Sustainability and Innovation in Agriculture

Invernizzi AGRI Lab researchers have helped identify appropriate financial solutions to support and develop the primary sector through the analysis of a significant sample of farms, with a focus on sustainability and innovation

The fruitful collaboration between Crédit Agricole Italia and the Invernizzi AGRI Lab at SDA Bocconi School of Management has led to the publication of the book "Agricoltura tra Sostenibilità e Innovazione" (Sustainability and Innovation in Agriculture). The study has provided an updated and detailed report on the economic and financial performance of the sector, filling a gap that has been historically lacking in sources of information and sufficiently extensive samples from Italian farms.

The text is composed of scenarios derived from the contributions of numerous scholars and prominent figures in the agricultural world, such as Paolo de Castro, Angelo Frascarelli, Anselmo Guerrieri Gonzaga, Maurizio Martina and Vittorio Ratto.

It is the first in a series on the performance of farms, which shares the results of research conducted by the Invernizzi AGRI Lab at SDA Bocconi School of Management, directed by Vitaliano Fiorillo, Lecturer in Operations and Technology at SDA Bocconi. The lab's researchers were able to analyze and update data from a sizeable sample of farms – a sample responding to industry segmentation – thanks to a database that Crédit Agricole Italia anonymously made available.

The research results revealed interesting aspects, especially with regards to farm management. For all supply chains, it found that management choices, rather than the size of the area used, are what makes farms robust and sustainable long term. Contrary to expectations, the highest profitability per unit of area farmed is on smaller farms, showing that while larger size means greater turnover, it does not necessarily mean greater profitability as well. Additionally, the size of the turnover, the study states, also has no impact on selling and buying prices. The data essentially show an identical income statement cost structure in the three turnover classes examined. Other important findings concern the impact of CAP subsidies and the solvency of farms.

Regarding this last point, however, the study does not simply provide an overall picture of the industry. The careful work of reconstructing income and equity aspects seeks to be a useful indicator for financial operators, who can count on an additional tool to contextualize the sector in which the companies operate. It has positively shown that our companies manage to meet their contracted credit obligations by covering their financial position in a short time.

“Crédit Agricole Italia has historical experience in the agribusiness sector, a sector of excellence for our country," says Vittorio Ratto, Deputy General Manager of Retail, Private and Digital at Crédit Agricole Italia. "We are confident that our commitment and the tools made available by the digital evolution, such as the AgriAdvisor app for our customers, along with initiatives like this one, made possible thanks to the collaboration with a great university like Bocconi, will allow us to carry out decisive prospective surveys to understand and outline the evolution of companies in the sector in terms of resource optimization and sustainability.”

"Crédit Agricole Italia's database has enabled us to examine what has remained under the radar thus far. The absence of requirements for publishing a financial statement has resulted in most cases in the absence of a financial statement, a fundamental tool not only for farm management, but also for conducting broad-ranging research that can give effective management guidance to the farms themselves," said Vitaliano Fiorillo, Director of the Invernizzi AGRI Lab at SDA Bocconi School of Management.

SDA Bocconi School of Management