rural development plan 2004-2006 lithuania · 2015-08-11 · 5.9. swot analysis ... table 37:...

Consolidated version as of 7th November, 2008

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MINISTRY OF AGRICULTURE OF THE REPUBLIC OF LITHUANIA

Rural Development Plan 2004-2006 Lithuania

NOVEMBER 7, 2008


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Table of contents

ABBREVIATIONS........................................................................................................ 7

1. INTRODUCTION ...................................................................................................... 8

2. MEMBER STATE AND ADMINISTRATIVE REGION ........................................ 8

3. GEOGRAPHICAL AREA COVERED BY THE PLAN........................................... 8

4. PLANNING AT THE RELEVANT GEOGRAPHICAL LEVEL............................. 9

5. QUANTIFIED DESCRIPTION OF THE CURRENT SITUATION ........................ 9

5.1. Lithuania’s geographic position ...................................................................... 9

5.2. Administrative structure, rural areas and settlements .................................... 10

5.3. Rural population.................................................................................................. 14

5.4. Employment and income in rural areas ............................................................ 16

5.5. Social and physical infrastructure in rural areas ............................................. 21

5.5.1. EDUCATION AND TRAINING.................................................................................. 21 5.5.2. RURAL INFRASTRUCTURE .................................................................................... 23 5.5.3. RURAL CULTURE ................................................................................................. 24 5.6. Agriculture ........................................................................................................... 24

5.6.1. SIGNIFICANCE OF THE SECTOR IN THE NATIONAL ECONOMY ............................... 24 5.6.2. LAND REFORM AND UTILIZATION OF THE LAND ................................................... 26 5.6.3. LESS FAVOURED AREAS ...................................................................................... 29 5.6.4. FARMING STRUCTURE, NUMBER OF FARMS AND SIZE ........................................... 30 5.6.5. AGE STRUCTURE OF FARMERS.............................................................................. 32 5.6.6. PRIMARY PRODUCTION AND PROCESSING INDUSTRY............................................ 33 5.7. Forestry................................................................................................................. 51

5.7.1. FOREST COVER..................................................................................................... 51 5.7.2. FORESTRY IN THE NATIONAL ECONOMY............................................................... 53 5.7.3. FOREST OWNERSHIP ............................................................................................. 54 5.7.4. LEGAL BASIS........................................................................................................ 55 5.7.5. MULTIPLE USE OF FORESTS .................................................................................. 57 5.7.6. AFFORESTATION OF AGRICULTURAL LAND .......................................................... 58 5.8. State of the environment – agriculture and forestry ........................................ 60

5.8.1. SOIL ..................................................................................................................... 61 5.8.2. WATER ................................................................................................................ 73 5.8.3. AIR AND CLIMATE................................................................................................ 77 5.8.4. BIODIVERSITY...................................................................................................... 78 5.8.5. LANDSCAPE AND PROTECTED AREAS ................................................................... 84 5.9. SWOT analysis..................................................................................................... 89

5.9.1. EXTERNAL ANALYSIS........................................................................................... 90 5.9.2. INTERNAL ANALYSIS............................................................................................ 91 5.10. Key problems in agriculture and rural development..................................... 97


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5.11. Impact from the previous programming period (title) .................................. 98

5.11.1. LESS FAVOURABLE AREAS ................................................................................. 99 5.11.2. AGRI-ENVIRONMENT........................................................................................ 101 5.11.3. AFFORESTATION OF AGRICULTURAL LAND ...................................................... 103

6. DESCRIPTION OF THE STRATEGY PROPOSED, ITS QUANTIFIED OBJECTIVES, THE RURAL DEVELOPMENT PRIORITIES SELECTED AND THE GEOGRAPHICAL AREA COVERED............................................................. 107

6.1. The objectives hierarchy for Rural development ........................................... 108

6.2. Overall Rural Development Strategy and Priorities ..................................... 112

6.2.1. SINGLE PROGRAMMING DOCUMENT .................................................................. 119 6.2.2. SPECIAL RURAL SUPPORT PROGRAMME ............................................................ 124 6.2.3. RURAL DEVELOPMENT PLAN............................................................................. 130 6.3. Extent to which the Strategy takes into account the specific features of the

areas concerned and compliance of the strategy with other EU policies ............ 139

6.3.1. INTEGRATION OF WOMEN AND MEN IN THE STRATEGY..................................... 140 6.3.2. FUTURE ENVIRONMENTAL OBLIGATIONS .......................................................... 141 6.4. Areas covered by Specific Territorial Measures ............................................ 148

6.5. Timetable and uptake........................................................................................ 148

7. INDICATIVE OVERALL FINANCIAL ALLOCATIONS.................................. 149

8. APPRAISAL SHOWING THE EXPECTED ECONOMIC, ENVIRONMENTAL AND SOCIAL IMPACT............................................................................................ 150

9. DESCRIPTION OF THE MEASURES................................................................. 150

10. NEED FOR ANY STUDIES, DEMONSTRATION PROJECTS, TRAINING OR TECHNICAL ASSISTANCE OPERATIONS .......................................................... 151

11. DESIGNATION OF COMPETENT AUTHORITIES AND BODIES RESPONSIBLE.......................................................................................................... 151

11.1. Ministry of Agriculture ................................................................................... 152

11.2. National Paying Agency .................................................................................. 153

11.3. Monitoring Committee................................................................................ 154

12. MONITORING AND CONTROL, EVALUATION AND PUBLICITY ........... 155

12.1. Controls and Sanctions ................................................................................... 155

12.1.1. ADMINISTRATIVE CHECKS ............................................................................... 155 12.1.2. ON-THE-SPOT CHECKS ..................................................................................... 156 12.1.3. CONTROL OF MEASURES .................................................................................. 156 12.1.4. SANCTIONS ...................................................................................................... 157


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12.2. Financial circuits.............................................................................................. 168

12.3. Publicity............................................................................................................ 169

12.4. Evaluation......................................................................................................... 170

12.4.1. EX-ANTE EVALUATION..................................................................................... 170

13. RESULS OF CONSULTATIONS AND DESIGNATION OF ASSOCIATED AUTHORITIES AND BODIES AS WELL AS ECONOMIC AND SOCIAL PARTNERS................................................................................................................ 172

14. BALANCE BETWEEN THE DIFFERENT SUPPORT MEASURES............... 177

15. COMPATIBILITY AND CONSISTENCY WITH EU POLICIES..................... 178

16. ADDITIONAL STATE AID................................................................................ 178

Annexes Annex 1: Technical sheets per measure.................................................................. 179 Annex 2: Good Farming Practice............................................................................ 239 Annex 3: Details on Less Favoured Areas.............................................................. 243 Annex 4: Details of the Code of Good Agricultural Practice and the Action

programme for implementation of EU Nitrate Directive ............................. 255 Annex 5: Physical and financial indicators of the measures (cumulative data per

year) ................................................................................................................... 262 Annex 6: Result and Impact indicators ............................................................... 264 Annex 7: Executive Summary of Ex-ante evaluation............................................ 273 Annex 8: List of social partners consulted during the preparation of this Rural

