Lombardy agriculture in figures. 2013, (4th ed.)

LOMBARDY AGRICULTURE IN FIGURES - 2013

Fondo Europeo Agricolo per lo Sviluppo Rurale: l’Europa investe nelle zone rurali PSR 2007-2013 Direzione Generale Agricoltura

Editing staff

Sabrina Giuca, INEA (supervisor); Maria Silvia Giannini (coordination for DGA, Lombardy Region); Alessandro Nebuloni, DGA Regione Lombardia; Roberto Pretolani, DEMM; Renato Pieri, SMEA; Roberto Cagliero, INEA; Francesca Marras, INEA; Guido Gay, ÉUPOLIS Lombardia

Topical consultants

Daniele Bellomo, Danilo Bertoni, Lucia Briamonte, Roberto Cagliero, Maurizio Castelli, Simonetta De Leo, Stefano Dell’Acqua, Paola Doria, Maria Silvia Giannini, Sabrina Giuca, Rita Iacono, Teresa Lettieri, Claudio Liberati, Pietro Manzoni di Chiosca e Poggiolo, Sonia Marongiu, Renato Pieri, Roberto Pretolani, Maria Rosaria Pupo d’Andrea, Serena Tarangioli

Editing revision

Sabrina Giuca e Maria Silvia Giannini Processing

Marco Amato, Alessia Fantini e Fabio Iacobini Editorial coordination

Benedetto Venuto

Layout plan and realisation Carlo Silva e Fabio Lapiana Photography

Carlo Silva Internet edition Massimo Perinotto Secretarial staff

Lara Abbondanza, Debora Pagani e Francesca Ribacchi

We would like to thank for their collaboration: Maria Teresa Besana, Gabriele Boccasile, Isabella Brandi, Roberta Capretti, Andrea Corapi, Gloria Corti, Cristian Della Torre, Stefano Foschini, Andrea Massari, Giovanna Nicastro, Donatella Parma, Anto-nio Pepe, Andrea Povellato, Marina Ragni, Roberto Tonetti

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Agricul-ture in figures - 2013” follows the de-cision made by the Lombardy Region’s Agricultural Department to produce an updated and easy to use reference tool relating to the main information about the Lombardy agrifood and forestry system. This publication identifies the structural and economic components and links of the system and provides briefly the framework of the interven-tions established by the instituinterven-tions. This study gives an overview of the situation, giving the opportunity to fo-cus on different issues. The main the-matic studies in support of the regional planning of activities are carried out by the Directorate General in cooperation with INEA, DEMM and SMEA. Those research institutes are involved in the draft of the present work and this col-laboration has ensured the success of the publication over the years. The an-nual report on the Lombardy agrifood system is the result of one of those

in-depth studies; this brochure is meant to complete the annual report and it in-cludes other important subjects as, in particular, public expenditure and the profitability of FADN (RICA in Italian) farms managed by INEA. The 2013 edi-tion brings back a snapshot of a criti-cal economic context in 2012 charac-terised by a standstill of the European GDP, a national trend, negative in real terms (-2.4%) and even more negative results (-3.3%) for the general situation of the sector. According to the last ISTAT data, in 2012 the value of Lombardy agricultural production, amounting to approximately 7.2 billion euro in cur-rent terms, remains almost constant (-0.1%) compared to the previous year, following the drop in the overall quan-tities (-3.7%) which is a consequence of the agrometeorological conditions of the crop year and it is compensated by an increase in average prices (+3.8%). The stability of the production value, accompanied by an increase in the

in-termediate consumption (+3%,) which can mainly be attributed to an increase in prices, nevertheless causes a 4.2% decrease of the regional agriculture value added; in 2012, the Lombardy agricultural value remains above the pre-crisis level, while the Lombardy agriculture added value doesn’t reach yet recover the levels of the two year pe-riod 2007-08 and in current terms, on a national scale declines from 12.2% to 11.9%. As regards to the sector’s profit-ability decrease and in relation to some problems linked to the supply of credit, the Lombardy Region promoted a series of interventions, partly in favour of op-erating credit and partly to ensure the agricultural sector a greater liquidity. In 2013 the Lombardy Region made over 300 million euro available to its farmers in order to effectively pay in advance 70% of the CAP aids to 90% of the agricultural holdings in the Mantua area hit by the earthquake in 2012. De-spite of the fact that there is an increase

of unpaid loans in agriculture, the in-crement of the requests for a loan may represent a positive indication of the inclination to invest in the sector, par-ticularly when compared to other areas of the Country or to other sectors of the economy. In this scenario, some signifi-cant elements emerge for the prospects of the agricultural sector, those ele-ments are represented by the trend of consumption and by the reaction of the food industry. In the Italian households, the reduction of the disposable income has generally caused a drop in the con-sumption and food expenditure due to an adaptation effect; it occurred in Lombardy as well. On the other hand, positive indications are found in some

sectors that indicate growing consump-tion, but it is the agrifood industry ex-ports which record a positive develop-ment over the last years, supported by the trends of foreign demand. In 2012, the agrifood exports in Lombardy grew by 4.9% while total exports grew by 3.8%. As is well known, the food in-dustry products constitute the main item of our agrifood exports. The dairy, prepared meat and wine products are among the most important produc-tion sectors in Italian manufacturing, that the agricultural production is in-dicated as one of the most competitive on a national level and it is more and more export oriented, agrifood export represents an important incentive

fac-tor, one of the best occasion to develop the regional agricultural sector, and a relevant motivation to look at the for-eign markets as fundamental business opportunity. There is the need of a more competitiveness system, more coopera-tion between producers, more integra-tion of the supply chains and a greater ability to build networks. Moreover, in relation to this I consider essential that the issue of recognition for Lombardy and Italian products, as well as the fight against fakes, which are kept in the foreground; in reference to this, we could not have a better occasion than EXPO Milano 2015 to give the neces-sary attention to those subjects.

Gianni Fava Councillor for Agriculture of the Lombardy Region

ECONOMY AND AGRICULTURE

Land and population pg. 10 Protected Areas pg. 16 Gross domestic product pg. 21 Value added pg. 24 Employment pg. 26

AGRI-INDUSTRIAL SYSTEM

Component of the system pg. 30 Food industry and cooperation pg. 32 Distribution pg. 37 Foreign trade pg. 39 Food consumption pg. 42

AGRICULTURE

Agri-meteorological trend pg. 46 Production levels in agriculture pg. 48 Intermediate consumption pg. 53 Investments pg. 56

Prices pg. 59

Structures in agriculture pg. 62 Economic results of farms pg. 76 Credit for agriculture pg. 83 Land market pg. 86

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MULTI-FUNCTIONALITY AND AGRICULTURE

Water resource management pg. 92

Forests pg. 96

Agri-energy pg. 100 Products of designated origin

and traditional products pg. 103 Organic farming pg. 110 Agri tourism (Farm stays) pg. 114 Direct sales pg. 118 Educational farms pg. 124

AGRICULTURAL POLICY

Regional legislation on agriculture pg. 126 Regional agricultural spending pg. 129 CAP – Pillar 1 pg. 131 Rural Development Programme

(CAP – pillar 2) pg. 134

GLOSSARY

The region, amounting to 23,862 square kilometres or approximately 7.9% of the national area, is character-ised by lowlands (47%), hills (12.4%)

and mountains (40.5%). In terms of population, Lombardy is the first Italian region with nearly 10 million residents (16.3% of the national

popu-lation), mostly concentrated in the lowlands and foothills. In these areas, the population density is over 600 in-hab./km2 compared to the regional

land

and

population

Land, resident population and inhabitant density in Lombardy, 2012

Total land % Breakdown Resident population % Breakdown of Density

(sq.km.) of land as of 1/1/2012 resident population (inhabitants/sq.m.)

