops are practiced respectively in 1.8% and 41.5% of the farms covering 0.6 and 19.3% of the SAU and take part in the GSI for the 10.8% and 30.7%. Specialization concerns foremost Italian insular (84.1%) and northern (83.7%) farms, whereas it is inferior in the South (81.7%) and in the Centre (75.8%).

- Economic dimension. As for the economic dimension, 51.1% of the farms realize less than 2 EDU (Economic Dimension Unit, that is 4.3 millions lire). These farms cover 18.7% of the SAU, contributing for 11.8% to the GSI. On the contrary, about 65% of the GSI is own to 9.6% of those farms that, cultivating 52.7% of the SAU, employ 34.5% of the total job. The farms with GSI inferior to 6 are concentrated for the 56% in the South, whereas those having economic dimension higher than 100 EDU are for the 30.7% in the North-West.

It is therefore confirmed the idea of an Italian agriculture characterized by a strong economic and territorial differentiation in the enterprises. This feature seems to affect the spread of non food crops within the limits of geographical areas favoured by farm size, availability of resources (both hydric supply and availability of youth labour), and economic dimension.

- The effect on Agenda 2000. This briefly sketched picture cannot be deeply modified by the realization of the interventions planned by AGENDA 2000, unless a specific no food crops politics is defined.

In fact, the reform started in 1992 hasn’t produced remarkable changes as to the agricultural structural evolution typical of dynamic societies.

- Other factors. The Italian agriculture has been definitely more affected by the devaluation of the lira occurred in the same year and by the extremely favourable conditions of prices and of EU compensations. Due to this, since 1993 there has been a sharp trend inversion in the machine and building investments, both with constant 1990 prices and current ones, thus co-operating to the good renewal of the farm instrumental equipment.

However, it is reckoned that in the near future the main impacts on the evolution of agriculture, of its structures, and on the possibility of the development of non food crops, might derive from the serious emergence of aging with its repercussions on the improvement of the agricultural structures and farming trends.

With regard to this, it is important to remember the influence of the distribution system’s most recent evolution, characterized on the one hand by the growth of large scale retail trade, on the other by a global decrease in small retail trade and employment.

Up to 1 January 1997, there were surveyed 5,207 supermarkets, with a numeric growth by 8.8% if compared to the previous year. In this way, the global selling surface has reached 4.5 millions square meters with 95,950 employees.

On the same date, hypermarkets were 230 units with a selling surface of almost 1.2 millions square meters and 33,000 employees. The cash and carry system was in a slightly opposing trend with 288 units and a surface of about 728,000 square meters.

All this confirms the deep and fast change taking place in the Italian distributing system. In the last years it has represented - and it still might in the nearest future - one of the major impact factors on the evolution of the agricultural farming system. This is due to the effects on the development of trends in farming and production techniques. It is within such developments that the growth of the non food agriculture can be joined as one of the few productive alternatives feasible for farmers.

Under this point of view, it is necessary to underline the lack of either specific process innovations for non food crops and of "chain" projects. The only exception is the biodiesel experience supported by the Eridania Beghin Say Group through the checking of Novaol, which has realized at Livorno the biggest plant for the esterification of vegetable oils in all Europe.

This reality does not prevent the world of the industrial enterprises to be interested and available. The most interested have been those producing lubricating oils and additives, those producing pannels based on fibre-cellulose materials, and paper mills.

In the field of the technical oils, for example, some experiences in the development of products obtained from set-aside grown species, were done by the Houghton Italiana.

The Italian pannel industry has resulted particularly interested in the product innovation and in the research of fibre-cellulose alternative materials in order to keep the first rate role it plays in Europe.

In the sector of cellulose paste production, the scanty national production has not prevented the two major firms operating in this sector - Istituto Poligrafico e Zecca di Stato and Sicem-Saga - to show interest in new sources of raw material.

In all these cases, however, the lack of a non food politics has limited the shift from a phase of study to a pre-industrial one.

Subjective and unquantifiable factors

Opportunities in the spread of non food crops in Italy depend also on unquantifiable different situations. It is necessary a distinction between agriculture and industry.