Development Plan ............................................................................................. 277 Annex 9 : Statistical data on municipalities ........................................................... 279 Annex 10: SPA's for meadow birds protection in Lithuania................................ 281 Annex 11. Calculations of payments for the measure Agri-environment ........... 283 Annex 12: Equipment used as basis for calculations of payments for meeting

requirements of Council Directive 92/46/EEC............................................... 328 Annex 13: LFA area ................................................................................................. 329 List of tables Table 1: Rural areas in Lithuania - population and area, February 2002........... 13 Table 2: Rural settlements, 2000 ............................................................................... 13 Table 3: Changes in rural population....................................................................... 14 Table 4: Vital statistics and migration of rural population 1996-2000 ........................... 15 Table 5:Age structure of population, February 2002.............................................. 16 Table 6:Employment in agriculture, hunting and forestry and fishing, 1990-2001,

% .......................................................................................................................... 16 Table 7:Employed rural population by economic activity in 1997 – 2001, in %.. 17 Table 8: Activity, employment and unemployment rates in rural areas compared

to urban, 2000 ..................................................................................................... 18 Table 9:Change in average disposable incomes per capita, 1996-2001 ................. 18 Table 10: Average household disposable income and expenditure in 1996-2000, in

Litas...................................................................................................................... 19


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Table 11: Number of population within the categories of education, per 1000 of inhabitants, 2001 ................................................................................................. 21

Table 12: Distribution of LAAS contracted clients according education, %........ 22 Table 13: LAAS awareness raising activities .......................................................... 23 Table 14:Macroeconomic indicators of the agricultural and food sector in 1995-

2000 ...................................................................................................................... 25 Table 15: Land use as of January 1, 2001 ................................................................ 27 Table 16: Structure of agricultural holdings, June 2003 ........................................ 31 Table 17: Statistics of Crop Sector, 2002.................................................................. 33 Table 18: Development of bio-organic farming in 1993-2001 ................................ 37 Table 19: Ranking of problematic areas in the sector (3-high, 2-medium, 1-low) 40 Table 20: Farm sizes according to the number of livestock, 2002 ......................... 41 Table 21:Ranking of problems in the sector (3-high, 2-medium, and 1-low)........ 47 Table 22:Ranking of problems in the sector (3-high, 2-medium, and 1-low)........ 48 Table 23: Lithuanian manufactures of food and beverages: number of enterprises

and employees, in 19993...................................................................................... 49 Table 24:. Capital investment volume, 1995 -2000, mill. Litas............................... 51 Table 25: Earnings in public forestry, 1996-2000................................................... 53 Table 26: Market supply with forest berries, mushrooms and medical plants,

1996-2000 ............................................................................................................. 57 Table 27:. Exports of mushrooms and wild berries, 1995-2000 ............................. 57 Table 28:Average annual afforestation area during the period of 1941-2000

(thousand hectares)............................................................................................. 59 Table 29: Afforestation of private agricultural land in 1998-2001, ha .................. 60 Table 30: Use of mineral fertilisers (in active substance) ....................................... 62 Table 31: Structure of water consumption, %......................................................... 74 Table 32: Amounts of pollutants discharged into surface water bodies (tons per

year) ..................................................................................................................... 74 Table 33: Protected areas, in 2002 ............................................................................ 86 Table 34: SWOT analysis........................................................................................... 91 Table 35: Distribution of buckwheat quota in 1999 .............................................. 100 Table 36: List of measures in 2004-2006 and allocated financial resources........ 113 Table 37: Compatibility and coherence between measures in relation to the key

problems in agriculture and rural development............................................ 116 Table 38: Quantified objective hierarchy for Early Retirement measure ......... 133 Table 39: Expected impacts and results in Agri-environment ............................ 135 Table 40:Expected impacts and results for Support for semi-subsistence farms

undergoing restructuring measure ................................................................. 137 Table 41: Expected impacts and results for Meeting standards measure........... 138 Table 42: Estimated number of applicants and allocated financial resource for

measures, 2004-2006 ......................................................................................... 139 Table 43: Indicative overall financial table, including EU contribution (EUR

million) ............................................................................................................... 149 Table 44 Annual programming (EU contribution in EUR million)........................ 149 Table 45: List of sanctions in case of Transferor................................................... 159 Table 46: List of sanctions in case of Transferor of Small Diary Farm .............. 159 Table 47: List of sanctions in case of Farm Worker ............................................. 159 Table 48: List of sanctions in case of Transferee ................................................... 159 Table 49: List of sanctions to be applied for Less favoured areas and areas with

environmental restictions measure ................................................................. 160


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Table 50: Sanctions – Agri-environment................................................................ 162 Table 51: List of sanctions to be applied in Afforestation measure ..................... 164 Table 52: List of sanctions to be applied to a beneficiary in measure Support for

semi-subsistence farms undergoing restructuring......................................... 166 Table 53: List of sanctions to be applied in Meeting standards measure............ 166 Table 54: Ex-ante evaluation findings and the Actions taken by the Ministry of

Agriculture ........................................................................................................ 171 Table 55. Distribution of funds among measures, 2004-2006............................... 177 List of Figures: Figure 1: Change in structure of the incomes of the self-employers in agriculture

.............................................................................................................................. 20 Figure 2: LAAS clients according farm size ............................................................ 22 Figure 3: Structure of gross agricultural production in 2000 ............................... 26 Figure 4: Land used for agricultural activities by users ......................................... 28 Figure 5: Structure of dairy farmers by age ............................................................ 32 Figure 6: Number of dairy farms by the age of farmers......................................... 33 Figure 7: The structure of bio-organic crop area in 2002....................................... 38 Figure 8: Structure of sales of the food industry in 2001........................................ 49 Figure 9 :Labour Costs .............................................................................................. 50 Figure 10: Forest cover change in Lithuania from 1938 to present....................... 52 Figure 11: Forest stands area by dominant tree species ........................................ 52 Figure 12: Changes in the use of agricultural pesticides ........................................ 61 Figure 13: Change in the amount of mobile phosphorus in Lithuanian soils ....... 63 Figure 14: Changes in the amount of mobile potassium in Lithuanian soils ........ 63 Figure 15: Hierarchy of objectives .......................................................................... 110 Figure 16: Chain of Command in Implementing the Rural Development Plan . 152


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Abbreviations AEP Agri-environment Programme AIRBC Agricultural Information and Rural Business Centre CAP Common Agricultural Policy CGAP Code of Good Agricultural Practice EAGGF European Agriculture Guidance and Guarantee Fund ERS Early Retirement Scheme EU European Union FAO Food and Agriculture Organization FOAL Forest Owners Association of Lithuania GDP Gross Domestic Product GFP Good Farming Practice GoL Government of Lithuania LAAS – Lithuanian Agricultural Advisory Service HN Hugiene Norm LFA Less Favoured Areas MC Monitoring Committee MLS Minimum Living Standard MoA Ministry of Agriculture NGO Non Governmental Organization NVZ Nitrate Vulnerable Zones RDP Rural Development Plan RSF Rural Support Fund SAC Special Areas of Conservation SAPARD Special Accession Programme for Agriculture and Rural