Lombardy 23,862,80 100.0 9,700,881 100.0 406.5 Mountains 9,672.81 40.5 1,041,349 10.7 107.7 Hills 2,963.62 12.4 2,023,688 20.9 682.8 Lowlands 11,226.37 47.0 6,635,844 68.4 591.1 Bergamo 2,722.86 11.4 1,086,890 11.2 399.2 Brescia 4,784.36 20.0 1,238,075 12.8 258.8 Como 1,288.07 5.4 586,795 6.0 455.6 Cremona 1,770.57 7.4 357,581 3.7 202.0 Lecco 816.17 3.4 336,127 3.5 411.8 Lodi 782.36 3.3 223,659 2.3 285.9 Mantua 2,338.84 9.8 408,187 4.2 174.5 Milan 1,576.59 6.6 3,035,443 31.3 1,925.3

Monza and Brianza 405.49 1.7 840,358 8.7 2,072.5

Pavia 2,964.70 12.4 535,666 5.5 180.7

Sondrio 3,211.90 13.5 180,766 1.9 56.3

Varese 1,198.71 5.0 871,334 9.0 726.9

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national average of 197 inhab./km2. Over the last decade, the population of Lombardy increased by 7.4% com-pared to 4.2% nationally. The recent mass migration flows probably con-tributed to this result: around 10% of the resident population is foreign compared to 7% at the national level. Elderly persons (over 65 years old) represent 20.8% of the population, in line with the national average. In 2011 there were over 13.2 million tourist arrivals in Lombardy, equal to 12.8% of the national total. Al-most half of the tourist arrivals came from abroad which is more than the national average. The 2011/2010 an-nual variation recorded an increase of the total arrivals of 7.8% (+13% from abroad) compared to a national in-crease of 5%. As concerns overnight stays, the regional share on the na-tional total was 8.6%; the average

du-Land coverage in Lombardy, anthropised areas, woods and utilised agricultural area (UAA)

Anthropised Wooded UAA3

areas1 _{(%) areas}2 _(%) (%) (.000 ha) Bergamo 13.9 42.0 26.1 71.0 Brescia 11.3 35.4 38.0 181.8 Como 16.0 49.3 18.4 23.7 Cremona 10.6 1.9 76.5 135.5 Lecco 15.0 52.3 12.8 10.5 Lodi 12.5 3.4 71.1 55.6 Mantua 12.4 1.3 72.1 168.7 Milan 39.8 6.8 41.1 64.9

Monza and Brianza 53.4 8.3 23.9 9.7

Pavia 9.0 12.6 59.7 176.9

Sondrio 2.4 35.7 23.4 75.1

Varese 28.9 45.6 11.2 13.4

Lombardy 14.1 26.0 41.4 986.8

Source: 1_{ERSAF-DUSAF, 2007;} 2_{ERSAF, Report on the state of forests in Lombardy, 2011;} 3_{ISTAT – 6}th _{General Agricultural Census, 2010.}

ration of the stays is less in Lombardy, probably due to business trips, and it is also more frequent than in other regions. 46.3% of tourist arrivals are concentrated in the province of Milan,

followed by Brescia and its hinterland with 15.9%. The greatest impact of foreign tourists is in the province of Como (66%). 91% of the arrivals prefer hotel facilities while the remaining 9%

is for an alternative accommodation. The arrivals at agritourism facilities correspond to around 1% of the total amount.

According to DUSAF data (2007) the anthropisation rate is approximately

14.1%; with regard to the provinces, those of Monza and Brianza, and of Milan have particularly high rates (53.4% and 39.8% respectively). With reference to the ERSAF data (2011), the woodland areas extend over 26%

of the regional land, in particular in the mountain areas, reaching 52.3% in the province of Lecco.

The utilised agricultural area (UAA) is equal to less than 1 million hec-tares, corresponding to 41.4% of the Dynamics of agricultural land in Lombardy (1982-2010)

Mountains Hills Lowlands Total

UAA 1982 (ha) 289,482 118,943 753,227 1,161,652 UAA 1990 (ha) 242,172 107,711 753,264 1,103,147 UAA 2000 (ha) 212,018 96,858 730,661 1,039,537 UAA 2010 (ha) 173,578 91,962 721,286 986,826 % variation 1990/1982 -16.3 -9.4 0.0 -5.0 % variation 2000/1990 -12.5 -10.1 -3.0 -5.8 % variation 2010/2000 -18.1 -5.1 -1.3 -5.1

Global loss 1982-2010 (ha) -115,904 -26,981 -31,941 -174,827

% variation 2010/1982 -40.0 -22.7 -4.2 -15.0

UAA annual loss (hectares) -4,139 -964 -1,141 -6,244

UAA daily loss (hectares) -11.33 -2.64 -3.12 -17.1

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the national and EU averages. The regional UAA represents 7.7% of the Italian one and 0.6% of the EU one.

The province with the greatest share of UAA compared to its total area is Cremona (76.5%); Varese (11.2%) has the smallest share.

Food self-sufficiency rates in Lombardy and Italy (2005-2009 average) Italy Lombardy

Global self-sufficiency rates (Kcal) 72.7 79.0

- of which vegetable 72.0 70.1

- of which animal 77.2 143.3

Self-sufficiency rate of human consumption (Kcal) 70.3 60.0

- of which vegetable 69.7 35.1

- of which animal 71.9 133.5

Internal production per UAA hectare (Kcal) 9,137,390 22,432,287

Internal crop production per crop+tree hectare (Kcal) 10,424,589 21,323,029

Internal animal production per fodder hectare (Kcal) 3,035,614 11,147,893

Maintainable inhabitants/hectare 3.2 5.7

Total inhabitants that can be maintained with internal productions 40,788,250 5,630,888

Self-sufficiency rate as a value 89.8 72.0

Source: Pretolani, Agricoltura lombarda e consumo di suolo (Lombardy agriculture and land use) 2012.

The data of the 6th _{general agricultural}

census indicate a 5.1% decrease of the regional UAA on a ten year basis. This reduction is much more accentuated in the provinces of Bergamo (-23.6%), Sondrio and Lecco.

Looking at the last thirty years, be-tween 1982 and 2010, Lombardy lost around 175,000 hectares of UAA, largely due to the abandonment of less productive land in the hill and mountain areas, whilst in the lowland areas, where a 4.2% drop in utilised agricultural area is recorded in com-parison to 1982, the UAA decline is mainly attributable to urbanisation phenomena. On average from 1982 to 2010 the daily loss of UAA was ap-proximately 17 hectares.

The phenomenon of the loss of UAA characterizes also the rate of food self-sufficiency (RSS) of the region; for the period 2005-2009 the RSS is es-timated in calories equal to 79% (60%

if considering only human consump-tion) and to 72% in value (Pretolani, 2012). According to this estimation, despite of the greater average profit-ability in terms of calories per hec-tare (5.7 inhabitants maintainable by hectare compared to 3.2 on a national scale), Lombardy would succeed in maintaining only 59% of its inhabit-ants in terms of calories, compare to 69% of Italy.

As with the population density, the relationship between resident and agricultural area in Lombardy shows a very high value (1,005 inhab./100 hectares of UAA), considerably more than the corresponding national and EU statistics.

Ratio of population/agricultural land (inhabitants/100 ha UAA), 2010

Lombardy Italy - North Italy EU-27* 1,005 608 472 289

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Total % of arrivals Arrivals Arrivals in Agri-tourism Total

arrivals from abroad in hotels complementary businesses (farm stays)

Bergamo 965,087 38.6 841,624 123,463 4,537 1,903,877 Brescia 2,109,269 52.4 1,555,309 553,960 34,293 8,701,272 Como 1,033,137 66.0 883,374 149,763 8,516 2,695,457 Cremona 196,546 24.0 179,880 16,666 9,305 396,873 Lecco 192,202 47.1 133,919 58,283 2,411 525,895 Lodi 127,923 25.0 125,392 2,531 921 218,035 Mantua 199,416 28.2 142,015 57,401 24,499 441,323 Milan 6,136,327 54.3 6,031,631 104,696 n.d. 12,521,667

Monza and Brianza 455,473 24.3 452,056 3,417 n.d. 793,505

Pavia 206,121 18.4 184,037 22,084 11,848 591,925 Sondrio 672,241 34.7 568,462 103,779 11,554 2,569,818 Varese 965,117 51.1 909,774 55,343 2,435 1,763,915 Lombardy 13,258,859 49.7 12,007,473 1,251,386 110,319 33,123,562 Italy 103,723,869 45.8 83,055,769 20,668,100 2,343,087 386,894,732 Source: ISTAT.

