It has been two decades since Lithuania joined the European Union and became part of the Common Agricultural Policy (CAP). This integration has propelled the country’s agricultural sector to impressive heights, contributing over 18 billion euros to rural Lithuania and marking a significant breakthrough in agricultural development. Today, there is no doubt that agriculture plays a strategic role in the EU economy and is a crucial component of national security.
However, current agricultural practices face challenges that are more complex than those encountered two decades ago. Issues such as climate change, slow generational turnover in rural areas, a tense geopolitical landscape, and instances of unfair trade practices pose significant threats to the sector’s sustainability.
These pressing concerns were the focus of discussion at an international conference titled “20th Anniversary of Lithuania’s Membership in the European Union: Common Agricultural Policy – Good Practice and Future Prospects,” held in Vilnius on January 10-11. The event, organized by the Chamber of Agriculture of the Republic of Lithuania, highlighted the need for enhanced resilience within the agricultural sector to navigate these challenges effectively.
Strategically important sector
Over the past two decades since joining the European Union, Lithuania’s agricultural and rural sectors have achieved significant milestones, contributing an impressive 18 billion euros to the economy. The landscape of agriculture and rural life has transformed remarkably: since 2004, the gross added value in the agricultural and forestry sector has surged by 2.8 times, exports have nearly multiplied tenfold, and approximately 2,000 rural communities are now actively engaged in village life.
According to the European Parliament, the overall budget for the Common Agricultural Policy (CAP) from 2021 to 2027 is projected to reach 378.532 billion euros, which will represent 31 percent of all EU commitments. For the period of 2023–2027, both the EU and the Lithuanian government have earmarked 4.281 billion euros to bolster agriculture and rural development in Lithuania. This sector is unique and multifaceted, operating not only within the local market but also on a global scale.
During the opening of the conference, Dr. Arūnas Svitojus, President of the Chamber of Agriculture of the Republic of Lithuania, emphasized the significance of the 20-year anniversary of participation in the CAP as an invaluable opportunity to discuss the forthcoming directions for the policy and its implications for rural areas and agriculture. He highlighted that while the agricultural sector has benefited from substantial EU support, only a small fraction of farms—merely 5 percent—have fully utilized these resources. “We have considerable work ahead to ensure that farmers take greater advantage of the financial instruments available from the EU,” Dr. Svitojus stated. “Although agriculture has made significant strides, we cannot afford to become complacent. It is crucial that we quickly adopt the latest technologies, including biotechnology, digital systems, and artificial intelligence. While this transition can be challenging for rural communities and farmers, our mission is to assist them through enhanced information dissemination, consultation, education, and guidance.”
The Chairman of the Seimas Committee on Rural Affairs, Dr. Kęstutis Mažeika, underscored the importance of learning from the previous CAP period and integrating scientific research alongside best practices when formulating future strategies. “To build a sustainable future, we must understand our past. It is imperative that we do not repeat previous mistakes, and our decision-making should be guided not by emotions but by scientific insights,” Dr. Mažeika remarked at the conference. “Now, more than ever, we must focus on strengthening agriculture and ensuring the production of safe food for our population.”
The Prime Minister’s Advisor on Agricultural Issues, Dr. Vigilijus Jukna, expressed his satisfaction with the ongoing modernization of Lithuania’s agricultural sector and the successful application of innovative technologies. However, he also highlighted several pressing challenges. According to Eurostat data, agricultural land in Lithuania generates an average of €1,020 per hectare, placing the country fourth from the bottom among EU nations, where the average production value is €2,398 per hectare. In countries with the lowest agricultural production per hectare, including Lithuania, approximately half of the total output comes from crop production. Unfortunately, livestock farming—a crucial branch of agriculture—is experiencing a catastrophic decline in our country. Dr. Jukna emphasized the urgent need to stabilize this situation and prioritize the livestock sector while also considering the needs of other agricultural branches.
Meanwhile, Minister of Agriculture Ignas Hofmanas acknowledged that farmers are keenly aware of political sentiments not only within the EU but also across the Atlantic. He noted that farmers are overly concerned about new trade agreements with third countries, such as Mercosur, political cycles, or future EU expansion. According to the minister, the EU’s ambitions related to the Green Deal must be carefully measured and discussed with farmers to ensure that decisions are informed and equitable. “All EU citizens pay the price for unmeasured decisions. Agriculture should be recognized as a strategically important sector for ensuring national security.” Minister Hofmanas underscored the importance of attracting the younger generation to rural areas to farm and contribute to the agricultural sector. He outlined several key tasks: “We must ensure that direct payments are unified across the EU to guarantee fair competition.” These insights reflect both the challenges and responsibilities that lie ahead for Lithuania’s agriculture as it strives for modernization and sustainability.
