Roadside vegetable gardens in Milan
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There are normally only two kinds of people interested in a peach. Those that grow the fruit and those that eat it. The farmer receives 10 cents per kilogram for his fruit but it costs him about 45 cents to produce. The consumer pays two Euro for the same kilogram of peaches. This raises an interesting question, namely, who is it that has stolen our peaches and is driving our agriculture industry into the ground? Here is a long, desperate letter from a farmer from the Emilia Romagna region.

"Dear Beppe,
My name is Samuele Bertuzzi, I am 27 years old and I live in a small village near Imola. I am writing to you to explain what is happening in the world that I work in, a world that my family, my father and my grandparents always believed in, namely agriculture, the fruits of the land. I live in Romagna, where there are a number of major farming companies producing fruit such as apricots, peaches, nectarines, kiwis and grapes for making wine. The fruit growing industry in Italy is currently going through a very rough patch. The growers are being paid ridiculous prices for their fruit, around 8-10 cents per Kg (Source: Bologna Chamber of Commerce) for top grade peaches and nectarines, as against an average production cost of around 40/45 cents per Kg. This notwithstanding, the fruit is being sold in the shops at around two Euro per Kg or more. It is possible to find lower prices, but this is only during special promotions on lower grade fruit and then only for a few days at a time. 70% of our fruit is sold abroad (mainly Germany but also England, Austria, Switzerland, Belgium and Eastern Europe) where the prices being charged are just as incredible. A friend of mine who lives in London tells me that in one of the Tesco stores four peaches are being sold for 1 Pound (four peaches weigh about 500g, therefore, the cost is two Pounds per Kg or equivalent to 2.32€/Kg). At the end of the day, the effect of the production cost on the final selling price to the consumer is ridiculous: imagine, 10 cents as against a selling price of 2€ is equivalent to only 5%! The packaging and distribution of the peaches alone costs more than that! It is absolutely unbelievable that no one says anything about this! When they have to announce a price increase, the first thing that they show on TV are the beautiful market stalls laden with fruit and vegetables because this makes a good impression, but no one says anything about what goes on behind the scenes.
I want to explain to you very briefly how the fruit production “supply chain” works. The main player is the grower, the party that produces the goods, the fruit or the vegetables in question. What we’re talking about here is fruit, because that’s what I know the most about. The grower produces the fruit, which takes him a year to do, and then he harvests his crop over a three-month period (from June through to the end of August in the Romagna region). A lot of work goes into producing the crop, including pruning, soil treatment, fertilising, pest control, etc, with the grower having to fund the process up-front. The grower is essentially a businessman who owns a piece of land and has to make certain business decisions, just like any other businessman. Once the fruit has been harvested, it is time for it to be sold on to people for whom the fruit is the raw material for their business. This is normally a fruit and vegetable warehouse (either a privately owned company or a co-operative) who then stores, refrigerates, processes, packages and sells the end product.
The system that has been created over the past 20 years means that when the grower sells his produce to the warehouse, there is no real sale as such, one involving any negotiation on the pricing, but simply a handover. The grower delivers his products to the warehouse at a price that will only be set at the end of the season once the warehouse knows precisely what he has received from product sales, less his expenses. In other words, the grower receives a set price. He can’t set the price and he sells his product at a price that is only determined at the end of the season.
Continuing along the supply chain, the warehouse processes the fruit, packages it and sells it on to the importer. For negotiation purposes, the importer often utilises the services of a intermediary agency, a party that receives its orders from the importer and sources the product from the Italian warehouses. These are people that ONLY shuffle papers. They don’t even see the fruit that they are sourcing because it goes directly from the Italian warehouse to the loading platform. In many cases even the importer is little more than yet another agent between the foreign distributor and the Italian agency! The fruit arrives at the loading platform where it is checked, re-processed if necessary and then delivered to the sales outlets. Here too there are often other intermediaries that do nothing other than shuffle papers. At the end of the supply chain, the parties that set the price are the final sellers of the product: in the vast majority of cases these are the members of the Wholesale Distribution Network (the Department Stores) which in Italy include chains such as Coop, Esselunga, Auchan, Conad; in Germany, Lidl, Metro, Edeka, Aldi and Tengelmann; in England, Tesco and Sainsbury. The Department Stores establishes the price, which then cascades back down the supply chain, with each party in the chain getting their share of the income to cover their costs, but in the opposite direction taken by the product in the first place and without any TRANSPARENCY whatsoever. The last two parties are the packaging warehouse and the farm, which should actually be the main role players since they are the original producers! The warehouse receives an average price of 0.60€ for peaches and nectarines, from which they deduct their costs and WHATEVER IS LEFT OVER IS PAID OUT TO THE GROWERS!
The farmers are in a position where they know what it will cost them to produce the goods, but not how much they will receive. Above all, they will receive a price that is SET BY SOMEONE ELSE and one that doesn’t even cover 20% of their production costs. This doesn’t even take into account the fact that the farmer is the one that carries all the risks posed by weather conditions, such as hailstorms, excessive rain, flooding of fields and wind damage. On top of it all, at the time of harvest, the farmer cannot afford to leave the fruit on the trees since he has already incurred 80% of the production costs. I conclude by saying that not even the non-profit and welfare associations are interested in taking the fruit, even though there are entire populations without any food!
Beppe, I ask you please to give us some exposure on your Blog because no one else is willing to say anything about this problem. No articles in any newspapers, no television reports, no radio programmes, no one says anything because agriculture does not qualify as news and, in Italy, AGRICULTURE MEANS NOTHING, even though our industry represents 15% of the Country’s GDP! Thousands of farming enterprises are in difficulty (perhaps the ones that are feeling the effects of the crisis more than any others), people, families that believe in what they are doing, in the fruits of the land, that are “dying”, abandoned by everyone. Not even the politicians are raising a finger to help. All they can talk about are the banks and CONFINDUSTRIA, but as far as they are concerned the farming enterprises don’t even exist, while the local politicians, lost in their bureaucratic quibbles, do absolutely nothing for us. Dear Beppe, we are dying, this kind of agriculture is busy dying out and the fields will soon become like stretches of desert, unkempt land, abandoned, replaced by parking areas and hypermarkets selling fruit that has travelled thousands of kilometres and produced more CO2, products that are polluted, poor quality and produced at low cost, often via the exploitation of manpower that will only make certain people rich. All that will be left for the farmers that have left the land is to go and pack fruit and vegetables on supermarket shelves or direct the traffic in the parking areas that now cover their former fields!
Dear Beppe, I am pleading with you to dedicate some space on your Blog to our industry that is in serious difficulty and forgotten by everyone, so that we don’t also simply give up! Regards." Samuele Bertuzzi