protected

areas

The sixth official list of protected ar-eas recorded a surface area of around 134,000 hectares in Lombardy, equal to 4.5% of the national level and 5.5% of the regional level of the protected earth’s surface. There are 105 sites listed, spread over various types of protected area: the Stelvio National Park, 2 state nature reserves (Bosco Fontana and Bosco Siro Negri), 13 regional nature parks, 62 regional nature reserves and 27 other pro-tected areas (natural monuments, oases, nature areas of local interest). Besides the classification of the offi-cial list, a System of Lombardy Pro-tected Areas also exists in the region (Regional Law 86/1983) adding other categories including 90 Local Parks of Supramunicipal Interest (PLIS in Ital-ian) and 24 regional parks, character-ised by various levels of naturalness and divided into the following types: river, mountain, metropolitan belt,

agricultural and forestry parks. 13 of those areas are on the official list of protected areas, as concerns areas characterised by higher levels of natu-ralness and aimed at the purpose of conservation according to the regula-tion of naregula-tional law (14% of the total). The System of Lombardy Protected Areas, is characterised by a particu-lar attention to the recovery of the traditional agricultural, forestry and pastoral activities connected to the rural area, as well as the management and protection of biodiversity; it holds over 73 architectural and cultural as-sets. Overall, this system extends over an area of 524,000 hectares.

There are different types of regional protected areas are: wet areas and ar-eas belonging to the Natura 2000 net-work, made up of Sites of Community Importance (SCIs) and Special Pro-tection Areas (SPAs).

There are 174 SCIs extended over an

area of 204,430 hectares (8.6% of the regional territory) while there are 48 SPAs extended over 277,656 hectares (11.6% of the territory). If we consid-er the 18 ovconsid-erlapping SCIs and SPAs (the C sites) which are 18 in an area of 19,796 hectares (0.8% of the ter-ritory), the Natura 2000 network in-cludes 242 sites in total over an area of 372,154 hectares (equal to 15.6% of the regional area).

23 sites have be identified in 20 forest-ry complexes of the regional forests in which there are some very important habitats such as the alluvial forests of Alnus glutinosa and Fraxinus excel-sior, the woods of Pinus mugo and Rhododendron hirsutum and the peat bog. The entire system of protected areas and sites of the Natura 2000 net-work constitute the Regional Ecologi-cal Network, a priority infrastructure acknowledged in the Regional Territo-rial Plan approved in 2010.

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Region National State Regional Regional Other Total % to % to

Park Nature Nature Nature regional national territorial

Reserve Park Reserve protected areas total surface

Molise 4,059 1,190 0 50 2,291 7,590 0.2 1.4 Liguria 3,860 16 21,592 23 1,781 27,272 0.9 4.7 Valle d’Aosta 37,007 0 5,747 512 0 43,266 1.5 13.2 Friuli-Venezia Giulia 0 399 46,352 7,043 0 53,794 1.8 6.8 Umbria 17,978 0 40,629 0 4,535 63,142 2.2 7.5 Marche 61,099 6,085 22,800 493 0 90,477 3.1 9.2 Sardinia 84,205 0 6,779 0 0 90,984 3.2 3.8 Emilia-Romagna 30,729 8,246 51,578 2,627 142 93,322 3.1 4.0 Veneto 15,030 19,483 56,734 2,120 0 93,367 3.2 5.1 Lombardy 59,766 244 63,756 9,492 702 133,960 4.5 5.5 Tuscany 39,958 11,039 51,471 32,539 6,040 141,047 5.4 6.9 Piedmont 45,377 3,383 95,425 15,181 19,747 179,113 5.7 6.6 Basilicata 157,346 965 33,655 2,197 0 194,163 4.1 12.0 Lazio 26,629 25,864 114,632 43,563 6,576 217,264 7.3 12.4 Calabria 220,630 16,158 17,687 750 10 255,235 8.7 16.9 Puglia 186,177 9,906 66,024 5,870 0 267,977 4.4 6.6 Sicily 0 0 185,551 85,164 3,026 273,741 9.3 10.5 Trentino-Alto Adige 70,968 0 207,651 2,211 1,790 282,620 9.7 20.8 Abruzzo 219,432 17,783 56,450 10,329 1,057 305,051 10.4 28.1 Campania 185,431 2,014 150,143 10,076 2,541 350,205 11.2 23.9 Italy 1,465,681 122,775 1,294,656 230,240 50,238 3,163,590 100 9.7

Protected land areas (n.) 22 146 105 335 144 752

- of which: Lombardy 1 2 13 62 27 105

The majority of Natura 2000 sites are located in the province of Sondrio (41.3%) followed by those of Bergamo (22.3%) and Pavia (15.6%). The bio-geographical region with the great-est representation in the SCIs and SPAs is the Alpine one (respectively 84.4% and 75.5% of the area) while the rest of the sites are located in the continental area. Lombardy has pro-moted a project Life+ (GESTIRE) at the Natura 2000 sites, funded by the European Commission for the period 2012-2015. Its priority objective is that of fine tuning a strategy for the management of these sites and to im-prove all the citizens’ awareness of the network.

It is important to highlight that the Lombardy Protected Areas System promotes a sustainable management of the territory in which the link be-tween protected areas and agriculture and the role performed by the farmers

Distribution of protected natural areas in Lombardy

44.6% 0.2% 0.5% 47.6% 7.1% National Park State Nature Reserve Regional Nature Park Regional Nature Reserve Other regional protected areas

Source: MATTM - Nature Conservation Board, EUAP, 2005; Official list of protected natural areas, 6th _{updating of 27 April 2010.}

is emphasised, in order to protect the landscape values. It is not by chance that the first ‘Agricultural Park’ in Ita-ly was set up in Lombardy.

The relationship between the protect-ed areas and agriculture, so significant

for the conservation of the environ-ment, in the period 2001-11 was also favoured by the ‘Progetto Speciale Ag-ricoltura’ (Agricultre Special Project) though which Lombardy funded one hundred farm businesses with funds

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with the Decree of the Regional

Gov-ernment 4684 of 16th _{January 2013}

the new content of the new memo-randum of the project was approved, while waiting for new funds. On a lo-cal level the PLIS has had great suc-cess since it is a tool that allows the Municipalities to do their territorial planning while also planning the ob-jectives to be pursued through the PLIS, and thus encourages direct con-tact between local population and the territory. Where population density is higher, the PLIS parks have allowed system of the urban green to be inte-grated with that of the protect areas of regional interest, therefore contribut-ing to the development of the network of biological corridors. The role of the PLIS parks in protecting the land is also important for agricultural areas, particularly in a region in which pres-sure for town planning is high.

Regional parks in Lombardy

Park (ha) Natural area to park (%)

Parco Adamello (*) 50,935 43

Parco Adda Nord (*) 6,900 28

Parco Adda Sud 24,343 0

Parco Agricolo Sud Milano 47,055 0

Parco Alto Garda Bresciano (*) 37,452 15

Parco Campo dei Fiori (*) 6,337 24

Parco Colli di Bergamo (*) 4,683 21

Parco Grigna Settentrionale 5,541 0

Parco Groane 3,696 35

Parco Lombardo della Valle del Ticino (*) 91,618 22

Parco Mincio 15,859 0

Parco Monte Barro (*) 645 64

Parco Monte Netto 1,470 0

Parco Montevecchia e Valle del Curone (*) 2,746 74

Parco Nord Milano (*) 641 13

Parco Oglio Nord 15,173 0

Parco Oglio Sud 12,745 0

Parco Orobie Bergamasche 69,860 0

Parco Orobie Valtellinesi 44,094 0

Parco Pineta di Appiano Gentile e Tradate (*) 4,833 76

Parco Serio 7,514 0

Parco Spina Verde (*) 967 88

Parco Bosco delle Querce (*) 44 100

Parco Valle del Lambro (*) 8,179 52

TOTAL 463,329 14

(*) Regional Parks in the EUAP 2010.

