Malta’s agri-food sector is embracing innovation and diversification to market its high quality, niche products.
Malta’s agricultural sector is on the edge of a new green revolution as serious attention is being paid towards tackling the many challenges facing the sector. With just 13,000 hectares of agricultural land, Malta’s food producers have struggled to maintain their relevance in the consumer age of mass-produced and processed ready meals. However, the seeds for change are currently being planted. Discussions are underway on how Maltese farmers could make the most of the innovation boom in agriculture. Farmland consolidation, the use of treated waste water and the reversal of the rural skill drain are some of the measures that have been singled out to make farming smarter and the sector more competitive. While the overwhelming majority of Maltese food is consumed locally, the island could build on its expertise in food processing for export markets.
Efforts to carve out new niche markets are also beginning to yield results. Speciality food for gourmet consumers in Europe and Asia is being marketed as a way to preserve and promote Malta’s artisan food producers. Spring crop potatoes are being exported at a premium to Northern Europe, and the famed Mediterranean diet is exploited by targeting the speciality sector with delicacies like olive oil, sun-dried tomatoes, fig jam, sheep milk cheese and sea salt. Despite being one of the world’s smallest wine making countries, Malta’s wine industry is rapidly gaining attention with consumers, and some wineries are exporting across Europe and beyond. Future growth potential exists in aquaculture, and the aim is to emulate the successful Norwegian and Scottish seafood farming industries by cultivating a range of species.
A Rich Heritage
Agriculture in Malta is as old as man’s presence on the island. The Phoenicians initiated the olive oil industry in Malta, while the tradition of bee-keeping dates back to the ancient Greeks and Romans, who considered Maltese honey to be a prized delicacy. In fact, the Greeks knew the island as Melite, deriving from ‘meli’, their word for honey. Later, under Arabic rule, the Maltese were introduced to new crops, such as carob, figs, citrus fruits and cotton. Centuries later the British attempted to develop Malta’s small cotton industry, with an eye on exports, but the initiative proved commercially unsustainable. Under British rule the importance of agriculture as a whole began to decline as a range of new sectors, such as light manufacturing and ship building, were introduced, attracting a large proportion of the rural population.
Today, the Maltese agro-food industry is tiny in comparison to its European neighbours. Agricultural production and fisheries account for a little less than 2% of Malta’s GDP and 2.9% of total employment, but the industry remains culturally important to the economy. Although around 80% of the island’s food requirements are imported, agriculture remains an important sector of the economy employing 18,500 people. However, over 90% are part-time farmers, and in the fishing industry only a minority of Malta’s 2,000 registered fishermen earn their livelihood solely from the sea. Farms have an average size of 1.2 hectares, and are significantly smaller than the average agricultural holding in the European Union with a size of 14.4 hectares. The main crops are vegetables and fruits. The country does have a small livestock sector that is skewed towards dairy farming to produce milk for local consumption.
While mass-markets are firmly out of reach, the island’s micro-producers have managed to score some notable export successes in a number of speciality niche areas including: bluefin tuna to the Japanese market, early season potatoes to Holland; and beverages, desserts, baking products, confectionery, sauces, dressings, wines and spirits to Europe, Africa and Asia. Companies such as Foster Clarks, Magro Brothers, Consolidated Biscuit Company and the Farsons Group have been the country’s main export success stories. The value of Malta’s food exports last year testifies to the success of the niche market strategy. Exports increased to €255 million in 2016 from 246 million in 2015. Food imports totalled €555 million compared to €521 in 2015.
Promoting Mediterranean Delicacies
With consumers increasingly favouring organic and traditional foods, Malta’s agricultural sector intends to capitalise on its natural food heritage by supplying premium products to international markets. This involves the promotion of traditional delicacies such as sheep milk cheese, sun-ripened tomatoes, pasta sauces, herbs and spices, olive oils, honey and fruits; all prepared using ancient recipes found in Maltese kitchens. Marketing of this kind is essential to distinguish Malta’s local, small-scale producers from their big-brand competitors and enable them to successfully compete internationally.
