1. The Agrifood Districts in the New Millennium
Local and Global Development
Regional Economic Policies 2016/2017 Prof. Cristina Brasili
The Agrifood Districts in the New Millennium

2. We are going to present an analysis of Agrifood Districts
The characteristics of ID approach and the main structural changes in the new Millennium
The figures of Agrifood Districts and their mosaic style of development
The Internationalisation of Agrifood Districts
The focus on the districts of the meat industry: the ham districts of Parma & Reggio Emilia and S. Daniele. Does still exists the “district effect”?

3. The Development of the ID’s in the New Millennium
According to an ISTAT analysis of 2001 Census data, the new Italian industrial “triangle” had moved towards the North-East and it was now characterised by IDs
In Italy there was a clear positive “district effect” for more than a decade (from the mid 80’s to the end of the 1990’s)
The real question is the specialisation of Italian industry
Many important changes, the globalization effects and the new competitive scenario call into question the rigidity of the Italian ID’s, but some of them have been able to react
Standardised production will have to be abandoned in favour of more flexible management aimed at producing typical and niche products

4. The “New” Food Districts among the “New” ID’s
In the new globalization scenario the Italian food industry has improved its export performance and its importance in employment market (Foresti G. Micelli S., 2007)
In the Italian food districts exports grew from 14,3% in 1991 to 17,6% in (% of total food production), and from 0.6% to 0,9% (% of total exports)
In the non-ID areas the workforce fell by 11,2% (‘91-’96) and rose by 3,4% (’97-’01)
In the agrifood districts the workforce fell by 5,3% (‘91-’96) and rose by 9,2% (‘97-’01)
Important changes in the exports of IDs: the percentage of total exports to non- EU countries increased from 16% in 1995 to 24% in 2005
Different trends have been evident in the agrifood districts: the exports increased most to USA and Canada
Non-standardised products and the Districts where they are produced are less vulnerable to competition

5. Manifacturing Industry Capability of Check the Import Flow
The IDs were also involved in the opening up of production chaines to the international market
Using the provincial data for exports and imports this process can be done a proxy measurement
The index utilised shows the capacity of the Italian firms to check the flow of import from emerging countries

6. manufacturing average
Italian District products
are of greater value than
manufacturing average
The products of the food
Districts were less able to check the flow (’95-’04)
A process of concentration
has taken place in the Italian IDs
The Italian IDs show a good
vitality and capability of reaction to global changes in several sectors of manufacturing industry

7. IDs in Italy by kind of production (ISTAT 2001)
Inside the SLL the presence of the IDs is determined by:
156 ID’s were identified using the census data
Only 7 IDs belong to food industry, the agrifood districts are largely “understimated”: only 4,5% of the total numebr of ID; 1,8% of manufacturing firms; 1,7% of manufacturing industries workers The 7 Agrifood Districts are only in few Northern Italian regions
The presence of many SMEs, in term of number of firms and employees

8. A different methodology
We propose an alternative methodology specifically considers the concentration and specialization of the food industry (and not that of manufacturing industry) at municipal level (and not the local labour system).
It uses six indices
8 main subsectors of the Italian food industry are identified
It attaches more importance to the presence of clusters of firms and agrifood districts, and in particular the meat industry than the ISTAT methodology does

11. Exports of Italian firms by size (number of employees) and sector (2000; 2004; 2007)
Sectors
2000
2004
2007
< 50
50-249
> 250
Total
Manufacturing
24.2
29.4
46.4
22.1
30.1
47.9
20.4
30.5
49.1
Food products and beverages
33.6
34.5
31.9
10.885
28.9
34.6
36.5
12.916
29.8
35.8
34.4
15.392
31.4
27.0
41.5
28.8
27.5
43.6
27.6
28.0
44.3
Source: ICE processing ISTAT data