Extension and number of Natura 2000 sites per Region (ha)* Piedmont Valle d'Aost a Lombard y Liguria Trento Bolzano Veneto Friuli-V enezia Giulia

Emilia-Romagn a Tuscan y Umbri a

Marche Lazio _Abruzzo Molise

Campania Puglia Basilica

ta

Calabria Sicily Sardinia

0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 396,89 9 98,968 372,15 4 149,89 8 176,18 1 418,01 9 149,76 4 149,09 3 269,81 2 390,84 2 130,09 2 141,93 5 441,64 6 390,49 5 118,72 4 398,17 4 474,59 8 171,76 5 328,07 8 638,75 9 573,19 4 0 50 100 150 200 250 141 30 242 40 142 130 61 133 158 150 102 96 200 58 88 124 83 53 185 238 122

* The number and extension of Natura 2000 sites by region is calculated excluding overlapping of SCIs and SPAs. Source: MATTM, 2013.

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simi-lar for the gross domestic product by work unit (WU) that in 2011 was in current terms approximately 75,000 euro, 15% and 33% above the national

and EU parameter respectively; this data places Lombardy in first place out of all the Italian regions.

With respect to the situation of cri-sis of 2009, the 2011 data of the GDP

gross

domestic

product

The gross domestic product (GDP) produced in Lombardy in 2011 amounts to 333.5 billion euro, equal to 21.1% of the national GDP and 2.6% of the GDP of the EU-27. In particular, the Lombardy GDP exceeds the gross domestic product of 18 EU countries, coming in behind Belgium, Poland and Sweden and represents twice the GDP of the Czech Republic and over three times Hungary’s GDP.

If we compare the data of the GDP to that of the regional population (which represents 16.4% of the national popu-lation and 1.9% of the EU popupopu-lation), it appears that Lombardy’s GDP per capita is 29% higher than the national one and 34% higher than the EU one. Lombardy’s GDP per capita is higher than Germany’s one by 6.1% and that the one of France by 9.5%. In Italy, the Lombardy GDP per capita is located in third place after that of the Aosta Valley and that of Trentino-Alto Adige.

Trend in GDP per inhabitant in Lombardy (euro), 2004-2011* GDP/Inhabitant

Lombardy Italy Current Chain Current Chain

Year prices indexes prices indexes

2004 31,008 31,530 24,145 24,584 2005 31,357 31,357 24,569 24,569 2006 32,071 31,677 25,413 24,986 2007 33,290 32,010 26,284 25,243 2008 33,925 31,835 26,420 24,747 2009 32,326 29,553 25,309 23,222 2010 33,404 30,562 25,739 23,527 2011 33,624 30,469 26,056 23,518 Lombardy/Italy (2011) 1.29 1.30 Lombardy/North-Italy (2011) 1.07 1.07 Lombardy/EU-27 (2011) 1.34 1.30

* Chain indexes - year of reference 2005. Source: ISTAT, Regional economic accounts.

on a regional level highlight a certain economic recovery for Lombardy. Al-though the regional GDP measured at chain values indicated an increase of 4.3% between 2009 and 2010 and a more contained increase (+0.6%) be-tween 2010 and 2011, similar to the trend of the national figure, which in-creased by 1.8% and 0.4% respective-ly. Also work profitability, measured at chain values, shows and increase of 5.1% between 2009 and 2010 and of 0.4% between 2010 and 2011.

However, in 2012 the European GDP indicates a standstill and the Italian one records -2.4% in real values.

Trend in GDP per work unit in Lombardy (euro), 2004-2011* GDP/Work unit

Lombardy Italy Current Chain Current Chain

Year prices indexes prices indexes

2004 63,839 64,914 57,347 58,389 2005 65,527 65,527 58,840 58,840 2006 66,510 65,692 60,230 59,219 2007 69,149 66,490 62,102 59,644 2008 71,092 66,712 63,161 59,162 2009 70,796 64,722 62,726 57,552 2010 74,343 68,017 64,677 59,119 2011 75,382 68,309 65,720 59,319 Lombardy/Italy (2011) 1.15 1.15 Lombardy/North-Italy (2011) 1.09 1.09 Lombardy/EU-27 (2011) 1.33 1.30

* Chain indexes - year of reference 2005. Source: ISTAT, Regional economic accounts.

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Current prices Chain indexes 260,000 270,000 280,000 290,000 300,000 310,000 320,000 330,000 340,000 350,000 2008 2004 2005 2006 2007 2009 2010 2011 333,475 302,184 300,302 328,231 314,944 287,923 306,962 327,117 317,768 305,550 300,147 303,882 294,535 291,555 286,726

* Chain indexes - year of reference 2005. Source: ISTAT, Regional economic accounts.

% Share of VA from agriculture1 _to GDP, 2011 VA Lombardy 0.9 Itay 1.8 Italy - North 1.4 Italy - Centre 1.3

Italy - South and Islands 2.9

EU-27 1.7 Belgium 0.7 Bulgaria 5.4 Denmark 1.4 France 1.9 Germany 0.9 Greece 3.4 Netherlands 1.6 Poland 4.0 Portugal 2.2 United Kingdom 0.7 Romania 7.5 Spain 2.5 Sweden 1.8 Hungary 4.5

1_{Agriculture, forestry and fishing.}

Source: ISTAT, Regional economic accounting; EUROSTAT.

value

added

68.6% of the value added (VA) in Lom-bardy comes from the services sector and 30.4% from industrial businesses, while the contribution of the primary sector is 1.1% which is lower than both the national average (1.8%) and the EU average (1.7%). At a European level this value is similar to that of countries such as Germany and the United Kingdom.

In absolute terms Lombardy contrib-utes to the formation of 11.4% of the national agricultural value added, a figure that places the region in first place nationally. The Lombardy agri-cultural value added share out of the EU-27 total is 1.6%, similar to that of countries such as Denmark, Portugal and the Czech Republic. This value is more than that of the 12 EU coun-tries. In 2011 the value added of the primary sector, measured at chained values, showed a certain stability with respect to the previous year (+0.2%).

VA at basic prices1 _{by sector in}

Lombardy (million euro), 2011

30.4%

68.6%

1.0%

Agriculture, forestry and fishing Industry, including building Services, including the public sector Total

3,160 91,433 206,310 300,902

1 _{Values at current prices.}

Source: ISTAT, Regional economic accounting.

Slightly more noticeable is the same value expressed at the current prices, which also incorporates the dynamic of the prices with an increase of 1.1% on an annual basis.

25

Italy Italy - North Lombardy 0.0 0.5 1.0 1.5 2.0 2.5 3.0 2010 2004 2005 2006 2007 2008 2009 2011

1_{Agriculture, hunting and fishing.}

2_{Values at current prices.}

Total and agricultural workers by gender and geographical area, 2012

Workers Agricultural workers

‘000 units % women ‘000 units % women

Lombardy 4,279.8 42.7 58.1 17.8

Itay - North 11,900.6 43.2 315.1 27.0

Italy 22,898.7 41.3 849.1 29.0

Source: ISTAT, workforce survey - average 2012.

employment

The agricultural employment in Lom-bardy, expressed in work units (WU) represents 2.5% of the regional total compared to 32.2% of industry and 65.3% of the service sector (ISTAT 2011). If we take into account that the agricultural value added affects the re-gional value added for only 1.1% , as in other contexts, a marked produc-tivity disparity emerges between the employed agricultural workers and the ones of other sectors. The average productivity of an agricultural work unit is equal to 45% of an average

work unit in the services sector and to 50% in the industrial one. Despite of the high difference with other sec-tors in Lombardy, over the last years, an increasing trend is highlighted in the value added per employee in the region; this phenomenon which does not appear in the other sectors, there-fore highlights a certain reduction of the profitability gap per employee. According to the ISTAT data, in Lom-bardy in 2011 agriculture employees were over 58,000 units, correspond-ing to 1.4% of the total and 6.8% of

32.2%

65.3%

2.5%

Agriculture, forestry and fishing Industry, including building Services, including the public sector Total

111.8 1,425.2 2,886.8 4,423.8

Source: ISTAT, Regional economic accounting.

Work units by sector in Lombardy (‘000 units), 2011

27

share of agriculture employees out of a total of the employees in Lombardy is less than the national average (equal to 3.7%) and that of the EU-27 (5.2%). The annual variation 2012/2011 of the Lombardy agriculture employees is positive (+1%), whilst a slight decrease occurs on a national level (-0.2%). The rate of women employed in the agricultural sector in Lombardy in 2010 is 17.8%, it is lower both in re-lation to the total of economy and the rate of women employed in the agricultural sector in the northern

regions (27%) and in Italy generally (29%). The amount of permanent em-ployees out of the total of agriculture employees is around 35.6% for the re-gion compared to 50.3% on a national scale.

