2nd LSIRD Conference on Livestock production in the European LFAs, Bray, Ireland. Dec '98


Integrating the multi-objective roles of livestock production activities in a policy for sustainable development: the case of the Italian area of "Carso".

Gianluigi Gallenti(a), Francesco Marangon(b), Roberta Leonarduzzi(c)

(a) Dipartimento di Economia e Tecnica Aziendale, Università degli Studi di Trieste, Italy.
(b) Dipartimento di Scienze Economiche, Università degli Studi di Udine, Italy.
(c) Dipartimento di Scienze della Produzione Animale, Università degli Studi di Udine, Italy.


Summary

The European Union (EU), recognizing the specific needs of rural areas characterized by social, economical and territorial marginalization processes, has been promoting since the seventies an increasingly integrated development policy, implemented through various instruments such as the Less Favoured Areas Directive, Structural Funds programmes, accompanying measures of the CAP and "Agenda 2000" proposals. In spite of the evidence and the general agreement about these situations, there is no common definition either of rural area or of marginalization process: several formulations of these concepts can be found in national and EU laws and in the scientific literature, generally based on socio-economic criteria. But many rural areas, even showing socio-economic marginalization, are not disadvantaged if their natural resources availability, in the broad sense of the term, is taken into consideration: they often have a wide variety of ecological resources, although accompanied by a fragile equilibrium. Therefore EU policies in many cases are not able to ensure effective development measures for these situations. An example of it is the Carso area, near the city of Trieste (north-east of Italy) where Community measures are mainly addressed to sustain secondary and tertiary activities, while the area has some important rural characteristics according to the new roles of EU agriculture, first of all the environmental management. Therefore a local authority, following the agri-environmental policy approach of the EU, proposed an integrated development plan made up of different projects. One of these concerns the preservation of a local landscape, called "Landa Carsica", created by wind erosion and grazing activity, with important aspects for biodiversity, that as a consequence of livestock activity abandonment is disappearing with natural and unmanaged succession of woodland and consequent increasing fire risk and biodiversity reduction. The proposal concerns the re-introduction of a rare breed of sheep ("pecora carsolina") in extensive production systems to preserve "Landa Carsica", reduce fire risk, improve value-added in livestock enterprises, and satisfy the demand of environmental services and of high quality traditional agri-food products.

Theoretical and institutional framework

Rural areas and marginalization: two fuzzy definitions

European rural world, also called rural Europe (involving territories, people and production systems), extends across wide regions, landscapes of natural countryside, farmland, forest, villages, small towns, neighbourhood of urban areas and industrial centres, and includes a diverse and complex economic and social fabric, that consist of farms, small shops and businesses, commerce and services, small and medium-sized industries. They are characterised by a great wealth of natural resources, countryside, habitats, cultural traditions, and regional agricultural systems which, in most cases, have worked for a long time in harmony with local environmental conditions. All these elements constitute nowadays important assets for Europe's natural and cultural heritage and are assuming an increasingly important role for recreational activities.

However, in the last times, rural world has been undergoing a process of radical transformation in which increasing pressures are being placed on an already fragile equilibrium, and that has consequently determined a marginalization of agricultural activity in many areas. These pressures, that are the result of a complex process of evolution of the agricultural sector inside the whole economic, social and environmental system, have not yet come to an end.

In fact, rural societies and areas, as well known, must deal with some correlated problems: the weakening of the economic and social fabric, the reduction of per capita income and gross value added (expressed in purchasing power parities) in agricultural sector, increase in the unemployment rates, abandonment of agricultural activity, depopulation, out-migration of young people from rural areas and the agricultural sector, increase in the average age of the agricultural employees and of the population, reduction in the services which are essential to quality of life, degradation of natural resources.

In spite of the evidence and the general agreement about these problems, there is no common definition either of rural area or of marginalization: several formulations of these concepts can be found in national and European Union (EU) laws and in the scientific literature. The frequent use of terms as rurality, rural area, rural society and the like, is justified by their apparent clarity: they are immediately understood by everybody as something that evokes a physical, social and cultural concept which is a counterpart of urban. But, both in practice and in theory, formulating an unequivocal definition of rurality appears to be an impossible task. So the different EU's Member States have generally developed their own definitions of rural areas, which are often only based on socio-economic criteria (such as agricultural patterns, density of inhabitants per square kilometres or population decline) and are quite heterogeneous and not universally applicable. While at EU level, there is no common definition of this concept, similarly there is not a strict definition of marginalization.

