The Malta Independent 3 February 2023, Friday
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The ‘agricultural reform white paper‘: Neither pro-agriculture nor reforming

Sunday, 27 November 2022, 08:54 Last update: about 3 months ago

Paul Sant Cassia

In response to recent court cases the Government published its White Paper (henceforth WP) on Agricultural Leases on 4th October 2022. That same day Government presented an Act in Parliament to amend the Agricultural Leases Act, Cap.199. The Cabinet had approved the planned changes in February. Malta Youth in Agriculture (MaYA) Foundation and Graffitti  echoed the dismay of many that the Act failed to resolve the issues raised by the WP. These included inter alia identifying who are “genuine farmers”, youth marginalisation, and the sweeping ambiguous powers intended for yet another “Authority” (naturally, like other Authorities,  transparent and not bedevilled by corruption).

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This contribution is about the WP’s inadequacies of vision. To begin with, it is difficult to ascertain whether its main argument (“secure food supply”) is an astonishing exercise in bluff or a dismaying disconcertment at its earnest credulity. It is also difficult to decide whether its acknowledged difficulty in distinguishing between “genuine farmers” from part-timers is an honest recognition of a problem requiring resolution or an intentioned deferral to a simulated bureaucratic exercise. The public will find it difficult to decide whether the private rental rural ‘reform’ is either (i) a case of ‘plus ça change’, (ii) a missed opportunity, or (iii) a new Land Grab Mark 2. The resulting legislation may transpire to be all three. What is indubitable is that it makes no attempt to comprehend, much less tackle, the key issue: why the private rural rents regime is a major cause of the paltry state of Malta’s agricultural sector compared to other sectors that have grown. It is the only sector that exhibits a precipitous decline including its GDP contribution.  Malta’s agriculture has not shrunk despite protection, but because of it. The Act will do little to halt this decline.

 

The fantasies of ‘food security’

The WP’s key objective is ‘food security’,  to ‘support agriculture in the wake of its importance for guaranteeing an ample food supply’. There are four problems with this argument. First, it uses ‘food security’ to suggest ‘self-sufficiency’, knowing full well that the latter is fantasy. According to the FAO, ‘food security’ merely means a country’s ability to source its food, usually from abroad. Food ‘self-sufficiency’ means “the domestic capacity to produce it in sufficient quantities”. Second, what exactly in quantifiable terms does the WP mean by ‘ample food supply’? ‘Ample’ would seem to suggest at least half of our food requirement, if not more. Has Malta ever produced at least half of its food supply? Third, does the WP intend food security across all areas of production, from flour to bananas, cabbages, lamb, and beef? Finally, has Malta ever been food self-sufficient?

Malta has not been food self-sufficient since at least the 15th century, for it was dependent upon Sicily. The notion of food autarchy (self-sufficiency) is a deceptive illusory fantasy. Even Malta’s traditional “hobzawas made from Sicilian wheat (15-19th centuries), then Ukrainian (British period, 19th century), then Canadian wheat (20th century). Until 1800 the Universita bought Sicilian wheat, and the Sette Giugno riots occurred precisely because the British refused to subsidize the increased imported wheat prices.  A year before (1920) a British agronomist noted ‘there is little prospect of the Island ever being able to produce any large proportion of the wheat required for consumption’ (Dawson Shepherd). WWII is the clearest example that Malta is not food self-sufficient that, like Britain, nearly starved.  Malta’s growing population across the last 500 years shows that whereas in 1593 there was roughly 2.7 hectares (2700 sq. metres) of arable land per head of population, today the ratio is a princely 0.0199 hectares (199 square metres). That is 0.177 or 177/1000 of a tomna per person (based on 2020 Agricultural Census: declared utilized and unutilized land of 11,402 ha; population includes 52,982 average daily tourists for they too need feeding).  That is the size of a generous 3 bedroomed property. ‘Ample food supply’ anyone?

