Maltese farmers who receive direct payments through the EU’s Common Agricultural Policy stand to lose two-thirds of their annual amount by 2020, according to proposals in a draft reform of the CAP.
Malta currently receives 12 per cent of its CAP funds in direct payments. Under this system, local farmers receive €750 per hectare in direct payments every year.
The European Commission is proposing gradually eradicating national discrepancies in direct payments to farmers, with farmers across the EU all receiving €250 per hectare by 2020.
Leonard Mizzi, from the Commission’s Directorate-General for Agriculture, said Maltese farmers would not necessarily lose out through the reforms, provided there was better exploitation of CAP rural development funds. The vast bulk of Maltese CAP funds – 81 per cent – come as rural development funds.
“The reform suggests averaging out direct payments, but if schemes for rural development funds are better targeted and Malta improves its competitiveness, there shouldn’t be any shocks to the total amounts received.”
Mr Mizzi also indicated that there would be an element of fine-tuning to the proposals. “The Commission will take specific country constraints into account.”
Some local agriculture stakeholders, however, were sceptical of the reform’s value to Maltese agriculture.
“From a European perspective, the proposed reforms are a step in the right direction,” said agricultural consultant Tony Meli. “But from a Maltese perspective, the ‘one size fits all’ approach to agriculture penalises us because of our small size.”
According to EU statistics, in 2007 the average farm in Malta was 1.75 hectares in size when compared to an EU average of 18 hectares.
“Maltese farmers, with such small farms and very limited earnings, have got the same obligations under CAP as farmers with farms larger than Malta, who will get a thousand times more in CAP funds than Maltese farmers,” Mr Meli said.
Although there was still scope to better tap CAP rural development funds, these funds required farmers to meet certain targets and placed more obligations on farmers than the direct payment system, he said.
Dairy Farmers Cooperative general manager Gaetano Buttigieg spoke along similar lines. “Being uncompetitive is one thing but being uncompetitive because you’re at a disadvantage is another,” he said.
Malta’s small size and location meant the local agricultural sector faced a multitude of disadvantages.
“All we are looking for is enough financial aid to overcome these inherent disadvantages and create fair competition,” Mr Buttigieg said.
The draft reform covers the period 2014-2020 and also proposes a simplified flat-rate payment ranging from €500 to €1000 for small farmers, additional investment in agricultural research and dedicating 30 per cent of all CAP direct payments to “green” practices.
It also includes measures aimed at encouraging people under 40 to enter the agricultural profession, and seeks to better integrate agricultural policy into other economic activities.