However owing to the lack of a universally accepted definition of what is a marginal agricultural area, it's commonly assumed that a marginal agricultural situation is one which is at the margin of economic viability. In this way the marginalization phenomena could be considered as a process, guided by a set of social, economic, political and environmental factors, in consequence of which certain agricultural areas (in the broad sense of the term, including all primary activities) cease to be viable under an existing natural resources use and socio-economic structure. So, agricultural marginalization can take on a variety of forms, occurring at different scales, ranging from the individual patch of land to sizeable regions, and can involve agricultural areas that are quite different according to their proximity to urban centres, their endowment in natural resources, their historical, cultural and socio-economic development, their social fabric and cultural heritage. Nevertheless they share some common characteristics in their social organisation and economic structure: the main of these is the limited possible use of natural resources (first of all land use). In most cases, these areas, despite strong heterogeneity and wide variation of physical resource endowments, are characterised by poorer quality of productive resources compared to other rural areas, because of different factors as altitude, short growing season, steep slopes, infertile soils and low productivity, remoteness and distance from the main population centres. Marginal areas are mostly concentrated in the less fertile and drier zones, hilly and mountainous areas, but in other cases it's possible to find marginal areas located near urban centres or industrial zones.

These definitions of rural areas and marginalization taking mainly into account, and in some cases only, socio-economic criteria, appear too restrictive to embrace the wide variety of disadvantaged situations. Following these traditional methods some areas can be classified as no-rural areas, because they haven't got any agricultural productive or social characteristics, but rurality results from the linkage between agricultural activity and ecological system. In other cases some rural areas even showing socio-economic problems, are not disadvantaged taking into consideration their natural resources availability, in the broad sense of the term. They have a wide variety of ecological resources, but a fragile equilibrium. Therefore the socio-economic definitions and EU policies are not always be able to ensure effective development measures for these situations.

Sustainable development, agricultural externalities and multi-objective function of livestock farming

The socio-economic marginalization processes are mainly determined by the considerable gap of economic gains between agricultural and non-agricultural activities and between disadvantaged and favoured areas. This diverging trend is also due to the measures of the Common Agricultural Policy (CAP). The prices and guarantees provided through actions and production aids, as well known, stimulated output at a rate increasingly beyond the market's absorption capacity, and consequently determined a marginalization of agriculture in disadvantaged, and less productive, areas and an intensification of agricultural activity in more productive zones, implying social, economic and environmental problems.

In fact, the "Old CAP" was a sectoral policy and not considered that all production systems always interact with their economic, social and ecological environment. Such interaction is, in general terms, more evident in disadvantaged areas that experience a rapid decline and important adverse changes in their economic and social organisation as well as in areas with high natural values. Moreover the primary sector has, by definition, a considerable impact on the state of the ecosystem: the very meaning of agriculture activity is the modification of natural resources for the purpose of producing food, raw material and environmental service through land cultivation and animal breeding.

Beneficially, agriculture has created, over a long period of time, those cultivated landscapes which are today perceived as desirable. In many areas, the historical development of specific agri­ecosystems has contributed to a biodiversity much richer than that present in formerly more monotonous landscapes. There are many environmentally sensitive sites in the EU where the continuation of agriculture is to be welcome from an environmental point of view, as their abandonment to nature would be accompanied by land erosion, soil degradation and a loss of biodiversity. But the diffusion of intensive farming, stimulated by technical progress, food demand and agricultural policies, has led to an environmental stress. The production of food and raw materials is not always environmentally sound and sometimes clashes with the society's desire to preserve natural resources and protect the environment, so contamination of water by pesticides and fertilisers, degradation of the biodiversity agriculture helped to create, the destruction of traditional landscapes can be analyzed as a consequence of competing interests. This dichotomy has unwanted repercussions if a well defined framework of institutional rules and appropriate incentives is not considered. Where environmental problems occur, appropriate policies, based on a proper investigation as to the nature of those problems or shortcomings, are needed to mitigate them.

Inside primary sector, according to the above integrated view, livestock activity can play an important role in the development of marginal areas. Also the new trends of community policies increasingly recognised that traditional husbandry methods have played an essential role in creating and maintaining the characteristic habitats and landscapes of many rural areas, that are, on the one hand valued by all countryside users, and on the other, threatened by intensive agriculture practices. So the policy makers has to find alternative ways to maintain income levels in rural areas in the longer term. In particular in marginal areas (as Less Favoured Areas) there is a strong need for such alternatives to be compatible with sound environmental management, particularly as to maintaining floral and faunal diversity, a traditional or/and attractive landscape, low pollution and the public access to the areas.

