It doesn’t take much to come up with a list of disadvantages for the local dairy sector: small farms, lack of arable land for fodder and land for grazing, scant water, dependence in imported cereals for dry feed...

But perhaps what people do not appreciate is the fact that, in spite of all this, fresh milk in Malta still costs far less than it does in most Mediterranean countries.

“It costs just €0.86 for a litre of full-fat milk, compared with €1.40 in Cyprus,” the general manager of the Koperativa Produtturi Ħalib Gejtu Buttigieg said.

“If you look at annual consumption, this means that the Maltese are saving €15 million compared to what they would have to spend if there were no local production and they had to rely on imports.”

Just the thought of this possibility sends shivers down his spine.

“I wonder if people realise the implications if the dairy sector in Malta had given up and closed down! To start with, there is the element of food security – having a guaranteed supply of this essential nutrient. Also, imagine the impact on the countryside: Around half of the 11,000 hectares of arable land in Malta is used to grow forage for the local milking herd – even more in Gozo!

“Without milk production, much this land would probably not be cultivated, which would completely change our rural landscape, a terrible loss not only for the locals but one which also has implications for tourism,” he said.

Apart from MDP’s 120 employees, the people involved in the 119 licensed farms and the 40 distributors, there are also indirect employees such as those involved in the making of feed.

But the very existence of the dairy sector is still taken somewhat for granted. When Malta acceded to the EU 10 years ago, it could quite easily have turned out differently, as the volumes of regulations and standards meant significant change if the sector were to continue at all – and the removal of onerous protective levies made competition from imports a real challenge.

“Everything had to change, from the culture to the methods, from the processing to the transportation. There are standards for each and every step from stable to table! MDP has invested £€17 million since 2004, of which only 2.5 per cent came from the EU,” MDP and KPĦ board member Brian Vella explained.

Malta did not have any pre-accession funds so the investment for this sector was late in starting. MDP had already started upgrading a year before accession but the farms started later, eventually ploughing some €40 million in.

“Not all qualified for funding,” Mr Vella added, “and even those who did only got a maximum of half the amount they were spending, from the Rural Development Programme. Some did not get anything at all.”

We have to constantly tweak the output of fresh milk

KPĦ helped them with a range of services, from design and soft loans, to help with Mepa permits and recommended contractors. It also organises courses, some of them mandatory, for the farmers.

“It was simple: They either had to upgrade or close down. Some did – and we have seen considerable consolidation in the sector,” Mr Buttigieg said.

In fact, the investment resulted in much higher efficiency. While the number of cows has gone down from 7,600 in 2003 to 6,300 in 2013, the amount of milk produced has gone up by eight per cent.

And the quality of the milk has also improved. Whereas MDP only offered milk with 2.5 per cent fat prior to accession, the improved nutritional approach, housing standards and genetics paid off and it now offers 3.5 per cent fat milk – so small achievement. The hygiene standards are three times better than those set by the EU.

The farms are also enticed to improve standards by being offered a premium for good products through a quality incentive scheme, funded by MDP.

“The scheme costs us a lot of money but that is how we managed to increase the fat content by 30 per cent,” Mr Buttigieg explained.

The key to the survival of the sector is the unique set-up. KPĦ own 70 per cent of MDP (the rest belongs to the government), meaning that the producers have a direct interest in the processing and marketing of their milk and milk products ­– which has now expanded to several milk flavours, 18 yoghurts, mozzarella and cheeselets, and the Benna Life range of yoghurt with plant sterols. In all, these represent a third of MDP’s turnover.

“It requires a lot of management. Unlike other plants overseas, we do not use surplus milk to make skimmed milk powder or long-life milk as the investment required for this machinery is not feasible. And we can’t export it either... So we have to constantly tweak the output of fresh milk and of longer shelf-life products like yoghurt and cheese,” Mr Buttigieg explained.

“This is something that we are constantly trying to explain to the European Commission. Because of all the disadvantages, it is not a level playing field for us. We do not want special treatment but they could certainly compensate for the realities here... And I am not just talking about financial compensation!

“This really should be open to negotiation...” he concluded.

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