Family Farms in South Tyrol: An Agriculture Innovation Case Study

18 September 2014

The document, an occasional paper that was published by the Food and Agriculture Organization of the United Nations (FAO), studies the economic branch of apple production in Alto Adige-South Tyrol as an effective example of an innovative approach to agriculture.
It deals with the development of this approach that has gone on to become a codified system, as well as the factors that made the origin of such a system possible. Here below is a summary of the paper, which will be presented at the international Congress “The Apple in the World” on occasion of Interpoma 2014, from the 20th to the 22nd November in Bolzano (South Tyrol/Italy)

(Bolzano, 18th September 2014) The cultivation of apples in South Tyrol dates back to at least the sixteenth century. Over the course of more recent decades, it has been characterized by historical, cultural, social, political, geographical, and economic factors. These led to apple cultivation becoming the single most important sector of occupation within South Tyrol agriculture, with over eight thousand family farms working a total area of 19,000 hectares (47,000 acres). South Tyrol currently produces half of all of the apples sold in Italy, 15% of the apples on the European market, and 2% of the supply for the entire world. 
The success story of the South Tyrol apple industry is based upon a highly developed and adaptable network of stakeholders consisting of producers, their cooperatives and associations, research institutions, agricultural consulting services, and other public and private players that organized themselves after the Second World War. The so-called “Learning and Innovation Network for Sustainable Agricultural” (LINSA) is a network in which new knowledge is exchanged or further developed.  It is characterized by the close collaboration of all members and their sound knowledge regarding problems that are inherent to their own economic branch. 
The basic principles that were defined by Friedrich Wilhelm Raiffeisen of self-help, self-administration, self-responsibility, and member promotion are the anchor of this LINSA. In the end, the South Tyrolean apple producers have turned it into a genuinely unique system. Their wealth of ideas and their powers of innovation have been the decisive factors for their success. 
The analysis first and foremost scrutinizes the origin and development of the various institutions and the creation of linkages within the LINSA.  Its development is analyzed in five phases.
• 1945-1960 – Strength in Unity and Independent Advisory Service
After World War II, South Tyrol was an impoverished province. The marketing of apples was controlled by private traders and was non-transparent and unsatisfactory for the producers. The producers developed the consciousness that they had to work together, and thus in 1945, the VOG federation of cooperatives was founded. It brought together nine cooperatives of fruit producers in order to increase their own competitiveness and position themselves on the market. At the same time, new cooperatives came into existence with the intention of storing and marketing the apples that were produced by their members. The year 1945 also marked the re-establishment of the Bauernbund farmers’ league. The LINSA was still in its infancy and made use of an informal system to share ideas and knowledge with others. In 1957, when specific, independent, and up-to-date technical advice for fruit growers became more and more necessary, the Beratungsring für Obst- und Weinbau [the Fruit and Winegrowing Consulting Center] was created, one of the principal actors in the LINSA.
• 1961-1971 – Intensification, Integrated Production and Storage 
In the 1950s and 1960s, the apple industry in South Tyrol experienced an increase in labor costs and a decrease in the price of apples as a result of the emigration of labor forces and the European crisis in the fruit and vegetable sector. The LINSA reacted in a different way: at the institutional level with the founding of the School for Viticulture and Horticulture in Laimburg in 1962. The Laimburg Technical College and the Beratungsring became the two principal actors of the Agricultural Knowledge and Information System (AKIS) that was set up to support agricultural production. The LINSA was active at the technical production level. The production system grew more intensified. First, the Italian palmette system was introduced, followed by the slender spindle system. The cultivation system was less labor-intensive and produced higher yields. The intensification of production provided the impetus for technical innovations in the area of the long-term storage of apples. The need for storage led to innovation in apple varieties. Beginning in 1970, the older varieties were replaced with modern ones that were better suited to the new methods of cultivation and storage. During this period, the LINSA also received the first subsidies on the part of the European Community for modernizing the infrastructure of the cooperatives and thus meeting the demands of the market.  
• 1972-1990 – Quality Improvement and First Innovation Platform 
The determination of the South Tyrol provincial government to set up a separate structure which would support agricultural production in the province brought about the creation of several new institutions. In 1973, the Konsortium für den Schutz landwirtschaftlicher Kulturen vor Witterungsunbilden [the Consortium for the Protection of Crops from Weather Adversities] was established, while in 1976, the Agricultural Research Station was founded in Laimburg. In addition, the cooperative structure consolidated during these years at the level of the Vinschgau Valley producers (VI.P) and the Association of South Tyrol Fruitgrowers Cooperatives (VOG). At the end of the 1960s, the concept of integrated production was introduced. In 1988, integrated fruit production was institutionalized with the founding of AGRIOS, the work group for integrated fruit production in South Tyrol. Since that time, AGRIOS has continued to be another actor with the LINSA. Other institutional innovations were also of significance: in 1974, the first organic apple producer in the province; in 1977, the recognition of Südtiroler Apfel-Mela Alto Adige as a Protected Geographical Indication; and in 1981, the founding of the KSB, the first cooperative for apple tree nurseries under the sanitary and quality control of Laimburg. 