According to the census, in Lombardy the presence of foreign agriculture workers is significant with over 16,000 units. These workers represent 42% of the non-family member labour force and 12% of the total, an almost dou-ble share with respect to the average Italian framework. The majority come from non-EU countries.

% Share of workers in agriculture1 _to

total of the economy, 2012 % Lombardy 1.4 Italy 3.7

Italy - North 2.6

Italy - Centre 2.4

Italy - South and Islands 6.8

EU-27 5.2 Austria 4.7 Belgium 1.3 Bulgaria 19.4 Denmark 2.6 France 2.7 Germany 1.6 Greece 12.2 Netherlands 2.6 Poland 12.5 Portugal 11.0 United Kingdom 1.2 Romania 30.4 Spain 4.2 Sweden 2.1 Hungary 7.4

1_{Agriculture, hunting and fishing.}

VA at basic prices per AWU and by sector (euro)*, 2004-2011 Agriculture Services Industry 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 2010 2011 2005 2006 2004 2007 2008 2009

*Chain indexes - year of reference 2005. Source: ISTAT, Regional economic accounts.

components

of

the

system

In 2012 the economic dimension of the Lombardy agrifood system (in-cluding catering and distribution) is estimated at around 38 billion euro, equal to 16.4% of the value of the na-tional agrifood system.

A growth of 1.5% was registered in comparison to 2011 while a 0.7%

in-crease was recorded on a national level.

In 2012 the value of the Lombardy agrifood system in current terms im-pacted on the regional GDP by 11.4% (11.2% in the previous year) and by 14.9% on a national level.

The greatest contribution to the value

of the Lombardy agrifood system is of-fered by the distribution and catering services (60%), with an impact on the total by 41.5% and 18.6% respectively; while, the general value of the agricul-ture sector (average consumption and agriculture value added) and the food industry, equal to around 12 billion Main components of the agri-industrial system at basic prices in Lombardy (million euro), 2012

Intermediate consumption in agriculture, forestry and fishing Value added from agriculture, forestry and fishing Value added from the food industry Value added from catering Trade and distribution Indirect taxation on agri-industry 13.2%

41.5%

7.7% 11.2% 7.9%

18.6%

31

Within the agrifood system, the con-tribution of the food industry, equal to around 5 billion euro, influences the entire system of the 13.2%, while on a national level this sector counts for the 11.1%. In terms of production, the agriculture value added only con-tributes by 7.9% to the development of the system value, compared to 11.9% on a national level, while intermedi-ate consumption in agriculture repre-sents barely more than 11%.

Variations of the main components of the agro-industrial system at base prices in Lombardy 2011-2012

Million % variation

euro 2012/2011

Intermediate consumption in agriculture, forestry and fishing 4,246 3.0%

Value added from agriculture, forestry and fishing 3,001 -4.2%

Value added from the food industry 5,007 4.4%

Value added from catering 7,074 0.5%

Trade and distribution 15,775 2.3%

Indirect taxation on agri-industry 2,927 -1.2%

Agri-industrial system value 38,030 1.5%

The value added (VA) from the food industry of Lombardy was estimated at approximately 5 billion euro in 2012, corresponding to 20% of the VA from the national food industry and 13.2% of the value from the regional agrifood system (including distribu-tion and catering). The value added in the food industry is 60% higher than in the agricultural industry. Moreover, the food industry in Lombardy counts for 41% of the agro-industrial produc-tion value compared to 33% on a na-tional level.

There are 5,937 enterprises active in the food and drinks sector, which amount to 5.7% of the regional manu-facturing ones and 10% of the Italian food companies. 95.7% of the food in-dustry businesses are involved in the production of food, while 4.3% of the total amount are in the drink sector. Over 67% of the businesses are char-acterised by an artisanal dimension;

food

industry

and

cooperation

Provincial distribution of food and manufacturing businesses in Lombardy1_{, 2012}

Food Artisan food Manufacturing

Tot. % share Tot. % share Tot. % share

Bergamo 660 11.1 520 13.1 11,526 11.1 Brescia 900 15.2 656 16.5 15,515 15.0 Como 310 5.2 240 6.0 6,870 6.6 Cremona 362 6.1 232 5.8 3,205 3.1 Lecco 222 3.7 157 3.9 4,169 4.0 Lodi 124 2.1 81 2.0 1,645 1.6

Monza and Brianza 330 5.6 220 5.5 9,729 9.4

Milan 1,562 26.3 871 21.9 30,508 29.4 Mantua 448 7.5 300 7.5 4,560 4.4 Pavia 403 6.8 260 6.5 4,769 4.6 Sondrio 205 3.5 133 3.3 1,364 1.3 Varese 411 6.9 307 7.7 9,847 9.5 Total 5,937 100.0 3,977 100.0 103,707 100.0 1_{Active businesses.} Source: Infocamere.

there is an exception in the drink sec-tor where artisanal companies repre-sent only 27% of the total.

In 2012 the number of food and drink

businesses is slightly less than the pre-vious year (-0.6% compared to -0.2% nationally). However, the food sector has a better situation compared to the

33

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 Active businesses Registered

businesses Registeredbusinesses businessesActive ARTISAN BUSINESSES TOTAL BUSINESSES 304 256 70 70 6,390 5,681 3,937 3,907 Food Drinks Source: Infocamere.

Share of business categories in food and manufacturing businesses in Lombardy1_{, 2012} 0 20% 40% 60% 80% 100%

Food Drinks Food Drinks TOTAL FOOD

BUSINESS

Total business ARTISAN FOOD

BUSINESS MANUFACTURINGBUSINESS Artisan business 23.4% 53.9% 29.7% 11.7% 5.7% 45.1% 49.1% 11.4% 55.7% 32.9% 8.1% 33.5% 58.4% 37.2% 24.7% 37.4% 36.4% 36.7% Individual businesses Capital companies Other Partner companies 1_{Active businesses.} Source: Infocamere.

Division of the Lombardy food businesses per production type, 2012

Processing and conservation of meat and production of meat-based products Processing and conservation of fish, crustaceans and molluscs Processing and conservation of fruit and vegetables Production of vegetable and animal oils and fats Dairy industry Processing grain for the production of starch and starch products Production of bakery and flour products Production of other food products Production of food products for animals Drinks industry 12.5% 0.4% 2.0% 0.8% 2.7% 63.4% 6.5% 5.7% 1.7% 4.4% Source: Infocamere.

regional manufacturing sector overall, in which the annual decline of busi-nesses was more consistent (-2.5%). Regarding the distribution of the food industries by province, the province

of Milan has the highest percentage (26.3%), followed by Brescia (15.2%) and Bergamo (11.1%); the artisanal and manufacturing businesses follow the same dynamic.

The annual dynamics show slight increases in the provinces of Lecco (+2.8%) and Brescia (+2.5%) and a marked decrease in Lodi (-6.1%). As concerns the legal form of the food

35

repre-sented by sole proprietorship and partnership. There are many joint-stock companies (23.4%) that are

mainly in the drink sector (53.9%). If only artisanal businesses are consid-ered, the share changes in favour of proprietorship.

Provincial distribution of workers in food businesses in Lombardy, 2010

Food Artisan food

Tot. % share Tot. % share

Bergamo 7,815 7.8 2,904 13.3 Brescia 8,959 9.0 3,668 16.8 Como 4,152 4.2 1,356 6.2 Cremona 7,279 7.3 1,132 5.2 Lecco 2,880 2.9 862 4.0 Lodi 2,107 2.1 484 2.2 Mantua 7,143 7.2 1,533 7.0 Milan 44,147 44.2 4,619 21.2

Monza and Brianza 4,008 4.0 1,238 5.7

Pavia 3,554 3.6 1,337 6.1 Sondrio 2,829 2.8 798 3.7 Varese 4,960 5.0 1,885 8.6 Lombardy 99,833 100.0 21,816 100.0 Italy 487,197 182,200 Lombardy/Italy (%) 20.49 11.97 Source: INAIL.