The task is to strengthen the resilience of farms
A significant number of representatives from EU institutions and agricultural organizations attended the conference. Following the presentation of the report on the latest developments in the Common Agricultural Policy (CAP) and its future prospects, Mario Milouchev, Head of DG AGRI at the European Commission, emphasized the EU’s commitment to fostering competitive, sustainable, and resilient agriculture. He highlighted that the ongoing CAP strategy simplifies existing frameworks to achieve a balanced approach to regulation, incentives, and investments, all while ensuring continued food security.
Speaking about the political guidelines for the work of the newly formed European Commission for 2024-2029, he emphasized food security, water and nature protection. According to him, food and agricultural production plays a strategic role in the new geopolitical context. Sustainable agriculture is one of the key parts of EU security. “It is necessary to strengthen the bargaining power of farmers in the food supply chain, it is important to prevent unfair trade practices. It is very important that farmers receive a fair and sufficient income. They should not be forced to systematically sell their products at prices below production costs. We are also thinking about a risk management fund that would help farms facing strong natural disasters, of which there have been quite a few in recent years,” M. Milouchev listed the main measures that would help strengthen the resilience of EU farms.
Currently, 63 percent of farms in the EU are smaller than 5 hectares, although there are observable trends in farm size. According to the head of DG AGRI, various measures can be implemented to support family farms, including financial assistance for small farms and establishing ceilings on direct payments.
Risks of protectionism are rising
Massimiliano Giansanti, President of Copa, the EU Committee of Professional Agricultural Organisations, participated in the conference and emphasized the need for member states to enhance risk management measures. He highlighted that these measures are crucial for helping farmers navigate extreme weather conditions and market volatility. Giansanti advocated for the implementation of additional EU common measures to bolster the effectiveness of existing strategies, especially in light of increasingly frequent and severe weather events.
“We must ensure that direct support is available for all CAP farmers, irrespective of their size or type of production. This is particularly important regarding direct area payments. It is essential to reassess CAP requirements to alleviate administrative burdens and reduce costs,” he stated.
In his remarks, Giansanti also addressed the impact of geopolitical developments on global trade, pointing to the war in Ukraine and escalating tensions with China. He noted that political shifts in the United States, particularly with President Donald Trump’s inauguration in January, are contributing to this uncertainty. “The prospect of rising protectionism poses a risk to EU agricultural exports,” he warned.
Furthermore, Giansanti underscored the importance of diversifying markets, enhancing competitiveness, and ensuring fair trade practices. However, he cautioned that markets like China and the US are not easily substitutable.
Liberalize the market only after protecting local producers
He was also supported by Lennart Nilsson, president of the EU General Confederation of Agricultural Cooperatives, Cogeca. According to Nilsson, it is crucial to acknowledge that farmers are the backbone of the entire food supply chain, but they often remain its most vulnerable link: they receive a low price for their products as production costs increase, and unfair trading practices are on the rise. “The reality is brutal,” Nilsson stated candidly. “Many farmers are being forced to sell their products cheaper than the cost of production, which poses a threat to both the economic, social, and environmental sustainability of agriculture.”
The President of Cogeca expressed his concerns about the impact of temporary trade liberalization measures implemented for Ukraine in June 2022, which have since been extended into 2023 and 2024. These measures have resulted in a significant increase in imports of Ukrainian agricultural products into the EU, adversely affecting European producers, particularly in the cereals, oilseeds, poultry, eggs, honey, and sugar sectors.
“A solution must be found that allows exports to continue, provided that the pace and volumes are manageable and can be absorbed by the European market without destabilizing local producers,” stated Lennart Nilsson, head of Cogeca. “Supporting Ukraine is essential, but despite the ongoing war, Ukraine’s agricultural potential remains strong, so a cautious approach to further liberalization is necessary.”
Elli Tsiforou, Secretary-General of the EU’s Copa-Cogeca Confederation of Professional Agricultural Organizations and Cooperatives, echoed these concerns. She emphasized the need to increase the Common Agricultural Policy (CAP) budget beyond 2027, particularly in light of the challenges facing the agricultural sector and rising inflation. “Currently, the CAP accounts for only 0.4% of EU GDP, while agriculture makes up 1.3%,” Tsiforou noted.
