Pavia, a district with traction from agriculture

Recent years of hardship for the Pavia industries has led to a strengthening of the tertiary sector in the economy of the province. Growth in agriculture has been led by rice crops and the production of fine wines. In this setting agricultural mechanization manufacturers have been playing a key role though their sales are more substantial on foreign markets

The 2012 harvest of grapes for the production of DOP wines, with Protected Designation of Origin, in the Province of Pavia came to 50% of the total for the entire Lombardy Region and more than 3,000 firms specializing in winemaking account for 42% of the agricultural enterprises around Pavia, home of one of the oldest wine producing regions in the world. These producers are located mainly in the Oltrepò Pavese, Pavia across the Po, and turn out one-third of Italy's certified wines to make of the district a point of reference for excellent quality wines. Other than claiming more than half the region's land area under vineyards, 13,000 hectares of USA (usable agricultural areas) out of a total of 23,000 hectares, the province can vaunt some of the world's most important cultivations of Pinot Noir grapes and the production of quality sprakling wines. Estimates made public by the Oltrepò Pavese District of Quality Wines put annual production at 12 million bottles. Moreover, the wines of the province now identified by the Oltrepò Pavese denomination, Bonarda, Buttafuoco, Casteggio and Sangue di Giuda, were consumed by the ancients as is known through the writings of the ancient Roman author and philosopher Pliny the Elder (AD 23 – AD 79). Even earlier, around 40 BC, Greek geographer and historian Strabone (64/63 BC – AD 24) wrote of the Oltrepò Pavese as producing “good wine, hospitable people and very big wooden barrels.” Viticulture is not, however, the only sector which can claim front rank status in the Pavia district also standing at the top for rice production, for the varieties cultivated as well as land committed to this crop. A National Rice Agency estimate picked up in the 2012 Report on the Provincial Economy issued by the Pavia Chamber of Commerce disclosed that 1,925 producers had slightly less than 100,000 hectares under rice crops compared to two other Italian provinces which rank as major producers, 85,000 hectares around Vercelli and 34,000 for Novara. Province of Pavia leadership becomes even more evident in consideration of the fact that 40% of all rice cultivations are located here. This ranking was recognized in February this year with the formation of the Lombardy District Rice and Risotti Rice Production Chain with the Pavia Chamber of Commerce leading the way. The founding acts of this institution were undersigned by producers and the representatives of the rice industries in the provinces of Pavia, Milan, Lodi and Mantua. Aside from the other major specialized cultivations, which include chopped and kernal maize, cereals, barley, soya and forage, the primary sector is showing signs of great vitality. In 2011, farming around Pavia accounted for 2.9% of the formation of provincial value added, compared to 0.9% for 2010, a 2% national average and 1.1% regional average. In the Lombardy region, the agriculture of the province comes in fourth for value added, 311 million euro in 2009, and value of production, 660 million euro in 2011, and takes first place for agricultural land area with more than 176,000 hectares under crops in 2010. But there are two more datum testifying to the recovery of farming in the Province of Pavia. The first is the trend of employment in agriculture which climbed from 2011 to 2012 by a healthy 8.8% to lead the way in this macro-sector; the second results from a census of agritourism – statistics which gauge the development of multifunctional farming activities in the province – which disclosed 214 facilities at work in the province in 2011 behind only the Province of Brescia with 290 agritourism farms.

 

Industry losing ground: outdated manufacturing and infrastructure

The vitality witnessed in agriculture is not matched however by the industrial sector in the province where the closure of the Merck Sharp & Dome pharmaceutical multinational expected for 14 December this year is coming as a litmus test for the structural problems manufacturing is experiencing following the blow taken in 2012 with a 5% decline in sales and orders. Moreover, a similar setback for Pavia manufacturing came not that long ago when the illustrious sewing machine manufacturer Nicchi Spa shut down its Pavia plant and abandoned the area. In this case the closure of this world famous brand name was made even more bitter by the shock of the failure followed by lengthy litigation in the courts. With the storm put in the past, the Necchi brand returned to life with the acquisition in 2006 by Alpian Italia Spa which then opened shop in Stradella, a community with a population of 11,000 only twenty kilometers from the provincial capital. Other than revitalizing Necchi's original core business, Alpian Italian Spa diversified production to small electrical appliances, vacuum cleaners, irons and the like, medical equipment and gardening equipment, including wireless trimmers, brush cutters and mowers. Another industrial sector in distress in the Province of Pavia is long established  footwear manufacturing in and around Vigevano which counted 667 enterprises in 2011. Aside from making footwear, many of these companies are at work manufacturing tanning machinery and equipment and the production of leather goods. The National Observatory of Italian Districts has reported that, “The Vigevano footwear district has been subjected to a downsizing process over the past ten years due mainly to two factors: one linked to the market and the other to the competitiveness of prices of products of inferior quality.” Not faring any better is the construction industry which has shed 2,500 jobs over the last four years and seen the closure of 500 enterprises. In 2012 alone 282 companies in manufacturing and construction went out of business. In this connection, Alberto Cazzani, the president of the Confindustria in Pavia, the local office of the National Manufacturers Confederation, has spoken explicitly of the de-industrialization of the province's production fabric, a process favored by fragmentation and the small scale of local companies. The plight of these industries has become more evident with the growth of the tertiary sector in the Pavia economy as indicated by data on value added in the province in the two year period 2010-2011. While services held out at 69.5% and 69.6%, the industrial sector slipped by 1% to the advantage of the primary sector.  

 

Agricultural machinery: exports doing well but registrations still falling

In the midst of problems for manufacturers, penalized considerable by the slump of the domestic market, there are positive signals and most of them are arriving from the trend of exports which disclosed gains of 10% since 2011 to reach the threshold of four billion euro. This figure shows the substantial recovery of ground lost over these past four years. In Lombardy, only the Province of Lodi did better in the comparison of 2012 and 2011. Especially on the defense was the sector of chemicals/rubber/plastic which, in pharmaceutical production, accounted for 19% Pavia's exports to become the province's cutting edge, followed by mechanical engineering and electronics with mechanics ahead thanks to exports valued at more than one billion euro in 2012. Leading the way in the mechanical engineering sector was tanning machinery followed by machine tools and agricultural machinery with exports which stabilized at around 18 million euro in 2011 and 2012. Involved in these categories are 24 companies. Less positive are the data on the trend of the agricultural machinery market in the province. FederUnacoma statistics for the period 2008-2013 show a generalized 22% plunge in registrations from 424 units sold to 329 in line with the trend for the period reported for the rest of Italy. An exception came in 2013 when the 15.5% dive taken the previous year was reversed with a gain of 4.4%. This recovery, through not great, was a reflection of 8.9% growth for the Lombardy Region and ran counter to national conditions in 2013 when sales fell 1.7%. Already back in 2011 the Pavia district made a bid to reverse course with a slight increase in agricultural machinery demand but this was seen to be temporary and was followed by an acute crisis phase and the deterioration of the fundamental macroeconomic picture of the entire district. The general economic scene looks to be conditioning the specfic sector of agricultural mechanization also in 2014, in the province as well as nationally, especially as regards the domestic component in overall agricultural machinery demand which is expected to remain depressed.