Local agricultural prices rise 9.4%

Agricultural prices in the first quarter of the year rose by an annual 9.4 percent, giving consumers  a respite after last year’s price hikes of 11.5 percent.  But this year’s price increase is still higher than average inflation, which was an annual 2.1 percent during the same period.

The increase in prices was fuelled mainly by substantial rises in the prices of fresh vegetables, which were 37 percent more expensive than last year, on top of a 32 percent increase the year before.  Cauliflower, lettuce and marrows were the main culprits, with annual price increases of 88 percent, 82 percent and 71 percent respectively.  Out of eight types of fresh vegetables for which the NSO gave producer prices, only three saw declines.  These were tomatoes (-8.6%), green beans (-19.5%), and mushrooms (-31%).

Those who love chips or potatoes cookes in whichever way, however, had a field day.  In fact, potatoe prices crashed by 23 percent after the previous year’s 32 percent increase.  Pity that potatoes have a mere 6.8 percent weight in agricultural produce, whereas fresh vegetables have a weight of 25 percent.

Fruit prices also played a role in the overall inflation, when they increased by an annual 18 percent.  Most types of fresh fruit cost more, but lemons took the cherry, so to say, with a 33.7 percent increase.  Some analysts claimed that this might have been due to higher demand for lemons by the Nationalist Government leadership in a bid to lower high blood pressure due to the Franco Debono crisis, but probably this explanation was offered with tongue in cheek!

Animal product prices were relatively stable in the first quarter, with an overall rise of 2.8 percent.    Beef and veal prices rose by some 19 percent, but pork was only 5.5 percent more expensive whereas rabbit meat pricing was stationary.   The fact that pork and rabbit meat account for almost 32 percent of animal meat production meant that their moderate prices kept meat product pricing low.

The NSO also published input prices paid by farmers for goods and services they purchased.  These increased by a mere 1.4 percent and do not appear, therefore, to have played a major role in the inflation in output prices.  The main rises in input prices were motor fuel (+9.4%) and machinery and building prices (6.3%). 

Putting Maltese price indices in a European  context, according to Eurostat, deflated input prices in Malta during the period 2005-2010 rose by around 2.1 percent (EU:1.5%), whereas output prices barely moved up, with just a 0.6 percent increase (EU:1.3%).

However, income from agricultural activity in Malta (measured by real net value added at factor cost) has decidedly been on the upswing, with a 55 percent rise over 10 years, compared to a 17.5 percent increase in the EU27 over the same period.  But EU membership does not appear to have helped boost agricultural income. In fact, whereas income rose by 27 percent in the five years pre-accession, it only increased by 9 percent in the five subsequent years.