Agricultural output last year lower than in 2002

A significant share of farmers' income last year came from subsidies introduced after the removal of levies, according to economic accounts for agriculture published by the National Statistics Office.

"Whereas, in 2002, subsidies on production amounted to 2.7 per cent of gross value added, these increased to 13.8 per cent of gross value added in 2003. Subsidies were used to compensate farmers' loss of income from lower prices obtained due to the removal of levies," the NSO said.

"Final production at producer prices declined by eight per cent, from Lm57.1 million to Lm52.5 million. In order to make up for this drop, farmers were compensated by Lm4.1 million in subsidies."

In real terms, the total factor income of the agricultural sector (constant 1998 prices), declined by 0.8 per cent from Lm24.9 million in 2002 to Lm24.7 million in 2003. Factor income declined in real terms as the marginal increase in nominal income was off-set by an increase in the general level of prices.

When compared to 2002, the overall output of the agricultural industry in 2003 was 3.3 per cent lower in real terms. The decline in output was a result of contrasting developments in the crop and animal sectors.

Whereas the value of crop products declined from Lm18.6 million in 2002 to Lm16.6 million in 2003 (-10.8 per cent), the value of animal products in real terms increased from Lm12.7 million in 2002 to Lm13.8 million in 2003 (+8.7 per cent). In real terms, the slaughtering of livestock declined by four per cent, when compared to 2002.

Intermediate consumption dropped by 6.2 per cent in 2003, when compared to the previous year. Animal feeds, which dropped by 7.2 per cent in real terms, were mainly responsible for the decline in the value of intermediate consumption.

Net entrepreneurial income (profits) at current and real prices amount to 90.7 per cent of total factor income. Since agriculture in Malta is mainly a family concern, the workforce is also coming from the family.

There is only a small number of full-time workers who are salaried. Net entrepreneurial income declined by 1.8 per cent, at constant prices, when compared to 2002, while non-salaried labour input increased by 0.8 per cent. This resulted in a decline in net real entrepreneurial income per non-salaried annual work units of 2.5 per cent from Lm5,700 in 2002 to Lm5,558 in 2003.

The increase in agricultural factor income at current market prices last year was negligible, increasing by 0.3 per cent from Lm27.8 million in 2002 to Lm27.9 million in 2003.

The marginal increase was mainly the result of a decrease in intermediate consumption rather than an increase in the final production at basic prices. When comparing the annual 2003 data to 2002 data, intermediate consumption decreased by 5.2 per cent, while the final production at basic prices, (after taking into consideration subsidies and deducting losses), declined by 2.3 per cent from Lm57.9 million in 2002 to Lm56.6 million in 2003.

A drop of Lm2.0 million (-9.8 per cent), from Lm20.8 million to Lm18.8 million in the value of forage and vegetable production was mainly responsible for the drop in the final production at basic prices.

Although "livestock products" declined by 2.9 per cent from Lm22.6 million in 2002 to Lm21.9 million in 2003, mainly due to declines in the value of beef and pork by 19.7 per cent and 4.8 per cent respectively, this drop was marginally off-set by an increase in the value of 'other animal products' from Lm14.1 million in 2002 to Lm15.6 million in 2003 (+9.8 per cent).