The Italian food supply chain amidst raw material shortages and drought

Introduction

What are the critical issues emerging from the impact of drought and raw material shortages on the Italian food supply chain? What are the opportunities for making the necessary investments to overcome the obstacles that still limit the sector's potential?

The document describes the functioning of the Italian food supply chain, focusing in particular on identifying critical issues arising from shortages of raw materials and increasingly frequent extreme drought events, and on the strategic priorities identified to fully develop the sector from an industry perspective

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The food supply industry is one of the main sectors of the national production system with a turnover of more than €500 billion and almost 4 million employees, equal 17% of the national total.
Italy imports more than 22% of its agricultural products and 49% of its production input comes from abroad. This dependence, which has been growing over the past 20 years, leaves the country exposed to turbulence on international markets.
While 2021 was a record year for exports, totalling more than €50 billion, 2022 is a year of raw material shortages and price rises for energy, agricultural products and fertilisers.
Italy is now being hit by the blockade of exports of certain agricultural products (maize, wheat, sunflower oil, fertilisers) for which Russia and Ukraine are among the main global suppliers.
Added to these difficult conditions, increasingly frequent extreme drought events are significantly compromising crop yields, with cereal crops estimated to fall by 40% in 2022.
These factors have led to the need to identify strategic priorities:
- in the short term, measures to protect national production specialities and ensure security and diversification of supply must be strengthened;
- in the medium to long term, investments are needed in the irrigation system (irrigation plants, reservoirs and desalinators) and in agriculture 4.0 technologies, to make production input use more efficient, including with a focus on reuse.

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