Distribution of the agrifood cooperatives in Italy and Lombardy, 2011 Businesses Turnover (millions of euro) Lombardy 309 3,611.5 Italy 5,901 35,051.8 Italy - North 2,479 28,256.0 Italy - Centre 826 2,491.0

Italy - South and Islands 2,596 4,305.0

Lombardy/Italy (%) 5.2 10.3

Lombardy/Italy North (%) 12.5 12.8

Source: Observatory of Agricultural Cooperation in Italy.

Over 63% of the food businesses are involved in the production of bakery products; this activity involves almost all the artisan bakery businesses. According to INAIL data from 2011, the food industry ensures employ-ment to approximately 100,000 op-erators, corresponding to 20.5% of

the national total and to 8.8% of the regional operators of the manufactur-ing industry. 21.9% of the employees actually work in artisan businesses. As concerns localisation, almost half of the employees are concentrated in the Milan metropolitan area where the largest companies operate. Be-tween 2010 and 2011 the food in-dustry employees decreased by 1.7% in comparison to a 0.6% decrease in overall manufacturing.

The cooperation phenomenon is con-siderably important in the food pro-cessing sector. There are over 300 production sites in the regional area, i.e. 5.2% of the national total. The eco-nomic average size of the Lombardy food cooperatives is almost twice the national one, and therefore their im-pact on the national turnover is of over 10% (3.6 billion euro). Accord-ing to the data of the Osservatorio della Cooperazione Agricola Italiana

(Observatory of Italian Agricultural Cooperation), 4 out of the 30 Italian agrifood cooperatives ranked first for their turnover have their registered offices in Lombardy: Consorzio Vir-gilio, Latteria Soresina, Produttori Suini Pro Sus and Consorzio Casalas-co del Pomodoro. Moreover, lots of Casalas- co-operative have their supply bases or, in some cases, production sites in the region.

37

distribution

Lombardy is confirmed as one of the leaders in the national and in the European distribution: the density of the current sales points (hypermar-kets, supermar(hypermar-kets, mini-supermar-kets and discount stores) in 2012 was over 300 square metres per 1,000 in-habitants. This figure is extremely rel-evant, similar or superior to the one referring at the most densely inhab-ited European areas.

In the region there are 2,509 sales points of the modern food distribu-tion, with an overall area of over 2.9

million m2_{, on the increase with}

re-spect to 2011 (+2.7%). The increase of the sales surface area, with a rate considerably higher than the national average (+1.9%) affected almost all the provinces with the exception of Cremona.

This further stage of development of modern distribution is firstly due to the discount stores increased by

Modern distribution sales points in Lombardy, 2012

N. sales points Area

sq. m. % change 2012/11 Superettes 598 169,026 -2.8 Supermarkets 1,089 1,093,929 1.0 Hyper-markets 239 1,269,868 3.9 Discount 583 371,497 6.3 Total 2,509 2,904,320 2.7

Source: Processing of Nielsen figures and Observatory of Commerce - Lombardy Region.

Area per 1,000 inhabitants in modern distribution sales points in Lombardy (sq.m.), 2012

Superettes Supermarkets Hyper-markets Discount Super+Hyper Total

Bergamo 20.3 121.2 112.7 50.4 234.0 304.7 Brescia 19.8 161.4 149.5 56.0 310.8 386.6 Como 15.7 87.0 139.9 40.7 227.0 283.4 Cremona 9.1 116.7 118.9 41.1 235.6 285.8 Lecco 14.8 94.9 143.3 40.5 238.2 293.4 Lodi 13.4 85.7 236.5 41.3 322.2 376.9 Mantua 18.7 172.2 117.6 71.0 289.8 379.5 Milan 16.4 88.8 120.7 25.0 209.5 250.9

Monza and Brianza 15.1 84.3 150.4 26.1 234.7 275.9

Pavia 19.5 127.4 143.6 44.6 271.0 335.0

Sondrio 62.4 116.0 140.4 43.4 256.4 362.2

Varese 13.1 146.6 117.0 35.7 263.6 312.4

Regional total 17.5 113.4 131.7 38.5 245.1 301.2

6.3% (with an active amount of 28 sales points), after having registered increased rates in the previous years, and due to the hypermarkets (+3.9% in 2012), where the balance between openings and closures of 9 sales points in a single year, guaranteed a positive figure.

In the region, private chains prevail in large-scale distribution; the huge re-structuring of the purchasing centres, continued also in 2012, confirms the leadership of Centrale Cieffea which connects two leading businesses such as Carrefour and Finiper. This group represents almost 19% of the sales surface area of the region, followed by Centrale Italiana (15.2%) and Esd Italia (13.4%).

Breakdown of modern distribution sales area in Lombardy, 2012

Centrale Cieffea Centrale Italiana Esd Italia Centrale Auchan-Crai Esselunga Bennet Lombardini Standa/Rewe Conad Altri Total (sq. m.) 18.9% 15.2% 10.7% 9.0% 6.3% 13.4% 4.7% 3.7% 3.4% 14.6% 550,227 441,083 390,460 310,006 261,832 183,443 136,955 106,469 98,583 425,262 2,904,320 Source: Nielsen figures and Observatory of Commerce - Lombardy Region.

39

standard-ised positive value is reached both by the food industry (+4.8) and the

pri-mary sector (+1.8).

Lombardy’s main foreign supply mar-ket is France, with a 20.8% share

foreign

trade

The deficit in the foreign trade of ag-rifood products at the current prices consistently decreased in 2012 both in Lombardy, where it amounts to 4,063 million euro, and on a nation-al level, where it decreased to 6,410 million euro; the reduction on an an-nual basis is equal to 15% and 28.3% respectively. This is the result of two phenomena common to both the ter-ritorial areas: on one hand the value of purchases on the foreign market falls, and on the other hand, the ex-ports increase. In Lombardy, the in-crease of exports (+4.9%) depends on a growth that regards both quantity (+3.1%) and prices (+1.7%), while the decrease in imports (-5%) is the result of a decline that is only quantitative (-4.6%).

The agrifood imports represent 8% of the regional imports while the exports amount to 4.7%; in Italy these values reach 10.2% and 8.2% respectively.

Lombardy’s foreign trade in agri-food products at current prices (million euro)

% Share of agri-food products in the make-up of Lombardy’s trade balance

Import Export Balance

1999 5,690 2,425 -3,265 2000 6,120 2,608 -3,512 2001 6,273 2,811 -3,462 2002 6,283 3,025 -3,258 2003 6,542 3,152 -3,390 2004 6,844 3,278 -3,566 2005 7,119 3,559 -3,560 2006 7,902 3,742 -4,160 2007 8,309 4,122 -4,187 2008 8,559 4,571 -3,988 2009 7,929 4,214 -3,715 2010 8,691 4,579 -4,112 2011 9,637 4,856 -4,781 2012 9,157 5,093 -4,063 % Change 2012/2011 -4.98 4.89 % Change 2012/1999 60.93 110.02 Source: Processing of ISTAT figures in SH6 classification.

Import Export 1999 7.2 3.8 2000 6.4 3.6 2001 6.4 3.6 2002 6.5 4.0 2003 6.7 4.2 2004 6.5 4.1 2005 6.4 4.2 2006 6.6 4.0 2007 6.2 4.1 2008 7.1 4.4 2009 8.2 5.1 2010 7.5 4.9 2011 7.8 4.7 2012 8.0 4.7

in imports, followed by Germany (13.6%), the Netherlands (11.5%) and Spain (10.8%). As concerns exports, France (15%) and Germany (12.3%) rank first and second place respec-tively, followed by two non-EU mar-kets: the US (8.9%) and Switzerland (8.1%). Therefore, the supply sources are in total more concentrated than the export sources.

