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Page last updated at 14:20 GMT, Thursday, 9 July 2009 15:20 UK

Harvesting Italy's red gold

By Stephanie Holmes
BBC News, L'Aquila

As the G8 leaders in the quake-hit city of L'Aquila plot a way out of the financial crisis, in the same region Silvio Sarra is feeling the effects of the crisis on his own business - cultivating one of the world's most expensive spices.

The Navelli plains where saffron is cultivated
Saffron has been grown on the Navelli plains for centuries

Gathered from humble, violet-petalled crocus flowers, saffron is grown in a painstakingly labour-intensive way in this corner of Italy.

The price of the spice varies according to its provenance but the most sought-after variety in the world, locals insist, is cultivated organically in miniscule quantities and gathered and processed by hand on the plains around the regional capital of the Abruzzo region, in central Italy.

Saffron has been called "vermillion gold". With it selling at 16 euros (£13.80) a gram - compared to 22.9 euros (£20) for the precious metal - it is easy to see why.

Collection at dawn

"The soil has to be rich and yet at the same time fluffy," explains 73-year-old Mr Sarra, pointing to a triangle of land lying fallow before being planted with the tiny brown bulbs.

"We have to pick the flowers at the right time of day, at dawn. If we collect them too late then the sun makes the petals go sticky, and we can't separate the stigma properly," he says.

Silvio Sarra holds up a picture of his father
From father to son: Mr Sarra follows a family tradition of growing saffron

The process of cultivating saffron has gone unchanged for generations.

Inside his house he shows me a photo of his own father - strikingly similar - carefully releasing the red stamina threads from the flowers.

Once collected, the threads are gently heated over almond wood coals to intensify the spice's flavour.

He revived the ancient saffron industry around the Navelli plains near his home village 35 years ago.

Mr Sarra heads a consortium of saffron producers - they number 100 in total - who produce, between them, some 50 to 60kg of saffron a year, in three short months.

The small and medium enterprises in Italy are its strength - it is in these firms that the most innovative products and systems are used

Natacha Valla
Economist, Goldman Sachs

It is the kind of value-added, meticulously-made product that Italy is justifiably famous for and Mr Sarra would like to see it sold more widely internationally.

As the financial slowdown bites it is, perhaps surprisingly, these small and medium-sized companies making high quality goods - the backbone of Italy's export economy - that are weathering the economic storm most resiliently.

According to a recent report by government statistics agency Istat, in January and February, for example, almost 29% of exporting firms had managed to increase sales, despite exports overall falling by almost a third compared to the same period a year earlier. A third of these firms had fewer than 10 employees, another third between 10 and 49.

"Small and medium enterprises in Italy are its strength - it is in these firms that the most innovative products and systems are used," explains Goldman Sachs economist on Italy, Natacha Valla.

While export volumes declined by 4% in 2008, the valued-added content of Italian exports - the factor that makes a pair of Italian shoes worth more than others made elsewhere - actually grew by 5.7%.

Proud products

Yet these firms' resilience is delicate, she adds, warning that as banks tighten their lending criteria they face a critical moment.

"On a recent trip to northern Italy, speaking to medium-sized firms, they were telling me: 'In the past, we've never had any trouble getting small loans because of our direct relationship with local banks. But now banks are becoming tighter and if things don't get better we'll be in trouble in a few months time'," she explains.

Recently, Italy announced it would provide a 1.3bn euros (£1.1bn) government guaranteed loan to help such firms, recognising their importance to the survival of the Italian economy as whole.

Collecting crocuses to make saffron
Crocus flowers are collected by hand to make saffron

Ms Valla says she has seen a real shift in the way Italian companies are marketing themselves abroad over the past decade - concentrating on accentuating the artisan-like qualities of their products, and building a brand based solely on provenance.

There is nevertheless a tension, between combining the cutting-edge techniques needed to market high-quality products and adhering to the absolute tradition - and pride - that makes them.

"Yes, we have a fantastic product, and a wonderful website too," admits Dina, Mr Sarra's niece. "But it's not enough to just make and showcase our the saffron that we grow here, we have to sell it too."



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