Italian Agricultural Market in Down Cycle, Legislation Looks to Alleviate

During a press conference at EIMA 2016, FederUnacoma reported the Italian agricultural machinery market continues to be down, but legislation in the 2017 budget shows potential to help improve conditions.

FederUnacoma

The Italian agricultural machinery market is still caught in a negative cycle. Ministry of Transport registration data elaborated by FederUnacoma were reported in Bologna during a conference marking the opening of EIMA International, running from November 9-13. These figures show a further decline for tractor registrations, down 1.2% under the same month in 2015 with only 15,283 units sold. The slump for combine harvesters came to 2% with 329 units moved and serious stagnation for trailers was confirmed by sales ahead by 1% over October 2015 when, however, registrations fell by 4%. The only recovery came for transporters with 678 units registered, showing a gain of 17.7%. The year-end balance sheet is certain to confirm the sinking trend of sales which has held over the past 10 years while tractor registrations dropped from 30,000 units in 2006 to 18,400 last year for a 38% plunge and expectations for the current year slipping to less than 18,000 units moved.   

According to FederUnacoma President Massimo Goldoni, “The ongoing market crisis does not mean a loss of interest in mechanization in Italian farming because such trade fairs as EIMA are always packed with farmers displaying extraordinary interest in innovations on offer by the mechanization industry.” He went on to say, “The drastic reduction in sales is the result of the crisis of the agricultural sector where there is a steady decline in the number of working farms, falling by 9% from 2010-2013, and scant production earnings due to the overly small size of farms which fails to allow economies of scale.”

Nonetheless, the prospects for improving conditions and thus an agricultural machinery market recovery are now better than they have been in the past. Legislation in the 2017 budget approved by the government provides for the elimination of farmers’ personal income taxation and a set of tax breaks, especially for young farmers. The National Industrial Plan 4.0 issued in mid-September and aimed at maintaining digital production processes, as explained at the conference, will have significant fallout for the entire agricultural production supply chain and substantial impact on mechanization by helping the spread of machinery and support of precision farming. On the side of direct support for the purchase of agricultural machinery, on November 10 an early registration procedure will be officially opened for applying for contributions from the €45 million fund managed by INAIL, the National Workers Accident Insurance Institute, for acquiring machinery with high safety standards. However, European Union Rural Development Plans, RDP, remain the principle mechanization resource. A share coming to €5.4 billion accounting for 29% of RDP financing assigned to Italy, are targeted on Italian regions under Measure 4. In the European setting, Italy is the country prepared to take on the highest percentage of these Measure 4 funds with expectations that they will generate positive developments over the 2014-2020 period of allocation. 

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