Malta: massive drop in state aid

Malta needs special status if some food sectors – among which tomato processing – want to survive drop in state aid, says Member of European Parliament Alfred Sant.

Maltese agriculture is losing an annual Euro 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 Euro 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 and 2020; now this cash will fall to just Euro 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 tomato industries have long commanded a generous proportion of voluntary coupled support, guaranteeing a certain level of income and production.

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 (transport costs, development difficulties, etc.), these islands benefit from an added support scheme under CAP. 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, where tomatoes are grown  and processed.

Referring to the Voluntary Coupled Support provisions of the EU’s Common Agricultural Policy which were recently tweaked, former MEP candidate Peter Agius said that “Maltese kunserva will almost certainly be replaced with mass produced tomato paste and other large scale products if proposed changes to the EU’s agricultural policy are not revised.”
Local tomato growers have already warned that kunserva production is becoming increasingly sticky. Back in February an association of farmers threatened to drastically cut the amount of tomatoes they supply to kunserva processors if the “pittance” they receive for their produce is not improved. Malcolm Borg who heads the farmers’ association said he is hopeful the funds will be retained. However, if these were to fall through, he doubts local tomato processor (Magro Brothers (Foods) Ltd) would be in a position to make up for the subsidy the farmers currently receive through this EU aid.