Italy to prop up flagging Parmesan cheese industry

Let them eat cheese. With data showing a growing underclass and food lines now in most major cities, the Italian government has come up with a way to help the needy while propping up one of its iconic industries.

Agriculture Minister Luca Zaia has committed to buying 100,000 30-kilogram wheels each of Parmigiano Reggiano and the very similar Grana Padano cheese to donate to the needy.

'This is a crisis of pricing, not of consumption.' Giorgio Apostoli, dairy farmers representative

Producers sought government help in the face of prices that have fallen some 25 per cent over the past five years, said Giorgio Apostoli, who represents dairy farmers for the Coldiretti agriculture lobby. The producers faced pressure from distributors who offer sharp discounts on the cheeses to lure shoppers into supermarkets.

The government said it will buythree per cent of the annual production at market prices. The Parmigiano Reggiano and Grana Padano consortia put the value at 50 million euros ($83 million).

"It's a help. It doesn't resolve the problem, but it is a help," Apostoli said Thursday.

"This is a crisis of pricing, not of consumption," Apostoli said, noting that while consumption of the more expensive ParmigianoReggiano has fallen slightly in the last year that of Grana Padano has risen slightly.

Apostoli said the measure doubles the usual government acquisition of Parmigiano and Gran Padano under an EU program to provide food for the poor. Italy was allocated 66.4 million euros ($110 million) in 2008, which will nearly double to 129 million euros ($214 million) next year, according to the Agriculture Ministry.

Government to tout Parmesan abroad

The government also plans to convene a round table with distributors to negotiate sales promotions that will be fairer to producers, as well as launch campaigns to promote Italian Parmesan abroad, where it can command higher prices.

An overwhelming 85 per cent of the Parmigiano Reggiano and Grana Padano produced is consumed in Italy; Coldiretti estimates that some 60 per cent of that is sold at discounted prices.

Parmigiano Reggiano and Grana Padano cheeses are produced according to very strict traditions tied to their geographic origins primarily the Po River Valley of northern Italy specifying everything from the aging process to the origin of the milk used. Italy is jealous even of the name Parmesan, having gone to the EU seeking to ban its use by copycats cashing in on the culinary tradition.