7. Resilience to animal and plant health risks in Italy

The Italian agricultural sector is very diverse and the country is a significant producer of grains, oil crops, fruits, vegetables, dairy, and meat. Within the European Union, Italy has been the largest agricultural economy in terms of gross value added since 2012, and is the largest producer of a variety of goods, including durum wheat, rice, soybean and tomatoes (Eurostat, 2019[1]). Additionally, the country is one of the world’s largest exporters of apples, cheese, grapes, ice cream, olive oil, wine and other foodstuffs. While agricultural value added represents 2% of GDP, agriculture still represents nearly 4% of the country’s employment (OECD, 2019[2]). In addition to the diversity of production, the sector’s farms are very heterogeneous, with a large number of very small farms or non-commercial farms producing alongside increasingly larger farms that are competing in international markets.

Previous investigations have concluded that agriculture in the Mediterranean Basin is highly exposed and vulnerable to climatic risks, with producers also facing a wide range of risks from plant and animal diseases related to the diversity of production (Pontrandolfi et al., 2016[3]). Managing animal and plant disease risk is particularly challenging for the sector. Italy’s fruit and vegetable sector is exposed to a large number of plant diseases and, as a significant producer, faces potentially high losses in the event of a disease outbreak. Similarly, with large national herds of cattle, sheep, and poultry, preventing and managing animal disease outbreaks is also a major priority for the sector. In both cases, preventative measures and pre-established response frameworks are key to averting negative impacts from these types of risks. However, very small farms may lack the necessary skills, resources or incentives to take preventative measures, which in turn can have implications for the sector as a whole. As a result, a key challenge for the government is ensuring that all farms – including small, non-commercial enterprises – are both incentivised and have the capacity to implement on-farm biosecurity measures necessary to manage pests and diseases.

This case study examines Italy’s approach to improving sector resilience with respect to animal and plant health risks. First, the case study describes the current state of the sector and the policy landscape. It then assesses the measures Italy is taking to manage animal and plant health risks according to the five dimensions of the OECD risk management framework for agricultural resilience.

The Italian agricultural sector has undergone substantial restructuring in recent decades; nevertheless, the sector remains extremely heterogeneous. Italy has a large number of very small farms, some of which have low productivity, while others are poorly integrated into agricultural markets. In fact, around one-quarter of farms produce solely for their own consumption, and even amongst farms that sell their products, more than half registered sales of less than EUR 10 000 in 2010 (Buglione et al., 2018[4]). There are also larger, increasingly specialised commercial farms that are competitive in international markets (Cardillo et al., 2016[5]). This heterogeneity has implications for producer capacities to compete – including their ability to respond to and manage risk (Box 7.1).

Animal and plant health risks are addressed under both agricultural and public health policy frameworks, with supranational EU policy structures overseeing both. Agricultural policy (including policies with respect to risk management) is elaborated under the EU Common Agricultural Policy (CAP), but some national-level risk management tools are also in place outside of the CAP (Box 4.2). Regulations on animal and plant health are overseen by the European Food Safety Authority (EFSA) under the EU Directorate-General for Health and Food Safety.1 Policies, practices, and frameworks developed at these two levels have implications for how animal and plant health risk is managed in Italy, both at the farm level and in the sector at large.

Governance arrangements for managing animal and plant health risks – including biosecurity system infrastructure, services, regulations and emergency response frameworks – are prescribed in dedicated legislation. Regarding animal health, the new EU Animal Health Law (EU Regulation 2016/429) entered into force in April 2016, and will apply from 21 April 2021. This regulation streamlines the legislative framework governing animal health in the European Union (which was previously addressed under multiple regulations), and is based on the “One Health” premise that prevention is preferable to the cure. The Law provides the overarching animal health framework for all EU Member States, including laying out a harmonised approach for disease prevention, notification, control and eradication; defining priority diseases; and prescribing provisions for dealing with emerging diseases. The regulation also elaborates the responsibilities of the different actors in managing animal health risk:

  • Farm operators should bear primary responsibility for prevention and control of the spread of animal diseases, including the obligations to keep up-to-date animal health records, and to immediately notify authorities when they suspect the presence of certain diseases.

  • Veterinarians are tasked with taking all appropriate measures to prevent the introduction, development and spread of diseases, including early detection, proper diagnosis, and awareness-raising.

  • Member States are required to ensure the functionality of a competent animal health authority, which should oversee tasks including application of eradication measures, implementation of a surveillance programme, disease awareness, reporting on disease incidence, and registration of livestock operations.

  • Penalties for non-compliance with the regulation are set by the individual Member States.

Italy has yet to put in place an implementing regulation detailing the specifics on how it will implement the EU Animal Health Law. In the meantime, animal health in Italy is governed by various regulations (including, for example, the Veterinary Policy Rule 320/54), but remains the responsibility of the Director General of Animal Health and Veterinary Medicine under the Ministry of Health. That agency is responsible for surveillance, maintaining a registry of livestock operations, running a central crisis unit for emergency situations, carrying out audits and inspections for compliance, and generally managing risk in the area of animal health.

Similarly for plant health, a new EU “Plant Health Law” (EU Regulation 2016/2031) entered into force on 13 December 2016, and will be applicable from 14 December 2019. This regulation builds on previous legislation to provide the overall framework for preventing the introduction or spread of harmful pests and diseases that affect all crops, fruits, vegetables, flowers, ornamentals and forests, and is based on provisions laid down in the International Plant Protection Convention (IPPC). Among its provisions, the Law stresses the importance of prevention and early detection and mandates systematic pest surveys to that end; establishes lists of quarantine and priority pests that could potentially have large economic, environmental or social impacts; describes the notification obligations for Member States and operators; and lays out the rules on movements of plants and plant products. Specific responsibilities assigned to the different actors in the regulation include:

  • Operators (including farmers, but also other actors involved in the production, transport, and trade of plants and plant products) are obligated to notify competent authorities if they suspect the presence of a quarantine pest, provide the competent authority with all needed information, and take necessary measures needed to prevent the spread of the pest in question in accordance with any instructions provided by the competent authority.