The dairy products represent the main exchange goods of the food industry both in terms of imports (14.3%) and on that of exports (19.2%). In the agri-food exports, prepared meat and wine cover 6% and 4.9% respectively, after products such as the cereal-based ones (18.6%) Other export products are sugar and sweet products (6.5%), oils and fats (6%) and non-alcoholic drinks (6.7%)

Main countries of origin and destination for Lombardy’s agri-food imports and exports, 2012

11.5% 2.8% 31.2% 20.8% France Germany Netherlands Spain Belgium Switzerland United Kingdom Austria Other 13.6% 10.8% 4.3%

IMPORT

EXPORT

41

8.0% 6.1% 4.1% 14.3% 12.8% 6.3% 5.9%

IMPORT

Milk and dairy products Fresh and frozen meat Processed and preserved fish Feedingstuffs Oils and fats Cereal derivatives Sugar and sweet products Other products 6.0% 6.0%

32.1%

19.2%

Milk and dairy products Cereal derivatives Oils and fats Sugar and sweet products Soft drinks Prepared meats Wine Other products 18.6% 6.5% 6.7%

EXPORT

Source: Processing of ISTAT figures in SH6 classification.

8.0% 6.1% 4.1% 14.3% 12.8% 6.3% 5.9%

IMPORT

Milk and dairy products Fresh and frozen meat Processed and preserved fish Feedingstuffs Oils and fats Cereal derivatives Sugar and sweet products Other products 6.0% 6.0%

32.1%

19.2%

Milk and dairy products Cereal derivatives Oils and fats Sugar and sweet products Soft drinks Prepared meats Wine Other products 18.6% 6.5% 6.7%

EXPORT

food

consumption

In 2012 Lombardy showed a value of 2,866 euro, thus losing the record for the highest average monthly expendi-ture. This fell by 5.5% with respect to 2011 while the national average of 2,419 euro dropped by 2.8% com-pared to the previous year. The region was consequently surpassed by Tren-tino-Alto Adige (2,919 euro, growing on an annual basis of 2.2%) closely followed by Veneto (2,835 euro) while Sicily had the lowest average monthly expenditure (1,628 euro). These dif-ferences become even more signifi-cant if we also take into account the different number of members per household in the different regions. Moreover, considering the dynamic of inflation, which is 3%, the drop in the average monthly expenditure per household in Italy is considerably higher in real terms compared to the current variation.

The average expenditure of

house-Average monthly household expenditure at current prices (euro), 2005-2012

Lombardy Italy Italy-North

2,000 2,500 3,000 3,500 2,872 2,886 2,896 2,930 2,918 2,896 3,033 2,398 2,461 2,480 2,485 2,442 2,453 2,488 2,689 2,786 2,796 2,810 2,768 2,796 2,843 2,866 2,419 2,761 2005 2006 2007 2008 2009 2010 2011 2012

43

nation-al level remains considerably stable, falling from 477 to 468 euro (-1.9%), also as a result of strategies to reduce expenditure put in place by the fami-lies in order to deal with the increase of prices. In fact, the percentages of those who have reduced the quantity and/or quality of food purchased in-creased (from 53.6% in 2011 to 62.3% in 2012), as well as the percentage of people who turn towards ‘hard dis-count’ stores (from 10.5% to 12.3%). In particular, people reduce the ex-penditure for meat, milk, cheese, eggs and bread, while those for drinks in-crease.

Lombardy has a rather high average monthly expenditure for food and drinks (473 euro, decreasing by 3.7% on an annual basis), and is preceded only by Abruzzo, Umbria, Campa-nia, Lazio and Tuscany in this order, which are regions where households

Average monthly household expenditure at current prices for food and drinks (euro), 2005-2012

Lombardy Italy Italy-North

400 500 486 486 463 483 470 475 461 491 456 467 466 475 461 467 477 454 461 449 464 455 473 473 468 463 2005 2006 2007 2008 2009 2010 2011 2012 490 480 470 460 450 440 430 410 420

have the highest number of members in Italy and a not too efficient distri-bution network.

The food and drinks expenditure increases compared to 2011: from 19.2% to 19.4%. The most consistent increase is recorded in the region of the Centre (from 19.2% to 19.3%) but it is in the South that the highest val-ues are recorded with peaks of 25.3%. Lombardy (16.5%) is preceded by Trentino-Alto Adige (14.9%), Veneto (16.1%), Emilia Romagna (16.1%) and Valle d’Aosta (16.3%). The lowest val-ues of food and drinks expenditure are recorded in Calabria (2.4%), Sicily (27.1%) and Campania (26.3%).

Average monthly household expenditure (euro) and percentage share for food and drinks by region, 2011

Expenditure for food and drinks (euro)

% Share for food and drinks

Average monthly expenditure (=100%)

Piedmont Valle d'AostaLombardy

Liguria

Trentino-A lto Adige Veneto

Friuli-V enezia Giuli

a

Emilia-Romagna

Tuscany Umbria Marche Lazio_{Abruzzo Molise Campani} a

Puglia

Basilicata Calabria Sicily Sardinia Italy

0 500 1,000 1,500 2,000 2,500 3,000 3,500 0 5 10 15 20 25 30

% Share food and drinks

Average monthly expenditure per family

In 2012 the Lombardy region experi-enced an initially mild and dry win-ter that caused low wawin-ter level in the Po River and many other Alpine riv-ers. This fact contributed to the low water levels in the region’s lakes and reservoirs. Between January and Feb-ruary the harsh temperatures caused the freezing of the drinking troughs of dairy breeding farms, particularly in Bergamo, and it was necessary to raise the temperature in the pig breeding farms and greenhouses. Due to frost in the areas of Como and Lecco, there was a significant blight of bee hives (around 2,500 out of 6,000 bee hives in the Como area).

In Spring the drought quickly spread to the whole regional area: the wa-ter level of Lake Iseo at the Sarnico weather station, for example, the temperature never went below zero. Nevertheless, the bad weather of April allowed a slight recovery of the

water deficit of the Lombardy lakes and the respective outflowing rivers, with flood phenomena of various in-tensities in the provinces of Milan and Brescia.

Following the rapid increase in tem-peratures, the effects of replenishment of the groundwater due to melting of the consistent snowy blanket over the regional land; in order to exploit residual humidity of soil, many farm-ers brought the corn sowing forwards 15-20 days and the farming consortia brought forward the irrigation opera-tions in order to maintain the alfalfa, corn, melons, fruit and vegetables. The same situation occurred in the rice fields of Lomellina.

During the summer season, serious difficulties, linked to the climate situ-ation, emerged for crop production: for tomatoes, the estimated yield was -20% in the Cremona area; har-vesting of waxy corn began earlier in

the region provided initial outputs of 250-300 q/hectare, compared to 600 quintals on average in full season. The breeding farms recorded around 10% reductions in milk and 20% in the body weight of pigs. In the Milan area, the corn (2q/ha compared to 10 q/ha on average) and the vegetable culti-vations were damaged and this event caused serious concerns for the forth-coming rapeseed sowing. In the Man-tua area in particular, the loss of corn depended on the irrigation shifts, and in the Destra Secchia area, the lack of irrigation and the compactness of soil caused losses of up to 70%. For the other cultivations such as sunflowers, soya, beets, alfalfa and pears with IGP (protected geographic indication), the declines were estimated at between 10% and 50%.

Depending on the warm and dry me-teorological situation, white grape harvest operations in the Moscato

47

Tres-core and in the valleys of Calepio and Cavellina were moved forward. In the Lodi area, corn harvesting was hur-ried along to cope with the loss of humidity of the product, subjected to high temperatures. In order to deal with the emergency, the Consortium arranged a 40% reduction for the col-lection of irrigation water.

The situation of water reserves repre-sented another very serious aspect for Lombardy: the lakes Como and

Mag-giore experienced a drop in the water level of 45 cm and 38 cm respectively in just 15 days, while the Po meas-urements highlighted the continual decrease of the river course. In the same way as other regions, Lombardy therefore submitted natural disaster status application.

With the arrival of autumn, the chest-nut tree sector reached losses of al-most 70%; the olive yield, sustained by the end of summer rains, was actu-ally better than estimated, with losses

of 20%-30%.

