On the one hand, 2022 simply continued the economic chaos sown by the pandemic years, and on the other hand, it exacerbated it in some areas. The agricultural sector is no exception in this context. Due to the dramatically increased prices of fertilisers, energy resources, and raw materials, as well as disrupted supply chains, crop and animal farming have become perhaps the areas most affected by the crisis.
The parallel challenge – ambitious Green Deal goals, the implementation of which is hampered by unpredictable economic circumstances. How did Lithuanian farmers cope with these trials? Does 2023 bring more optimism or concern? Let's take a look at what experts think about this.
2022 wasn't as bad as feared
According to Agriculture Minister K. Navickas, last year’s harvest was relatively good: a 0.81% increase in harvested produce was recorded, and major losses were avoided. Farmers engaged in crop production were pleased by the slight rise in purchase prices, but, as noted by Raimondas Juknevičius, Chairman of the Lithuanian Farmers„ Union (LŪS), the year was profitable only “on paper’, as the money received must be invested immediately due to the difficult situation.
The biggest concern is the prices of advance purchases. They are significantly ahead of current costs, so, according to the chairman of the LŪS, it is realistic that the coming year may be a loss-making one. In the face of such a possibility, it is important to reduce costs with the help of technology, which is already a daily practice for professional farmers. However, for newcomers to this field, it is important not to rush headlong and to select reliable consultants, otherwise, there is a risk of incurring even greater losses.
The new Strategic Plan
The new Lithuanian agricultural and rural development strategic plan, adopted at the end of 2022, once again saw differing opinions: some saw more restrictions in it, while others saw opportunities. The main direction of the plan remains the Green Course, leading towards the fulfilment of the European Commission's 2030 targets. However, this time several old incentive measures were changed and new ones were introduced.
The most debate was caused by so-called eco-schemes, presented as new opportunities for farmers to earn additional support. This is one of the types of direct payments, but unlike GAAB requirements, it can be chosen voluntarily. Doubts about eco-schemes were raised by the sanctions measures threatening farmers who have not fully implemented the chosen programme. However, by thoroughly studying the rules and calculating the available resources, it is quite realistic to take advantage of the benefits offered by eco-schemes.
Top 3 agricultural trends for 2023
- Investment in sustainable production and innovation
As we move towards climate-neutral policies, we must focus on modernising agriculture, which will help create higher added-value products. The main focus remains on digitalisation and sustainable technologies that reduce environmental impact and promote greater productivity of cultivated land.
- The criteria for agricultural holding investment support are changing
Equipment modernisation is an essential tool for cost reduction and energy saving, and to encourage this process, preferential loans of up to €200,000 have been available since the beginning of this year, and support intensity for young farmers has been increased. In 2023–2027, applicants whose farm economic size (FES) is greater than €30,000 will be eligible for support.
- Sustainable investments in animal husbandry
Livestock farming is one of the sectors with the highest greenhouse gas emissions, so a new measure is being launched this year to promote sustainable technologies on livestock farms. Farmers who receive support will be able to apply it widely: from the installation and improvement of manure and slurry management systems to the implementation of solutions that improve animal housing conditions.