  • Member States are tasked with carrying out surveys for quarantine pests, taking all necessary phytosanitary measures to eradicate quarantine pests (including the establishment of demarcated areas consisting of an infested zone and a buffer zone), notifying the Commission and the other Member States when its competent authority confirms the presence of a new quarantine pest in its territory or in a part of its territory where it was previously not present, and establishing contingency plans for priority pests capable of entering its territory.

  • As with the Animal Health Law, penalties for non-compliance are set by the Member States.

There is as yet no implementing regulation for the application of the Plant Health Law in Italy, but responsibilities for plant health and protection are carried out under the previous legislation by the National Phytosanitary Service (SFN) under the direction of MiPAAF. Among its functions, SFN is responsible for phytosanitary control of imports, implementing a permanent monitoring programme, handling phytosanitary emergencies, and certifying exports. SFN is comprised of a central unit, regional phytosanitary service offices, and a national phytosanitary committee, which carries out both technical consultative and propositional activities.

Prevention and management of plant and animal disease risks cut across risk management layers, with measures, tools, and strategies needed at all levels – producers can reduce their risk exposure through farm management and good agricultural practices (including on-farm biosecurity measures) – and they can use on-farm risk management strategies to cope with small reductions in farm income; private sector tools are available to help manage mid-range declines in income (including losses due to plant and animal diseases); and government risk management policies help farmers to cope with large income declines through both ex ante and ex post arrangements (including disaster payments, mutual funds, and IST). General services for the sector, such as national biosecurity systems, monitoring and early warning systems, and investments in research and knowledge transfer, also play a role in disease prevention and management (Figure 7.1).

There is evidence that farmers are investing more in developing their on-farm resilience capacities, in terms of human capital and capacity to deal with fluctuating farm incomes, although national averages may mask relative differences in capacity between very small and larger, more market-oriented farms. Available statistics with respect to on-farm human capital indicate that the overall share of farm enterprise heads with some agricultural training is low – just 5.3% of producers in 2013, compared to 8.3% in the European Union overall (Buglione et al., 2018[4]). At the same time, statistics also indicate that the educational attainment of Italy’s next generation of farmers is improving relative to previous generations, and the number of farmers engaging in agricultural training is also on the rise (Buglione et al., 2018[4]). In 2013, just over 30% of all of the country’s farmers had attained at least a high school diploma. However, amongst farmers under the age of 40, 67% had at least a high school degree, with 13% having graduated university – double the 6% share for the sector as a whole.2 Shifts in the structure of the industry also signify an increasing prevalence of professional versus subsistence farms – while the number of farms declined by nearly 20% from 2007-17, the number of professional entities organised as joint-stock companies and partnerships rose (SVIMEZ-ISMEA, 2018[6]).

Financial capacity is also crucial for on-farm resilience to risk. In this area, enterprise diversification has been a priority for sector development. Over the past decade, the financial importance of secondary income-generating activities to farms increased in every Italian region. By 2018, the contribution of secondary on-farm activities and support activities had grown to 21% of all value produced from agriculture, with renewable energy generation (mostly solar power) and agritourism the most important on-farm income diversifying activities (ISTAT, 2019[12]). The growth of agritourism in particular has been substantial in Italy, with more than 23 000 firms registered in 2017, up from 13 000 in 2013 (ISTAT, 2018[13]; Buglione et al., 2018[4]). Farms also practice product diversification. An analysis of farm-level data from 1981-2003 indicates that over that time frame, Italian farms cultivated 4.7 crops on average (Bozzola, 2014[14]). Finally, a majority of Italian farms have a good capacity to repay their current liabilities – 62.5% of farms have a liquidity index score that is acceptable (between 0.5 and 1) or positive (greater than 1) (SVIMEZ-ISMEA, 2018[6]).

Market instruments utilised fall into two categories – instruments that help producers to manage the financial losses associated with plant and animal health risk, and those that help producers to prevent losses from these risks. With respect to the first category, some market instruments are available, although risk markets in general are considered poorly developed in Italy compared to other OECD countries (ISMEA, 2018[15]). A few private insurance products are offered for plant and animal disease risks, and some private, non-subsidised mutual funds are also available (DG Agri, 2017[16]). With respect to instruments for prevention, private consortiums are increasingly developing decision support tools to help producers mitigate or manage mid-level animal and plant disease risks. For example, the CondifesaTVB producer consortium located in the Veneto region offers a digital decision support tool (in the form of an App) to wine grape growers to facilitate better management of phytosanitary risks. The App – BODI™ – forecasts meteorological conditions at the vineyard level, calculates a risk index for certain pathogens, and offers a list of authorised crop protection products to confront the risk.3 Italian farmers also increasingly purchase consultancy services aimed at helping them to adopt optimal practices to reduce their risk exposure. On average, Italian farmers spend the same amount on consultancy services as on insurance premiums (Pontrandolfi et al., 2016[3]).

Government assistance to cope with animal and plant health risks is provided through a range of measures that cover agricultural risks more broadly, including ex ante measures, measures that are triggered ex post but defined ex ante, and measures that are defined ex post. The largest of the ex ante measures are direct payments received by producers under CAP Pillar 1, representing 63.2% of Italy’s CAP expenditures in 2018 (DG Agri, 2019[17]). Although these payments are not designed as a risk management tool, they do contribute to farm income stabilisation for some of the country’s producers. In particular, CAP payments between 2005 and 2012 were estimated to cover 100% of variable costs on average for farms that are not insured, indicating that they had little need for additional risk management tools (Pontrandolfi et al., 2016[3]).