Animal production is one of the principal means by which this can be achieved and the role of livestock activity should be examined using a sustainable development model, in the form of a tripartite system: economic, social and ecological. The advantage of this conceptual approach is that it provides an understanding of interactions between livestock activity, the primary sector, the overall economy, the social fabric and resource availability. In this way livestock farming takes a multifunctional role, pursuing a broad range of objectives regarding agri-food production, environmental management, farm income, agricultural employment. Consequently the farm efficiency analysis must take into account the multiple objective function of livestock activity, that embraces both private and public aims, and must adopt effective evaluation criteria, not only including economic parameters, but also social and economic aspects.

The EU action from agricultural policy to rural development policy: the new role of livestock activity.

The EU recognizes the needs above mentioned and promotes a rural development policy, adopting an integrated and multi-sectoral approach, whose main aims can be identified as follows:

To reach these objectives the EU has made use of different instruments such as:

This EU address is remarked in the recent European Commission's proposals on the future framework of the European Union, "Agenda 2000 - For a Stronger and Wider Europe", that includes reform of the CAP and rural policy. The proposals follow the route of shifting payments towards objectives favoured by the public (environment, rural development, socially fragile areas) and linking farmers to these objectives, with a reinforcement of agri-environment measures. That choice points out the intention to progressively change the old sectoral agricultural policy into a rural development policy.

In this situation the development of livestock activity in marginal regions (defined as disadvantage areas, LFAs or others) is necessary to maintain competitiveness with other activities, in particular extensive livestock production is considered as a potential development option. In fact the disappearance of extensive grazing systems is endangering biodiversity within numerous interesting environments, such as damp meadows, marshes, dry short grass, prairies etc. In order to restore and preserve these natural and/or semi-natural environments, it is necessary to ensure the survival of the ancient practices that maintain them. They may also be replaced by alternative practices. In this regard, various bodies responsible for the management of conservation areas have set up experiments to study biotope management techniques using extensive grazing. Through these trials, the conservation bodies have accumulated considerable experience in this field. The particular role of livestock in habitat management will depend upon the ecosystem found in the different regions of Europe and the application of the general principles, combined with appropriate site-specific knowledge, can lead to the development of grazing strategies for different farmed species to meet nature conservation and environmental needs. These strategies do not necessarily conflict with animal production objectives and the maintenance of rural human populations.

Marginal agricultural in Peri-urban situation: the case of the Italian area of "Carso"

General description of the area

The Italian area of "Carso" is a small semi-natural upland located in the neighbourhood of the city of Trieste, between the Adriatic see and the Republic of Slovenia border. The Trieste province has a surface of 212 Km2 and a population of 250,000 people, which means a high average density (about 1,200 people/km2); moreover people is mainly concentrated in the urban centre (Trieste). The local micro-climate can be described as a maritime-Mediterranean type near the cost and as a sub-mountain one on the upland, with diversified temperatures and rainfall, and a strong wind from ENE, called "bora".

This province presents social, demographic, economic and environmental problems with an elderly population, a low percentage of working-age population, high population density and a high percentage of urban population, industrial and economic decline, transport pollution. Therefore the Trieste province has the status of Objective 2 with respect to Structural Funds programmes.

Unlike the industrial and commerce activities of the urban centre, the district around the city of Trieste presents some important rural characteristics. Most part of it lies on a karst plateau with specific climatic, hydrological, geological and edaphic aspects, a wide variety of ecological resources, and several natural and historical endowments. The Carso area is interested by many phenomena catalogued under the name "karst", and also many of their consequent hypogean forms that occur in presence of fissured, mostly calcareous, rocks. So the mainly characteristics are the absence of a superficial hydrographic web, the partial or total loss of soil forms caused by running water, an irregular plateau with steep undulations morphology, the presence of closed depressions, basin shaped, karstic pits, swallow-holes, caves, underground watercourses, karstic springs and lakes. Therefore the more widespread landscape of Carso is one studded with impressively furrowed stony fields and blocks of any size, unevenly eroded in the course of millennia by water working its way in the comparatively soft calcareous stone.