Development SASP Special Agricultural Support Programme SDF Small Diary Farm SPAs Special Protection Areas SPD Single programming Document SWOT Strengths, Weaknesses, Opportunities, Threats UAA Utilised Agricultural Area


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Rural Development Plan 2004-2006, Lithuania 1. Introduction The Rural Development Plan for the period 2004-2006 has been prepared by the Ministry of Agriculture of the Republic of Lithuania in fulfilment of the obligations under Article 41- 44 of the Council Regulation 1257/1999 and in accordance with the detailed requirements laid down in the Commission Regulation 817/2004. The structure and the content of this Rural Development Plan in general follows the Annex II of the mentioned Regulation and only a one change in the present document structure and content have been introduced. This change was introduced aiming at improving the readability, coherence and consistency of the Rural Development Plan and is as follows:

The detailed descriptions of the measures have been placed not inside the Plan but instead in the Annex 1. It is believed that in such a manner the chapter 6 related to the Rural Development Objectives, Strategy and Priorities is much more all-in-one and helps the reader to get a full picture of the Rural Development Policy in Lithuania. Instead a role of the Rural Development Plan in implementing the strategy and its role among other financial instruments available is described.

This document was developed following the 'Guidelines for the switch from SAPARD to postaccession Rural Development Instruments (2004-2006)' dated 17.12.2003 in order to ensure that continuity of the experiences gained under SAPARD as well as smooth switch to the new rural development measures would be ensured.

2. Member state and administrative region This Rural Development Plan is prepared for the Republic of Lithuania and covers the entire territory of the country.

The Rural Development Plan 2004-2006 has been prepared following the overall country’s development strategy stated in the Single Programming Document and the measures proposed in the Rural Development Plan complement the Single Programming Document measures related to agriculture, rural development and forestry in order to ensure that proposed actions interplay with one another to obtain synergy and sustainable results for rural development. Compatibility and coherence between the documents and therein-embodied actions are dealt in chapter 6. 3. Geographical area covered by the plan

All the measures (except Measure 2 "Less favoured areas and areas with environmental restrictions") included in this Rural Development Plan are to be applied all over Lithuania. Measure 2 will only be implemented in the designated less-favoured areas, which are to be approved alongside the adoption of this Plan and in the designated Natura 2000 territories.


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Since all territory of Lithuania is classified as an Objective 1 country in transition, the Plan contains the following four EAGGF Guarantee section funded accompanying measures:

• Early Retirement • Less Favoured Areas and Areas with Environmental Restrictions • Agri-Environment (the only mandatory measure) • Afforestation of Agricultural Land

In addition, Lithuania also has chosen to implement four optional measures to be funded from EAGGF Guarantee envelope and therefore those are included in this plan and are as follows:

• Support for semi-subsistence farms undergoing restructuring • Meeting standards • Technical assistance • Top –ups for direct payments

4. Planning at the relevant geographical level As already mentioned above in Chapter 2 this Rural Development Plan is prepared for the entire territory of the Republic of Lithuania. There are no any other plans of such nature to be applied on the exceptional basis in the country. 5. Quantified description of the current situation This chapter provides an overview of the situation in rural areas in terms of the area, population, employment and income of rural population as well as social and physical infrastructure. Also, the role of agriculture and forestry in the national economy as well as the impacts of the sector to the rural development is presented. A specific emphasis is put on the development of activities in less favoured areas and at the present state of environment in the rural areas. The fishery sector even though playing an important role in terms or rural employment and additional income generation is not covered within this plan as it is a part of the Single Programming Document in which the throughout description of the sector and the measures to remedy the problems existing within this sector, are presented. 5.1. Lithuania’s geographic position Lithuania is located in the eastern part of Europe, bordering Latvia in the north (610 km long border), Belarus to the east and south (724 km) and Poland to the south (110 km), as well as Kaliningrad region of Russia (303 km) to the southwest. The total surface area of Lithuania is 65.3 thousand sq. km (roughly the size of Ireland). Lithuanian population is 3,462 million of which 2,317 million live in urban areas and about 1,145 million in rural areas.


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Map 1. Lithuania’s geographic position

The country forms part of the great North European Plain, and landscape alternates between hilly areas and flat plains. There are two elevated regions with a maximum of 290 m above sea level, and three plains and lowlands. Lithuania has 758 rivers longer than 10 km, and there are 2834 lakes larger than 0.5 ha. Forests cover 31 per cent of the territory. 5.2. Administrative structure, rural areas and settlements Pursuant to the Law on the Territorial Administrative Units of the Republic of Lithuania and their Boundaries (adopted on 19 July 1994, No. I-558) Lithuania is divided into administrative units: municipalities and counties. Municipality is a territorial administrative unit administered by the bodies self-government elected by the community pursuant to the Law of Self-government of the Republic of Lithuania and other respective laws. Municipality consists of populated areas. The main criteria for the establishment of municipality are related to the ability of the municipality to manage and maintain the environment, municipal economy, provide services to the inhabitants of this municipality as well as how the municipality is capable of implementing other functions prescribed by the Law of Self-government. County is a higher administrative unit of the territory whose administration is organised by the Government of the Republic of Lithuania pursuant to the Law on Administration of the County and other respective laws. County consists of the territories of municipalities that are characterised by the common social, economic and etnocultural interests. Based on the Law of the Republic of Lithuania on Territorial and Administrative Units and their Boundaries at the first stage of the reform of territorial


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administrative units 56 Municipalities and 10 Counties were established. The Counties are as follows: Alytus, Kaunas, Klaipeda, Marijampole, Panevezys, Siauliai, Taurage, Telsiai, Utena and Vilnius. Further, there was the second stage of the reform (in the beginning of 2000) during which few more municipalities were established, also change of the borders of the existing municipalities were introduced. As the result, in the meantime the territory of the Republic of Lithuanian comprises 10 Counties and 60 Municipalities (Map 2, Map 3). Map 2. Counties in Lithuania


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Map 3. Municipalities in Lithuania

Further Article 3 of the above-mentioned law provides the definitions of populated areas. The definitions are presented below: The towns are compactly built up residential areas with a population exceeding 3000. More than 2/3 of the working population is employed in industry, business and production and social infrastructure. The towns of the Republic of Lithuania with a population of less than 3000, regional towns and urban-type settlements and residential areas shall be considered as towns even after the coming into effect of the Law on the Territorial Administrative Units of the Republic of Lithuania and their Boundaries. Small towns are compactly built up residential areas with a population from 500 up to 3000. More than half of the working population is employed in industry, business and production and social infrastructures, as well as traditional small towns. Villages are other residential areas having no characteristic features of a town and a small town. Exact boundaries of towns are defined by the Decision of the Government of the Republic of Lithuania. The rural areas are of substantial importance in terms of both surface area and population. At the beginning of 2002, the rural areas covered 63.6 thousand sq. km. This equalled 97.4 % of the total Lithuanian surface area.