Under CAP Pillar 2 (Rural Development Programme) the largest ex ante government risk management measure is support for subsidised crop and livestock insurance policies (with policies covering losses in both volume and product quality) – an estimated 87.4% of expenditures on risk management tools funded under M17 are dedicated to insurance premium subsidies (ISMEA, 2019[11]). Policies are administered by insurance companies, but the premiums are subsidised through RD funds at a maximum rate of 70%,4 with the minimum threshold for compensation set at production loss of 20%. Italy has also recently introduced some new types of insurance policies funded through the FSN, including index-based policies for cereals, forage crops and oilseeds, and a revenue guarantee for durum and soft wheat. Thresholds for these policies are higher (damage must exceed 30%), and support is lower (65% of premiums). In 2018, nearly 62 000 farmers purchased insurance, representing the first rise in policy purchases since 2014. However, coverage rates vary widely based on region and commodity – nationwide, 18.7% of the value of crop production is insured, but coverage rises to more than 30% in regions with substantial production of high-value crops like wine grapes and apples (ISMEA, 2019[11]). In conjunction with these subsidised insurance policies, there is a large market for supplemental, non-subsidised policies, nearly all of which provide coverage for losses even smaller than the 20% threshold of subsidised policies. Of producers who purchase subsidised policies, 90% purchase a supplementary policy as well (ISMEA, 2019[11]).

Other provisions of the CAP are defined ex ante, but are triggered ex post for responding to risks to plant or animal health. These are namely CAP risk management tools activated by the Italian Government to help farmers manage larger declines in income and catastrophic risks, including support for mutual funds using M17.2, and support for sectoral income stabilisation tools (IST) under M17.3 (Box 4.2). Mutual funds can be set up to provide compensation for adverse weather conditions, animal and plant diseases, pest infestations, and environmental emergencies. The government can provide subsidies for up to 70% of the premium, and the damage threshold for compensation under the funds is a minimum of 30% (ISMEA, 2019[11]). Italy has also introduced sectoral level IST tools for fruits and vegetables, durum wheat, cow’s milk, olive cultivation, and poultry. The tools use cost indices to calculate income losses, which facilitates the calculation and reduces the reporting burden for individual farms. Up to 70% of the premium is subsidised, and damages must exceed 20%. However, having been so recently introduced within the 2019 National Risk Management Plan, data on uptake, expenditures and outcomes under these new tools is not yet available.

Outside of the CAP, two noteworthy types of ex ante policy frameworks that are triggered ex post are relevant in dealing with catastrophic animal or plant disease events. First of all, effective catastrophic event response depends upon having effective emergency response frameworks in place prior to a disease event. For animal diseases, the Ministry of Health operates the Central Crisis Unit (UCC), which brings together stakeholders from across the government to ensure that the response to a disease outbreak is effective and co-ordinated. Aside from these emergency frameworks, the Italian Government also subsidises premiums for insurance against damage to agricultural facilities and for the destruction of livestock necessary to mitigate the spread of disease under the FSN. These policies have no damage threshold, but are subsidised at a rate of 50%. Most spending on premium subsidies through the FSN (68%) supports policies for animal carcass removal (ISMEA, 2019[11]).

Italy also provides some assistance that is decided ex post, but it represents a small amount of resources overall. The first is support through the FSN to restore agricultural production activities following damage to production, facilities, or infrastructure that is not covered under the National Risk Management Plan. Payments of this type are estimated to account for roughly 8% of annual total risk management expenditures (ISMEA, 2018[15]). This setup serves to discipline ad hoc payments, as assistance through the FSN is only available for non-insurable events. Payments are subject to fund availability, and typically only cover a fraction of damage incurred. Ad hoc assistance can also be delivered through certain EU provisions. For example, EU Regulation 1308/2013 defining the rules for the Common Market Organisation (CMO) allows the implementation of exceptional support measures in response to severe market disturbances attributed to a loss in consumer confidence due to public, animal or plant health and disease risks. CMO measures can be activated in response to large declines in prices for any reason, however. In 2018, market measures activated under the CMO represented 11% of Italy’s CAP expenditures, with Italy spending more on market measures than any other EU Member State (DG Agri, 2019[17]; DG Agri, 2019[18]). Outside of these measures, regional RDP funds can also be used to provide ex post assistance – all regions allow some funds for M05 on “Restoring agricultural production potential damaged by natural disasters and introduction of appropriate prevention” in their plans, but these are typically used for a very specific sector that has been damaged by a certain risk. However, as funds can also be used for preventative measures, the share of payments that qualifies as ex post assistance is not clear. Finally, discounts on tax bills are also sometimes enacted ex post for farmers that have experienced catastrophic events.

The Italian Government also helps farmers to manage animal and plant health risks through no-regret policies such as expenditures on public goods to help to prevent disease outbreaks from occurring, and support for better on-farm decision-making. Such measures play an important role in preventing disease outbreaks and mitigating their impacts.

Most prominently with respect to plant and animal health, the government has a role in maintaining national veterinary and plant health systems and organisations that prevent, control, and monitor diseases, supported by an effective regulatory framework (OECD, 2017[19]). In the realm of animal health, these functions are carried out by the Directorate of Animal Health and Veterinary Medicine under the Ministry of Health. One of the areas that the Directorate oversees is information sharing with respect to disease monitoring and notification. Regarding monitoring, the Directorate prepares an annual plan for the prevention and control of main diseases, in accordance with EU and Italian legislation. Animal disease outbreaks can be notified through the National Animal Disease Information System (SIMAN) on the Veterinary Information System website (Salute, 2018[20]). Confirmed cases of diseases for which notification is required5 are then transmitted to the EU-wide Animal Disease Notification System (ADNS). The Directorate is also launching a collaborative platform – called ClassyFarm – between veterinary officials and corporate veterinarians to improve sector-wide collaboration in the management of animal disease risk. The goals of the platform include improving monitoring, analysis, and better targeting interventions for improved food safety and quality, outside of merely disease reporting.