Considering these natural characteristics, the upland of Carso extends over the frontier with Slovenia. At present some narrow but important areas are natural protected areas (at municipality level), moreover there is a plan for the institution of a Natural Park at provincial level (named "Parco Intercomunale del Carso") and a proposal for the institution of an international Natural Park across the italian-slovenian frontier ("Parco Internazionale del Carso"). Moreover in the coastal zone of the province there is a Marine Reserve ("Riserva Marina di Miramare"): a protected areas in which, in general, natural resource use (fishing, swimming, etc…) in not permitted. These measures and future projects are a reflection a double aspect: from one hand there is a high demand of environmental services and from the other hand there is the conviction that the a formal protective status is necessary to preserve these areas. That points out (1) the so called market failure and the importance of the public role in natural resource management, and (2) the important role agriculture in the environmental management.

In this area different habitats are present such as woodland, pinewood, scrub, underbrush, and a local type of heathland, called Landa Carsica.

The "Landa Carsica"

One of the most important habitats of Carso upland is the "Landa Carsica". In the last century deforestation has turned some areas of Carso into a healthland swept by the strong wind from ENE, called "bora", where only few plants can endure the summer dryness. The natural evolution of this habitats is the transformation into a bush and then a woodland, but the traditional grazing activity (above all sheep, but also cows and horses) managed the landscape, stabilising the vegetation status, and therefore this landscape represents a situation of transition from the grassland to the forest.

This habitat even in its degradation is one of the most representative aspects of Carso with a high biodiversity and landscape value (plants, flowers and insects variety). The more widespread plant species are: Centaurea cristata Barti, lris illyrica Tomm., Potentilla tommasiniana F.W. Schultz, Gentiana tergestina (Beck) Fritsch, Jurinea mollis Rchb., Onosma Javorkoe Simk., and the Carex humilis Leys. that together the Centaurea rupestris L. has created the local grassland called Carici-Centaureetum rupestris. The animal species living in Landa Carsica are Greek partridge (Alectoris graeca), hare (Lepus europeus), partridge (Perdix perdix) woodcock (Scolopax rusticola).

Note that some Landa Carsica areas, on Monte Stena, are included in the "Val Rosandra" Natural Park, a protected area (434 hectares) created 1984, located in the south-est part of Trieste province.

The rurality of Carso.

Agriculture in this area is an activity which adopts traditional production systems and shows the features of: (a) agriculture of marginal areas (limited possible land uses because of steep slopes, infertile soil, low productivity); (b) suburban agriculture (high demand of environmental services and traditional products, local markets, increasing demand of non-agricultural land uses); (c) agriculture in areas with environmental conservation problems.

The extent of agri-forest area is about 16,000 hectares and the extent of utilised agricultural area is only about 7,000 hectares. During the last thirty years agriculture lost a relevant shares of land owned to no-agricultural productive use (roads, factories, infrastructures) and to building trade for new residential zones in the "green area" of Carso. This land use evolution is caused by the local development policies which considered agriculture as a marginal activity and therefore the town-planning and territory-planning schemes permitted this reduction.

There are about 1,700 small-sized farms, with an average farm area of 4 hectares, most of them subdivided into separate small parcels, as a chessboard. In this situation the mechanisation of agricultural activities is very difficult to reach. Almost all are managed by the land owner and his family. Pluriactivity is also another feature of this entity, being usually a mixture activity: livestock, crop and tree production activities and, above all, work in industry or services. The most important agricultural products are: milk, vine (D.O.C.), vegetables, olive, honey. The primary sector accounted less than 1% of the total gross value added at factor cost.

Moreover in this area a Slovenian-speaking ethnic community lives with an important cultural identity and rural tradition, and a typical aspect concerns a local sort of agri-tourism, called "osmize", a word derived form Slovenian "osem" (eight), reminding at the permits allowed since the eighteen century, to freely sell wine and other home-made or small farm products for no longer than eight days each year.

But the Carso upland is characterized by the high natural and landscape value and the recreational use by local people and tourists, nevertheless only a part of the Carso area is included in the Less Favoured Areas zone by the national legislation that implemented the Directive (EEC) 268/75. But it's important to remark that all area Carso and particularly some areas with environmentally sensitive conditions, as "Landa Carsica", shows a clearly multiple-use of natural resources.

The case study: A sheep breeding project for landscape management

Description of the project

Because of its rural and ecological characteristics the Carso area needs a particular economic, environmental and social policy different from the policies considered in the Objective n. 2 of EU's Structural Founds programmes. So a local authority (Provincia di Trieste) proposed, in 1997, an agri-forestry development plan made up of different projects: one of these concerns the preservation of "Landa Carsica" and the development of other livestock activities with positive environmental externalities.

