Food prices rise and grain harvests fall

It’s not just oil and gas, the drought which is playing its part this time in “upset” Italy is causing the prices of agricultural raw materials to soar. In fact, the North is dry. That’s why the predicted arrival of rain has brought a sigh of relief to farmers.

Rainfall is important – explained Coldiretti – to save more than 30% of the national agricultural production, including tomato sauce, fruits, vegetables and wheat, and half of the livestock that we find in the valley of the Po, where the Po River registers a hydrometric level of -3.3 meters, as at the height of summer”.

But the great thirst does not spare the South. According to the Istat report, published yesterday, it is in the South that the most critical situations are found. About 2.4 million cubic meters are lost every day in the network of southern capitals, a volume that could meet the water needs of 10 million people.

And without water, there is no agriculture. At this time when the prices of the main agricultural commodities are strongly supported, a drop in production could give the final blow to the sector and to the entire economy.

As tensions rise due to the effects of the blocking of exports from Russia and Ukraine (16% of world corn, 30% of wheat and 65% of sunflower oil arrive from the conflict zone) which, if they do not have a direct impact on Italian sectors, risk triggering revolts in the name of bread in the most fragile countries around the Mediterranean, from Egypt to Tunisia, from Morocco to Libya.

The FAO reported a record rise in food prices that could reach up to 22% due to the conflict, but also noted a drop in cereal production of more than 5% in 47 low-income and deficit countries. food. In Italy, on the other hand, the specter is that of inflation linked to a slowdown in production.

The signs are all there. First of all, there is the energy bill, which is set to increase. According to Davide Tabarelli, president of Nomisma Energia, the price of oil has not yet reached its maximum and if it were to reach 300 dollars a barrel there would be a risk of shock. If prices don’t go down, everything closes.

Alongside the gas and oil emergency is added the food crisis with the cost of basic necessities soaring by 4.6% with peaks at 19% for seed oil, 17% for vegetables and 12% for pasta. . But the retouched labels mark all food products.

This is why water is saved in this phase when the first spring sowing of corn, soybean and sunflower has begun. And even if this element becomes rare and expensive, it risks increasing the costs of companies that are struggling to support electricity bills and production costs. The largest percentage increases in current costs (from +170% fertilizer to +129% diesel) are borne by cereal crops currently in short supply (according to Centro Divulga analysis, national crops cover the needs 53% corn and 27% soy) or are on the market at prohibitive prices.

From now on, Brussels has the green light to cultivate fallow land (200,000 hectares in Italy) for an additional production, according to Coldiretti, of 15 million quintals of cereals.

But with the current bill, it will be difficult to increase harvests “unequivocally influenced – says the Ismea Agrimercati report – by the growth in food prices, by the reduction in the purchasing power of families due to the increase in bills and by the new uncertainty about economic recovery in the crisis scenario determined by the war between Russia and Ukraine”.

Despite the fact that the agri-food sector showed good resilience in 2021 after the pandemic shock, the picture is bound to darken. The direct and indirect consequences of the war, believes Ismea, will have a strong impact on the international scenario, both for the accentuated instability of the financial markets and the upward pressure on the prices of all raw materials, including raw materials , only for the introduction of sanctions and restrictions.

Also due to the effect of internal consumption which is heading towards an inexorable decline. Assoutenti has launched a new call for urgent action on the price of energy because otherwise families and businesses – denounces the association – will face a new maximum increase in their bills from April 1 next year. opportunity to update quarterly rates. The cost must be reduced immediately, Assoutenti said “If you want to avoid an economic catastrophe, encourage the recovery of the country and consumption and stop inflation”. A recovery also slowed by the blocking of construction sites, the engine of GDP, due to the high prices of all the raw materials necessary for construction.

And even if the war were to end, Felice Adinolfi, director of Divulga and professor at the Faculty of Agriculture of the University of Bologna, will take at least three years to reconstitute the production potential.

The agri-food industry – he explained – is already coming from a season of high prices for the Covid and the climate, now with the war everything is getting worse, then we must consider that it operates in a market that “beats the ‘money in Chicago’.

Speculation complicates the scenario. Pesticides are on the rise and China – says Adinolfi – is investing 7 billion dollars in Algeria to produce fertilizers. While within the European Union everything is focused on environmental standards which already today, according to the teacher, separate the EU from the rest of the world: “that’s why I defined the Green Deal as the Green Bill”.

With the new “green” rules imposed by Brussels, agricultural production could be reduced by 10 to 20%. And so – denounces the Coldiretti – it would go against the tide of the strategy of producing more to guarantee the autonomy of food supplies. But without compromising security.

“We will oppose any attempt to back down on the quality and guarantees of food: the alibi of the difficulty of supply must not leave the line – declared the president of the Coldiretti Ettore Prandini – that you can buy n anything. No derogation from the principle of reciprocity and the transparency of labels”.

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