On plant health, and in accordance with both national and EU regulations, Italy executes an annual plant pest and health monitoring exercise with the goals of detecting new outbreaks in a timely manner and providing detailed information on the status of known outbreaks so that appropriate phytosanitary measures can be taken in response (MiPAAF, 2019[21]). The annual national monitoring exercise includes a detailed plan that identifies where assessments should be carried out (home gardens, cultivated areas, nurseries, forests, green spaces, or other sites) for a list of different specific pests in all of Italy’s regions.

In conjunction with monitoring efforts, early warning and information systems are in place for both plant and animal diseases, typically in the form of web portals.6 These include general information portals (such as the Italian Veterinary Information System7 and the National Veterinary Epidemiological Bulletin8) and portals focused on specific diseases, (such as the Blue Tongue Information System9 and the Emergenza Xylella10 sites). International organisations also publish information portals that can be utilised by stakeholders, including the OIE’s WAHIS Interface,11 the EPPO Alert List,12 or the joint FAO-OIE-WHO Global Early Warning System for health threats and emerging risks at the human-animal-ecosystems interface (GLEWS+).13 These information collection and monitoring systems function in combination with established plant and animal health standards and frameworks, which define the diseases to be monitored, the appropriate response or preventative measures needed to reduce or eliminate a given threat, and the relevant responsibilities of different actors. However, the usefulness of these systems in reaching the country’s older farmers – who are typically less connected to technology – may be limited.

Research and innovation that contribute to better management of animal and plant diseases in Italy are funded under different mechanisms, and potentially involve a large network of institutions. With respect to funding arrangements, individual regional RDPs can fund specific projects. At the same time, many initiatives contained within regional RDPs are conducted under the European Innovation Partnership for Agricultural Productivity and Sustainability (EIP-AGRI) – one of five EU innovation partnerships founded in 2012 that brings together different actors (farmers, researchers, experts, businesses, NGOs) from a variety of backgrounds (public, private, national and regional) to speed innovation through an interactive approach. Through the EIP network, temporary EIP-AGRI Focus Groups can be set up to investigate a specific subject, including taking stock of research or identifying needs for further work. RDP funds can be used to set up EIP-AGRI Operational Groups that tackle a specific practical problem or opportunity, which could lead to a new innovation. While RDP-funded projects confront more localised issues, Italy also benefits from the EU-wide Horizon 2020 research programme, which provides EUR 3.7 billion for funding over seven years for projects related to “Food security, sustainable agriculture and forestry, marine, maritime and inland water research and the bioeconomy.” Horizon 2020 funds can also support EIP-AGRI projects or multi-actor thematic networks, which compile existing knowledge and disseminate it to relevant stakeholders. Using these (and other) sources of funding, Italy is home to various research institutions with high capacity for innovation in food and agriculture, including the Council for Agricultural Research and Analysis of the Agricultural Economy (CREA), the Institute for Sustainable Plant Protection (IPSP), the Institute of Services for the Agricultural Food Market (ISMEA), National Research Council (Consiglio Nazionale delle Ricerche), and the network of ten Experimental Zooprophylactic Institutes (IZS), as well as research capacity housed in universities.

In conjunction with research and development efforts, other no-regret investments funded through regional RDPs contribute to better on-farm capacity to manage risk in Italy (including animal and plant health risks). For example, under the 2007-2013 CAP, around 169 000 farmers participated in training courses, 32 000 farmers received advisory services, 44 000 farms received assistance to fund farm modernising improvements, and 6 300 farm enterprises received support for diversification (Buglione et al., 2018[4]). Under the 2014-2020 CAP within the risk management sphere specifically, all regions allocate some funding to restoring damaged production capacity or introducing preventative measures to mitigate natural disaster risk, and more than half of regions devote a small part of their RDP funds to knowledge transfer and innovation initiatives specific to risk prevention and management (ISMEA, 2019[11]). Numerous regions also fund co-operation projects undertaken to better integrate researchers, farmers, and the private sector in developing innovations for the sector.

Finally, the Italian Government also produces other information that helps producers to make farm management decisions. These include data and reports that track general sectoral trends, market monitoring and outlook reports, which are produced periodically by ISMEA.

There is a strong awareness in Italy that the risk landscape is shifting, and that in response, the country’s agricultural risk management policy framework needs to be both comprehensive – that is, effective in helping to manage a wide range of risks – as well as flexible enough to adjust to constantly changing circumstances. In the area of animal and plant disease risk, current disease outbreaks are testing the country’s prevention and response frameworks, demonstrating areas where the systems are working well, but also indicating where further resources should be devoted to improve the sector’s resilience to these types of risks.

Improving sector resilience to plant and animal diseases depends upon establishing policy frameworks, response mechanisms, preventative measures and research capacity in advance of disease outbreaks to both mitigate their effects (for example, by limiting their spread), and also to help producers cope with negative outcomes in a predictable way. Recent domestic reviews of the country’s risk management framework stress the importance of the holistic approach to risk in agriculture, including encouraging the development of flexible ex ante and ex post policies designed to respond to a variety of potential scenarios (ISMEA, 2018[15]). Additionally, developments in EU-level legislation on animal and plant health have made strides to better emphasise the importance of prevention in managing these types of risks.

Italy has already taken steps to shift its risk management policy framework to focus on ex ante instruments, reflected through its support for insurance products (and to a lesser extent, measures that are set up ex ante but triggered ex post, such as support for mutual funds or the income stabilisation tool). These measures also cover farm financial risks, which are not specific to impacts of animal or plant disease events. Around 76% of Italy’s risk management spending is for ex ante measures like insurance, with an additional 13% of spending on RD measures, and 11% of spending coming from the FSN (which includes both ex ante and ex post measures) (ISMEA, 2018[15]). Following reforms to EU rules in the 2017 Omnibus regulation, uptake and coverage levels for insurance have increased, suggesting that more producers are in a position to financially cope with severe losses (ISMEA, 2019[11]). Italy has also shown a willingness to refine its risk management tools to provide more cost-effective coverage and help producers hedge against risk (both by electing to fund the different risk management measures available under CAP, and also by making legislative changes to allow the development of these new tools). However, the lack of clear guidance and details on policy implementation has so far hindered their development and uptake (Cordier and Santeramo, 2019[22]).