At present, as a consequence of livestock activity abandonment, "Landa Carsica" is disappearing with natural and unmanaged succession of woodland and consequently increasing fire risk and biodiversity reduction. Fires slows down the transformation process of "Landa Carsica" into wood and bush land, but at the same time determines a deterioration of vegetation. The livestock cattle systems changed in last thirty years: the tradition livestock management using natural grassland and extensive or semi-extensive grazing have been replaced by intensive production system using market feeds (instead of farm feeds). In any case the Carso area is characterised by low incidence of livestock activity in general and the sheep are at present less then 100 heads.

The project, following the agri-environmental policy approach of the EU, integrates the multiple objective roles of livestock production activities, and it is been developed in a multicriteria and multidisciplinary framework, taking into account ecological, zootechnical, productive, financial and social issues and pursuing the following objectives: fire risk prevention, farm income support, landscape and biodiversity preservation, traditional agri-food products quality improvement, employment rate increase, cultural identity conservation (Figure 1)

Farm incomes can derive from private income and public subsidies: the former concerns milk, cheese and meat production and the later regards regional, national and community supports. The actions concern a sheep breeding aids and (financial support), and a marketing action.

Figure 1 - The multi-objective roles of Sheep livestock activity

SHEEP LIVESTOCK

Objectives

Sheep breeding

Grazing

Milk, cheese and meat production

Farm work

Biodiversity

+
("pecora carsolina"
preservation)

+
(flora and fauna preservation)

+
(variety traditional agri-food products)

Landscape

+
(variety landscape with animal)

+
("Landa Carsica" preservation)

Rural incomes

+
(indirect increase - sheep supplier)

+
(indirect increase - feeds supplier)

+
(milk, cheese and meat sale )

+
(farm incomes)

Employment

+
(indirect increase - sheep supplier)

+
(indirect increase - feeds supplier)

+
(milking, cheese and meat production, and others agri-food chain activities)

+
(farm and extra-farm work)

Quality of life

+
(environmental improvement)

+
(environmental improvement)

+
(improvement of quantity and quality of agri-food products)

+
(cultural and rural identity)

Livestock characteristics

It consists in the re-introduction of a local rare breed of sheep ("pecora carsolina", also called "pecora istriana"), for which Regione Autonoma Friuli-Venezia Giulia (regional authority at NUTS 2 level) provides a financial support, inside the zonal programmes implementing the agri-environmental accompanying measures (Reg. (EEC) 2078/92) of the New CAP. This breed of sheep is at present in danger of extinction, but in the past it was widespread animal not only in the Carso area, but also in the near area of Istria (a territory now included in the Republics of Slovenia and Croatia). The characteristics of this animal seem very suited for an area with many environmental constraints: steep undulations morphology, scarcity of water, summer dryness, poorness of grass. The "pecora carsolina" is also included in the official list of Italian breads, compiled by AIMA (Azienda Italiana di intervento sui Mercati Agricoli), a national authority that works in agricultural sector, mainly for the application of CAP measures in Italy.

Land availability

Land availability varies from 19 to 107 hectares according to different geographical locations and the planning of the local Forestry authority (Ispettorato provinciale delle Foreste): these zones includes healthland, woodland and healt/wood land (lands in transition state). Therefore the grazing system must be a multi-use system, the best solution for the management of possible mix systems (silvopastoral, agropastoral, agrosilvopastoral) in the Carso area; the silvopastoral system appears to be the more flexible solution. This solution is similar to the dehehas in Spain.

Some relevant shares of the agricultural area of Carso, and also of the land considered in this project, are common property areas or public (regional) areas.

Sheep cattle system

As far as possible, animals use grass production by grazing. The vegetation and climatic characteristics in Carso area are of the Mediterranean type with discontinuous grass production available for 7-8 months and with two production picks in winter-spring and autumn, and a lack of pasture during the summer months. In this period for sheep feeding three choice are possible: (1) to use feeds purchasable on the market; (2) to use grass production of other Carso areas; (3) to move sheep from "Landa Carsica" to upland of mountain areas. So two periods of grazing can clearly be noticed: the grazing on the Carso upland and the movement to the mountain pastures (transhumance) with a complementary use of valley-mountain resources. The balance between the intensity of hill and upland grazing and the conservation value of livestock farming has been acknowledged for sometime. It is also possible to use some concentrates mainly during the last part of the pregnancy and during the whole milking period.

