Traditional pitkali traders, who have been a fixture for generations, risk being eradicated by a legal notice that overlooks their role as middlemen between farmers and buyers, a lawyer said in court.
Lawyer Edward Gatt said the legal notice issued last January did not take into account the fact that the pitkala, who help farmers secure the best price for the sale of their fruit and vegetables, receive an eight per cent commission.
It did not make sense that pitkala were now expected to volunteer 10 per cent of their earnings “from the sale of agricultural produce”. The key element, he noted, was that they do not actually sell the produce themselves.
Dr Gatt was making legal submissions before Mr Justice Joseph R. Micallef on behalf of the 10 pitkala who are calling on the court to stop the authorities from forcing them to provide hefty bank guarantees. The court last week issued a temporary injunction and a final decision is soon expected.
According to the legal notice, pitkala will have to make a bank guarantee equivalent to 10 per cent of the turnover registered the previous year from the sale of agricultural products.
Dr Gatt said the turnover of the pitkal is not the turnover of the farmer. The 10 per cent guarantee should therefore be calculated on the eight per cent commission and not on the sales.
Paul Bonello testified that he had been working as a pitkal for over 30 years, noting there are about 16 pitkali traders in total.
He said their business is not based on contracts but built on trust with farmers. The pitkala auctioned the produce for the best price and retained an eight per cent commission. The money was deposited at APS Bank by the buyer through a voucher system and then divided at the end of every month.
In November, the government called a meeting for traders and informed them they would have to start collecting the money themselves instead of through the bank.
Mr Bonello said he had asked the farmers he works with to sign a petition objecting to the legal notice, which they did, and their petitions were exhibited in court.
The turnover of the pitkal is not the turnover of the farmer. The 10 per cent guarantee should therefore be calculated on the eight per cent commission and not on the sales
Mario Spiteri of the agriculture directorate said there was a government agreement which expired in 2012 that involved APS handling the money.
There were times when money was not deposited and the bank acted as a guarantor and paid the farmer. Sometimes, the amounts not deposited reached €100,000.
Once the agreement with APS expired, the government could be exposed to risk – hence the demand for the guarantee.
Dr Spiteri said meetings had been held with pitkali traders and eight had agreed to make the guarantee.
Lawyer Abigail Caruana, representing the directorate, said the guarantee is a necessary safeguard. She insisted that, contrary to what Dr Gatt had said, according to law the pitkala are considered to be sellers.