Direct Payments

Agreement at EU-level on direct payment support, provided through the European Agricultural Guarantee Fund (EAGF), was reached in 2013 and resulted in the adoption of the Direct Payments Regulation (DPR), Regulation (EU) No 1307/2013.

Malta has been allocated an annual budget of €5.2 million until end 2019, a budget which will be used to support active farmers via the implementation of the new, compulsory schemes (applicable for all Member States), as well as the voluntary schemes.  Malta will be implementing a total of 5 schemes under the DPR, namely:

• Basic Payment Scheme (BPS)
  
• Payment for agricultural practices beneficial for the climate and the environment (Greening)
  
• Payments for young farmers
  
• Voluntary Coupled Support (VCS)
  
• Small Farmers Scheme (SFS)

Basic Payment Scheme (BPS)

The Basic Payment Scheme (BPS) is very similar to the past Single Payment Scheme (SPS), which was implemented throughout the 2007-2013 programming period. The scheme will be based on payment entitlements which Malta will be allocating in 2015, meaning that farmers will be receiving new entitlements in accordance with the eligible agricultural area registered with the Agriculture and Rural Payments Agency (ARPA). Under this new framework Malta will be allocating one type of entitlement with one value.

Farmers will be required to activate the entitlements each year, together with the equivalent eligible area registered by the beneficiary. These entitlements shall be traded like the previous entitlements; they can either be transferred or leased. Entitlements which are not activated for two consecutive years shall be transferred to the National Reserve, which serves as an envelope to be used to allocate new entitlements to new farmers.

In order to be eligible for support under the BPS, applicants must have possess a minimum of 0.3 hectares (equivalent to 2.6 tumoli) of eligible agricultural land (or land used for agricultural purposes). Parcels which are left fallow shall be considered eligible as long as the farmer is carrying out what is known as ‘a minimum activity’. This is a new obligation introduced under the new framework aimed to support active farmers; parcels left fallow must be tilled at least once a year between April and May in order to satisfy this minimum activity obligation.

Payment for agricultural practices beneficial for the climate and the environment (Greening)

During the 2014-2020 period, the Commission has placed considerable importance upon the greening measures, and this is evident by the fact that 30% of the total Direct Payments budget has been allocated to greening payments.  

In Malta, €1.57 million will be allocated annually for greening. Greening comprises three schemes, and all farmers falling within the set thresholds of the schemes are obliged to observe the applicable obligations.  In case of non-compliance they will be subject to penalties and/or reductions.  The three greening schemes are the following:

• ​Crop Diversification

Farmers in possession of over 10 hectares (88 Tumoli) of arable land must observe the crop diversification system:

​- Farmers who have over 10 hectares but less than 30 hectares must cultivate at least 2 crops on their     arable land. The main crop must not exceed 75% of the total arable land;

- Farmers with an arable area of more than 30 hectares (266 tumoli) must cultivate at least 3 crops with  the main crop not exceeding 75%. The main crop together with the secondary crop must not exceed  95% of the arable area.

Farmers who either cultivate over 75% of their arable land with fodder crops, or leave their land fallow, are exempt from the crop diversification obligation.

• ​Permanent Grasslands

This scheme is not applicable to Malta as there are no permanent grasslands.

• ​Ecological Focus Area (EFAs)

Farmers who have an area of 15 hectares (133 tumoli) or more of arable land are obliged to maintain at least 5% Ecological Focus Areas (EFAs).  Malta has determined the following areas as Ecological Focus Areas:

​- Fallow Land

​- Nitrogen fixing crops

Farmers with less than 10 hectares are exempt from the greening obligation but are still eligible for the greening payment.

Payment for young farmers

This scheme is aimed to support young people starting an agricultural activity. Farmers who are 40 years or younger will be able to benefit from an additional financial top-up to their basic payment.

The top-up amounts to 25% of the payment entitlement value, and support is granted for the first 5 years from when the farmers commence their agricultural activity.

Small Farmers Scheme (SFS)

The European Commission has proposed a simplified scheme for farmers who receive payment of less than €1,250. The Small Farmers Scheme shall help these small farmers to submit a simple application form rather than applying for the Basic Payment Scheme (BPS), greening and/or young farmers’ scheme.

The farmers will receive the same amount of funds but through a simplified scheme instead, and Malta will consider all farmers who will receive payment of less than €1,250 as being part of the SFS. Farmers may decide to withdraw from the SFS at any time simply by informing the Agriculture and Rural Payments Agency (ARPA). Farmers participating in the Small Farmers Scheme (SFS) are exempt from the greening obligations and the penalties and reductions related to cross compliance obligations.

Voluntary Coupled Support (VCS)

The objective of the Voluntary Coupled Support (VCS) scheme is to support sectors that are particularly important for economic, social or environmental reasons, and which are undergoing certain difficulties. Malta obtained derogation from the EU under the Voluntary Coupled Support (VCS) scheme allowing the possibility to allocate up to €3 million for this measure.

Malta will be using this scheme to support four sectors: dairy, beef, Sheep and tomato (for processing). Farmers in these sectors are requested to submit an expression of interest to receive support under this scheme.

• ​Dairy Sector

Dairy breeders may receive support if they fulfil the follow criteria:

​- Have a contract with a dairy processor

- Have at least 10 dairy cows

• Beef Sector

Farmers in the beef industry are eligible for support as long as they have:

-Slaughtered at least three bulls or heifers in 2014. Under this scheme an eligible heifer must be of a beef breed or cross-bred with a beef breed. Eligible bovines must be slaughtered between the age of 8 and 20 months and must have been registered under the breeder’s name for at least 6 months.

• Sheep Sector

Farmers in the sheep sector may be eligible for support if they have:

- At least 20 ewes which are 1 year (or older) or more registered under their name.

• Tomato Sector

Farmers who cultivate tomatoes for processing must meet the following criteria to receive support:

- Have a contract with a Producer Organisation (PO) or Cooperative within the tomatoes for processing sector

Budget for all Schemes

As stated above, the total budget for Direct Payments in Malta until 2019 will be of €5.2 million annually.  The following table provides a breakdown for budgetary allocation for each scheme:

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