New compensation scheme for herdsmen

An agreement, introducing a new direct compensation scheme on the milk produced by herdsmen, was yesterday signed between the Agriculture Ministry and the Milk Producers Cooperative Society Ltd (KPH).

The new Dairy Compensation Scheme, which is being tried for a year and is replacing the Beef Intervention Scheme, involves a government allocation of Lm500,000 for a year, Agriculture Minister Ninu Zammit said.

It aims at a more efficient and economical milk production and at improving both the quantity and quality, he said.

The scheme should also serve to render producers responsible not only for the production of milk and beef, but also for the marketing of these products for the first time.

Discussions on the agreement had been under way since March, he said.

Under the scheme, every herdsman would be receiving five cents for every gallon of milk produced, according to their quota, Mr Zammit explained.

Since not every herdsman reached the quota, part of the compensation would be passed onto a company that was being set up by the cooperative to organise the beef market for its producer members and others interested in joining the initiative.

Under the old scheme, the government was forking out hundreds of thousands of liri to subsidise the cows that were slaughtered after they had produced milk for a number of years and whose carcasses would then be processed.

Mr Zammit explained that since these cows did not fetch a good price, the government had established a price itself and would subsidise the herdsmen where they did not get that price.

When the old scheme was introduced in 1995, the meat that would be processed amounted to around 240 tonnes, with a subsidy of Lm215,000 a year. This amount increased to 360 tonnes and a subsidy of Lm480,000 in 2001.

Moreover, the scheme was not leading to restructuring initiatives by the herdsmen, who were not carrying out the necessary changes, not even as regards farm waste disposal.

Mr Zammit augured that the new scheme would be established on a permanent basis.