At the same time, there is an awareness that a more holistic approach to managing risk is needed, particularly to develop new risk management tools; reduce the heavy reliance on insurance premium subsidies in the risk management framework; and enhance the use of RDP measures for risk prevention, innovation, and training (ISMEA, 2018[15]; Pontrandolfi et al., 2016[3]). In particular, there is scope to increase support to risk prevention measures that would reduce the need for these tools by helping producers to avoid negative impacts from adverse events in the first place – particularly through greater awareness and training regarding good on-farm biosecurity practices.

Despite this awareness, risk prevention is not a focus of the current National Risk Management Plan. While RD measures under M05 (funds for the restoration of production potential damaged by disasters and the use of preventative measures) and M08 (including funding to prevent damage to forests) are mentioned in the National Risk Management Plan, there is no further elaboration or emphasis on the importance of those activities in Italy’s framework for managing risk in agriculture. This is somewhat reflected in the share of funding for prevention in domestic expenditures – from 2014 to 2018, support for risk management tools has averaged around 8.4% of total domestic spending, while support for M05 (restoration and prevention) has averaged only 1.6% of spending, leaving risk prevention with a still smaller share.14 Further on from funding shares, M05 is activated with respect to plant and animal health threats in fewer than one third of the regional RDPs.15 To some extent, this reflects the relative economic threat posed by some specific risks to the regions in question given their main sectors, but the lack of measures taken by adjacent regions suggests that a more integrated approach to prevention of these risks could be warranted.

Increased focus on prevention on-farm through the implementation of good biosecurity practices could be complemented by additional forward-looking activities, including more dedicated and co-ordinated efforts to anticipate new diseases, prepare response plans, and notify actors about emerging or imminent threats. For example, foresighting activities such as horizon scanning, scenario analysis and sector outlooks can help build long-term resilience. Italian stakeholders conduct scenario analyses to inform policy frameworks (both as part of their seven-year planning process to support ex ante policy measures, and to inform the yearly reviews of the National Risk Management Plans), but there are no systematic foresighting exercises carried out by domestic stakeholders with a view to reducing risk exposure or increasing preparedness.16 Multi-stakeholder foresighting exercises have the potential to improve sector resilience through multiple pathways, including informing policy makers on industry priorities and capacity to manage or respond to risks; informing contingency planning exercises and research priorities; and providing a vehicle to improve farm-level preparedness for these risks by helping farmers to better understand how uncertain future events could impact their operations. Some projects of this nature have been undertaken that targeted better sector-wide preparedness, which could provide a blueprint for future exercises. For example, the joint JRC/EFSA CLIMPEST project looked at how geographical disease risk for citrus black spot would likely evolve under potential climate change scenarios (Castellari S., Venturini S., Ballarin Denti A., Bigano A., Bindi M. et al., 2014[23]). There could also be scope to link the annual pest monitoring exercise to longer-term foresighting or scenario planning activities.

Italy has made a number of policy adjustments towards giving more incentives for farmers to better manage their risks from animal and plant diseases (although most of these policies are not specific to animal and plant health risks). These shifts imply trade-offs in budget, time frame, and outcomes. First of all, Italy has made substantial progress in reducing ad hoc disaster assistance available for all types of adverse events under the FSN. Because the programme is now only available for carcass disposal, repair of structures, or to restore productive activities damaged by events not outlined in the National Risk Management Plan, the layers of responsibility are clear. Consequently, national outlays under FSN represent only a very small amount of total damages incurred due to catastrophic events – the fund paid out EUR 29 million in assistance in 2017, representing just 1.5% of total damages incurred (ISMEA, 2019[11]). Some operational limitations of the FSN may also disincentivise producers from depending on it in cases of catastrophic losses – past analysis indicated that compensation from FSN is not well-linked to the damage incurred, and the time lag between the event and the compensation can be substantial (Santeramo et al., 2016[24]).

This limited availability of ad hoc assistance should serve as an incentive for producers to take more responsibility for managing general farm risk, including from animal and plant health events (either by implementing on-farm measures, or through the utilisation of risk management tools). However, the net effect for on-farm risk management is less clear given conflicting incentives from the rest of the policy framework of support under the CAP. Although a substantial portion of Italy’s RD funding is dedicated to risk management, spending is small compared to direct payments under Pillar 1, which represented nearly two-thirds of Italy’s CAP expenditures in 2018 (DG Agri, 2019[17]). While direct payments can have an income stabilising effect, they also limit producer risk management incentives – specifically, direct payments can crowd out other risk management strategies and tools (Mathijs, 2017[25]). Evidence for crowding out has been found in the Italian context – research on Tuscan farms indicated that while farms that received single farm payments were more likely to undertake at least one on-farm diversification activity, higher direct payments reduced the overall number of diversification activities (Bartolini, Andreoli and Brunori, 2014[26]). Other authors found that direct payments are actually correlated to higher revenue variability, indicating that because the payments stabilise total farm income, they can incentivise farmers to make riskier production choices (knowing that their total income will remain stable), and they can also detract from the uptake of specifically-designed risk management instruments (Severini, Tantari and Tommaso, 2017[27]).

Direct payments may also crowd out use of other risk management tools, such as insurance. By a large margin, the most commonly insured crops nationwide (by both number of farms and total insured value) are specialty crops, led by wine grapes and apples (ISMEA, 2019[11]). These crops receive less support under Pillar 1 (although Pillar 1 does include some measures for the wine sector, in Italy the wine sector is not included in the direct payment scheme), and analysis has concluded that direct payments have no income stabilising effect for horticultural farms (Severini, Tantari and Di Tommaso, 2016[28]). In contrast, the types of farms where researchers found that direct payments contributed to farm income stabilisation were those for which direct payments comprise a greater share of total farm income – typically farms raising field crops, grazing livestock, or mixed livestock/mixed crops-livestock.

