Maltese farmers braced for massive drop in state aid after MEP vote

Maltese agriculture is losing an annual €3 million in state aid after a reform in Common Agriculture Policy rules removed the ability to derogate from rules for direct aid to farmers.

The matter has been brought to fore by Labour MEP Alfred Sant, who says Maltese farmers will face massive drops in state aid and even face a definite collapse of the industry.

The new EU farm strategy, a successor to the 2014-2020 CAP, will see major changes in Malta’s system of direct farm aid.

Under previous rules, farmers could claim up to €3 million in voluntary coupled support, but other member states had just 8-13% of their annual national ceiling. Without the derogation, Malta follows others members states in allocating just 13% of direct aid, now rebranded as ‘coupled income support’.

Sant has warned that previous aid accounted for 57% of Malta’s CAP funds between 2014-2020; now this cash will fall to just €650,000 every year, split between the dairy, beef, sheep and tomato processing sectors.

“The derogation is needed in order to balance the already disadvantaged status of Maltese farmers in the European market. This is especially crucial in the Maltese dairy, tomatoes, beef and sheep sectors. Voluntary coupled support is needed not only to sustain production levels of important sectors, but also to help the agricultural sector compete with excessively high land prices and to safeguard the countryside landscape,” Sant has argued.

Malta’s dairy and tomato industries have long commanded a generous proportion of voluntary coupled support, guaranteeing a certain level of income and production. “The dairy sector also exerts an important pull on the use of arable land, as half of our utilised agricultural area is earmarked for the cultivation of fodder. Without a viable dairy sector, farmers producing fodder would have no outlet to sell to,” Sant said.

Beyond the derogation, Sant suggests that Malta is better off obtaining special status within the EU, similar to the status granted to the Greek Aegean islands. Like Malta, the Aegean islands are highly insulated and face severe geographic constraints.

To offset these challenges, these islands benefit from an added support scheme under CAP so that they limit the additional costs of transporting agricultural products, and to foster the development of local production. “Much more needs to be done to further target disadvantaged regions and assist small farmers and their communities,” he said.

Those working in agriculture share a similar sentiment. Jeanette Borg from the Malta Youth in Agriculture (MaYA) Foundation agrees with the idea of negotiating a special agreement within the European framework given the insularity Malta faces, and Gozo doubly so.

“Other member states sell produce and ship them to Maltese shores with a certain ease – huge production quantities allow for lower production costs due to economies of scale. Locally we cannot compete through quantities produced and most of our inputs need to be procured from abroad such as fodder, grains, fertilisers, and other essentials to produce crops and livestock. Being away from the mainland increases our shipping costs, both to ship goods to and away from Malta.”

But Borg welcomed the overall CAP reform, which will see somewhat of a decentralisation process, making individual member states drawing up national strategic plans on the way they intend to implement nine new CAP objectives.

Borg said the dedication of a minimum 2% of member states’ direct payments towards young farmers and added measures that facilitate access to land and land transfers will reinvigorate part of the industry. “Securing funding for young farmers means securing a future for farming in our country,” she said.