The goal of the ewe and goat premiums is to support farmers and ensure the economic viability of farms in Malta. 5 direct payment schemes under the Voluntary Coupled Scheme (VCS) were implemented to support the dairy, beef, sheep and tomato sectors. Sheep farmers receive a premium of EUR 13 per animal at the time of slaughter if they have at least 20 ewes which are at least 1 year old. The primary beneficiaries of this scheme are goat and ewe farmers, who tend to own small farms.
The direct payment schemes have an annual budget of EUR 3 million, allocated amongst the dairy, beef, sheep and tomato sectors. In 2019, the budget impact of the sheep sector was EUR 13 per sheep, so that the producer price was EUR 13 more than the consumer price. If the subsidy were to be removed, either the producer price would decrease by 10% or the consumer price would need to be increased by 11.3%. If the consumer price rose, there would be an 8.4% decrease in consumption.
The sheep and goat premium encourages the production of meat, which increases the number of livestock as well as demands on resources and land. The environmental impact of this subsidy includes increased levels of greenhouse gas emissions and the amount of waste produced. Greenhouse gas emissions could be reduced by 150 tons of CO2 each year if this subsidy were abolished.
Malta aims to take its agricultural sector in a more sustainable direction to increase the competitiveness of its farmers, encourage sustainable farming practices and to respond to challenges from climate change. In June 2021, EU Member States agreed to reform their common agricultural policy, with funds already allocated towards animal welfare and climate change. EU funds can help Malta achieve its agricultural sustainability goals. Other potential subsidy reforms include ending farming subsidies based on hectares, reducing the EU’s meat and dairy consumption and setting legally binding maximum livestock density levels.
More information on ewe and goat premiums and other candidates for reform in Malta and other Member States can be found in the country case studies and factsheets compilation.