Note that, in general, vegetal productions of Carso area can be considered as being quite limited and not intensive and therefore the expenses and utilization of chemical fertilizers does not involve any environmental risk. Moreover, as the characteristics of the lands (sloping lands, small size) somehow interfere with the use of agricultural machinery, the use of chemical N, considering all kind of prairies, is negligible. This low environmental impact ensure a good quality of grass and above all of feed produced in Carso area. This breed of sheep produce a lamb in winter that is slaughtered in spring, while the milk production concern spring and summer months. Sheep remain at the farm during the lactation period and they are fed using no-farm feeds.

Livestock production

This type of livestock can provide different sources of income for the farmer: milk, cheese and meat. The sheep-milk can be sold or used for the production of a cheese with typical characteristics and high-quality. To improve the livestock value-added all milk production is transformed into cheese. This breed of sheep produce a lamb, sold at 30-40 days age with a liveweight of 12-18 Kg in spring, during the Easter-time when the demand is very high because there is a traditional consume of this meat for the feast. The lamb meat can be sold to local restaurant, agri-tourist structures and some shops in the urban centre or in other cities in specialized shops in typical products.

Environmental interaction

This type of livestock can interact in a positive way with "Landa Carsica" landscape and with the ecological system if the grazing system avoids the overgrazing.

The Reg. (EEC) 2078/92, in the Regione Autonoma Friuli-Venezia Giulia, with the objectives to encourage the extensification of production methods and to preserve the landscape and the ecosystem, fixed a maximum stocking rate per hectare linked with compensatory payments. This threshold is equal to 9,3 livestock unit (sheep head) per hectare. Taking into account this constraint, the goal of land management and the natural resources situation in the availability areas, the project considers a target of about 3-4 sheep per hectare.

Market policies

In certain cases, the quality of an area is identified by a mark, i.e. the "D.O.C." (see note n.6). In the case of areas with high ecological and landscape value, the mark links the goods produced in these areas with the fundamental values of the area, i.e. the "regional", "natural", "authentic" and "non-industrial" characteristics, so that these products seem to incorporate the ecological and landscape characteristics of the area. Therefore it's possible to link products strongly to their origin and the quality of the area. As far as animal husbandry is concerned, the marked products incorporate the concept of open space management. The market strategy can be a successful only if the area is well known to the consumer and he knows and appreciates its characteristics: as for example in the case of a natural park.

But it is necessary to ensure the intrinsic quality of the products resulting from the sheep breeding, such as cheese and meat, by not only the consumer but also by all the actors in the agri-food chain (filière): slaughter-house, butcher, restaurant, agri-tourism, shop.

In parallel, testing the concept of associating a consumable good (meat and cheese) with landscape, appears as a useful opportunity, especially nowadays, when consumers are placing a higher importance on the origin and the quality of the products which they buy and consume. About this problem most of the local people usually appreciate some landscape like woodland, pinewood above all, and do not know and appreciate other ones like "Landa Carsica", therefore it becomes very important to create a more appropriate knowledge of this landscape.

Above all, it's necessary to give a widespread support to this operation. The written consumers' appreciation can be expressed within the framework of a questionnaire given to them after the meal. The association of two concepts - produce quality and landscape - is sufficiently deep to permit the prediction that in the future, a large proportion of consumers will not be indifferent to the idea that such products contribute to a pleasurable lifestyle, and in addition guarantee a quality product and a landscape preservation.

Incomes and costs of farming - public financial support

The project proposes a pilot farm of a sheep breeding: this uses 68 hectares ("Landa Carsica" and woodland) for sheep grazing and therefore consider a semi-extensive livestock with a cattle of about 200 heads, of whom 180-190 ewes and among them about 80% in reproduction age. Some 85-95% of these last ewes produce a lamb; the twin birth can vary from 0% to 10%, and the death rate of lambs can vary from 5% to 20%. Therefore lamb production can vary from 80 to 108 heads, which have a liveweight from 12 to 15 Kg at the sell-time. The milk production per ewe varies from 60 to 80 Kg.

The costs concern the building of stable and of a little cheese factory, and the sheep purchase (Table 1); then there are annual costs that concern no­farm feeds, veterinary expenses, extra-farm labour costs, and others (Table 2).

Table 1 - Fixed costs of the sheep cattle.

