Farmers 'doing well' in liberalised environment

Official figures proved that the agricultural sector was managing to face the impact of liberalisation, Environment and Rural Affairs Minister George Pullicino said yesterday.

Peter Axisa, secretary general of the Maltese Farmers Association who had also served as government consultant during the delicate EU accession negotiation process on agriculture, is insisting that the sector is facing serious problems and that despite the fact that the government had negotiated a safeguard clause it is now reluctant to apply it.

He said the safeguard clause enables the government to put in place measures to protect the Maltese farmer against foreign agricultural products in case the local sector does not cope with competition from the European market.

The association is threatening to take the matter to the European Court of Justice.

However, during a press conference announcing a package of financial aid for the industry, Mr Pullicino said the safeguard clause can only be used as a second safety net if the first - the subsidy regime - fails.

"But the subsidies are not failing," he added. "On the contrary, in this first quarter alone volumes at the Pitkali - the vegetables wholesale market in Ta' Qali - have increased by 25 per cent. How could the government justify the introduction of the safeguard clause with the EU when statistics show there is no need?"

Statistics, furnished to The Times by the ministry, show that volumes at the Pitkali have increased consistently since 2003, from just under 19.5 million kilogrammes of produce to about 20.7 million kilogrammes so far this year.

The value, not considering subsidies, has almost reached the levels of 2003, now standing at Lm3.96 million; in 2003 it stood at just over Lm4 million. Total revenue, including subsidies, increased from about Lm4.2 million in 2003 to just under Lm4.4 million this year.

Commenting on this point, Mr Axisa said the fact that figures are almost the same as those in 2003 is not good, given that this period of subsidies is precisely intended as a buffer during which restructuring is supposed to take place.

"The restructuring process is largely not taking place partly because ideas are lacking and partly because there is simply no money to back the necessary investment," he insisted.

This year's round of subsidies, over and above the production subsidies, are aimed at helping farmers invest to improve their marketing and infrastructures, Mr Pullicino said yesterday. The subsidy package provides a total of Lm2.6 million for the 2004 - 2006 period. This year farmers will be able to access a total of just over Lm1 million in subsidies under two schemes.

The minister was asked to comment on the situation in the poultry production sector, described to The Times by one producer yesterday as dire. Since accession the sector has seen a staggering decline in business of 50 per cent, the producer claimed. "From 16 producers we are now five and two are facing a very uncertain future."

While not denying that the sector was facing problems, Mr Pullicino said there was lack of organisation within the poultry industry. "To give a practical example, in Malta it only makes sense to have four slaughter lines, when up to some time ago we had 14. I have personally made and keep making appeals to farmers and breeders to pool their resources."

Change is hard to sell in Malta generally, however, the agricultural sector is particularly conservative, Mr Pullicino continued. Yet, although far from being perfect, the outlook is far from the collapse some predicted before accession, he added.

"The poultry processors kept delaying reforms until after the referendum and the election instead of pulling up their socks to prepare themselves," he said. With or without EU membership the agricultural market would have to face free trade, he said, referring to an agreement which lays down that the Euro-Mediterranean region should liberalise the agricultural sector by 2010.