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Table 1: Rural areas in Lithuania - population and area, February 2002

Area (sq. km'000)

Per-centage

Population ('000)

Per-centage

Population Density in sq. km

Total Lithuania 65.3 100.0 3.475 100.0 53.3 Rural Areas 63.6 97.4 1.143 32.9 18.0

Sources: Department of Statistics under the Government of the republic of Lithuania, 2002 30,8 per cent of the total Lithuanian population lives in approximately 22,000 rural settlements of various sizes. Most of them are small villages with a population of less than 50 inhabitants. The density of population is 18,0 inhabitants per km2. The density of rural population is usually higher in the municipalities with higher agricultural potential or in the municipalities near larger cities (the highest density is in Kaunas district, making up to 40 inhabitants per km2)). Rural areas in the eastern and south-eastern part of Lithuania have the lowest density of population (the lowest one is in the district of Švencionys, making up 8.72 inhabitants per km2) ). Table 2: Rural settlements, 2000

Number of inhabitants

Number of rural settlements

Percentage of rural settlements

Up to 26 14767 68.5 26-50 2635 12.2 51-200 2732 12.7 201-1000 1300 6.1 >1000 115 0.5

Source: Lithuanian Department of Statistics, 2001 Small rural settlements prevail in Lithuania; most of them are farmstead villages (about 80 percent of the total rural settlements). Large settlements and small towns comprise 20 per cent of the total number of settlements. More data about the population in different municipalities provided in Annex 9. Below in share of agricultural land in all the municipalities of Lithuania is presented. The data about share of agricultural land on municipality level is provided in Annex 9.


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Map 4: Share of agricultural land in all the municipalities of Lithuania

There are 15 municipalities in which agricultural land makes more then 60 % of the total land area. From territorial perspective most of those municipalities are situated in the central part of Lithuania; however some of them are also situated in the northwest part (2 municipalities namely Skuodas and Mazeikiai) and one in the western part – Pagegiai. 5.3. Rural population The newest Population census data states that in 2003, Lithuania’s population was estimated at 3,462,553 inhabitants – about 49 thousand less than in the beginning of 2000. In 2003, the rural population was estimated at 1,145 million inhabitants, i. e. accounted for 33,06 per cent of the total Lithuanian population. From 1995 the total population was constantly decreasing. However, in the rural population very slight fluctuation can be observed and on average the rural population in the period 1995-2002 was 32.7 percent. Table 3: Changes in rural population Beginning of the year

Total population (‘000)

Rural population (‘000)

% of rural population

1995 3 643 1 183 32.4 1996 3 615 1 183 32.7 1997 3 588 1 159 32.3


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1998 3 562 1 163 32.6 1999 3 536 1 159 32.8 2000 3 512 1 155 32.9 2001 3 478 1 153 33.2 2002 3 475 1 149 33 06 2003 3 463 1 145 33.06 Source: Statistical Yearbooks of Lithuania 2000, 2001 2002, 2003.-Vilnius: Department of Statistics

under the Government of the republic of Lithuania, 2001, 2002 2003 Demographic Yearbook 1996, 1997, 1998, 1999.-Vilnius: Department of Statistics under the Government of the Republic of Lithuania, 2001

The demographic processes in rural areas have an influence on the quantitative aspects of the labour force engaged in agriculture. Table 4: Vital statistics and migration of rural population 1996-2000 Vital statistics and migration 1996 1997 1998 1999 2000 Births 14326 14080 13953 13619 13141 Deaths 19430 18527 18344 17693 16987 Natural increase -5084 -4447 -4391 -4344 -3846 Immigration 36554 34477 25918 23429 20034 Emigration 27461 27910 23548 20732 15770 Net migration 9093 6567 2370 2697 4264 Source: Statistical Yearbook of Lithuania 2000.-Vilnius: Department of Statistics under the

Government of the Republic of Lithuania, 2000 Demographic Yearbook 1996, 1997, 1998, 1999.-Vilnius: Department of Statistics under the Government of the Republic of Lithuania, 2000

Natural increase of rural population is negative –number of deaths exceeds number births. Birth rate in rural areas is by 30% higher than in urban, but the percentage is annually decreasing. High death rate in rural areas, which is by 75% higher than in urban areas, makes a negative impact on natural population increase. Net migration remains positive as more people move to rural areas than leave them. However, the composition of the rural population deteriorates: more persons of working age leave, while more persons of retirement age move in. In 2000, persons of working age accounted for 52,5 percent of the total population in rural areas, persons of retirement age made up to 24,6 percent and children under 15 – 22,9 percent, The number of children in rural areas decreased by 11,9 thousand since 1996. The tendency of ageing population is common to the whole European region, however is it more evident in rural areas than in the towns. According to the data of February 2002 the share of population between 15 and 64 years was lower in rural areas (61.5 %) compared to urban areas (69.4%). At the same time the share of population over 64 years was significantly higher in rural areas (17.9%) compared to urban areas (12.4%). Demographic structure of rural population has a negative impact on further implementation of integrated rural development actions.


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Table 5:Age structure of population, February 2002 Total

population Population under 15 years

Population between 15-64 years

Population above 64 years

Thous. % Thous. % Thous. % Thous. % Total Lithuania 3475,6 100 659,6 19,0 2321,1 66,8 494,9 14,2 Urban areas 2326,2 66,9 422,5 18,2 1614,2 69,4 289,5 12,4 Rural areas 1149,4 33,1 237,1 20,6 706,9 61,5 205,4 17,9 Source: Data of Research of Employment in February 2002 by the Lithuanian Department of Statistics The proportion of the urban-rural population among counties is quite even - there are 3 counties with an above average urban population, as well as 3 counties with an above rural population and 4 counties with about average. The even distribution of population is considered by the Government to be an important strength of Lithuania. It provides a sound basis for sustainability of municipalities and rural communities. 5.4. Employment and income in rural areas During the process of transition Lithuania's labour market has undergone significant changes. The labour force experienced a dramatic loss of income and, in turn, purchasing power during the early transition, although a partial recovery of income became apparent in 1994 with economic recovery. The development of economic reforms produced a downward trend in employment. Lithuania's employment data for 2001 compared to 1997 indicate an accumulated job loss of around 7% (106 900). During the same period the number of employed population decreased from 85,9% to 83%. At the end of 2001, the total rural working population made up to 30 per cent of total Lithuanian employment, while agriculture, forestry and fishery employment rate was estimated at 17.8 per cent. In spite of the fact, that in 1995 the share of the sector employment made up 22.8 % of total employment, it must be considered, that the share of employment is continuously decreasing. Table 6:Employment in agriculture, hunting and forestry and fishing, 1990-2001, %