However, Milouchev, head of the European Commission’s Directorate-General for Agriculture and Rural Development (DG AGRI), reminded attendees that the CAP budget is determined not by the agriculture ministries of member states but by finance ministers, with final decisions resting at the level of heads of state. “The decisions are made by the finance sector, not by the agricultural sector. While this sometimes leads to dissatisfaction regarding unmet goals, that is the reality we face,” Milouchev explained.
It is necessary to respect the rights of rural people
The conference organized by the Chamber of Agriculture of the Republic of Lithuania, featured expert discussions focused on the future prospects of the Common Agricultural Policy (CAP). Leaders from farmers’ self-governments in Estonia, Latvia, Poland, Hungary, and Romania actively participated in these discussions. Andrzej Steckiewicz, Vice President of the Polish Federation of Cattle Breeders and Milk Producers, emphasized the importance of Europe becoming self-sufficient in nutrition and improving conditions for farmers who continue to produce.
“When it comes to the EU agreement with South American countries, we can in no way compete with industrial farms and conglomerates. Furthermore, other continents do not adhere to such stringent environmental regulations. Currently, there are only about 2.3 million dairy cows in Poland. It becomes increasingly challenging for rural residents to coexist with those who have moved from urban areas. We must ensure that the rights of rural communities are respected. City dwellers often come to the countryside for relaxation but then complain about noise after 8 p.m. and the odors emanating from farms. While we are implementing advanced technologies to manage odor, it is essential to recognize that agriculture inherently produces smells,” remarked A. Steckiewicz, highlighting significant challenges facing Polish milk producers.
Focus on the Nature Restoration Regulation
Ragnar Viikoja, Head of Agricultural Policy at the Estonian Chamber of Agriculture and Commerce; Bercu Florentin, Head of the Romanian Agricultural and Cooperative Alliance; Barnabas Heincz and Szilvia Palakovics, representatives of the Hungarian Chamber of Agriculture; Dr. Jurgen Tack, Secretary General of the European Landowners’ Organisation (ELO); Dr. Algis Gaižutis, Head of the Lithuanian Forest and Landowners’ Association; and Vytautas Buivydas, Vice-Chairman of the Chamber of Agriculture of the Republic of Lithuania, came together to discuss the expectations of European land and forest owners regarding the EU Common Agricultural Policy (CAP) and the anticipated outcomes of the Strategic Dialogue on the Future of EU Agriculture.
During the discussion, the participants highlighted the pressing issue of uncertainty in forest policy. “We do not have a unified forestry policy within the EU, and we are eager to see this change. We hope that the European Commission’s Directorate-General for Agriculture and Rural Development (DG AGRI) will take the lead on this matter,” expressed Dr. A. Gaižutis.
The Nature Restoration Regulation presents several challenges for member states, which will soon be required to submit their restoration plans. According to J. Tack, the EU intends to increase the import of products from Latin America, often produced at the expense of tropical forests that are cleared to expand agricultural land. This situation stands in contrast to the new restrictions being imposed on EU member states. Tack was supported by representatives from Poland and Lithuania, who emphasized that sustainable forest management plays a crucial role in driving economic growth, creating jobs, and generating high added value.
V. Buivydas highlighted the potential for young farmers to revitalize regions and rural areas. However, statistical data reveals a troubling trend: over the past decade, nearly 50 percent of young farmers have left the agricultural sector, indicating that generational change is not occurring as needed. He stressed the importance of addressing national issues that also require European attention, such as the ineffective laws governing land acquisition in Lithuania. “How can a young person enter agriculture when finding a free plot of land is already so challenging? Large corporations have much greater opportunities to purchase land compared to young individuals just starting their agricultural careers,” Buivydas questioned.
Look in one direction
In summarizing the conference, Dr. A. Svitojus, President of the Chamber of Agriculture of the Republic of Lithuania, emphasized the importance of unity and a shared vision for the future. “In the upcoming period, it will be crucial for us to focus and look in one direction,” he stated. “We need to engage in dialogue both within our country and with international organizations.” He expressed gratitude for the numerous representatives who attended the event in Vilnius, noting that the opportunity to review draft strategies and hear firsthand insights into future developments was invaluable. “Thank you to all the guests and participants for contributing to this important conversation,” A. Svitojus concluded.
The conference was concluded by the awards bestowed by the Chamber of Agriculture of the Republic of Lithuania to its organizational members, “TOP farms”, and a ceremony honoring social partners.