Italy: The possible economic impact resulting from Psa

During the National Psa Convention held in Latina (Italy) on 24th and 25th May, 2012, the Italian CSO showed a presentation on "The impact on crops and trade".

According to CSO, it is difficult to assess the consequences of Psa on crops and trade as at the moment Psa is in a stage of strong evolution and it is hard to estimate what will happen in the future. Now, we can only conjecture some situations based on current production/trade and importance of kiwifruit.

After a view on Italian kiwifruit production trend compared to other countries of northern hemisphere (relevant, Greece +30% from 2005/06 to 2011/12), CSO presentation illustrated also the Italian export trend that represents about 60% of total in northern hemisphere.

Italy focused heavily on the kiwifruit during the last decades and this is due to good revenues got from this crop, with interesting average producer and export prices. This crop is showing some problems in the last years, among others the growing competitiveness against other countries such as Greece, New Zealand and Chile. In the last two marketing campaigns, for example, Greece exported about 85% of its domestic production with a price lower than the Italian one.

In this general framework also Psa is included with obvious consequences:

Explants and then decrease of production: if explants are huge, the Italian kiwifruit sector loses competitiveness, otherwise they could be also a positive factor from an economic point of view.
Yield decrease due to the Psa presence. According to CSO data, in 2011 the companies affected by Psa reported a production drop from 10% to 50% compared to not affected ones.
The competitiveness with other countries depends also on disease spread out Italy. We know in fact that Psa is diffused in other countries such as New Zealand.

Damages caused by Psa may have repercussions on value of agricultural chain and in terms of employment. In order to analyse these aspects, the University of Bologna carried out a study to simulate different scenarios of losses, on the basis of CSO data.

The calculus is based on an areal drop between 10% and 30%. Economic impact are not directly proportional to the surface drop, because:

On the economic level, the lower availability of product should cause an increase in market prices.
At long term, it is possible that more specialized companies are able to implement strategies more easily to oppose the spread of the disease; such process could mean an increase of average yield.

In terms of production value, the University of Bologna underlined that conceivable losses could be:

-4/6% in the case of a 10% cultivated area reduction;
-17/20% in the case of a 30% cultivated area reduction.

Also in terms of employment a significant recoil is expected, with loss of working hours for everybody: the reduction should be almost parallel to the reduction in the areal.

According to CSO, this kiwifruit situation showed lights and shadows, present independently from Psa. Especially in the current period of fruit and vegetable consumption crisis, finally we can say that kiwifruit crop is still more profitable compared to others and for this reason it must be defended.

For more information: www.csoservizi.com

Data on kiwifruit production
Acreage in Italy: 24.000.
Domestic production: 480,000 tons, the first producer in the northern hemisphere.
Export: 370,000 tons, one third of worldwide market.
Marketing value: 300,000,000 Euro.
Producing regions: Lazio (first domestic producing region with 8,000 hectares, 3,000 companies and 650,000 working days), Piemonte, Emilia-Romagna, Veneto, Campania and Calabria.
Economic losses due to Psa (in the province of Latina): 40,000,000 Euro.