Kind of economicactivity 1990 1995 1996 1997 1998 1999 2000 2001

Agriculture, hunting and forestry and fishing

19.5 22.8 24.2 21.8 21.5 20.2 19.9 17.8

Agriculture, hunting and forestry 19.4 22.7 24.1 21.7 21.4 20.1 19.8 17.7

Agriculture 18.5 22.9 23.1 20.8 20.6 19.2 18.9 16.7

Fishing 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1


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Sources: Statistical Yearbook of Lithuania 2000.-Vilnius: Department of Statistics under the Government of the republic of Lithuania, 2000

Rather large number of people engaged in agriculture is determined by the low efficiency of labour, partial employment and small farms. Lithuanian agriculture has large possibilities to increase labour efficiency by consolidating and specializing farms. Therefore the number of the directly employed in agriculture would go down and thus will contribute to the growth of unemployment in rural areas. Redundant people should have possibilities and suitable conditions to develop new traditions in agricultural production and to engage in new business activities. In the last years, the changes in the labour force in rural areas have not been very great, but there are certain adverse tendencies that give reasons for concern: the number of the employed decreases while unemployment is growing. In 2001, employment rate in rural areas was 43 percent and it is by 7% lower then in urban areas. The rate fluctuates in the country from 34,5 to 51,7 % broadly reflecting the actual economic and social development within different parts of Lithuania. Table 7:Employed rural population by economic activity in 1997 – 2001, in %

Economic activity 1997 1998 1999 2001 Agriculture, hunting, forestry and fisheries 58 56 53 51 Industry and construction 12 12 14 10 Services 16 17 17 20 Education 6 8 9 9 Health and social work 4 4 4 4 Other activities: public, social and personal service

4 3 3 6

Source: Labour force, employment and unemployment 1997, 1998, 2000, 2001. – V. Department of Statistics under the Government of Lithuania Agriculture, hunting, forestry and fisheries remain the key economic sector in rural areas and employs 51 percent of the total rural population. However, in the period of 1997 – 2001 the amount of employed population in this sector decreased by 23 % in total. In different counties agriculture, hunting, forestry and fisheries employs from 52 to 82 % of the total rural population. The over dependency of rural population in terms of income from agricultural activities is a weakness of rural sector having a negative impact on successful implementation of rural development strategy. The second largest employer is service sector - it employs 20 % of the total rural working population. The rest part of rural population is engaged in industry and construction, other services such as education, health care and social work and other activities. The total unemployment rate of about 14% in 1997 increased to 17% in 2001. This rate exceeds considerably the EU average estimated to be 10.8%. However, according to register-based unemployment rates, in 2000 the total unemployment rate increased to 11,5 % in comparison to 5,9 % in 1997. The number of unemployed persons in rural areas in the period 1997-2001 increased from 58 to 70 thousands and it makes up to 21 %. Every third unemployed person applying to the Labour Exchange is from rural areas. The number of persons previously employed in agriculture and having no jobs presently is increasing.


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The unemployment rate among the rural population makes up to 14.6 %, while in the urban areas the same indicator estimates at 16.7 per cent. But the age structure of the rural unemployed is unfavourable: the large number of rural youth unemployment is common. At the end of 2000, the unemployment rate among rural youth up to 25 years of age made up to 33.8 %. It, however, leads to the conclusion that a lot of the young generation in rural areas lack education and professional skills. Usually, the rural activity rate is considerably lower than the urban one. At the end of 2001, it was 57.4 per cent, compared to 63.2 per cent in Lithuanian urban areas. However, the gaps between the rural employment rate and employment rate in the urban area are rather small (51.3 per cent and 52.6 per cent respectively). Despite of that rural population is less unemployed than in urban areas. Table 8: Activity, employment and unemployment rates in rural areas compared to urban, 2000 Urban areas Rural areas Activity rate 63.2 57.4 Unemployment rate * 16.7 14.6 Employment rate 52.6 51.3

Source: Lithuanian Department of Statistics – * Labour Force Survey, 2001 The incidence of long-term unemployed is also high -59%, 58,5% in urban and 60,8% in rural areas respectively. The highest long-term unemployment rates were recorded for people aged over 50, who tend to leave the labour force because of health problems or unavailability of work. The share of women in long-term unemployment accounts for 38.6 %. However, some positive tendencies should be observed in labour market, as more of the rural population tends to switch to the employment in services and other activities that is of crucial importance in aiming to minimise the dependency of rural population from agriculture. Consequently, lower activity and employment of the rural population leads to lower average disposable household income, when compared to the urban population. According the survey of the household income and expenditure in 2001 average disposable income per capita made up 409,5 Litas per month. Average household income in rural area was 310,9 Litas per capita, while the average urban household income was 455,4 Litas per capita. Rise of the total disposable income during 1996-2001 year period made up 25,3 per cent (29,1 in urban and 15,6 in rural area). The average rate of increase during this period made up 4,6 per cent, 5,2 per cent in urban and 2,9 per cent in rural area respectively. According the income survey, the difference between average urban and rural household income increased from 31 per cent in 1996 to 46,5 per cent in 2001. Therefore, the already existing gap between rural and urban households in terms of income keeps on widening. Table 9:Change in average disposable incomes per capita, 1996-2001

1996 1997 1998 1999 2000 2001

Average rate of growth


19

Total, Litas per month 326,7 368,9 422,5 428 415,4 409,5 X Annual rate of growth X 1,129 1,145 1,013 0,971 0,986 1,046 Annual rate of growth of real income X 1,037 1,090 1,005 0,961 0,973 1,012 Urban, Litas per month 352,7 403,1 463,5 475,2 464,9 455,4 X Annual rate of growth X 1,143 1,150 1,025 0,978 0,980 1,052 Annual rate of growth of real income X 1,049 1,094 1,017 0,969 0,967 1,018 Rural, Litas per month 268,9 298,4 336,3 327,1 311 310,9 X Annual rate of growth X 1,110 1,127 0,973 0,951 1,000 1,029 Annual rate of growth of real income X 1,019 1,072 0,965 0,941 0,987 0,996

Low incomes of rural population determines the structure of expenses. The majority goes for food, the smallest amount for health and education. Table 10: Average household disposable income and expenditure in 1996-2000, in Litas Indicators 1996 1997 1998 1999 2000 Average disposable income per family member monthly

urban 352.7 403.1 463.5 475.2 464.9 rural 268.9 298.4 336.3 327.1 311.0 of which farmers’ 24838 245.7 286.0 252.2 239.3 Share of expenditure on food, %

urban 51.7 48.5 44.3 42.0 40.4 rural 65.3 62.1 59.0 56.8 56.2 of which farmers’ 66.8 67.5 63.6 62.6 60.6 Health care urban 2.7 3.1 3.5 3.7 4.5 rural 2.4 3.2 3.3 3.4 5.8 of which farmers’ 2.1 2.1 2.1 2.1 3.3 Education urban 1.0 1.0 0.4 0.8 0.8 rural 0.6 0.7 0.1 0.2 0.3 of which farmers’ 0.6 0.6 0.0 0.1 0.0 Source: Household income and expenditure in 1996, 1997, 1998, 1999, 2000.-Vilnius: Department of Statistics under the Government of the Republic of Lithuania Rural population’s in kind income makes up to one third of the total household income per member, and in the case of farmer – 45 percent in 2000. Although a share of in