The olive oil industry, for which Malta was so famous, has also been re-established by planting thousands of cuttings from 2,000-year-old indigenous olive trees. The oil has been applauded for its flavour, purity and health-enhancing qualities. Maltese honey is also a sought-after and prized gourmet product. The island’s producers believe that it has great export potential and is destined for the shelves of high-end food emporiums for foodies around the globe to enjoy. Malta has also become an important supplier to the Dutch market, with the island’s floury-flavoured early season potatoes being exported almost exclusively to the Netherlands at premium prices.
Fishing & Seafood
Malta’s fishing sector covers both traditional methods and more modern aquaculture techniques. While the daily catch from traditional fishing boats mainly supplies local markets and restaurants, the introduction of fish farming and tuna penning has resulted in a marked increase in seafood exports. At its peak, Malta was estimated to have supplied around 30% of Japan’s frozen bluefin tuna imports; but EU-imposed quotas have seen industry output fall considerably. Today, Maltese fishermen are allowed to catch slightly more than 225 tons per season.
Passion in a Glass
Though wine making in Malta is said to date back to the time of the Phoenicians, it is only recently that Malta’s wine industry has garnered international buzz. There are a total of 16 wineries in Malta and Gozo; with Marsovin, Delicata, Camilleri Wines, Meridiana, Montekristo and Ta` Mena (Gozo) being the main producers. There are two indigenous grape varieties, Girgentina and Gellewza, being cultivated in Malta. Although blessed with suitable soil and a near perfect climate, Maltese winemakers are constrained by the shortage of available land, which they started to address by producing higher quality wines. In 2007, Malta introduced its own appellation system, the DOK, to ensure quality and origin. In recent years Malta’s winemakers have also invested heavily in modern equipment to improve the production and quality of their produce. Their wines have begun to slowly capture global attention, with market leaders winning international awards, and Maltese wines are now finding their way into wine sellers as far away as China.
A New Source of Income
Agritourism is also a way of sustaining rural livelihoods and is increasingly becoming a vibrant part of Malta’s tourism product. Farmers living on Malta and in particular on its smaller sister island Gozo, offer visitors an alternative way of holiday making. Tourists are invited to stay in restored farmhouses in small villages or in the countryside to experience a rural lifestyle. They can engage in hands-on activities such as milking sheep, making cheese pickled in salt, vinegar and pepper, picking and pickling capers, wine-making and fishing in the colourful traditional boats.
Farming as a Business
Malta’s government is actively supporting the agricultural sector. The Ministry for Sustainable Development, the Environment and Climate Change and the Parliamentary Secretariat for Agriculture, Fisheries and Animal Rights are introducing measures to increase the competitiveness and innovation within the sector. The primary focus is on modernising agricultural techniques and facilitating investment – since capital investment presents a major obstacle to a sector dominated by small producers. The rationale is that farmers should be able to attain a respectable income from their operations, making agribusiness also an attractive job prospect for the younger generation.
Agriculture is set to benefit from EU funds and in the period up to 2020, the Common Agricultural Policy (CAP) is going to invest €134 million in the Maltese farming sector and rural areas. In the agri-food sector, Malta is increasing its focus on research and investment to upgrade the existing production structure, introduce new technologies and modernise systems. The Institute of Agriculture at the University of Malta and the island’s vocational college MCAST both offer training in sustainable production and new technologies.
Despite the initial successes and promising potential, the road to sustainable agriculture in Malta is challenging. The quality of local produce has recently hit the headlines after it had been found to contain excessive pesticide residues. The over-exploitation of fresh water and excessive use of pesticides and fertilisers, leading to high concentrations of nitrates in water and soil, have created serious environmental problems. While groundwater and desalinated seawater are currently being used, there are initiatives promoting and facilitating the use of so-called new water – treated waste water – for irrigation purposes. Land fragmentation and the scale of agricultural holdings also pose pressing commercial challenges. Farmland is predominantly government-owned and is leased to farmers through agricultural leases, which are renewed yearly. However, these leases can only be passed on from parents to children, and hence cannot be transferred between siblings without the content of their parents and cannot be sold or sublet. This situation is restricting the consolidation of farmland by progressive farmers who seek to overcome difficulties related to economies of scale. There are also concerns over an aging farmer population, and investment in innovative technology and profitable niches is seen as important in improving the image of farming as a viable career path for the younger generation.
