Wednesday, December 13

Italy: Globalisation flattens prices of products with very different costs

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Az. Agr. Cilio Salvatore e Figli (Sicily)

The South-West of Sicily has been affected by abnormal weather: “Almost every week, there are damages caused by strong winds between 40 and 60 km/h. This has been going on from the start of 2013, as every ten days there’s a windstorm which damages the plastic coverings and the roofs of greenhouses. This happens especially in the South-West (from Licata to Syracuse).”

This is the report of Giuseppe Cilio from the Cilio Salvatore e Filgi commercial farm located in Vittoria, currently producing cherry tomatoes, bunch tomatoes and aubergines on 15 hectares of protected cultivations: 5 hectares are dedicated to aubergines (long and round), whereas the remaining 10 are destined to cherry, bunch and piccadilly tomatoes.

“In 2001, we only had 3 hectares of protected cultivation, which we gradually expanded despite the crisis. We have managed to grow, and we also own a nursery garden. The situation has changed though, it’s not possible to make investments any more and we can only try to defend ourselves. Between the markets and politics, we lost quite a bit of enthusiasm.”

The company has been active for more than 40 years: Giuseppe inherited it from his father. “I believe in it, especially since I’ve also inherited his courage and work ethics, so I feel that I can’t and I won’t betray his memory.”

At a commercial level, the Cilio company, just like many others, has been affected by the EU-Morocco agreement concerning the imports of cherry and date tomatoes. “At the moment, date tomatoes sell better, as it’s probable that the Moroccan production has ended and so prices have increased. The situation is very different as regards cherry tomatoes, as we haven’t made much profit from the harvesting we carried out in September 2012. Let’s say that so far the agreement has done more harm than good.”

As the producer points out: “They cannot put two different situations, the Italian and the Moroccan one, on the same level. On top of lower labour costs, Morocco has been awarded advantages such as the entrance in Europe at a preferential rate. Costs for cherry tomatoes are higher for us, and therefore we can’t compete. They can produce below cost, and are able to make a profit from it, but we can’t sell at the same price as they do, as we wouldn’t be able to cover labour costs. And this is not even considering the other expenses concerning pesticides, fertilizers, nitrate, soil solarization, etc. The two worlds should not be compared or put on the same level however, in such a globalized market, this is precisely what happens.”

In addition to Morocco, Sicilian tomatoes must confront competition from Spain as well. “As it’s in the European Community, Spain has the same problems and costs we have, but it still manages to sell at lower prices.”

The farm ships almost the whole cherry tomato production abroad to Germany and Austria. “Sometimes though, prices are not worthwhile to Germans, and they turn to Morocco.” Aubergines, bunch tomatoes and long green tomatoes are destined for the national market.

“Bunch tomatoes are sold at a satisfying prices thanks to Romanian and Bulgarian brokers. They buy great amounts of produce at Vittoria’s wholesale market and then they ship it to Russia and East European countries. And they pay very well.”

However, average profits have dropped in the last few years. “Year after year, the yield of each square metre has decreased. If we used to talk about €8/sq m, last year we reached €5/sq m and, considering that expenses can go up to €6/sq m, you can see how we work at a loss”

“We used to cultivate only cherry tomatoes, but now we try to diversify to meet the needs of the market. If a product is not popular, we try to sell something else. This is why we cultivate 5 different products: aubergines, cherry tomatoes, bunch tomatoes, piccadilly tomatoes and peppers. The more the better, even though the market is the one who has the last say.”

Concluding, Giuseppe explains that, “if 20 years ago you could live with 2 hectares, today you can’t even cover costs with 15. Each day there’s an obstacle, as the market doesn’t have fair prices with respect to production costs, the “made in Italy” is not defended and the Italian produce is not differentiated enough from that of other regions.”

Giuseppe Cilio
Azienda Agricola Cilio Salvatore e Figli
Vittoria (RG)


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