The Covid-19 emergency could offer an opportunity to rethink the framework and timing of programming
of European Funds in agriculture.
Premise
We are experiencing a time of great difficulty, primarily health-related, but also social, economic and
cultural.
In this first month of the crisis we had to deal directly with the health emergency and the
contribution we could make as a society was to “stay at home” to help avoid a
spread of the virus.
But our work, which is largely linked to the programming of the Structural Funds in Italy, has us
led to reflect on what the impacts of this pandemic associated with Covid-19 could be on
territories in which we are present and have operated alongside the Public Administrations for over 20 years.
Now these reflections push us to translate the discussions that have been going on for some time into an operational proposal
before this emergency, accompany the projects and evaluations we carry out, with reference to
particular to the agricultural sector, central to community policies due to its intrinsic weaknesses and
its strategic and economic importance.
For some time, in fact, together with public administrations, we have been studying and evaluating interventions aimed at
sector, particularly in disadvantaged areas, seeking solutions and new ways of action in order to
preserve agricultural activity as it produces primary goods and is necessary for protecting the territory.
The Covid emergency arrives in the start-up phase of the new seven-year programming period 2021/2027. To boot
new aid tools in a situation of crisis and uncertainty like the current one may not be there
optimal solution, while it is certainly simpler to intervene by appropriately modifying the
devices on which there is already experience, competence and, therefore, greater speed of action.
The idea of maintaining the current tools for a certain period in order to ensure continuity
in the disbursement of premiums and offer the possibility to agricultural companies to make investments in time
quickly and with known tools, could help alleviate economic and financial difficulties
that companies are and will be facing, but above all it could constitute the prerequisite
to rethink the perspective of “seven-year” programming in agriculture and make it more stable over time.
The proposal
IZI has been involved in the planning, management and evaluation of programs for over 25 years
communities that support agriculture, a sector that, in this period, is complicated to say the least
our economic and social life, is on the front line to guarantee all of us what we need
food supply and which, at the same time, has to face market uncertainties
determined by the sudden change in eating habits: from the closure of the Horeca sector, to which
a sharp contraction in sales of some especially high-quality products corresponds to the decision
of many supermarkets in Northern Italy to no longer offer over-the-counter products in compliance with distancing requirements
social, with the shift of sales towards portioned and packaged products for which companies
smaller sizes are not always equipped; from the slowdown in exports which concern in
especially Italian agri-food excellence, to the increase in demand for some products (e.g.
apples) and services (e.g. home deliveries) for which companies must equip themselves and prepare.
Added to all this is the uncertainty about when this emergency will end and what effects it will have on people
our habits, with the consequent difficulties in planning the restart, difficulties accentuated by the fact
that agriculture, by its nature, has relatively long reaction times because a salad (or wheat
for flour or an apricot…..) cannot be assembled, but must be sown, transplanted, cultivated and
gather.
The need to reorient production and work organization can only result in the urgency of
make investments, which are only possible in the presence of suitable instruments and income guarantees. To this
In this regard, the EU initiative which, through the European Bank for
Investments (EIB) has made €8,000 million available to support SMEs, including agricultural ones 1 .
However, Italian agriculture is reluctant and unaccustomed to using financial instruments
as in most cases the companies are family-run with methods of operating that are not
they follow those of large companies.
For this reason it would be appropriate today to extend the current programs co-financed by the EC through
ESIF 2 in order to accelerate the making available of public contributions through existing instruments
tested and fully active and, in the case of agriculture, seize the opportunity chance to rethink the logic of one
currently seven-year programming for interventions that in fact continue almost unchanged over time
between one period and another.
Covid-19 arrives in Europe in the very year in which the seven-year 2014/2020 programming period ends.
Overcoming the taboo of seven-year planning and continuing to use consolidated tools (i.e
the current Rural Development Programmes) would allow administrations to concentrate their own
activities on implementation, for beneficiaries to operate on known terrain, for policy makers to use
forms of governance that allow the control of the funds disbursed, continuing in the current way
consolidated and possibly, if necessary, increase the co-financing quota for some types of
projects or categories of beneficiaries.