These figures are extraordinary for two reasons. First, they demonstrate the absurdity of any aspiration towards local ‘food security’. Second, that the Ministry of Agriculture had the audacity to peddle this populist delusion in an official document, when it itself collected the above agricultural use figures. It should be obvious to any rational observer that agriculture has long been unable to sustain the population, and never will. Furthermore, the burgeoning population, extraordinary for any Mediterranean island, is ironically the most convincing evidence that Malta has done well for itself over centuries despite occasional troughs, for why would people immigrate to the island (as they have done from neighbouring societies) were it not flourishing? Paradoxically, it could be argued that Malta thrived, and its population grew precisely because it has not been food self-sufficient, obliging its inhabitants to develop a diversified economy. Massive 19th and 20th century emigration is ample proof of chronic agricultural penury compounded by declining imperial employment.

Our forefathers long recognized that farming could not support them, exemplified by the ironic saying Malta qatt ma irrifjutat il-qamħ (Malta never refused wheat). Yet it was wealthier than Sicily whose resources were extracted. By contrast, resource-poor Malta drew in wealth from external sources: European land rents and the Corso during the Knights, defence spending by the British; EU grants, passport sales, iGaming, lower international company taxes, etc. today. Ethically compromising much like the Corso, they provide the neo-colonial State with patronage resources to ‘protect’ its grateful subjects.  

 

Land rental regimes determine agricultural development

In alighting on ‘food security’ the authorities scrabbled around to find a legitimating argument to ‘fix what they considered a legal problem: challenges to a monopolistic land rental system that the Government wants to claw back - not to protect agriculture but to protect its political interests. To ensure the latter, it is prepared to destroy the former. The Opposition is no different in privileging political temerity over economic rationality.  Ironically, it is this land tenure system itself that is a major cause of Malta’s agricultural underperformance. Of all the factors that have cumulatively contributed to the current state of Maltese agriculture (lack of innovation, micro-farms, low productivity, lack of crop rotation, environmental degradation, etc.), the land tenure system is a critical contributory factor. It is a fundamental causative agent not an independent variable.

Any legal tenancy regime has direct causative effects on the type of agriculture that emerges, i.e., whether it is dynamic, static, or regressive, the level of investment, innovation, and the introduction of new ideas, crops, niche products, or wheat and cabbages. The current land rental regime, particularly that governing part-time cultivators (the majority of ‘farmers’, a term that needs redefining), is a major cause of the current sorry state of Maltese agriculture.  Apart from its violation of owners’ rights, protected land tenureship across generations has had three deleterious effects: (i) land fragmentation leading to gross inefficiencies (ii) de facto exclusion of young blood, and (iii) the re- enforcement of a ‘peasant’ mode of production. By overregulating the land rental market to its disappearance, the State has effectively incubated a regressive agricultural productive system that ill-serves the country’s food supply and excludes the rest of the population from investing in agriculture.

The EU Commission’s ‘Recommendations for Malta’s Common Agricultural Policy (CAP) strategic plan’ (18.12.2020) makes no recommendation or reference to food supply. It knows full well that Malta’s agriculture cannot provide ‘sufficient and adequate farming in order for the country to ensure its food supply’ (in the words of the WP).  Instead, it  criticizes Malta’s CAP strategic plan: ‘Rather than competing based on price, Malta’s farm sector should focus more on adding value to agricultural products and orientate towards producing for niche markets.In this way, it would be able to charge premium prices for its products and become a more sustainable sector’. By referring to ‘competition based on price’ it is basically saying that local farmers produce similar foodstuffs to imported ones. As these benefit from economies of scale, local profit margins are inevitably reduced because they must shadow imported food prices (mainly vegetable, poultry, and animal feed). The Commission warns this is not sustainable (consumption of fertilizers, soil nutrient depletion, scarce water) and does not optimize scarce land.

Malta’s agricultural sector did not adapt from the ‘closed shop’ of pre-EU times (when it was protected by high tariffs) to the current open market. Instead, many part-time cultivators on private leases occupying 22% of arable land, persist in treating their leases merely as an extractive income with little investment. With the notable exception of private entrepreneurs investing in viticulture, olive oil, etc., agriculture (particularly in the small tenant sector) continues its inexorable decline. As in the protected pre-EU past, private tenancies concentrate on two types of products: (i) vegetables to compete with supermarket imports (if cultivators have the time) and particularly (ii) forage crops. According to the 2020 Government Census, 67.47 % of our scarce land is given to forage crops (i.e., animal feed) (5251 out of 7782 hectares), i.e., 2/3 of all land. Instead of investing in new specialist crops, the private tenancy sector practices the most basic form of agriculture with little value added.  Hardly surprising, then, that part-time tenants (“farmers”) grumble about higher rents:  their farming is basically a land holding exercise, protected by low rents and heritable tenancies, with little investment and risk. The ‘equation’ is simple:  20 annual rents + heritable tenancies + owner liability succession tax = Minimal investment (forage crops) + Maximum Extraction. It is also environmentally damaging.