The wave of bad weather in the month of November caused various emergen-cies; in Mantua, the Secchia river overflowed damaging the temporary works in the Apennines. Due to this fact, it was not possible to use the wa-ter pumping plants, as they had been damaged by the earthquake at the end of May (Mondine di Moglia and Bon-danello). Other overflows occurred at the Chiese and Adda rivers in the Bassa Lodigiana area.

production

levels

in

agriculture

In 2012 the regional agricultural out-put at basic prices (OBP) excluding forestry and fishing and including the connected services and

second-Agricultural output at basic prices, intermediate consumption and value added in Lombardy, (million euro), 2012

Lombardy Italy Lombardy/Italy

million euro % of the total OBP % of the sector million euro % of the total OBP % of the sector %

Crops 1,971 27.5 100.0 26,185 51.9 100.0 7.5 Herbaceous 1,187 16.6 60.2 14,036 27.8 53.6 8.5 Fodder 450 6.3 22.8 1,643 3.3 6.3 27.4 Tree crops 334 4.7 17.0 10,506 20.8 40.1 3.2 Livestock 4,496 62.8 100.0 17,268 34.2 100.0 26.0 Meat 2,581 36.0 57.4 10,723 21.2 62.1 24.1 Milk 1,654 23.1 36.8 4,987 9.9 28.9 33.2 Other livestock 262 3.7 5.8 1,557 3.1 9.0 16.8 Connected services 558 7.8 6,474 12.8 8.6

Total OBP goods and agricultural services 7,025 98.1 49,926 98.9 14.1

(+) secondary activities* 209 2.9 1,540 3.0 13.6

(-) secondary activities* 70 1.0 968 1.9 7.3

Total OBP agriculture 7,164 100.0 50,498 100.0 14.2

(-) Intermediate consumption 4,239 59.2 24,085 47.7 17.6

Value added at basic prices 2,925 40.8 26,413 52.3 11.1

* Secondary activities mean those performed in agriculture and not separable from it, such as farm stays, processing of milk, fruit and meat, shown with the sign (+), and those performed in other branches of the economy within the scope of crops and livestock (for example by commercial enterprises), shown with the sign (-).

Source: ISTAT, Value added at basic prices from agriculture by region.

ary activities, amounted to a value in current terms of over 7.1 billion euro. The regional share of the national ag-ricultural production value (14.1%)

was confirmed over time as the high-est in the country. Regarding EU culture, the effect of Lombardy agri-culture on the EU-27 agriagri-culture OBP

49

considering only livestock produc-tions (EUROSTAT, 2011).

In comparison to the previous year, the agricultural production value is more or less constant (-0.1%), as the decrease of overall quantities (-3.7%) is compensated by an average in-crease of prices (+3.8%); in 2012 the national agricultural OBP increased instead by 1.8%.

The crop productions in particular ex-perienced an annual decrease of more than 10% caused mainly by a reduc-tion of quantity, while the livestock products increase in value by 4.7%. This is above all due to a 6.4% increase in price. An increase is also recorded for the related services (+5.2%), while the secondary activities fall by 3.3%. The composition of the OBP confirms Lombardy’s emphasis on livestock: in fact livestock contributes to 62.8% of it and the share out of the national

Value of agricultural output at basic prices by main category in Lombardy, 2012

Cereals and dried legumes Vegetables Industrial crops Nursery products Vines Fruit Other tree crops Fodder crops Beef Pigmeat Other meats Milk Eggs and other Connected services

11.6%

3.7%

7.9%

3.5%

_0.5%

1.3%

2.3%

1.9%

16.5%

8.4%

11.8%

23.5%

0.6%

6.4%

Main crop production in Lombardy, 2012

OBP1 _{at current prices OBP}1 _{at chain indexes 2005 % variation 2012/2011}

Million euro % Lombardy/Italy Million euro Quantity Prices PBP

Soft wheat 83.2 9.8 40.4 48.9 -1.8 46.2 Durum wheat 17.6 1.3 10.1 21.9 -2.2 19.2 Barley 20.2 10.0 12.1 15.0 -0.9 14.0 Rice 137.7 41.5 164.2 4.3 -33.7 -30.9 Hybrid maize 510.0 28.7 287.2 -21.0 -1.3 -22.0 Soybeans 26.9 18.6 13.9 -31.2 19.4 -17.9 Sugar beets 9.0 7.8 9.5 13.7 7.4 22.1 Patatoes 9.5 1.4 7.6 -12.4 -8.0 -19.4 Tomatoes n.d n.d n.d n.d n.d n.d Melons 38.1 18.6 46.9 3.5 -10.5 -7.4

Sold wine grapes 18.7 2.2 15.5 -16.5 30.4 8.9

Wine 143.1 6.8 94.4 -17.4 22.0 0.7 Olive oil 2.7 0.2 4.1 20.0 -0.4 19.6 Peaches 2.0 0.6 2.1 -6.1 18.1 10.9 Apples 18.4 2.2 14.1 -10.7 34.1 19.8 Pears 11.8 2.6 8.3 -1.7 38.5 36.1 KIwi 4.0 1.9 5.1 1.2 -26.8 -25.9

1 _{Production value at basic prices.}

Source: ISTAT, Value added at basic prices from agriculture by region. framework increases to 26%. This is followed by the crop productions (27.5%), related services and

second-ary activities. However, on a national level, the crop OBP is higher than the one of livestock (with percentages of

52% and 34% respectively).

As regards to the single sectors, in terms of share on the total OBP, milk

51

beef (11.8%) and cereals (11.6%) are leading.

The increase of the livestock produc-tion value is led by pork (+6.1%) and by beef (+3.9%), while the milk sector experiences a slight reduction (-0.3%). The poultry OBP increases to 10% and that of eggs to 30%.

As concerns the crop OBP, cereals are

loosing in value of over 18% in com-parison with 2011, caused equally by the quantity and price variations. Decreases in value are also noticed in industrial crops (-12.1%), fod-der (-7.6%), plant nursery cultiva-tion (-4.4%) and horticulture (-2.6%). However, there are increases in the tree crops (+2.7%), closely followed by fruit in particular (15.6%) and,

to a smaller extent, by wine growing (+1.6%).

Among the single crops, rice (equal to 41.5% of the national rice growing OBP) undergoes a marked decrease of over 30% as a result of the drastic fall in prices. On the other hand, those decreases impact on the significant decrease in the corn OBP (-22%). The production variations augment the Main livestock production in Lombardy, 2012

OBP1 _{at current prices OBP}1 _{at chain indexes 2005 % variation 2012/2011}

Million euro % Lombardy/Italy Million euro Quantity Prices PBP

Beef 831.0 23.2 749.7 -3.1 7.2 3.9

Pigmeat 1,158.6 39.0 917.7 -2.1 8.4 6.1

Sheepmeat and goatmeat 2.8 1.4 3.2 0.0 0.4 0.4

Poultrymeat 496.2 17.1 386.9 4.8 4.7 9.7

Eggs 256.6 17.0 146.2 -1.4 32.5 30.7

Cow’s milk 1,651.2 36.3 1,510.9 -2.4 2.2 -0.3

Sheep and goat milk 2.5 0.6 2.0 0.0 2.5 2.5

Honey 5.4 15.0 3.3 -11.8 8.0 -4.7

1 _{Production value at basic prices.}

production value of autumn and win-ter cereals while soya is more similar to corn trend.

With regard to tree crops, the grape-vine undergoes a large reduction in quantity which is nevertheless com-pensated by the variation of price. The same positive price variation pushes the OBP of fruit crops up, ap-ples and pears in particular. With ref-erence to the processed products, the OBP of the wine-making records an annual variation of 0.7% while that of oil is more marked (+19.6%).

In terms of livestock, Lombardy

reaches, with considerable success, the 39% production of pork, 23% of beef and 36.3% of cow’s milk out of the national share. The regional percent-ages of the total national production of poultry (17.1%), eggs (17%) and honey (15%) are also significant. In terms of single products, the in-crease in the value of the livestock OBP is confirmed for pork (+6.1% in value and -2.1% in quantity), beef (+3.9% in value and -3.1% in quantity) and poultry (+9.7% and +4.8% respec-tively). The cow’s milk OBP shows a slight decrease (-0.3%), compared to a

2.4% decrease in quantity. The reduc-tion of honey (-4.7% in value) is more marked.

The immobility of the production val-ue, together with the increase of inter-mediate consumption, in 2012 caused a 4.2% reduction of the regional agri-cultural value added equal to around 3 billion euro, and led to a 40.8% re-duction of the impact of value added on the production value of the agri-cultural sector. In the same period, the value added of Italian agriculture increased by 0.8%.