At the top of the agenda is the development of successful market niches. The demand for Maltese olive oil has increased in the last decade and could be exploited further. Another niche product for which demand exceeds the supply is honey. While the world’s bee population is declining due to pollinating habits, pesticides and intensive farming, there is an opportunity in the production of Maltese queen bees for export. Organic food production also offers significant potential for growth as Malta currently has the lowest level of organic farms at EU level. A promising export market has also been identified for herbs and spices grown on the island.
Increased cooperation is one possible route for developing the sector further. The island’s small scale food producers could pool resources to sell their food products to foreign markets. By forming strategic alliances of producers, sharing investment and knowledge in product development and market access, the country’s agricultural sector has a good chance of carving out its own niche in the speciality sector. Wine tourism has been identified as another way to make Maltese wine known to international mainstream consumers, with wineries and special wine events and festivals attracting foreign visitors to the islands.
A Blueprint for Aquaculture
With the world’s oceans and seas at risk of over fishing and subject to catch quotas, the Maltese authorities are convinced that future growth can be made possible by the development of a thriving aquaculture industry, through which fish is farmed in controlled conditions. There are a handful of aquaculture farms operating from different sites, producing captured based species (CBSs) or tuna, as well closed cycle species (CCSs), such as sea bream, sea bass and meagre that are cultured from eggs produced in hatcheries. With the island’s close proximity to European and North African markets and significant sea acreage to host fish farms, the strategy highlights that the sector has the potential to contribute over €70 million to the Maltese economy by 2020. Species diversification is the target for the future and research is already being conducted into the farming of other fish.
Malta also believes it can profit from its long trading tradition with Arab countries and the vast agricultural potential in North Africa. The island is ideally placed as a food processing and distribution hub for North African agricultural products, such as wheat, oats, olives and dates, targeting the European market. Malta also possesses the infrastructure to produce and export high-value nutritious foods that many African countries lack. Facilities include one of the largest Mediterranean ports as well as a range of processing and warehousing facilities.
One such example is the Kordin Grain Terminal in the Port of Valletta, which handles the storage and trans-shipment of free-flowing grains such as wheat, maize, soya beans and sunflower seeds. These products reach Malta from grain-producing nations and use the island as a gateway to the world. While the terminal’s business has declined in recent years, Malta is currently conducting market studies to tap into new trends and opportunities. As an EU member state on the doorstep of the African continent, which possesses more than half of the world’s fertile land, Malta is keen to further exploit its location by encouraging global food processing companies to invest and develop facilities on the island. In this regard, public-private partnerships are also being explored. Additionally, the government is highlighting the island’s potential as a management hub for international food companies with operations in Africa.
Malta’s agriculture sector could get a boost from technological advances. Precision agriculture – the use of digital tools and smart machines for remote sensing, data processing and automation – offers the opportunity to minimise inputs and maximise productivity, while also contributing to the struggle against environmental damage and climate change. Smart technology is also being brought to the fish farming industry, a sector that is very promising in Malta. There are few limits on growth, given Malta’s vast offshore region and the increasing global demand for fish. The EU in particular is only 70% self-sufficient in its seafood needs and Malta is determined to capitalise on this tremendous opportunity.
The rising interest in alternative foods also offers opportunities for speciality food producers to tap into new markets and secure a premium for their products. The country already sells a number of high-quality products to the overseas customer but significant effort will be needed if these are to establish a firm foothold in the consumer market. In order to target foreign markets and consumers willing to pay top prices, the sector needs to change current methods of production, marketing and sales.