12. Agrifood Import-Export in Italy (in mln euro) and % over the total (1999-2009)
Import
Export
Import %
Export %
1999
23.034
15.692
11,1%
7,1%
2000
25.068
16.886
9,7%
6,5%
2001
25.922
18.219
9,8%
6,7%
2002
26.054
19.138
10,0%
2003
26.620
18.999
10,1%
7,2%
2004
27.282
19.449
9,6%
6,8%
2005
28.043
20.571
9,1%
6,9%
2006
30.187
22.198
8,6%
2007
31.856
24.141
8,5%
6,6%
2008
33.145
26.241
8,7%
2009
29.969
24.542
8,4%
Var % 2009/2008
-9,58%
-6,47%
Source: ICE/ISTAT 12

13. Italy: % of Agrifood export over the total (1999-2009)
Source: ICE/ISTAT 13

14. Emilia-Romagna: % of Agrifood import & export in mln euro and as % over the total
( )
Import
Export
% import totale
% export totale
1999
3.024
2.524
20,4%
9,7%
2000
3.265
2.679
18,8%
8,9%
2001
3.532
2.820
19,7%
9,0%
2002
3.562
2.898
18,5%
9,1%
2003
3.690
2.870
19,0%
2004
3.819
2.996
18,9%
8,7%
2005
3.679
3.152
16,4%
8,4%
2006
3.936
3.462
15,5%
2007
4.378
3.730
15,1%
8,0%
2008
4.712
4.049
8,5%
2009
4.349
3.863
20,1%
10,6%
Variazione % 2009/2008
-7,69%
-4,61%
Source: ICE/ISTAT 14

15. Emilia-Romagna: % of Agrifood import & export (in mln euro and as %)
Parma: % of Agrifood import & export (in mln euro and as %)
Source: ICE/ISTAT
Source: ICE/ISTAT 15

16. Gross foreign direct investments in the Agrifood system from Italy
Source: Ismea processing of Ice and Uic data
Gross foreign direct investments (FDI) towards Italy in the agrifood system and the total economy
Source: Ismea processing of Ice and Uic data

17. Foreign companies with Italian participation in the agrifood system
Source: Ismea processing of Ice and Uic data

18. Cooperation, aggregation and collaboration of firms in Emilia-Romagna
271 food enterprises from Emilia-Romagna participated in foreign enterprises in 2005
Most collaboration is with other EU countries (119 firms)
Firms that have important investments in foreign countries are capital companies or cooperatives (Unioncamere 2006)
these enterprises had previously developed several forms of collaboration with other firms in the region or from other regions, aimed at investing or collaborating with foreign enterprises
The most common forms of network are consortium, association, or participation in the capital of the companies (Brasili, Fanfani, 2007)
The generalized likelihood-ratio statistic is defined by:
=-2/ln[L(H0)/L(H1)]
where L(H0) is the value of the likelihood function in which the parameter restrictions specified by the null hypothesis H0 are imposed, and L(H1) is the value of the likelihood function for the general frontier model. If H0 is true, then  has approximately chi-square (or mixed chi-square) distribution with degrees of freedom equal to the difference between the parameters estimated under H1 and H
As far as the error specification is concerned, the null hypothesis has been tested for inefficiency in the subsector (=i=0 i=1). Should the hypothesis be accepted, the model could be estimated by using OLS. The result of the LR test exceeds the corresponding value tabulated in Kodde and Palm’s tables

19. Does the “district effect” still exist?
Analysis of the ham districts of Parma & Reggio Emilia and S. Daniele
Does the “district effect” still exist?

20. The Data 110 firms from the ham districts of Parma&Reggio Emilia
The analysis has focused on those firms of the meat sector from 1999 to 2008:
110 firms from the ham districts of Parma&Reggio Emilia
14 other meat firms from the provinces of Parma&Reggio Emilia
30 firms from the ham district of San Daniele
The Parma and San Daniele ham-producing districts have different structural and economic features
System Dynamics and Innovation in Food Networks, Igls/Innsbruck, February 8-12, 2010 –
The Agrifood Districts in the New Millennium by Cristina Brasili and Roberto Fanfani