Forage production has little to do with ‘food security’ except very inefficiently, for local animal feed production must likewise compete with cheap imports that provide the bulk of local consumption. This nominal ‘agriculture’ is an environmentally damaging mono-crop extractive capitalism. It provides medium-income security with minimal risk for the ‘remote-control’ tenant who has little ‘hands on’ engagement. So ingrained has this environmentally damaging, over-extractive monocrop culture become that indigenous mulberries, pomegranates and carobs (both ‘superfoods’) have been abandoned, and even prickly pears are imported from Sicily.  Rent protection (plus subsidies) to part-time cultivators (a more precise definition than ‘farmer’) thus sustains extractive, environmentally damaging agriculture, discourages innovation, and excludes others keen to invest in new ventures. To the part-time cultivator this land promises a capitalizable resource plus spare income. To the rest of society, this land is a valuable scarce national resource that should be more widely accessible through a liberalized market to be inventively cultivated.

 

How could the State morally and rationally support such a blatant misuse of our scarce national resource through appropriation of other people’s land? A consequence is that the local population is excluded from accessing and investing in it through a more liberal market. The State is not protecting “agriculture”. It is sabotaging it to protect a particular social segment’s transmitted privileges.  You can’t blame the tenants. They are merely taking advantage of Government extravagance with other people’s property: “l’appetito vien mangiando”, particularly if you are dining at someone else’s table for life.   But given that land is so scarce and so valuable, as the State claims, it is outrageous that it underwrites this wastage of resources to protect a legally defined category of heritable leases. In contrast to their grandparent (full-time) farmers, these beneficiaries now come from all walks of life, evidence of welcome social mobility.  Contrast this to the investment (e.g., greenhouses), new crops, production for the market, largely undertaken by entrepreneurial full-timers on owner- occupied/farmed land, such as boutique wineries, olive presses, citrus groves, etc.  

 

Land-rent hoarding in anticipation of speculation

Different rental regime conditions (rent costs, length and security of tenure, etc.) generate different results. How has the private rental regime shaped the engagement, attitude, and expectations of the average beneficiary?

First observation: the time spent on working the land is indicative of engagement and commitment. If the part-time cultivator grows forage crops, he is an absentee cultivator. No investment there; he is merely extracting as much as he can, with environmental deterioration. If he grows vegetables his horticultural work may be a psychologically important passatemp. But overall, in contrast to the full-time farmer, any extra income from the part-time tenant cultivator’s other job, or his agricultural income, is not ploughed back into agriculture but into consumption. He is disinclined to invest- he mainly desires a supplementary income, like any part-time job. He considers the land he rents ‘not his’ to warrant investment although he knows full well that he has security of tenure, but de facto ‘his’ to hold on to, to transmit to his children or demand a ‘rigal’ to vacate. He calculates this “gift” not as a multiple of the land’s agricultural income, but on its potential value as a building plot, and he fiercely resists any suggestion of rent increases. His labour costs are not calculated against crop output but as an investment in the land’s potential capital value should that be realisable. He thus continues to service land in a peasant mode of production, not costing his labour, growing animal fodder that requires minimal labour with guaranteed sales.   He continues doing so because “why give it up?” “ This is a capital resource”. Why give up ‘free land’ whose inheritance taxes are paid by the legal owners? This tenanted land holds more capital value promise to him than its mere agricultural income value.