While there is evidence that provisions of the CAP can cause some crowding out of other risk management efforts, the risk management programme menu itself is likely not affecting production decisions. The national risk management plan provides for insurance policies for a wide variety of crops and livestock, and insures producers against a variety of risks – no specific sector is favoured. The IST, however, has thus far been defined only for certain sectors (poultry, bovine milk, fruit and vegetables, wheat, and olive growing).

Although substantial resources have been devoted to tools to help producers absorb the consequences of adverse events, the comparative focus on animal and plant health risk prevention, adaptation and transformation is less pronounced, at least within the context of CAP – spending on pest and disease control measures (which could fund either prevention or ex post mitigation) averages less than 1% of Rural Development expenditures, and spending on natural disaster prevention is similarly limited. These activities could be funded through other mechanisms, but at the very least, prevention, adaptation and transformation are not a focus of the CAP. At the same time, there is greater awareness that adaptation and transformation may be critical to the sector’s future, and consequently, these are concepts that are increasingly considered in research programmes and discussions of the future direction of the sector.

Previous OECD work has noted that the management of risks from pests and diseases is more complicated because the unobservable actions of individuals can have strong externalities, with the implication that the primary policy challenge in this area is ensuring appropriate incentives for farmers and all stakeholders to take socially efficient action to prevent outbreaks (OECD, 2011[29]). Processes that collaboratively establish risk management responsibilities can contribute to the development of these types of incentive structures by ensuring that the perspectives and objectives of all stakeholders are considered collectively.

Italy’s current policy framework is developed under a collaborative and iterative process. The annual development of the National Risk Management Plan takes place after a consultation process with a technical committee composed of representatives from regions, crop protection associations, the insurance sector, and farmers. The effectiveness of the previous plan is also evaluated within the technical committee, which can lead to revisions of the overall plan or adjustments in the design or offer of insurance policies.

At the same time, past events have indicated that additional efforts in this area may be necessary to improve communication and trust amongst stakeholders; firmly establish the risk management responsibilities of different actors; and ensure that all farmers have adequate incentives to prevent and notify risks. This can be particularly challenging in some parts of Italy, where small, non-commercial farmers have different incentive structures and different risk perceptions. These producers are typically outside of policymaking processes, are less likely to purchase insurance, and may not be reached or influenced by existing risk communication structures.

For example, poor stakeholder co-operation and ineffective risk communication hindered initial containment measures for Xylella fastidiosa in Southern Apulia (Saponari et al., 2019[30]). The disease was first found in the region in 2013, leading to the declaration of a state of emergency by the Italian Council of Ministers in February 2015 (Catalano et al., 2019[31]). A strategy for the containment and eradication of the disease was then laid out in 2015,17 which included the removal of infected plants, the removal of all host plants within a radius of 100 m regardless of their health status, and provisions to manage disease vectors (which would later include mandates for spraying insecticides to control the population of the primary disease vector). However, many farmers in the affected area were resistant to the containment measures, highly sceptical of the underlying science, and questioned the motives of both scientists and authorities (Abbott, 2018[32]). As a result, many growers ignored the mandates, contributing to the disease’s spread. Recently, the number of outbreaks in the previous buffer zone indicated that eradication in the zone was no longer possible, resulting in the border of the containment zone being moved 20 km north in June 2018.18

Stakeholders recognised that part of the reason for this breakdown is poor public trust, combined with ineffective risk communication. At a 2017 EU Ministerial Conference convened specifically to address the disease, stakeholders agreed to undertake targeted awareness-raising campaigns to improve acceptance of the measures and increase transparency regarding surveillance and control measures by making results available to the public (European Commission, 2017[33]). Embodying these declarations, Italy’s “Intervention Plan for the Revival of the Agricultural and Agri-food Sector in the Territories Affected by Xylella,” (released by MiPAAF in February 2019 under Ministerial Decree 1785), outlined a targeted communication and outreach strategy to combat X. fastidiosa. The strategy includes a dedicated communication team to ensure a coherent national messaging strategy and respond to misinformation, awareness-raising campaigns in affected areas, and the organisation of technical meetings and seminars. In addition, this renewed commitment to transparency has also been evident through the establishment of a dedicated web portal19 for Apulia that posts the results of monitoring efforts, latest news, and other useful information. These types of measures represent an advance in stakeholder engagement that will help to better define risk management responsibilities for all actors to improve collective disease management outcomes.

As noted above, the Italian farm sector contains both large, commercial farms and very small farms that may not be well-integrated into the market. A large share of farmers producing for their own consumption are also of an advanced age, with very low levels of technology use in their operations and limited capacity or incentive to innovate. But recent evaluations have also indicated that an increasing proportion of the sector is innovating, competitive, and well integrated into world markets.

Italian stakeholders participate in EU-wide knowledge networks that connect producers in different countries to foster collaborative innovation in best practices on plant and animal health. For example, Italian swine producers and stakeholders share information on best practices and innovations for improved health management through the EU Pig Innovation Group portal (EU PiG, 2017[34]), and Italian dairy farms have participated as pilot farms in the EuroDairy thematic network, testing how certain innovations affect biodiversity, resource efficiency, socio-economic resilience, and animal welfare (EuroDairy, 2019[35]).

Italian legislation also includes provisions designed to foster business collaboration and networking among small agricultural firms that may otherwise not have sufficient capital or capacity to undertake new investments or innovation on their own. For example, a regulation that allows an “agricultural network” contract was introduced in 2014, which permits flexible contractual arrangements among two or more firms without requiring them to merge. This allows smaller agri-food businesses to leverage common resources, achieve scale synergies, and access new technologies to improve their competitive position. By the end of 2017, more than 4 500 agricultural firms were participating in these types of network arrangements (SVIMEZ-ISMEA, 2018[6]).