Fixed Costs ("una tantum")

Lire

A Stable building 135,000,000
B Milking facilities 120,000,000
C Cheese factory - building 50,000,000
D Cheese factory - equipment 64,000,000
E Fence facilities 10,000,000
F TOTAL-I (from A to E) 379,000,000
G Sheep purchase (L.250,000 per head) 50,000,000
H TOTAL-II (F+G) 429,000,000

Table 2 -Annual cost of the sheep cattle.

Annual Cost

Lire

Cheese production 3,200,000
Veterinary, medicine and others 2,000,000
TOTAL I (without extra-farm work) 5,200,000
Labour (extra-farm work) 38,400,000
TOTAL II (with extra-farm work) 43,600,000

Incomes include market incomes and public supports through compensation payments or other financial supports. The former regard cheese and meat selling. In the following analysis we have considered a "worst case" (with the less favourable values), a "best case" (with the more favourable values) and an "average case" (the average of the two extreme cases) (Table 3).

Table 3 - Structure, production and incomes of the sheep cattle.

VOICE

Unit of Measure

Worst case

Best case

Average case

Number of sheep

heads

200 200 200
Productive ewes

heads

121 153 137
Lambs

heads

103 135 122
Lamb price

Lire/head

90,000 130,000 110,000
Lamb income

Lire

9,265,000 17,550,000 13,680,000
Cheese production

Kg

1,600 2,490 1,990
Cheese price

Lire/Kg

10,000 14,000 12,000
Cheese income

Lire

16,030,000 34,820,000 24,460,000
TOTAL INCOME

Lire

25,300,000 52,370,000 38,140,000

Public support includes: a financial support for stable, milking and cheese facility; a payment per head, from AIMA and from EU, for rare breed of sheep; a payment per year for grassland conservation (Reg. (EEC) 2078/92) (Table 4)

Table 4 - Public support

PUBLIC SUPPORT

Lire

Financial support for stable, milking and cheese facility ("una tantum") 76,250,000
Sheep purchase support
(L. 100,000 per head, "una tantum")
20,000,000
Reg. (EEC) 2078/92:
Support for rare breed (200 head per year) 317,930,000
Grassland conservation
(68 hectars, per year)
16,210,000
MAXIMUM COMPENSATION PAYMENT PER FARM 59,580,000

Economic evaluation

To evaluate this project we calculate, first of all, the annual quotas of capital depreciation and replacement costs (Table 5). Then we calculate the gross margin in the three situations, "worst", "best" and "average", with and without public support.

Table 5 - Annual quota (capital depreciation/replacement) of fixed costs.

FIXED COSTS

%

Depreciation quota
(replacement cost)
without public support

Depreciation quota
(replacement cost)
with public support

Quota
(Lire)

Quota
(Lire)

Stable building

4

5,400,000
Milking facilities

12

14,400,000
Cheese factory - building

5

2,500,000
Cheese factory - equipment

12

7,680,000
Fence facilities

15

1,500,000
TOTAL-I 31,480,000 25,150,000
Sheep purchase

15

7,500,000 4,500,000
TOTAL-II 38,980,000 29,650,000

Table 6 - Gross margin analysis - without public support

Gross margin (Lire)

Worst case

Best case

Average case

A Income 19,000,000 68,690,000 43,850,000
B Annual cost 7,000,000 7,000,000 7,000,000
C Gross margin I (A-B) 12,000,000 61,890,000 36,850,000
D Quota (Total I - table 5) 31,480,000 31,480,000 31,480,000
E Gross margin II (C-D) - 19,480,000 - 30,210,000 - 5,370,000
F Quota (Total II - table 5) 7,500,000 7,500,000 7,500,000
G Gross margin III (E-F) - 26,980,000 22,710,000 - 2,130,000
H Labour cost 38,000,000 38,000,000 38,000,000
I Gross margin IV (G-H) - 64,980,000 - 15,290,000 - 40,130,000

Table 7 - Gross margin analysis - with public support

Gross margin (Lire)

Worst case

Best case

Average case

A1 Income 19,000,000 68,690,000 43,850,000
A2 Compensation payment 59,590,000 59,590,000 59,590,000
A Total Income (A1+A2) 78,590,000 128,280,000 103,440,000
B Annual cost 7,000,000 7,000,000 7,000,000
C Gross margin I (A-B) 71,590,000 121,280,000 96,440,000
D Quota (Total I - table 5) 25,150,000 25,150,000 25,150,000
E Gross margin II (C-D) 46,440,000 96,130,000 71,290,000
F Quota (Total II - table 5) 4,500,000 4,500,000 4,500,000
G Gross margin III (E-F) 67,090,000 116,780,000 91,940,000
H Labour cost 38,000,000 38,000,000 38,000,000
I Gross margin IV (G-H) 29,090,000 78,780,000 53,940,000