20

kind income was decreasing during the last years, individual agricultural activities in households are still the main source of income for rural population. Low monetary income from business indicates the low profitability of commercial agricultural production and unfavourable circumstances for alternative income in rural areas. If to analyse the percentage distribution of disposable income by source and residential area for 2000, urban dwellers derived 59.4 per cent of their income from employment, almost twice that of rural people (29.1 per cent). Rural people derived almost a quarter of their income from self-employment in agriculture (24.2 per cent), compared to 2.3 per cent for urban dwellers. Rural people also received a higher percentage of their income from retirement pensions (20.7 per cent versus 13.1 per cent). Figure below shows the changes in income structure of practicing farmers. Trend of declining portion of income from employment and rising portion of income from social benefits illustrate ageing process of farmers. On the other hand, low portion of income from employment shows low off-farm job possibilities among rural people engaged in farming activities.

9,20% 10,20%11,30%8,50%11%

59,60% 59,10%61,30%68,50%65,30%

22,80% 19,30%19,10%16,30%16,20%8,40% 11,40%8,30%6,70%7,50%

0%

20%

40%

60%

80%

100%

Otherincome

Income fromsocialbenefitsIncome fromself-employmentIncome fromemployment

Other income 18,4 19,2 21 27,4 21 Income from social benefits 39,8 46,5 48,3 46,1 57,1 Income from self- employment 160,4 195,8 154,8 141,5 148,9 Income from employment 27,1 24,5 28,5 24,3 22,9

1997 1998 1999 2000 2001

Figure 1: Change in structure of the incomes of the self-employers in agriculture Rural tourism is one of the most popular alternatives to traditional rural activities. In the year 2002 there were about 670 farmsteads involved in rural tourism business; in the year of 2001 the number of visitors in farmsteads involved in agro tourism made up to 56,8 thousand. The majority of the farmsteads are located in South-eastern and Western parts of Lithuania. These are the most favourable geographical regions, and are known for their rich natural and cultural resources. Compared to urban entrepreneurs, rural ones are less active to take new businesses as the business environment in rural areas is in less favourable situation, especially in terms of investments. The other obstacle for providing alternative activities is the lack of knowledge and experience in the fields of management and marketing.


21

Thus, data on employment and household income reveal major weaknesses in Lithuanian rural areas: first, high dependence on one source of income - agriculture; second, high unemployment among rural youth; and third, a widening income gap between rural and urban households. 5.5. Social and physical infrastructure in rural areas 5.5.1. Education and training The education level of the rural population is inferior to that of the urban population. People in the rural areas are less prepared for the development of competitive agriculture or work in other industries. Secondary education is dominant amongst both urban and rural population (34.5 and 30.1 per cent respectively). However, rural population with primary and less then primary education is of the same proportion as the population with secondary education and makes up to 30 per cent whereas in urban areas it is only 13 percent. Most of the rural population engaged in agriculture has secondary, secondary vocational (37.9 percent) and primary or less than primary education – 15.4 percent. Table 11: Number of population within the categories of education, per 1000 of inhabitants, 2001 Higher

educa-tion

Technical intermediate level education

Secondary education

Basic education

Primary level education

Urban population 161 211 286 132 172 Rural population 55 156 242 187 284

Sources: Labour Force, Employment and Unemployment 2000. Results of Labour Research.-Vilnius: Department of Statistics under the Government of the Republic of Lithuania.

The data of 2001 shows that in the group of 1000 inhabitants 658 urban inhabitants have higher, technical or secondary education, compared to 453 rural inhabitants. The level of higher education is three times lower among rural population. The Ministry of Education and Science of the Republic of Lithuania implements the general educational and science strategy in Lithuania. The state policy in scientific research works in agriculture, farmer's continuous learning, consultations, adult education, qualification improvement, farmer's self government, education and culture is implemented by the Rural Development and Information Department of the Ministry of Agriculture, its Science and Training Division that also coordinates activities of the Council of Agricultural Science and Farmer's Education Council. The department forms and implements the policy of agricultural science and education, introduction of new technologies in agriculture, organises and coordinates research orders by the Ministry of Agriculture, their financing, introduction and propagation of results, coordinates training and qualification improvement of agricultural specialists. Agricultural education can be obtained at 2 universities, 8 vocational and 27 agricultural and other professional education establishments. Agricultural universities and also 2 state scientific research institutes and their branches, 5 university scientific


22

research institutes and 2 state science establishment are engaged in agricultural scientific research. Lithuanian Agricultural Advisory Service (LAAS) plays an important role in training of rural population as the main costumers of their services are farmers, agricultural specialists, members of agricultural cooperatives, representatives of medium and small businesses in rural areas, teachers of agricultural schools. Each district has an advisory office (branch) taking into consideration needs and existent conditions of service users. There are 44 offices in total, each employing 3-6 specialists providing qualified services and consultations in traditional plant-growing, cattle breeding, accounting of the farm economics, construction and mechanisation of agricultural buildings, etc. Moreover, consultants organise courses, seminars and help farmers to realise joint projects with Lithuanian and foreign partners. Table 12: Distribution of LAAS contracted clients according education, %

Education Percent High 24 (54 % of which have agricultural) Higher 35 (59 % of which have agricultural) Secondary 31 Primary 10

Figure 2: LAAS clients according farm size LAAS is expanding its activities on a yearly basis in order to meet the ever-growing request of its clients both in terms of professional knowledge and awareness. Awareness is of great importance in making farmers to look for changes and improvements in their farming activities that lead to the improvements in the methods and technologies and further in the quality of their produce.