Second observation: hardly any tenant relinquishes land to its owner. To hold on to his tenancy, he continues working it remotely, by hiring the machinery to grow forage crops. This does very little to develop Malta’s agriculture. Consequently, more dynamic incomers are excluded.  The legal regime encourages him to consider his tenureship as his capital and to hoard it. You cannot blame him. It is the direct result of patrimonial state ‘protection’. He is not a commercial full-time farmer but an urbanite with rural roots who aspires to retain his agricultural pastime and perhaps develop a modest estate. The part-time cultivator does not aspire to become a full-time commercial farmer. He knows it is too hard and a risky vocation.  You cannot blame him. His vocation lies elsewhere. A rural development entrepreneur is more attractive and lucrative. It is society’s aspirational model where land is more a capital resource than a target of  agricultural innovation: Airbnb ‘agrotourism’ with a pool - more tourism than ‘agro’? Why not? Haven’t others obtained similar permits? Is it any surprise that agricultural innovation, investment, or enhanced productivity is subordinated to land as a capitalizable resource by cultivators themselves?

 

Consequences of the private rural rents regime

Three deleterious consequences follow: (i) land-hoarding by the part-time tenants, aware that the longer they hold on, the greater its potential capitalizable value. Forage crop cultivation is the ‘occupying expense’ to retain it; (ii) the disappearance of the agricultural land market.  Malta’s progressive governments have over-regulated the agricultural land rental market to such an extent that it has disappeared and  is inaccessible  to everyone except the third-generation heirs of the original tenants.  This pushes up prices of unencumbered land, further encouraging tenants to ‘land hoard’ in an upwards spiral. Finally (iii) it excludes full-time farmers from expanding, and 95% of the population who equally have a right to rent land on an open market and invest in new crops, innovate, enhance Malta’s ‘niche products’ and derive psychic sustenance. The non- “farming families” young (meaning no inherited leases) are the most excluded.  The tragedy is that we could have a much more dynamic open farming sector with less environmental damage if this indiscriminate protection is jettisoned for the common good. In the name of ‘protecting agriculture’, which means ‘protecting a particular legal classification’, the State is the major agent of its decline.

MaYA Foundation and Graffitti rightly ask “who is a genuine farmer”? The answer is simple: anyone who inherits a tenancy. Inheriting a tenancy makes you ipso facto a “farmer”. It is not the farming activity that makes the “farmer”, it is the inheritance of a protected rural lease. From that, privileges and protection accrue. The legal classification creates the identity and the fictional “class”, not the reverse. Legal Classification (lease inheritance) = “farmer”. There is no other self-ascribed occupation in Malta that brings with it a State supported set of inherited privileges and protections. No wonder the National Agricultural Policy (2018) reported: ‘the amount of registered full-time and part-time farmers in Malta is very high and there is no means to classify the active farmer segment that is producing food for the population’. And with Malta’s rapid social mobility over three generations, few tenancy heirs remain “farmers” for they are employers, employees, self-employed technicians, white collar workers, etc.  Not everyone who “farms” part-time is a farmer, just as any DIYer is not a full-time professional accountant, electrician, plumber, or tiler.

 

Misgovernment by ‘protection’

The Rural Leases issue is symptomatic of a mode of Governance that has long vitiated Malta’s neo-colonial state: Mis-Governance by Protection. Look around and you will see “protected species” depredating the unprotected, directly or indirectly – not just within society but across its boundaries, including one locally protected powerful species (hunters) preying on an internationally protected vulnerable one (e.g., migrating turtle doves). It is the currency of local politics in exchange for votes, sustaining our ‘Republic of the Petulantly Protected’.

Protection incubates abuse, generates inefficiencies, disincentivizes innovation, ghettoizes a social sector, prevents introduction of new blood, and generates a resentful but expectant dependency among the protected that is very hard to wean off.  In short, righteous indignation in a society where victimhood is a readily adopted identity, thus meriting protection in a vicious circle of petulant expectations and timid politician capitulation. The new amendments to the Law will entrench the inevitable and inexorable decline of agriculture in the private rental sector. It is a law designed to sustain the charade of an inherited legal identity. It undemocratically excludes 95% of the population from the means of rural production and investment, and their psychological well-being in a highly urbanized society. It is not about agricultural or environmental protection. 

 

 

Paul Sant Cassia is Professor of Anthropology at the University of Malta.

An expanded version of this contribution can be accessed at: https://www.academia.edu/90293317/A_CASE_OF_PLUS_ÇA_CHANGE_A_MISSED_OPPORTUNITY_OR_A_NEW_LAND_GRAB_?fbclid=IwAR2SDOhVIJRBeOQDVxC_Kg0JmQeSNPTBhCNOL4kACmaw9V__73och02WHFA

 

 

 

 

 

 

 

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