There is also increasing evidence of on-farm experimentation and innovation to find solutions to animal or plant health issues, which can be supported by certain CAP RD measures. In one example, growers in Apulia collaborated with researchers in testing X. fastidiosa disease management strategies, including attempting to identify disease-resistant cultivars in the hopes of rebuilding the local olive sector (Saponari et al., 2019[30]). Although these activities can be funded through various mechanisms, several Italian regions are currently using RD funds from M16 on co-operation to finance pilot projects for the development of new products, practices, processes and technologies.

Recognising that young and beginning farmers may lack the knowledge and capacities to manage risk effectively, a number of programmes include provisions targeting that group specifically. For example, beginning farmers can receive a full grant to cover their insurance premiums, ensuring that they have the capacity to cope with the aftermath of catastrophic losses from animal and plant health events. Specific training and mentorship opportunities also target capacity-building of young farmers. For example, the FarmLab project connects young farmers to host companies for real world operational training on a range of topics, including organic farming, obtaining SPS certifications for nursery products, and utilising precision farming systems to improve crop management.

In animal and plant disease risk management frameworks, one of the primary roles of government is the provision of general services that cross all risk layers, including funding research, education, training, risk assessment, communication, information, and providing national biosecurity infrastructure, services and regulations (OECD, 2017[19]). Knowledge generation and innovation is particularly important in managing plant and animal disease, as the threat profiles of diseases can change quickly.

Italy has substantial research expertise in the form of various agencies, universities, and research organisations dedicated to topics in plant and animal health, as well as agricultural risk management more generally. There are also various research projects that are funded at the EU-level. For example, a number of Horizon 2020 projects are underway to either help Italy prepare for new threats or manage existing ones. The Horizon 2020 work programme for 2018-20 funds projects working toward an African swine fever vaccine, cataloguing new and emerging risks to plant health, and investigating integrated health approaches and alternatives to pesticide use (European Commission, 2019[36]). These Horizon 2020 resources have resulted in innovative new approaches to disease identification and management. For example, one project identified a new way to detect X. fastidiosa infection in visually asymptomatic trees through remote sensing, potentially greatly facilitating disease containment efforts (Zarco-Tejada et al., 2018[37]). Additional future investments in similar research agendas are also foreseen as the next iteration of the CAP develops (OECD, 2019[38]). In addition to Horizon 2020 projects, several stock-taking exercises have been carried out by EIP-AGRI focus groups (including on olive tree pests and diseases, diseases and pests in viticulture, and reducing antibiotic use in pig farming). Local operational groups under EIP-AGRI are also working on issues related to risk management, including risk mapping and the development of new monitoring systems.

Although there are various research projects underway with implications for improved management of animal and plant health in Italy, there are two additional considerations in this area. First of all, for maximum effectiveness against cross-border threats, better co-ordination of research and knowledge sharing at EU level may be needed (EASAC, 2014[39]). Encouragingly, progress is being made in this area, as thematic networks supported under EIP-AGRI are a good example of how EU and Italian actors are working to close this gap. Second, although research is underway on some topics that are important to sector viability, overall resources for research have actually fallen – average Italian domestic expenditures on agricultural research have declined by nearly a quarter under CAP 2014-2020, compared with the previous CAP.20 This decline has been somewhat offset by EU-level spending increases (particular under the Horizon 2020 umbrella), but increased funding for these types of initiatives should be a priority for improved prevention and mitigation.

In order to be effective, research on new methods, production practices and risk prevention measures needs to be disseminated to producers. Knowledge transfer on plant and animal diseases in Italy is carried out through various mechanisms. Rural development M01 and M02 provide funding for knowledge and advisory services of all types, including on topics related to general farm enterprise risk management, and on topics specific to plant and animal health management. Thematic networks under the EIP-AGRI umbrella also contribute in this space. For example, various Italian stakeholders participate in the EU WINETWORK for knowledge transfer and exchange between European wine-growing regions, and one of the network’s primary objectives is to co-create a knowledge reservoir on two diseases that affect wine grapes (WINETWORK, 2015[40]). The EIP Operational Groups can also contribute to knowledge transfer, given that they include a cross-section of industry actors. MiPAAF also carries out targeted knowledge transfer activities in the area of risk management, including through information brochures or specific events.

Aside from research, innovation and knowledge transfer, other information services also contribute to biosecurity management. Early warning systems in particular can be a useful tool to communicate animal and plant health risks to stakeholders, facilitating more rapid decision-making to mitigate the risk. For both plant and animal diseases, various early warning platforms exist, hosted both within Italy and externally by other international organisations. For example, the Lombardy region’s “Risk Bulletin for Rice Blast Fungus” is produced on a daily basis, with infection risk scores calculated on the basis of weather conditions at the commune level, including the forecast for the coming three days.21

While all of these public goods contribute to better animal and plant disease management, they appear to be poorly connected with the National Agricultural Risk Management strategy – as noted above, risk prevention measures for agriculture are not mentioned in the sector’s 2019 risk management plan.22

Achieving a truly holistic risk management framework requires ensuring appropriate consideration of risk prevention, risk mitigation and risk coping in one integrated system. With respect to animal and plant disease risk, disease management frameworks at both the EU and Italian national level seem to be clearly defined, although several tools and instruments can be applied outside of the catastrophic layer. At the same time, the risk management framework places heavy emphasis on some parts of this system (particularly risk coping tools), and given the characteristics of the Italian agricultural sector, additional efforts may be needed to adequately address the animal and plant disease risk prevention and mitigation dimensions. Most prominently, a key challenge for the sector is to establish good biosecurity practices among non-commercial farmers. This is particularly important to manage plant and animal diseases, given that inaction by a small number of farmers can result in substantial negative impacts for the sector (Enright and Kao, 2015[41]). Addressing animal and plant health risk in this population starts with an improved understanding of the behavioural drivers (including farmer goals, attitudes, and cultural norms) and risk management capacities of these actors, which would inform the design of targeted prevention and control plans as needed (OECD, 2017[19]). Collaborative approaches should be the bedrock of these plans – these populations should be targeted through local-level consultations, specifically-tailored communication strategies, and locally-executed extension and education programmes that are developed within the relevant cultural context and with an understanding of farmer capacities and goals. The recently-released Xylella intervention plan makes strides in this area, but more regular participatory processes involving these groups should be considered to better manage new future risks.