Without public support (Table 6) the gross margins, taking into account annual costs and incomes, are positive in any case with 36,850,000 lire in the "average" case, but the economic result becomes always negative if we calculate the annual quotas. With public support (Table 7) the gross margins are positive in any case. Note that compensation payments, in the "average" case, are greater than market income. Therefore the annual gross margin permits to have a viable farm, but it's necessary that the public authority supports the project to cover the capital expenses. Another important public action concerns the marketing policy and the agri-food chain (filière) policy; these to increase the value-added of the activity. Moreover the farm management should be without extra-farm work because of the very high cost for this factor (38,000,000), while if the farmer works in the firm this amount becomes a part of his gross margin. The work need (1,600 hours per year) permits to have a part-time farm with pluriactivity, i.e. agri-tourist activity or others, with income integration.

At present we have no complete economic evaluation of the ecological and natural aspects of this project, but the annual public support is equal to 59,590,000, in an area with a high demand of environmental services, above all for recreational activities. The most appropriate valuation technique appears to be the Contingent Evaluation Method (CEM) that estimates the "willingness to pay" for the environmental benefits in a direct way. A real estimate being lacking, we can suppose that different percentages, from 100% to 0.5%, of the local people pay the costs of this project, so we can calculate the per capita average costs (Table 8).

Table 8- Hypothetical pro-capita average costs of the project

People

Pro-capita expenditure

250,000 238
225,000 265
200,000 298
175,000 341
150,000 397
125,000 477
100,000 596
75,000 795
50,000 1,192
25,000 2,384
12,500 4,767
6,250 9,534
2,500 23,836
1,250 47,672

Note that the pro-capita expenditure varies from 238 Lire (100% of the population) to 47,672 Lire (0,5% of the population). If we consider about 5,000-6,000 people the per-capita cost is equal to about 10,000 that at first sight seems a low level, and therefore the annual cost of this project appears probably justified. Considering also the annual quota the public support increases of about a 50%, but the total value of the last table remains low. But we must take into account that this is only a single project and not a complete environmental plan, i.e. for the whole Carso area preservation. Therefore it's necessary to evaluate the effective willingness to pay, considering also other similar options and their cost, and then compare the result with this simulation and with the real cost of the project.

Conclusions

The Carso area is a typical example of a multiple use management area, where the agriculture activities have the double roles of physical goods, agri-food and row material, production and above all environmental services supply. The last is assuming an increasing importance according to the general aims of improvement of quality of live and of social welfare. In this context the livestock activity can assume a central function.

The special development plan proposal by Provincia di Trieste includes a project in which different goals are integrated: preservation of "Landa Carsica", biodiversity conservation, farm income support, and the livestock of the "pecora carsolina", a rare breed of sheep, can pursue these objectives without trade-off effects among these.

The project shows some positive aspects: first of all a multiple objective framework that reflects a sustainable approach embracing economic, social and environmental elements. Then the "bottom up" approach according to the most recent address of EU policy.

The negative aspect and the weakness of the project concern the risk that it remains a public project without breeders' participation. In general, today, it is extremely difficult to persuade young people to practice livestock farming in marginal areas where there is no social life, but this, because of the semi-urban situation of agricultural activity in Carso area, is not a problem. The real problem is to change the preference for other agricultural productions such as wine and vegetables productions and promote a new type of activity: the re-introduction of a traditional activity with new objectives.

Moreover this activity has a public interest, but it remains an entrepreneurial activity with the connected element of risk. So a farm must pursue value-added objectives and not only survive thanks to public support. Therefore it's necessary that this activity has entrepreneurial characteristics, otherwise there is the risk that this activity will become a public activity or it will be abandoned, if the public support should decrease. Note that the public support seems justified by the high demand of environmental services.

Finally it's necessary to remark that the definition of Less Favoured Areas in Italy damaged the Carso area and a recent proposal to change these areas does not improve this situation, because it continues to adopt physical criteria, such as the average slope and altitude of the areas, that reflect productive limitations. While environmental criteria are excluded once again and therefore no sustainable approach is really considered.


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