The BSE crisis that has hit the Italian beef industry in early 2001 is damaging numerous businesses and having effects on employment. Farming industry associations have mobilised in an attempt to force the government to introduce measures to contain the damage and to introduce structural reforms of the sector. Trade unions have also expressed concern and proposed measures to address the crisis.
The bovine spongiform encephalitis (BSE) emergency affecting cattle is having a profound impact not only on health concerns but also on the economy and industrial relations in Italy. The crisis exploded in November 2000, following the alarm raised by the discovery that some French cattle were infected with so-called "mad cow disease". The Italian government promptly introduced a number of health measures, for example an embargo on the importing of cattle aged over 18 months and of beef-on-the-bone from France. Moreover, controls were increased on both cattle farms and abattoirs and on imported beef. The alarm increased further in January 2001, which the first case of a cow infected with BSE was discovered at a farm in northern Italy.
Beef sales have slumped as a consequence. According to some estimates (quoted in the il Sole 24 Ore newspaper on 6 February 2001), in January 2001 meat consumption fell by 20.3% on the previous year, and beef products were particularly hard-hit (with consumption down about 64%). This has pushed beef prices down and raised those of other kinds of meat.
Both the employers' associations and the trade unions are extremely worried about the consequences of the BSE crisis for employment. In fact, the entire meat products sector is at risk, including cattle-feed producers, farmers, slaughterhouses, and meat processing and distribution companies. According to estimates by Federcarni, a butchers' trade association, around 70,000 jobs are in jeopardy (although the figure should be treated with a certain amount of reserve), which is equivalent to around 10% of employment in the meat sector (quoted in Rassegna sindacale on 24 February 2001). Also cause for concern is the decision by Gruppo Cremonini, one of the leading Italian firms in the beef products sector, to lay off 90 workers (out of a total of 120) employed in a plant producing hamburgers. According to the unions, workers in small firms doing subcontracted work for large companies are most at risk of being hit by meat sector job losses.
How to deal with the crisis?
In view of the damaging effects of the BSE panic on the economy, the government, employers' associations and trade unions are examining ways to deal with the situation. There are two crucial issues at the economic level:
- how to deal in the short term with the crisis affecting numerous businesses in the sector. In the case of farmers in particular, the damage is due to factors such as the fall in beef prices, the costs caused by delays in slaughtering and the costs of disposing of carcasses. Moreover, although so far only one case of BSE has been confirmed, the problem is how to handle the crisis that may hit those beef farms found to be infected. The farm at which the infected cow was discovered has been closed and its entire herd killed; and
- how to relaunch the cattle-raising sector.
Coldiretti, one of the largest employers' associations in the sector, has made a number of proposals. It believes that it is necessary to guarantee the safety of foodstuffs, restore consumer confidence, and revive the sector, and that this requires the introduction of structural measures. The association's proposals, announced on 25 January 2001, consisted of three main points:
- the creation of a special fund financed by the European Union, the state and the regional administrations to cover the costs and damage caused by the culling of beef herds and to finance projects for business development (for example, the introduction of certification systems or investments to improve structures). Also proposed are forms of easy credit;
- the introduction of measures to guarantee food safety (for example, closer controls and the identification and elimination of materials "at risk"); and
- the adoption of measures to ensure transparency for consumers (for example, forms of certification and product labelling and a communication campaign).
To back its proposals, Coldiretti has organised demonstrations by farmers, both nationwide and in the main Italian cities. Controversy was caused by a demonstration organised at the end of January outside the parliament building in Rome, when a group of demonstrators throwing eggs and oranges blocked the entrance to the Chamber of Deputies. Other spontaneous protests have broken out mainly in the north of Italy, with roads being blocked by demonstrators.
Criticisms have been made of the Coldiretti proposals by Flai, the federation of food industry workers affiliated to the Cgil trade union confederation. According to Flai-Cgil, although support must be provided for the incomes of producers and workers in the sector, throwing money at the problem is not the solution. What are required instead are structural measures. Moreover, the BSE emergency testifies to the difficulties of the sector which arise from its marked fragmentation and deregulation: for example, quality marks should be promoted, and subcontracting should be combated, because it has led to unlawful practices.
On 7 February 2001, the Italian government approved a decree-law which allocates ITL 300 billion (on top of the ITL 600 billion formerly allocated) to cope with the BSE emergency. Moreover, compensation will be paid to beef farms on which suspected cases of infection have been discovered. Tax relief will also be made available.
Commentary
The crisis that has hit the Italian beef industry following the BSE emergency has highlighted that a lack of safety and health protection may have damaging economic consequences.
The protection of general interests (the health of consumers) should be combined with the protection of particular ones (in this case, those of companies and workers in the meat products sector). However, given that such a crucial matter as health is at stake, compromises are entirely out of the question. This prompts reflection on the broader issue of models of development. In Italy, the agricultural sector has traditionally been closely protected and highly subsidised. Today, the situation is very different: agriculture is displaying an increasing tendency towards industrialisation, and it is highly vulnerable to international competition, especially as regards costs. The protection traditionally afforded to the sector no longer seems sufficient: the impact of the market has induced numerous farming businesses to look for "short-cuts" to reduce costs. However, in a sector as crucial as food, this may be extremely damaging if the health and safety of consumers is threatened.
As far as the representation of interests is concerned, the mobilisation of the employers' associations in the sector is not surprising. They have acted as pressure groups vis-à-vis the government, resorting to outright conflict in view of the gravity of the crisis. By contrast, the BSE emergency has confirmed the weakness, at least in Italy, of consumer defence associations. (Marco Trentini)