FederUnacoma, the Italian Agricultural Machinery Manufacturers Federation, represents manufacturers of agricultural machinery and equipment in Italy. The federation supports and promotes the industry through various key activities, including organizing major trade fairs and exhibitions, which showcase innovations and trends in agricultural machinery. The federation also advocates for its members’ interests by engaging with policymakers and regulatory bodies to influence relevant legislation and standards.

Additionally, Feder-Unacoma provides market research, technical support, and compliance assistance to its members, helping them stay competitive and adhere to quality and safety regulations. The federation also promotes education and training initiatives to enhance the skills of professionals in the sector, organizing workshops and seminars to foster knowledge exchange and industry growth. The federation is credited to have played a crucial role in driving the development and global competitiveness of Italy’s agricultural machinery industry.

The federation’s flagship event, called EIMA International (Esposizione-Internazionale di Macchine per l’Agricoltura e il Giardinaggio) is considered the largest trade fair for agricultural and gardening machinery in EU region. It serves as a premier platform for showcasing the latest innovations, technologies, and trends in the agricultural machinery sector, featuring a vast exhibition space divided into specialized sectors, such as components, irrigation, and renewable energy, providing targeted insights and solutions for various aspects of agriculture and gardening.

The event also includes conferences, workshops, and technical demonstrations, facilitating knowledge exchange, networking, and business opportunities among industry professionals, researchers, and policymakers. The 2024 edition of this biennial event will take in Bologna, Italy, from November 06 – 10, later this year.

BR Research recently sat down with Fabio Ricci, Deputy Director-General of FederUnacoma, Italian Agricultural Machinery Manufacturers Association to understand how farming in Pakistan can leapfrog the development ladder by adopting the latest trends in agricultural technology – dubbed ‘Agriculture 4.0’or the fourth agricultural revolution, which uses the digital technologies to improve agricultural productivity and sustainability.

BR Research (BRR): The cost of adopting the latest technology in farming often makes little sense for small farmers, as low profitability does not justify the substantial upfront capital expenditure. How have policymakers in Italy addressed this challenge?

Fabio Ricci (FR): In Italy, contractors provide large machinery such as combines or big tractors with 200 horsepower or more. This is because the average landholding size is 12 hectares, much smaller than in countries like the USA, Canada, Brazil, or Australia. For the average farmer, investing in such expensive machinery is impractical; hence, they rely on contractors for these services.

Even when farmers decide to purchase equipment, access to finance is crucial. Therefore, governments must create enabling conditions for farmers to obtain microcredit. Even in developed countries such as Italy, the Ministry of Agriculture allocates funds for renewing agricultural fleets to ensure that farming technology stays up to date with the latest trends in Agriculture 4.0 and smart farming.

BRR: In a global market dominated by mega-manufacturers such as John Deere, AGCO, and Sinomach, what sets Italian agricultural machinery manufacturers apart in terms of competitive advantage?

FR: Italian manufacturers of agricultural machinery primarily consist of small and medium enterprises, unlike their counterparts in the US or China, who typically engage in mass production. Instead, these Italian manufacturers specialize in customizing machinery and tools to suit the specific needs of buyers’ local conditions. In essence, the Italian farm machinery industry resembles tailors more than mass producers of automobiles, prioritizing customization according to user requirements.

Furthermore, these manufacturers not only produce implements and equipment but also offer user training. We believe that customer training is essential not only for utilizing and maintaining equipment but also for implementing best practices in agronomy.

BRR: Pakistan ranks lowest among peer countries in the adoption of mechanization, with less than 0.7 million tractors offering 0.09hp per acre. Do you believe there is a case allocation of subsidies to the tractor industry to rapidly advance the adoption of machinery?

FR: More tractors alone cannot fully help optimize the benefits of mechanization. India, for example, faced a similar problem in the past. Government subsidies and incentives on sale of tractors led to a so-called ‘tractorization of rural India’. Annual tractor sales in the country reached a record number, becoming one of the highest in the world; however, in many cases they were being used for other purposes such as transport, and haulage. Despite this thrust for mechanization, the initiative failed to enhance farm productivity in a substantial way.

Thus, it may be misleading to measure the adoption of mechanization by a number of tractors or horsepower per acre. In our view, the adoption of the latest farm implements is equally – if not more – essential to enhancing per-acre productivity. Implements that are customized by crop and terrain can significantly raise productivity in a single cycle.

Italian manufacturers are world leaders in providing machinery for smallholder farmers, particularly implements designed to maximize productivity. Many developing countries across Africa – and now even rich GCC states – are benefiting from adoption of customized implements manufactured by Italian producers.

BRR: The Government of Pakistan currently grapples with twin challenges: limited fiscal space, which hinders the subsidization of modern farm equipment adoption, and a foreign exchange liquidity crisis, which discourages the importation of the latest but expensive farm technology. How should the country navigate these conditions to enhance technology adoption?

FR: Pakistan not only lags peer countries in the adoption of farm mechanization but its available machinery fleet and technology are also outdated. It also relies on importing used farm machinery from Italy and other parts of the world, which benefits the exporting countries but does little to improve farm productivity in Pakistan. While used machinery may offer affordability, it often falls short in performance, useful life, fuel efficiency, reliability, productivity, environmental footprint, and access to technical assistance and maintenance (such as spare parts).

Drawing inspiration from the success of Trringo in India, an e-commerce startup by the Mahindra Group launched in 2016, Pakistan has an opportunity to enhance its agricultural sector. Trringo operates as a farm equipment rental service, employing a franchise-based model—a sort of “Uber for tractors.”

Rather than attempting to independently establish a globally competitive farm machinery base domestically, Pakistan’s private sector could collaborate with Italian farm machinery manufacturers to establish a local rental service for farm machinery. Italian manufacturers can particularly service Pakistan’s mechanization needs by providing equipment that is customized and designed according to local conditions and requirements. This approach would allow small farmers to access the latest agricultural technology through a pay-per-use or rental model, fostering productivity and innovation in the sector.