Presentazione IST

Summary

The script discusses the introduction of a financial instrument called 'ST' for sugar beet farmers in Italy, aimed at stabilizing income and reducing the risk of revenue loss due to annual variability. Managed by a mutualistic fund, it triggers compensation when a farmer's income falls below 80% of the Olympic average, calculated over a five-year span. The participation involves a small cost-sharing contribution, with the European Union adding further support. The script also covers the roles of various stakeholders, including the management committee and the external entity ISMEA, and outlines the process for calculating compensation based on historical income data.

Takeaways

• 📋 The presentation is about an income stabilization tool (ST) for sugar beet growers to mitigate income variability risks.
• 👤 The tool is managed by Philippe Codato, who is the reference for ASNACOdi, and Samuele Trestini from the University of Padua, who developed the mathematical model supporting the ST.
• 🌱 The ST is triggered when a grower's income falls below 80% of the Olympic average, which is calculated by taking the average of the three middle years out of five, excluding the best and worst years.
• 💰 The ST is funded by grower contributions and European Union subsidies, with a 1:3 cost-sharing ratio, meaning for every euro paid by the grower, the ST provides about three euros in coverage.
• 🏛 The ST is different from insurance; it is a mutualistic fund that intervenes collectively for the entire sugar beet sector if a 'trigger' event occurs, indicating a sector-wide issue.
• 📈 The trigger event is determined by an external entity, such as ISMEA, and is based on documented losses that affect the entire sugar beet sector.
• 📝 Participation in the ST requires a three-year commitment from growers, with an annual fee and provision of necessary information.
• 🔢 The ST's effectiveness is evaluated using historical data from growers over a ten-year period, showing that 43% of them would have received compensation, with an average benefit of 3 euros per ton.
• 📉 The ST aims to stabilize growers' revenues by providing compensation during years of income loss, thus smoothing out the economic impact of bad years.
• 📋 The participation in the ST is open to all sugar beet growers who are members of a defense consortium within the ASNACOdi system and have signed a triennial sugar beet delivery contract with Co.Pro.B.

Q & A

What is the main purpose of the 'ST' (Stabilizzazione del Reddito) tool discussed in the script?

The main purpose of the ST tool is to mitigate the risk of income loss for sugar beet farmers by providing financial support when their income falls below a certain threshold, which is determined by comparing their income to an Olympic average (calculated over a period of three to five years, excluding the best and worst years).

What is the Olympic average mentioned in the script, and how is it calculated?

The Olympic average is a technical term used to calculate a mean income over a certain number of years, typically three to five. It excludes the highest and lowest income years and averages the remaining years. This average is used as a benchmark to determine if a farmer's income is below the threshold for ST intervention.

How does the ST tool differ from an insurance policy?

The ST tool is a mutualistic fund that operates collectively rather than on an individual basis. It intervenes when there is a problem affecting the entire sugar beet sector, not just a single agricultural business. It is triggered when the sector's income falls below 20% of the Olympic average, and the calculation is done by an external entity or the fund's management committee.

What is the role of the 'comitato di gestione' in the ST tool?

The management committee is responsible for overseeing the ST fund. It makes decisions regarding compensation when necessary, based on the trigger event, and is composed of seven members, including three nominated by Co.Pro.B and others from the defense association and management committees.

What is the minimum commitment period for a farmer to participate in the ST fund?

The minimum commitment period for a farmer to participate in the ST fund is three years, during which they must adhere to the fund's regulations and contribute annually.

What is the cost implication for a farmer to participate in the ST fund, and what additional support do they receive?

The cost for a farmer to participate in the ST fund is slightly less than one euro per ton of sugar beets. However, for every euro contributed by the farmer, the European Union adds approximately two euros, making the effective coverage of the ST tool equivalent to about three euros per euro contributed.

What is the role of Co.Pro.B in the ST fund?

Co.Pro.B provides annual data to the ST fund, including the value of invoices paid for sugar beets delivered and the value of PLV (Produzione Lorda Valore, or Gross Production Value). Co.Pro.B also participates in the management committee with three delegates.

What is the process for a farmer to receive compensation from the ST fund?

If the ST trigger event is activated due to a general sector income loss, the management committee evaluates each farmer's situation based on their historical income and compares it to the Olympic average. If a farmer's income is more than 20% below their own historical average, they are entitled to compensation.

What is the significance of the 'trigger event' in the ST tool?

The trigger event is a situation where the general sector income falls below a certain percentage, typically 15%, compared to the previous triennium. This event activates the ST tool, prompting the management committee to assess the situation and determine if compensation is necessary for the farmers.

What is the role of ISMEA in the ST tool?

ISMEA is an external entity that can calculate the sector's income and determine if there has been a significant loss that should be documented and compensated by the ST fund.

How does the ST tool affect the stability of a farmer's income over time?

The ST tool helps stabilize a farmer's income by providing compensation during years of crisis, making the income curve less volatile and more linear. It ensures that even in bad years, the farmer's economic outcome is supported by the ST fund.