More effective prevention and mitigation when dealing with evolving animal and plant health risks in Italy also requires devoting resources to research and innovation that reduce the probability of adverse events or reduce the impact of those events. Italy has substantial research expertise that will be crucial for the sector to confront future challenges in the realm of plant and animal health. Projects and initiatives funded through Rural Development and Horizon 2020 are already underway that are investigating new solutions to evolving disease threats. Focus groups operating under EIP-AGRI have brought together a variety of experts in research networks, and farmers are also increasingly involved in the innovation process.

Italy’s recent adjustments in risk management frameworks have largely focused on refining risk coping tools. In fact, Italy has been one of the leading proponents of innovating new risk management tools for Europe. Under CAP 2014-20, Italy has spent the most on risk management measures under Pillar 2, and is the only country to have activated all of the available tools – support for insurance, mutual funds, and the income stabilisation tool. However, a lack of guidelines at the EU level, consultations, and support for design of some of these tools have delayed their development and uptake. Consequently, the effectiveness of these new tools at helping producers to absorb the impacts of animal and plant disease outbreaks remains unclear. As they are implemented and refined over the course of future National Risk Management Plans, care should be taken to ensure that these tools do not crowd out private initiatives.

At the same time, other policies – direct payments in particular – may in some cases reduce the demand for public risk management tools or private measures, as such payments are sufficient for many producers to insulate them from the impacts of most adverse events. Further consideration of the interactions and trade-offs of the different policies would help to ensure that the available tools are both efficient and effective. A more consistent approach to support across farms (with payments and tools considering whole farm income instead of individual commodities) would also have implications for risk management tool uptake and farm-level risk management strategies.

Finally, greater linkages between the risk prevention policies and risk coping tools would help to improve the effectiveness of animal and plant health risk management. This reflects the findings of earlier scholarship in this area – a more holistic risk management framework for Italy and other EU countries for long-term resilience should give more weight to risk prevention and mitigation and not focus solely on risk coping mechanisms like insurance, while taking care not to crowd out private measures (Mathijs, 2017[25]). Some linkages have developed in other areas of risk management policy (for example, more advanced mapping of frost risk with the goal of informing the design of parametric insurance policies), but there is scope for greater integration of the two in order to cultivate adaptive and transformative capacities in producers, and thereby reduce the need for policies designed solely to absorb risk impacts.


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← 1. In addition to these authorities, Italy and the European Union are signatories to various international agreements or participate in international organisations that have implications for plant and animal health, including disease monitoring, notification, research, and standards-setting activities. These include the World Trade Organization (WTO) Agreement on the Application of Sanitary and Phytosanitary (SPS) Measures, the International Plant Protection Convention (IPPC), the European and Mediterranean Plant Protection Organization (EPPO), and the World Organisation for Animal Health (OIE).

← 2. Author’s calculation based on the number of producers of all age groups 40 years and under, of the categories “with qualification (no university entry),” “high school diploma,” and “with university degree or diploma” from ISMEA’s Territorial Agricultural Indicators Database, Section B1: Census 2010 – SPA2013, http://www.ismeamercati.it/flex/FixedPages/IT/IndicatoriElenco.php/L/IT/F/101/SEZ/B.

← 3. https://www.condifesatvb.it/bodi.

← 4. Or at a rate of 65% for coverage for crops against only two risks.

← 5. Diseases for which notification is required can be found in the Regulation (EU 2016/429).

← 6. There are many such notification portals, covering slightly different jurisdictions or representing different interest groups. As such, it is not possible to catalogue all of these here, but some of the most relevant organisations to consult include the European Food Safety Authority (EFSA), the European and Mediterranean Plant Protection Organization (EPPO), Pest Organisms Threatening Europe (POnTE), and the OIE’s World Animal Health Information Database (WAHIS).

← 7. Available at https://www.vetinfo.it/.

← 8. Available at http://www.izs.it/BENV_NEW/index.html.

← 9. Available at https://bluetongue.izs.it/j6_bluetongue/home.

← 10. Available at http://www.emergenzaxylella.it/portal/portale_gestione_agricoltura.

← 11. Available at https://www.oie.int/wahis_2/public/wahid.php/Wahidhome/Home.

← 12. Available at https://www.eppo.int/ACTIVITIES/plant_quarantine/alert_list.

← 13. Available at http://www.glews.net/.

← 14. Calculations based on Italy’s reported PSE domestic expenditures.

← 15. Apulia, Emilia-Romagna, Lazio, Lombardy, Piedmont and Sicily.

← 16. It should be noted that various foresighting and horizon scanning activities for plant and animal diseases are carried out by EU-level agencies or organizations (including EFSA, EPPO, and JRC), with the participation of Italian stakeholders. The critical gap identified here is that outcomes of those exercises should be downscaled and discussed at a more local level.

← 17. EU Decision 2015/789.

← 18. EU Decision 2018/927. The Decision noted that, “due to the significant delays in the removal of plants infected by the specified organism, the risk of further spread towards the north of the Apulia region is high as the current containment and buffer zones no longer fulfil their functions.”

← 19. See http://emergenzaxylella.it.

← 20. Calculations based on Italy’s reported PSE domestic expenditures.

← 21. See https://www.ersaf.lombardia.it/it/servizio-fitosanitario/protezione-delle-piante/bollettini/bollettini-riso-(rischio-infezione-brusone).

← 22. Preventative measures with respect to forest management are mentioned, and although a mention of M05 is included, the description curiously includes only the restoration aspect of the measure.

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