• 1991-2001 – Variety Innovation, Consolidation, and International Networks
In the 1990s, institutional innovations of a political nature – in particular, the subsidies which the provincial administration provided only to cooperatives of a certain size – triggered a merger of the cooperatives. This made possible the modernization of the infrastructure in an efficient manner, creating an excellent basis for a sustainable system. The clever distribution of the subsidies and the fact that they went to cooperatives and not to individuals is one of the reasons for the high degree of efficiency of the LINSA. During this period, the LINSA also opened its doors to international partnerships by collaborating with Swiss and Austrian research centers. In 1998, the first edition of the Interpoma trade show was held. It was dedicated to the cultivation, storage, and marketing of apples and went on to develop as a platform for common interests for the exchange of information, for opening up new markets, and for cooperation at the international level. In 1991, the researchers at Laimburg began testing new storage methods with a dynamically controlled atmosphere. In spite of all of the progress with the LINSA, in the 1990s the network missed the importance of club or managed varieties for the future. There were new apple varieties that are patented and provided with a trademark and then cultivated and marketed by a group, all of whom follow the same production method and the same marketing (the “club”). It was late when they started looking for opportunities to join the most important clubs. As a subsequent reaction, the LINSA created a new innovation platform in 2002, the Sortenerneuerungskonsortium Südtirol (or SK Südtirol – the Variety Innovation Consortium South Tyrol) which set itself the goal of coordinating the varietal innovation in the province along with the Laimburg Research Center. 
• 2002 to date – Innovation, Professionalization, and Market
Over the past decade, there has been a further consolidation in the cooperative-based marketing structure as a reaction to the concentration of the fruit retail market.  The cooperatives are now organized as marketing pools under the VOG and Vi.P. The integrated production rules and regulations were strengthened and a new consortium was created for quality control Südtiroler Qualitätskontrolle (or SQK – South Tyrol Quality Control). The production of organic fruit increased. Along with two producer organizations from Trentino, the Vi.P and the VOG recently created a new marketing organization (FROM). Its goal is to open up new markets and to increase apple exports to non-EU countries. In 1997, European retailers introduced a certification system (originally EurepG.A.P., now Global G.A.P.). Just four years later, 87% of producers were already participating in it.  Very recently, the Bauernbund set up an innovation incubator. 
The development of the LINSA was influenced by formal and informal mechanisms for network development with a prominent component of social learning. The formal mechanisms can be found at various levels. At the political level, the provincial administration has supported apple producers with a good roadway infrastructure and a functional AKIS, for which public structures were set up and financially supported. At the institutional level, linkages were created. The cooperatives are supported by the AKIS. Innovation platforms such as AGRIOS and SK were established. At the individual level, the competences and motivation of the people who are involved in the LINSA contribute to increasing mutual trust and understanding within the network and thus further developing them. 
The social learning aspects of this LINSA permeate the entire system. In South Tyrol, the learning is linked to an outside and inside dynamic at both the individual and collective levels. The social capital that is created within this geographical space makes possible the development of the system by absorbing the existing knowledge from others and creating new knowledge on one’s own. The evolution of the LINSA followed an organizational path that is typical of learning organizations.
The learning mechanisms of the LINSA may be subdivided into three phases: learning empirically, by emulation, and through acquisition. Between 1945 and 1960, the applied method was experience, where new knowledge was acquired empirically and then tried out in a “learning by doing” manner. Starting in 1960, the learning method of emulation was applied, which began as a process of imitation and then led step by step to the improvement and conceptualization of the acquired knowledge. More recently, the method of acquisition was moved to in which there are necessary components in the system which were not available in the LINSA and therefore had to be acquired.
These three learning mechanisms go hand in hand with the demand for innovation and ideas that form the basis for moving forward. 
The LINSA came into existence as a network that is based upon human relationships and trust and has the goal of developing the common interests of its members. It has evolved into an efficient, profitable, and highly productive system and has turned apple production in South Tyrol into an effective example of a lively system for innovation in agriculture. In a region in which the soil, water, and labor forces are finite resources, the path was to consider innovation as essential and to consider knowledge and ideas as the most important, infinite capital. The LINSA made use of this to its best advantage and did not consider knowledge to be a product for competition, but rather shared it and created value from it.

Read more: