(Adds Parliamentary Secretariat's reaction)
An association representing pitkala traders said an excessive bank guarantee imposed by Agriculture Parliamentary Secretary Roderick Galdes risked driving some of them out of business.
In a judicial protest filed yesterday, the Pitkala Association called on Mr Galdes to revoke the “unacceptable and quasi-despotic” obligation of hefty bank guarantees Pitkali sellers were faced with.
The association said that, in line with a legal notice issued in January, pitkala who acted as middlemen between the farmer and the market had to make a bank guarantee equivalent to 10 per cent of the turnover registered the previous year from the sales of agricultural produce.
In its protest, signed by lawyer Edward Gatt, the association felt that, since those failing to make such a bank guarantee would not be allowed to operate, the measure constituted a change in their licence conditions.
The unilateral imposition was unacceptable and quasi-despotic
Several vendors genuinely lacked the financial means to make the bank guarantee being demanded and that this could lead to some of them ceasing to operate, the association added.
It complained that the “unilateral” imposition was “unacceptable and quasi-despotic”, adding that the guarantee, if anything, should have been based on the commission individual vendors received and not on their gross income.
The association said it was worried about the “attitude” Mr Galdes had adopted, saying he was hardly available for discussion. Also, it continued, when discussions did take place he “would do the opposite of what had been agreed”.
The association therefore called on Mr Galdes to revoke the newly imposed guarantee, warning of further action in default.
PARLIAMENTARY SECRETARIAT'S REACTION
In a statement this afternoon, Parliamentary Secretariat said it was committed to go ahead with the reform of the Pitkalija to introduce more transparency and accountability and stop abuse.
However, the government did not intend to dismiss the existing pitkala but insisted they should follow regulations and the measures introduced to safeguard farmers and for the benefit of all stakeholders.
The bank guarantee, the secretariat said, was to ensure that pitkala honoured their financial obligations to farmers.
The bank that offered this guarantee in the past had stopped doing so because some pitkala were falling behind in their payments to farmers for many months and, in certain cases, the amounts due went up to hundreds of thousands of euros. This was threatening the transactions system at the pitkalija.
The secretariat also said that sales from the pitkalija to housewives had been stopped after it was noted that the concept was being abused by commercial entities, including food establishments and hotels.
The secretariat said it had received a number of complaints from farmers who alleged that certain products pitkala said had been thrown away were sold to these entities without them being given compensation.