53%

24%

13%10%

up to50 ha50 - 100 ha100 - 200 ha200 ha and more


23

Table 13: LAAS awareness raising activities 2001 2002 first half year Number of seminars 777 653 Number of participants in the seminars 16987 15438 Number of topics of the technical notes 1511 1048 Number of article topics 633 399 Number of field days 214 138 Number of participants in the field days 3695 2222 Publications 24 12 Education and training of rural population as well as awareness rising is a must in aiming at sustainable economical and social rural development which is impossible without increase in abilities of rural population to operate in the open market environment. Rural population is lacking initiative, self-confidence and capacity to take active part in the decision-making or implementation process related to the development of their own rural territories. The network of agricultural advisory and educational institutions is established and evenly distributed among rural territories in Lithuania. However, they lack human resources capable of spreading the most advanced knowledge and the best experiences and there is a big need to upgrade the existing base in order to provide all necessary capacity building which is required to reflect all needs of rural society. 5.5.2. Rural Infrastructure Compared to urban areas, Lithuanian rural areas have a lower standard of living in terms of physical infrastructure. The underdeveloped rural infrastructure is a serious weakness of rural areas. Although there are no villages without electricity, wide disparities between rural and urban areas existed in water supply, central heating systems, sewage and telephone networks. A significant number of rural inhabitants are supplied with poor quality drinking water. Only 43.5% of rural residential units, or one third of rural settlements, have central piped water supply systems. Approximately 700,000 rural inhabitants use drinking water from 300,000 dug wells. The problem is that 30% of dug wells used for drinking water in rural areas are contaminated with nitrates. The artesian bores and central water supply systems installed in most of rural settlements are out-dated and doesn’t comply with hygiene and environmental standards. The same is true for sewage systems. In total, 733 sewage systems have been installed in rural areas. They serve around one third of rural inhabitants. Poor development of water supply and sewage systems raises major environmental issues. Though Lithuania has a well-developed local road network (at the end of 2001 the total length of local roads was 48.152 km) and electricity supply, the setting up farmers or farmers undergoing restructuring are facing problem of establishing road or electricity connection to new households and farmsteads. A significant problem in rural areas is related to functioning of earlier established drainage management systems. Those represent the large-scale drainage systems that are interconnected by water conducting canals including a large number of hydraulic


24

structures. These systems installed during last decades are covering an area of 3.01 million of ha including not only agricultural land, but also territories of rural settlements, forests, other recreational and public territories. They are not complying with environmental standards, as the water collected from contaminated territories is not decontaminated. To conclude, poor water supply and sewage systems represent a major threat to rural environment. Besides, existing disparities in infrastructure between rural and urban areas and poorer quality of life may lead to migration from rural to urban areas. These trends would have a negative impact on rural development and threaten the sustainability of rural communities. 5.5.3. Rural Culture In Lithuania there are 46 villages, which have either historical or cultural heritage. Additionally, more than 59 manors, buildings, parks and gardens subject to protection are located in the rural area. Together they cover more than 1,300 hectares. These sites of cultural value (villages, manors, etc.) play a vital role in development of rural tourism and recreation services, and preserving rural heritage. Rural libraries and cultural centres represent an important part of rural life, traditions and culture. In 1990-1999, the number of rural libraries and cultural centres steeply diminished. In 1990, there were 1439 rural libraries compared to 1206 in 1999. Also, the number of rural cultural centres dropped from 1045 in 1990 to 841 in 1999. At the same time, the number of rural libraries and cultural centres has been decreasing, their technical conditions worsened. However, in the last two years the establishment of local communities has started to take place. In many cases these communities are established and conduct their activities in the base of cultural centres and therefore the rebirth not only of the premises as such but also of the activities that used to be performed earlier is on the way. It should be emphasised, that social life in rural areas used to be very active through gatherings in those cultural centres and therefore absence of such a life for about 10 years after the independence has made rural people to renew their activities through which they enhance the culture, enrich their daily life. As of December 1st 2002, there were 159 local communities officially registered and operating in Lithuania. Thus, the support and reinforcement of such movement is of great importance in order to ensure that local initiatives are realised to the benefit of the local rural community and further of the entire rural population. 5.6. Agriculture 5.6.1. Significance of the sector in the National Economy Agriculture remains as one of the main sector in the national economy. Agriculture and food industry contribute substantial part of GDP. However, the share of the sector input in GDP constantly declines as also declines the agricultural production. In 1998 the share of the sector contribution made up 14.5 % of GDP (agriculture -9.4%), in 1999 -13% (7.9 % of agriculture, comparatively). In 2000 it declined to 12 % (6.9%).


25

Table 14:Macroeconomic indicators of the agricultural and food sector in 1995-2000 1995 1996 1997 1998 1999 2000 GDP at current prices, mln. Litas 24103 31569 38340 42990 42597 44409

Total agricultural production at current prices, mln. Litas 5572.1 6338.8 6378.6 6153.0 5065.6 4476.0

Share of agriculture in gross value added, * % 10.9 11.3 10.9 9.4 7.9 6.9

Export of agricultural and food products, mln. Litas 1982.7 2296.6 2472.0 2082.7 1509.1 1792.3

Share of agricultural and food products in total exports, % 18.3 17.1 16.0 14.0 12.6 11.6

Imports of agricultural and food products, mln. Litas 1950.3 2391.5 2510.4 2538.2 2166.4 2227.5

Share of agricultural and food products in total imports 13.4 13.1 11.1 11.0 11.2 10.2

* Including agricultural services, hunting Sources: Statistical Yearbook of Lithuania 2000.-Vilnius: Department of Statistics under the

Government of the republic of Lithuania, 2000 Agriculture in Lithuania 1999.-Vilnius: Department of Statistics under the Government of the republic of Lithuania, 2000

In the period 1995-1997 the total agricultural production as well as the share of agriculture in gross value added was increasing. The increase was even bigger that in the economy of the country as a whole, but in 1998 and 1999 due to the Russian crisis and other factors, the added value decreased. The share of value added in agriculture in respect of the total value added in the country’s economy shrank as well. In 1995 it made up 10.9 per cent, and in 2000 it dropped to 6.9 percent. Trade in agricultural and food products has a significant share in the structure of Lithuania’s foreign trade. In 2000, Lithuania’s agricultural and food product exports accounted for 11.6 % (LTL 1.8 billion) of the total value of Lithuanian exports, while imports accounted for 10.2 % (LTL 2.22 billion). Traditionally, the Lithuanian food industry is a net exporter. In 2000 Lithuania's milk production was 246%, egg production 117%, meat and grain production 100% of domestic consumption. The main export markets for agricultural products are the European countries. In 2000 59.0 per cent of exports of Lithuanian agricultural products went to the countries of the European Free Trade Association (EFTA), the Central Europe Free Trade Association (CEFTA), and Baltic Free Trade Agreement (BFTA), in comparison to 40 per cent in 1995. In 2000 the foreign trade results were improving to compare with 1999 (the trade deficit was decreasing, and the export share to the EU countries was increasing). In 2000 the dairy products accounted for the largest share (about one third) of the total agricultural and food export. Meat and meat products accounted for 6.0 per cent, grain – 3.0 per cent, fish and fish products – 7.0 per cent of the total agricultural and food export.


26

Taking into account these trends, Lithuanian food industry will be able to have the niche in the EU Common Market. However, to compete successfully in domestic and external markets, the Lithuanian food industry requires restructuring and modernisation. There is still a need of investments in capital and human resources to comply with quality, hygiene, food safety and environmental requirements. The structure of the agricultural production has changed significantly during the recent decade. In 1990 livestock production constitute the major part of the agricultural production (54.5 per cent) while in 2000; crop production took a leading position - 61.9 per cent.

