Food System

Support in agriculture. The words that are missing

April 14, 2021

378

The economic crisis triggered by Covid-19 has dealt a huge blow to thousands of Italian farms. Support in agriculture on the other hand cannot be improvised with extemporaneous measures that overlook the complexity of the sector and the need to direct aid only to those enterprises that are actually active.

Therefore, it is proposed that policymakers recover proven tools that have already been used in past decades to deal with natural disasters.

Table of Contents

Support in agriculture following disasters, the consolidated measures

Laws are recalled that have supported Italian agriculture in natural disasters for 30 years, to which the pandemic is in many ways assimilated. (1) Farmers and ranchers in sudden difficulties have found support in a few but effective measures, such as:

1) Extensions of agrarian loan maturities, for 24 months, and subsequent installments over 5 years,

2) relief loans of up to 80% of the damage incurred, with grants for 40% of the amounts disbursed and repayment over 5 years of the remaining balance (60%),

3) Abatement of up to 50 percent of INPS charges, OTD (Temporary Workers), OTI (Permanent Workers), CD (Direct Farmers),

4) Abatement of up to 90 percent of fixed and variable fees of reclamation consortia for a two-year period.

Support in agriculture, the useful measures

The measures mentioned above – although ‘superseded’ by the d.lgs. 102/04, c.d. agricultural insurance (2)-should now be restored and supplemented as follows. To offer concrete support to those who work and intend to continue working in the fields:

5) Increase the financing guaranteed by ISMEA, from the current 30 to 100 thousand euros, with repayment in 20 years at zero interest,

6) Abate past tax bills of land reclamation consortia, although suspended or not yet served.

Overview

Farmers and ranchers are gripped in an unprecedented market crisis that is spreading like wildfire, without territorial or category boundaries. The countless grey areas in the measures discussed and/or deliberated so far – between laughable ‘windfall aid’ and privileges to individual supply chains or even individual operators (3) – jeopardize the survival of thousands of active businesses and tens of thousands of jobs. As well as thwarting the care of rural lands and landscapes, an indispensable safeguard of ecosystems.

Subsidized insurance in agriculture after all has proven to be fallacious, unsuitable even to repair damage from natural disasters. Due to conflicts of interest between insured farmers on the one hand and insurer and/or broker agricultural unions on the other. Where representatives’ need to save money clashes with their interest in collecting commissions on their counterparts’ premiums. (4) And it is therefore that these instruments have had little application where even they could have shown usefulness.

An overview is as necessary as aid, without the need to reinvent the wheel. Rather, remember that the EU directive against unfair trade practices must be transposed by 1.5.21 and outlaw discounts already agreed upon between supply chain representatives are not allowed. (5)

Giuseppe Corrado and Dario Dongo

Notes

(1) Examples are cited:

– law 15.10.1981, no. 590. New rules for the National Solidarity Fund. (OJ No. 288, 20-10-1981)

– law 14.2.92, no. 185. Discipline of the National Solidarity Fund. (OJ No. 51, 02-03-1992 – Ordinary Suppl. No. 47)

– Law 8.8.02, no. 178. Conversion into law, with amendments, of DL 8.7.02 no. 138, on urgent interventions in the areas of taxation, privatization, curbing pharmaceutical spending and supporting the economy including in disadvantaged areas. (OJ No. 187, 10-08-2002-Ordinary Suppl. No. 168)

(2) Legislative Decree. 29.3.04 n. 102(financial interventions to support agricultural enterprises), as amended and supplemented by Leg. 18.4.08 n. 82. Consolidated text at https://www.politicheagricole.it/flex/cm/pages/ServeBLOB.php/L/IT/IDPagina/1377#main

(3) Dario Dongo. Revitalization decree, not just FCA and Atlantia. Reverse Robin Hood in the food sector. FT (Food Times). 5/28/20, https://www.greatitalianfoodtrade.it/idee/decreto-rilancio-non-solo-fca-e-atlantia-robin-hood-al-contrario-nel-settore-alimentare

(4) Dario Dongo. Subsidized insurance in agriculture, the big business of Coldiretti’s magic circle. #CleanSpades. FT (Food Times). 1.3.21, https://www.greatitalianfoodtrade.it/mercati/assicurazioni-agevolate-in-agricoltura-i-grandi-affari-del-cerchio-magico-di-coldiretti-vanghepulite

(5) Dario Dongo. Unfair trade practices, double-down supply chain agreement. GIFT(Great Italian Food Trade). 7.3.21, https://www.greatitalianfoodtrade.it/mercati/pratiche-commerciali-sleali-accordo-di-filiera-al-doppio-ribasso