21. The Parma ham district
In the Parma ham district the pigs are raised in the area and the meat processed here.
Some figures for ham production in Parma in 2008:
about 9.8 million sides of ham produced
2.9% more than 2007
164 firms
4,987 pig farms
turnover about € 1700 million, of which € 1,300 million was in Italy and € 400 million exported
a 2.7% decline in sides sold abroad with respect to 2007
an increase of 6.5% in sales of slices with respect to 2007, with increases of 8.4% and 5.7% abroad

22. The San Daniele ham district
By contrast, The local “San Daniele” system uses all the raw materials coming from outside the municipality
Some figures for San Daniele ham production in 2008:
2,8 million sides of ham produced
2.9% more than 2007;
30 firms
4,818 pigs farms
turnover more than € 330 million
sales 2% higher than in 2007
ham production has increased since 1995

23. The Dynamics of the Main Economic and Financial Indicators in the ham District of Parma, San Daniele and the Other Meat Firms in Parma and Reggio Emilia Provinces
ROS
Source: our processing of AIDA-Bureau Van Dijk data
The estimate of gamma are significantly different from zero both for conventional and organic farms, this implies that the part of variance associated with the inefficiency is an important component in the total variance of the error term.
ROE

24. VERTICAL INTEGRATION CURRENT RATIO c
The Dynamics of the Main Economic and Financial Indicators in the ham District of Parma, San Daniele and the Other Meat Firms in Parma and Reggio Emilia Provinces
VERTICAL INTEGRATION
Source: our processing of AIDA-Bureau Van Dijk data c
CURRENT RATIO

25. The Dynamics of the Main Economic and Financial Indicators in the ham District of Parma, San Daniele and the Other Meat Firms in Parma and Reggio Emilia Provinces
QUICK RATIO
Source: our processing of AIDA-Bureau Van Dijk data
LEVERAGE

26. LABOUR COST PER EMPLOYEE (.000 Euros per employee)
The Dynamics of the Main Economic and Financial Indicators in the ham District of Parma, San Daniele and the Other Meat Firms in Parma and Reggio Emilia Provinces
LABOUR PRODUCTIVITY
(.000 Euros per employee)
Source: our processing of AIDA-Bureau Van Dijk data
LABOUR COST PER EMPLOYEE (.000 Euros per employee)

27. Some questions
Have the “externalities”, namely those economical factors which are to be understood as external to the enterprises but internal to the district, run out?
Has the positive district effect shown in many previous papers, that highlights the higher performance of SME’s than isolated firms disappeared?

28. ......some answers
Important transformation in the economic scenario at national and international level have had different impact on the IDs.
Some of the IDs have shown that they are capable of reacting, have no employment difficulties and are also changing the geographical specialization of the export. These are due also because an important number of agrifood districts have characteristics of quality and typicality.
In the new global scenario of the new Millennium the Italian food industry is increasing its export performance and it importance in the labour market.

29. The previous findings are improved by the main economic and financial results of firms in the Parma and San Daniele ham districts, showing a sort of convergence between the district enterprises and the other meat firms in Parma & Reggio Emilia provinces, even though the results of the economic and financial indicators were still good.
moreover.
The SMEs (with less than 250 employees) in the food industry are still responsible for 65% of exports, against an average of 52% in manufacturing industry.
The different kinds of internationalisation have been characterised by a lower level of FDI in the food industry than in other “made in Italy” sectors of the Italian manufacturing industry
The de-localization of food enterprises has become less important and it have not regarded the production processes.

30. Regional Economic Policies The Agrifood Districts in the New Millennium To study
I distretti industriali del terzo millennio a cura di Fabrizio Guelpa e Stefano Micelli, il Mulino, 2007, Cap. 1 pp e Cap. 7 pp
Brasili C., Fanfani R. (2012) I “nuovi” distretti agroalimentari tra i “nuovi” distretti industriali, pp , In: Metamorfosi del «Modello Emiliano». C’è ancora un futuro per i distretti industriali?, Il Mulino, Bologna