The price of food: reality and fantasy projections

in the run-up to the Referendum, Dr Simon Busuttil, MEP, made the following statement, as head of the Malta-EU Information Centre (MIC) (The Times, December 24, 2002): "The price of food should go down, not up, if we join the EU. This can now safely be stated in view of the outcome of negotiations."

However, now we are living the truth, not the fantasy projections, and it seems he was grossly erroneous in his calculations. He also issued a very carefully chosen table of "Examples of what consumers will save":

¤ 15c on a kg of pig meat;

¤ 10c on 12 eggs;

¤ 4c on a kg poultry;

¤ 81c on a kg tomato polpa;

¤ 45c on a kg pasta;

¤ 50c on a kg peaches, plums;

¤ 15c on a litre juices;

¤ 25c on a litre beer; and

¤ Lm1.50 on litre wine.

This table carefully omitted such staple items as bread, beef, dairy products and sugar. Nevertheless, in the table published the following Sunday, Box 1 claimed ecstatically: "Food prices will go down on imported food products because of removal of levies."

Some examples: "beef, pig meat, poultry and eggs, fruit and vegetables and other food items, including tinned food, biscuits and ice-cream, drinks and wine".

Box 2 repeated Dr Busuttil's table, and Box 3 claimed: "On certain products, Malta will have to adjust to higher EU prices. But consumer prices will not be affected (my italics) because compensation, partly funded by the EU, will be given.

"Affected products are sugar, cereals, rice, semi-processed tomato products and some beef and dairy products."

Writing about the same products in his earlier article, Dr Busuttil also stated: "The impact of membership on the price of these products will therefore be negligible."

The following day I wrote a letter to The Times quoting page 137 NPAA of the Acquis Communautaire: "The adoption of internal prices of several commodities could have a direct bearing on domestic costs, and may affect negatively Malta's international competitiveness, particularly in the industrial and tourism sectors."

I also listed the massive protective tariffs which the EU would impose on Malta's imports at the best world market prices.

The proof as to who was right is partly in your shopping bags, 15c more per kg of bananas and apples, 10c more on oranges, 50c per kg on cheese, more expensive beef, and vastly more expensive sugar, which is often reflected in processed food such as cake and biscuits. Is this a negligible impact, as Dr Busuttil so happily and confidently claimed?

Eggs and pig meat are stable, not reduced, as he promised, and wine and poultry meat have fallen.

Furthermore, the compensation paid to the poultry producers, farmers and sugar importers, heralded by Dr Busuttil and the government, is at best only partly paid by the EU. The rest must be forked out by you, the Maltese consumer, in taxes, which reduce your take home pay.

So there will be less to spend in the housewife's purse, which will have to be spent on more expensive food. As over 50% of take home pay is spent on food, this is a serious matter to every household, so there will be unavoidable pressure to increase wages.

Thus the other part of who was right will be in your reducing take home pay as taxes are imposed to pay the subsidies; "partly funded" means you have to pay the other part.

Nationalist MEP Dr Busuttil has now come out in the open as a member of the governing party from under his umbrella as the head of the MIC. So I ask him: can you explain to the people the inaccuracy of your forecasts and also to give us your wisdom on how Malta can survive as a competitor, especially Maltese tourism, so vital to our economy, when it cannot buy at the most competitive prices?

Mr Farrugia is the Opposition Spokesperson for Agriculture, Fisheries and Rural Development.