26 July - 1 August 2001

Negative reaction to position paper on agriculture

by Ivan Brincat

The government’s position paper on the agricultural sector has raised a ruckus among members of the Malta European Union Steering and Action Committee (MEUSAC).
Over 120 people were present for a heated debate in which attendees objected to the
contents of Malta’s position paper and called for more details.
“What was positive from the meeting was the fact that constituted bodies and cooperatives are now waking up to the real threats facing the industry,” sources at the meeting told The Malta Business Weekly.
While various governments did not give due importance to the sector, the present government is now being told that the two per cent of GDP figure is a low estimate.
The sector is larger than many believe it to be. The agro-industry comprises 15 per cent of Malta’s manufacturing sector and a lot of households are directly linked to farming and breeding of some sort. Moreover, a lot of produce is not sold from the Pitkali but directly to the customers. Thus it is not registered.
Alternattiva – The Green Party chairman Harry Vassallo told The Malta Business
Weekly that the two per cent figure was questionable because it only considered produce sold at the Pitkali. “However, much more is sold directly to hotels, restaurants and supermarkets and this might not be calculated in these figures,” he said.
It is now becoming evident in the sector that the ministry is ill-equipped to handle matters because there are not enough qualified people working in the department. “The shortage of manpower and the lack of communication is deemed to be problematic.”
People who spoke to The Malta Business Weekly claim that they have no point of reference with whom they can discuss problems in the sector.
And the government is now also realising that this sector requires huge amounts of capital apart from human resources – which are not easily found.
It is understood that a high level meeting was held this week and it was agreed that the sector needs to be compensated when levies are removed. Institution building is also required and foreigners may have to be roped in because the expertise in certain areas does not exist.
Dr Vassallo said the government should help the farmers and people involved in the sector to organise themselves. “The government should allocate resources to these people.”
He added that it was evident at the MEUSAC meeting that not enough consultation with interested parties had taken place.
Meanwhile, government sources in the Ministry of Foreign Affairs said this is the first draft and was subject to changes. They added it was still too early to start discussing the chapter since the negotiations will only be completed towards the end of next year.
The Federation of Industry has been highly critical of the position paper and said the document lacked a clear stategy. A lot of information is left out and therefore the FOI could not propose any changes. The paper makes no reference to the tobacco industry, oil, margarine, beer, pasta and bread, the FOI said. “The plan is not comprehensive and only focuses on the primary sector without considering the processing industry.”
The FOI secretary general Edwin Calleja sent a detailed letter to the Foreign Affairs minister Joe Borg explaining the reasons why the Federation could not agree with the government on the position paper. It warned that the hastened removal of levies could lead to huge disadvantages for the sector.
For example, if the government compens-ated the pig-breeders, Maltese factories would buy pork (they already buy over 55 per cent) at a cheaper price but they can never achieve the economies of scale that foreign competitors benefit from.
However, Dr Vassallo said the Greens encouraged organic farming both for locals and foreigners. “If Maltese farmers start producing organic potatoes, they would get a better price for export than the price they get now for being first on the market.”
The European Union issue, he said, can lead to important changes which could be beneficial to farmers as long as they are helped. “It is evident that they can never compete in agri-
business because economies of scale cannot be achieved. However, Maltese farmers could also produce crops which can be grown in this region and which could be good for herbs, cosmetics and medicinals. But, this will require research, time and energy. We must empower farmers especially since the department will not come up with solutions,” Dr Vassallo said.