The agricultural sector in Malta

Abstract

Malta has a relatively small agricultural sector, contributing under 2% of GDP. The Maltese agricultural sector consists mostly of small holdings on terraced strips of land, and soils tend to be shallow. Agricultural land covers 10 000 ha, which is about 30% of the whole land area. The labour force in this sector is ageing. The method of production is generally based on small-scale machinery or manual tools, since the small size of holdings does not permit the use of large machines. The sector is characterised by a low productivity per capita with businesses being typically run by family members. Many farmers in Malta tend to place low opportunity cost on their leisure time, and are therefore prepared to work long hours at low remuneration rates, so that total income rather than net profit would be the motivating factor. There is substantial involvement of the sector in informal economic activities (mainly for the purposes of tax evasion). Although the National Accounts Statistics makes an allowance for imputed income from agricultural activities, the informal sector may by underrepresented in official agricultural statistics. In spite of the low productivity in this sector, Malta is self-sufficient in fresh vegetables, eggs, poultry, rabbit meat, pork and fresh milk, while a relatively large proportion of beef and fruit is imported. In recent years, horticultural production has tended to increase. Maltese agriculture is beset by a number of handicaps which explain its current precarious condition and which warrant appropriate policy intervention.