An economic and structural analysis of the horticultural industry in the Maltese Islands

Abstract

The Maltese agriculture faces several constrains due to the size of the holdings and fields, which are dominated by small parcels, thus most of the work has to be done manually. Moreover, when Malta joined the EU in 2004, farmers begin to face a stem competition from importation of agricultural products from the EU and third countries, with the consequence that agricultural prices had fallen, while on the other hand, farm expenses had risen mainly due to fuel crises and because Maltese agriculture depends mainly on importation of material. Thus it is of utmost important to determine whether, the horticulture industry is still viable, and how the different farm sizes are coping. In this study, aggregated data from the Farm Accountancy Data Network survey was used. FADN is an instrument for evaluating farmer's income and the impacts of the Common Agricultural Policy. This study gave a clear indication that the most efficient farms are large farms, followed by medium farms. Thus the greater the farm the more efficient it is. This study showed also the strength, weaknesses, opportunities and threats of the horticultural industry. This study also showed that farms are given large amount of subsidies, mainly through SMPPMA, but these are going to be phased out slowly. So farmers need to look for other alternatives, they have to produce typical products for a niche market, to obtain higher prices and to combat the importation of vegetables from EU and third countries. This study can also serve as guidelines to farmers, to compare their farm performance with the average of their size to have an indication of how their business is performing and ways for improvement.