Delays in European funding

Friday, 1. June 2018 - 11:30

Silvana Ballotta CEO of Business Strategies

The future of Italy’s EU funding is quivering.  Delays in its release because of a lack of organisation in local government, not to mention the ongoing election crisis is making life difficult for producers and wine grower consortiums to programme their funding with advance planning.  

For a start, the request for Italian EU funding under the COM (Common Organisation of Agricutlural Markets) was not submitted until 3rd November 2017. This delay was apparently caused by some regions running late. This added to the delay already caused by the agency for expenditures in agriculture, the AGEA (Agenzia per le Erogazioni in Agricoltura). Before it can sign any contractual agreement regarding the release of funds, it has to wait approval from Agecontrol, and it only received this on 30 March 2018.  

The effect of this delay meant that any funding programmes or projects that were to take place in the early months of January and February 2018 had to be re-programmed, as there were no contractual agreements to cover the funding of projects until the end of March. This meant that consortiums and wineries had to cover their own funding in order to go ahead with promotional activities that had already been planned.

“Such delays makes it difficult to plan in advance,” said , a company which assists individual wineries and consortiums with EU/CMO funding. “In order for the promotional activities to be effective, it is necessary to make medium to long term planning, and not be forced into making last minute decisions.”
 
One problem is that CMO funding legislation is not easy to interpret. In January 2018, Spain queried the use of funds for promoting wine in non-EU countries. It seemed that if a country could only invest in a market like China or the USA for five years maximum, no matter how important that market.

The answer Spain received was that, indeed, a sixth year of promotion will not be funded.

“This very restrictive interpretation puts at risk future investments in important countries such as the USA, Canada and China,” says Ballotta.  She says that the Italian and French ministries have initiated talks with Brussels to attempt to “salvage” the investments much in such countries. 

Regardless of the outcome, issues such delayed the release of the 2019 to 2023 five-yearly funding proposal. It was finally released on 16 May 2018, to the tune of €337m for Italy. 

The new funding
The new funding release has allocated €102m for promoting wines to non-EU countries, along with €150m for the restructuring and conversion of vineyards, €5m for green harvest, €60m to support investments and €20m for the distillation of winemaking by-products. 

It appears that the main differences between Italy and other EU countries who benefit from the CMO funding lies in the fact that other countries, such as France and Spain plan their allocated resources in advance: France, for example, has already allocated the funds for the year 2018/2019.

 “Over the years CMO funding and planning has helped to make Italy competitive in international markets, however the match with our main competitors, primarily France, is still open,” says Ballotta.  “France has shown that effective planning of resources can give the necessary boost to companies in the sector, while Italy has suffered a loss of competitiveness in different markets.”

According to Ballotta, the rules and timelines need to be established to make the funding programme for Italy more effective, such as setting the date for the release of the proposal and a deadline for the presentation of the projects, both of which should always fall at the time. Above all, Italy should plan the publication of CMO funding proposals in advance and allocate resources accordingly. For professionals such as Business Strategies as things stand now the entire industry lives in a state of constant ‘uncertainty’ and this state of affairs is not conducive for business.  If these issues could be dealt with, Italy would be far more competitive.
Michèle Shah

How the funds are allocated:

Sicily                            $55m
Veneto                         $38m
Tuscany                       $30m
Puglia                          $28m
Emilia Romagna         $27.5m
Piedmont                     $21m
Abruzzo                       $12.6m
Lombardy                    $11.8m
Friuli-Venezia Giulia   $9.8m
Sardinia                       $8.8m
Campania                    $8m
Marche                       $7.8m
Umbria                        $6.4m
Lazio                            $6m
Trento                         $4.3m
Calabria                      $4.2m
Bolzano                       $2.4m
Molise                         $18.m
Basilicata                    $1.8m
Liguria                         $441,000
Valla d’Aosta               $178,000

(The numbers have been rounded.)