The agricultural world witnesses the erosion of its own income and fears the near future because of the increase of costs and of the ongoing lowering of prices. It is therefore psychologically ready to face new crops and/or innovative production methodologies needed for new destinations of the product.

Industries potentially interested in non food crops claim their availability, however without taking practical initiatives. Indeed, on the one hand they can be supplied with raw material at a lower price by the world market; on the other, they don't want to run the risks implied in investments for innovations. They fear the difficult relationship with agriculture, the latter being considered unable to ensure qualitative and quantitative constancy in the different production years.

Not only does a real point of contact lack among the parts, now limited to certain sectors, but in general there is not a set of rules defining the agreements among them.

However, an ecological awareness has been developing lately in our country. As a result, the consumer requires those products considered environmentally friendly because of their features or of their processing methods.

The research has placed at disposal much information about the agricultural ring of the chain, while the knowledge about the industrial aspects is vague as the results are often patented.

At present, almost all the non food crops result economically unfit.

It would be necessary to consider in the budget both the direct environmental costs and the differences deriving from the replacement of crops with higher inputs.

There would be a need for fiscal measures considering the environmental aspect and supporting the start of non food chains.

Unfortunately, such a politics does not pay at once, but only in the long run, and the present economic situation of the Country does not foster investments without a prompt feed back.

Examining both the general situation of the Italian agriculture, described at point 1.2, and the non objective limits above summarized, the opinion is that a strong spur is fundamental for a meaningful development of non food industrial crops. With regards to this, a working hypothesis could be either that of international commitments aimed at the environmental safeguard or new industrial patents rendering particularly convenient agricultural raw material.

It is more difficult to suppose driving effects deriving from peculiar market situations.

2. Opportunities for non food industrial crops and their products

At present, non food industrial crops farmed in Italy on a commercial basis regard only a limited number of species, and for almost all of them very narrow surfaces.

Many traditional food crops assign part of the yield to uses in the non food sector. Many new species have been or are still under experimentation.

Among exclusively non food crops, a definitely wider surface is assigned to sunflower, followed at a far distance by colza, flax, crambe.

Among fibre crops, cotton, flax, kenaf and hemp cover surfaces shifting globally between some ten to some hundred ha according to the years.

Also niche crops do not globally exceed some ten ha (dyes, biocide, aromatic and medicinal plants).

To the non food sector is addressed part of the production of sugar beet, potato and cereals farmed prevailingly for human and animal food.

Many have been the species tested in research programs within a community, national or regional range or even carried out by single Universities, private or public groups of research.

Among the national Projects of Research it is to be mentioned in particular the PRisCA (Project of Research on Alternative Crops), supported and financed by the Ministry for the Agricultural Politics (MiPA). It carried out researches from 1992 to 1997 committing 26 Operative Units, foremost University Institutes, distributed al l over the Italian territory.

The activity of PRisCA was articulated into 5 chains: 1) Technical oils 2) Energy 3) Fibre and Cellulose 4) Starch 5) Special Uses.

The researches dealt foremost with the agronomic aspects connected to the primary production and to the environmental impact, whereas much smaller was the stress on the primary industrial process.

It was evaluated the flexibility of many genotypes with different origin and provenience. According to different grades of close examination, the setting up of new farming techniques was started for the most promising species in the different chains.

The efforts were directed onto the productive level as much as on the evaluation of the environmental impact and on how the crop techniques affect the qualitative and technological characteristics.

Other national projects have been promoted and financed by the CNR (National Council for Scientific Research): CITECA (Textile and Paper Industrial Crops 1990-1995) and ABSOV (Biological Activity Substances of Vegetable Origin 1996-1997). Besides, numerous Italian Institutes have taken parts in EU Projects: Euroflax; Eurocastor; white Lupin; Cynara; Miscanthus, Hemp fibre and sugar Sorghum.

The sum of these Projects has supplied a discrete amount of knowledge on the primary production of different species. Such a knowledge is capable of being transferred and applied wherever there are the conditions for an applicative development.

The following chapters will be about four chains: oil crops; fibre crops; carbohydrate crops and crops with specialist uses.