Six years ago the Times of Malta published a story in which ‘Paul’, a 40-year-old farmer, told the paper’s correspondent that “farming will not survive another 10 years”.   One other farmer told the paper that local farming would not last beyond 20 years.  Looking at the key findings of the last Census of Agriculture, just published by the National Statistics Office(NSO), it would appear that the farmers’ predictions may well come true.

According to the Census, over the last 10 years to 2020, the number of agricultural holdings has decreased by 16% to 10,281, the amount of utilised agricultural land has fallen by just over 6% to 10,730 hectares, while that of unutilised land has risen by around 43%, the agricultural labour force has shrunk by 26.7% to 13,340 persons, and that the percentage of farmers aged over 55 years has increased by 8% to over 58%.  The total full-time working days decreased by over 16 %.

These are very depressing statistics.  But they are not the end of the story.  In 2020, agricultural output was €120.7 million   ̶   5.9% less than that ten years ago   ̶   and gross value added 4.5% less, at €53.1 million.   And that was in nominal terms, so in real terms the decline was even greater.   Meanwhile, production of livestock products has been decimated by 41%   ̶   we produce less of everything, except for products from sheep and goats.

The farmer in the Times of Malta story was quoted as saying that the farmers’ lot had “become tougher as expenses increase and farmers’ profits decrease. Salaries in other sectors keep going up but ours, after working day and night, keep going down.”  According to the NSO, farmers’ expenses increased by 7.4% over a five- year period in spite of a fall in output.

Another farmer who, along with 34 others, sells his produce at the Ta’ Qali farmers’ market, was quoted in the newspaper article as saying that “it has been getting tougher with each passing year”.  Though he toils rain or shine, living off the sale of the produce that he grows in his own fields is a challenge as he faces ever-increasing expenses.

Yet, both the operating surplus and entrepreneurial income in the agricultural sector both improved by 16% over the period.  How so?  It seems that a lot of enterprises, intermediaries, and workers are making a better living in the sector, but that does not include the 1,800 full-time farmers.

Like the majority of his fellow farmers, Paul takes his produce to the Pitkalija in Ta’ Qali, where pitkali (middlemen) sell it to vendors, who in turn sell it to consumers.  The farmer has no say over his product’s price tag.

On one occasion, he was told that his cauliflower had been sold at three different prices by three different middlemen: €4, €3, and a mere 10c per box, each containing seven cauliflowers. This means that, in the latter case, the farmer made 1c5 on each cauliflower, which could ultimately be bought for 80c or €1 by the consumer. In this case, Paul made a loss, as each seedling cost him 5c.

Mind you, the picture is not much different in many other countries. Paulo Gouveia, chief policy adviser of EU farmers association COPA-COGECA, told EURACTIV some time ago that EU farmers receive only a small percentage of the price that the consumer pays for the food.

“Recent reports showed that vegetables were being sold in supermarkets at prices 13 to 14 times higher than the price the farmer was paid for them. Such situations cannot continue, and they are also at the root of the problem on the Common Agricultural Policy,” he highlighted.

Like ‘playing a lottery’

Farmers often feel like they are ‘playing a lottery’ when deciding which crop to grow.  Malcolm Borg, deputy director at MCAST’s Institute of Applied Sciences, told the newspaper that local farmers have no leverage.  In spite of their hard work, their income is threatened by imported fruit and vegetables.  Even when there is a low supply of a particular produce in Malta and farmers are earning a decent amount, crops are imported and this reduces the local farmers’ profit once again.

This may be different from the lot of the 17,330 farmers who work a short week or are part-time.  They also tend to have small holdings.  In fact, 78% of the agriculture holdings were smaller than a hectare, while those of between one and five hectares accounted for just 7.3% of the total.  The rapid sub-division of holdings makes it more difficult for farmers to benefit from economies of scale.

It seems that an increasing number of normal farmers are turning to part-time farming while they do another job.  In fact, Paul himself did that because “it’s not worth it”, recounting how his wife complained that, whenever he made some profit, he had to spend it on the following season’s crops.

Again, we are seeing that in the EU as well.  EU Agriculture Commissioner Janusz Wojciechowski recently pointed out that up to 1,000 farmers per day are deciding to leave the profession due to unprofitability.  Sinn Féin MEP Chris MacManus has added that understanding the gravity of the crisis in agriculture may go some way to explain why on average a farmer in France commits suicide every two days.

