Agriculture in Lithuania performs a significant economic, social and environmental function. More than a half of the total land resources are suitable for agricultural activities. Total area of agricultural land covers 3.37 mill. ha. Rural population make up 33.1% of the total population. There are favourable conditions for the development of milk and meat farms, cultivation of cereals, flax, sugar beet, fruit and vegetables as well as for the development of organic agriculture. In 2005, the share of agricultural and food sector accounted for 9.1% in the total value added and amounted to 12.8% in total exports. The share of population engaged in agriculture made up 13.2% of the total employed population.
The year 2005 was the first year when Lithuania as a full EU member had a possibility realistically to take advantages of the membership. An open single market and export subsidies made preconditions for a rapid growth of exports, while more active market and increased support enlarged income of economic entities.
Over 2005, the exports of Lithuanian agricultural and food products went up by 42% and made up 4.2 bill. Lt; the imports went up by 25% and came to 3.7 bill. Lt. The positive foreign trade balance exceeded a half billion Litas. Dairy products made up the largest share in the structure of total exports of agricultural products. Germany, Poland, Latvia, Netherlands and other EU countries as well as Russia were the major partners of Lithuania‘s foreign trade.
More active market encouraged the growth of production and purchase of agricultural products. Gross agricultural output at current prices in 2005 came to 5.1 bill. Lt and compared to the previous year went up by 14%. The purchased amounts of milk and cattle increased and purchase prices significantly went up.
After Lithuania has become a member of the EU support to agricultural and rural development increased. In 2005, from the national budget over 1.5 bill. Lt was allocated for the implementation of programmes of the Ministry of Agriculture: 566 mill. Lt made up structural support under the measures of SAPARD, SPD and RDP and direct payments for the declared agricultural area and livestock amounted to 788 mill. Lt.
Due to the growth of sales and prices of agricultural products and due to increased financial support, real income per AWU went up nearly by a quarter. There are real conditions to invest more into farms and enterprises, to use up-to-date technologies. In 2005, there were 85.9 thousands of family farms recorded in the Register and operated 543 agricultural companies and enterprises. 225 thousands of holdings were declared with the average size 11.5 ha. A large share of small semi-substance farms is one of the main obstacles impeding competitiveness in agricultural production. The other problem is the age of farmers: more than 60% of farmers are older than 55 years and only 14% are under 40. Active farmers’ application under RDP measure Early Retirement, support of young farmers and other structural measures promise positive changes.
Good results are reached in the field of quality of agricultural and food products. In 2005, the majority of Lithuanian food enterprises met EU standards and had licences to supply products into the single EU market. 93% of total milk purchased met EU standards. A system of pigs and cattle carcasses quality and settlement in compliance with EU standards is being implemented. In 2005, 1.8 thousands farms were certified as organic; certified area accounted for 69.4 thou. ha or nearly 3% of the total declared agricultural area.
In 2005 farmers had a possibility to raise their qualification skills at 378 continuing vocational training courses, participated in 1697 seminars and conferences, over 70 thousands of consultations were provided. Training of human resources is a priority of the development of agriculture and food sector.
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