This possibility seems to be even more important in the agricultural sector where one cannot limit oneself to
look only at investments, as operating contributions (premiums, aid, allowances)
represent a fundamental share of farmers’ income, reaching an average of 13%.
PLV of companies and 32% of their net income (see FADN 2018), an incidence which is particularly
relevant in some sectors.
The importance of the contributions is such that it becomes essential for farmers to have access to one
reasonable certainty about the amounts that will be disbursed and the timing of disbursement. Contributions arise
mainly from the first pillar of the CAP, but, for companies in less favored areas, they are a lot
those disbursed through the second pillar (PSR) are also significant.
A picture is provided by an analysis carried out for the Autonomous Provinces of Trento and Bolzano in the area
of the evaluation of the respective PSRs. The Agricultural Accounting Network – RICA makes the data available
disaggregated for both territories. These areas can be considered, with good approximation,
as representative of the disadvantaged areas present throughout the national territory. The analyzes have
highlighted as in these territories, for dairy cattle companies, typically present in the most areas
difficult and impervious, the impact of public aid on the PLV reaches 23% for Trento and 21% for Bolzano
and that on Net Income reaches 44% and 55% respectively. In both cases the contributions obtained
through the PSR are higher than those obtained through the first pillar. This data shows so
objectively what importance the contributions of agricultural policy have for agricultural companies and how, a
their slowdown, or worse, temporary interruption, as has sometimes happened in the past in the transition from
one program to another could compromise its survival.
The extension of the measures and instruments in force, with their refinancing, would offer companies
agricultural workers those economic guarantees indispensable for the continuation of their activity would be significantly reduced
the risks of abandonment of marginal areas would be significant and would allow easier access (e.g
administratively less onerous) to contributions for investments, without forgetting that all of this
It would help ensure a constant supply of products in this time of uncertainty
agricultural products for large-scale distribution and/or for the agro-industry and, ultimately, for the entire community.
Starting a new programming period in a situation of economic crisis could, however,
lead to delays and slowdowns such as to induce many agricultural companies, especially those operating in
disadvantaged areas, to abandon their activity.
Among other things, at least as regards the funds allocated to agriculture, the extension seems to be inevitable
also due to the serious delay accumulated in the approval of the new Regulations, so much so that the Court itself
of the Accounts of Luxembourg, even before the Covid emergency, considered it unlikely that the new ones would start
programs could take place with just one year’s delay, i.e. in 2022.
If, as seems possible, the Covid emergency will bring about positive changes in our habits, for example
example through the strengthening of smart working which is finding good appreciation in
this period of forced application, improving changes could be identified and maintained
also in consolidated community operating practices.
As regards the EAFRD, it would be desirable to overcome, not only in the emergency phase, the
logic of seven-year programs. In fact, these are interventions that are stable over time with continuity
of action that has lasted for at least 20 years, with adjustments due more to a greater finalization of the
strategy with respect to specific objectives, especially, but not only, environmental ones, and to other factors. The passage
between two successive programs has always led to discontinuities which, in addition to creating discontent
and risks of disparity in treatment between companies, leave farmers in uncertainty regarding premiums
(indeed, even worse, they risk creating gaps) with the risk of premature abandonment of the activity,
especially in disadvantaged areas. Not to mention the administrative efforts to create the new ones
plans and for the adaptation of measures to the new rules.
It could therefore be useful to reconsider the entire system by providing a more basic reference framework
stable within which the main aid provided for by the RDPs can find space: the prizes
agri-environmental, compensatory allowances, organic, but also aid to young farmers and
investments by agricultural companies and agro-industry. This framework could be subjected to
periodic checks and evaluations, even partial and/or sectoral, on the basis of which to intervene
modify, in a more agile and punctual way (and only when necessary) the planned interventions and methods
selection, adapting them to the new needs of the sector.
At this moment, as already highlighted, EU action in this way appears most appropriate
direction: starting a new programming period in a situation of economic crisis could
cause difficulties such as to induce many agricultural companies, especially those operating in areas
disadvantaged, to abandon their business.
Maintaining, at least for a certain period, the current tools (refinancing them) can offer companies
that continuity in the disbursement of premiums which guarantees the liquidity essential to alleviate the current ones
economic and financial uncertainties and ensures a greater propensity towards investments that are
will make it necessary.