Agricultural land turned into real estate

You might be wondering what’s happening to the unutilised land.  Well, there are farmers who prefer selling it to developers.  The parlous state of agriculture is connected to the fact that the economic elite appears to have lost interest in agriculture as a source of wealth. Maltese capitalists value land as a source of wealth, but instead of using it as a base for agricultural pursuits, they are using it for real estate development not just in the old urban centres but in the suburban periphery. 

The highest rates of return on investment come from shopping malls, office buildings, middle and upper middle-class housing, and tourist attractions in what used to be arable land.  Where land has not yet been transformed into malls, rural elites often leave it empty and unplanted, waiting for land values to rise as suburban expansion stretches to the rural hinterland, then selling at the “right price” at the “right time”.  They are enabled by some of the political class who sell their souls to developers.

There appears to be more than narrow economic calculus at work in the decline of the countryside. Much development thinking among technocrats, economists, and the business sector is centred on improving the atmosphere for business activities in the city, promoting a dynamic real estate industry, supporting the growth of financial services, and attracting more investment in business process outsourcing.  In this mindset, agriculture is an afterthought, and food security is one that can be met with increased imports.

Why?

The reason often given for the decline of agriculture is that Maltese farmers are inefficient, that their costs of production are too high, making them uncompetitive with foreign exporters. The explanation, rather, is that our farmers can’t compete because our agricultural market has become a dumping ground for foreign commodities that can be sold at dirt cheap prices because their producers are highly subsidised.

The recent farmer protests all over Europe show that agriculture in the EU as a whole is in big trouble.  Countries like France and Germany, which get heavy subsidies, might not be feeling the pinch as much as we are, but they too have a crisis.  Global warming is not helping.  Imagine what it is like in Malta, then, where the myriad problems emanating from our small size are compounded by competition from the rest of the EU and the world

Farmers’ demands

Some months ago, the Government was caught sleeping.  It brushed off the farmers’ first protest as one against the EU but could not do so again during the second protest.  The farmers presented five demands:  (1) blocking imports of “unnecessary” non-EU foodstuffs, (2) more stringent testing of non-EU food products, (3) subsidies on fertilisers, animal fodder, and the costs of local feeds, (4) a stop to any further EU rules that encourage land to remain fallow; and (5) not implementing  EU laws until an impact assessment on local agriculture has been conducted.

In my view, their second demand could be implemented right away. Farmers say their products must meet a much higher bar than that applicable to imported products.  If this is indeed the case, then they are right to cry foul.

The others may be somewhat problematic or outright impossible, but that doesn’t mean that we should give up.  Thus, there may be something in blocking imports of so-called “unnecessary” non-EU foodstuffs, but we cannot unilaterally refuse to implement any agriculture trade agreements the EU may have with other countries or blocs. Also, we must be careful not to restrict consumer choice unduly.  Going back to the situation when we had to buy local biscuits and chocolates, or smuggle them into Malta from Sicily, is not on.

Similarly, there is a case for looking at how the government can assist farmers in the purchase of fodder and fertilisers, but State Aid rules cannot be ditched unilaterally.  On the other hand, neither is it the case that we should take lying down the one-size-fits-all approach of the European Commission.

Again, their fourth demand is reasonable.  The farmers say it is absurd to limit agricultural land in Malta when it is already in very short supply and under sustained attacks from developers.  The contrary should be the case, and farmers should be encouraged and incentivised to bring fallow land into production.

Their fifth demand is not straightforward, but I believe the Government should be substantially more pro-active in its approach on the issues concerned vis-a-vis the European Commission. As the farmers argued, why should we implement the proposed prohibition of cage farming for chickens emanating from the European Green Deal?  Where are we going to raise our poultry   ̶   on road central strips?

Reviving the sector

For those who believe that agriculture is critical to our economy, our society, and our culture, there are important measures to be taken to revive this neglected sector.

Some reforms include enhanced support services, strong legal action to prevent landlords from retaking land, the commercial banks and the Malta Development Bank providing credit to farmers, pushing for EU reform of the Common Agricultural Policy to make small to medium farms viable by weighting payments in favour of the first number of hectares, and strengthening the new unfair trading practices directive by an EU-wide ban on below-cost selling by supermarkets.

Maltese agriculture is at risk of dying. It will take decisive steps to save it — and the Government, the Malta Development Bank, and the National Development and Social Fund should take the bull by the horns and rise to this challenge.