Grain28%

Eggs3%

Milk18%

Rape1%

Meat18%

Sugar beets3%

Fodder plants6%

Fruit and vegetables

9%

Potatoes13%

Other production1%

Figure 3: Structure of gross agricultural production in 2000 Source: Data provided by the Department of Statistics under the Government of the Republic of Lithuania Agricultural production in Lithuania is quite diversified. It is characterised by the concentration of some of the production to different parts of the country. It must be taken into account in the development of agriculture and the processing of agricultural products as well as rural development at the local level. The main part of agricultural production is produced in family farms and household farms – about 85 percent of crop production and about 70 percent of livestock productions 5.6.2. Land reform and utilization of the land The process of land reform and restoration of ownership rights to land started in 1991. The situation considerably improved in 1997 as the result of the improvement of the implementation of the land reform procedures. By 1st of October 2000 the land management projects have been prepared and approved. The share of the land the ownership rights to which have been restored makes up 79 per cent of land area indicated in applications. By the beginning of 2002 the total number of private


27

landowners reached 555 700. The total area of the land to which the ownership rights have been restored, makes up 2090 thousand hectares, or 52.8 per cent of UAA. Restitution process has not been finished yet. However, it is obvious that the existing private land tenures are too small to run perspective and competitive activities. In spite of the process of Lithuania integration into the EU, it is necessary to stimulate competitive farm development and promote formation of the expedient holdings. The preparation of the principles of the land management and administration are underway. These principles are aimed to improve the agricultural farm structure, to ensure implementation of the environmental protection, to stimulate infrastructure development. Of the 6.530 thousand hectares of the total Lithuanian area, utilized agriculture area (UAA) at the beginning of 2001 accounted for 53.4 per cent of total country area. Arable land accounted for 84.1 per cent of UAA, meadows and natural pastures –14.2 per cent of UAA and permanent crops - 1.7 per cent of UAA. Forests cover is 30.6 per cent of total country area. Water bodies make up 4.0 per cent, roads – 2.0 per cent, build-up territories –2.9 per cent, and other land –7.1 per cent of the total country area. The reclaimed area equalled 3.05 million hectares, 85 per cent of which has been drained. More than 1 million hectares of soil are acid, so it must be permanently chalked. Table 15: Land use as of January 1, 2001

Land use ‘000 ha % Total area 6.530 Utilized agricultural area (UAA)

3.488,7 53.4

Arable land 2.932,6 84.1 of UAA Meadows and natural pastures 497.1 14.2 of UAA Permanent crops 59 1.7 of UAA Forests 1998.4 30.6 Water bodies 262.1 4.0 Roads 131 2.0 Build-up territories 187.3 2.9 Other land 462.5 7.1 Sources: Statistical Yearbook of Lithuania 2001.-Vilnius: Department of Statistics under the

Government of the republic of Lithuania, 2001 The land reform is changing the structure of agricultural land from the point of view of its users. The number of farmers’ farms is increasing, while the number of agricultural partnerships and other kinds of agricultural enterprises and the area of land at their disposal is diminishing.


28

5,2

6,5

1,3

25,2

0,6

39,1

22,1

48,5

19,9

0,5

12,3

0,2

3,3

15,3

0 10 20 30 40 50 60

Private land used for agricultural activities

Land non-granted for usage and not leased or stateowned land

Land used by state enterprises

Land of other natural and legal entities leased from thestate

Land used by horticultural associations

Land of agricultural partnerships leased from the state

Land of houshold farms

1994 01 01 2001 01 01

Figure 4: Land used for agricultural activities by users Sources: Land fund of the Republic of Lithuania as of 1 January1995, 2001. – Vilnius: Department of

Land Management and Law under the Ministry of Agriculture, State Enterprise of Land and other Real Property Cadastre and Register

The number of the private owners of agricultural land has been changing throughout the land reform. As of January 1, 2001, there were 522.8 thousand private owners of land. The area at their disposal amounted to 1915.2 thousand hectares, which accounted for 29 per cent of the total land area or 48.5 per cent of agricultural land. Generally, climatic conditions and the natural fertility of soil constitute an important conditions for the favourable development of milk and meat sector, for growing wheat, rye, fruits and vegetables, flax, rape, sugar beets. Comparatively low soil; water and air pollution is of great importance in developing the organic farming. A very specific problem that Lithuania faces is the huge amount of agricultural land not being actually used for agricultural purposes. Over the last decade more and more agricultural lands in Lithuania have become abandoned and have not been cultivated for some time. This development is mainly a result of the land reform process and the adaptation by the agricultural sector to the open market. It is estimated that about 600.000 ha of agricultural land is not being currently farmed. In many cases, cultivation of such lands is being stopped since the areas are characterised by poor soils and other adverse growth conditions. However, the ongoing land reform process has resulted in some of the better soils being left uncultivated as well.


29

5.6.3. Less Favoured Areas In Lithuania there is a broad regional variety defined by natural, social, economic, traditional and other factors. These factors directly or indirectly influence productivity, efficiency, income and, ultimately, quality of life in a given region. In these regions where the income from agricultural activity is declining, the agricultural activity must be continued because of the protection of environment and rural area itself.

In period 2002-2003 in order to identify the less-favoured areas there had been approved national Procedure for the Selection of Less-Favoured Areas by Order No. 3 of the Minister of Agriculture of the Republic of Lithuania as of January 7, 2002.

To the less-favoured areas there had been attributed the areas in which agricultural losses are incurred due to the limited productivity of agricultural land and the density of rural population is below the country’s average or the viability of rural communities (ratio between births and deaths) is worsening.

In the period 2002-2003 the total less-favoured area covered 1.597,5 thous. ha or 47.4% of the total utilisable agricultural area in Lithuania.

Less favoured areas for the period 2004 - 2006 are to be attributed in accordance with Regulation (EC) 1257/1999 using these indices:

• yield of cereals is lower than 80 per cent. of national average,

• the value of total agricultural production per capita employed in agriculture,

• population density is lower than 50 per cent of national average,

• percentage of active population engaged in agriculture is more than 15 per cent,

• the rate of population regression 0.5 per cent per annum or more.

(See Annex 1. Technical sheet per measure).

With regard to the natural differences, it should be noted that there are 24 types of soil in Lithuania, which are further classified into 15 agronomic types of soil according to the locality, topographic and climate specifics. Each type of soil is creating different agricultural conditions and requiring different farming approach. The quality of soil is reflected by the soil productivity grading system (lowest – 30 points, highest – 50 points). In accordance with this system it can be seen that soil quality in Lithuania varies approximately 1.65 times on the level of local governments.

The most consistent region in terms of soil quality is Central Lithuania, with smallest proportion of low quality soil. The greatest concentration of the poor soil quality areas is in the Eastern, South – eastern and Western parts of the country.

Differences of soil quality result in different plant productivity, which varies within Lithuania about 3 times. For example, cereals productivity varied 2.2 times, the lowest being in Zarasai municipality (1.48 t/ha) and the highest productivity in Šakiai municipality (3.73 t/ha).

Income from agricultural production differs between the municipalities accordingly. Whereas in Marijampolė county income from 1ha of agricultural production is 800 Litas, in Telšiai county 1ha of utilizable agricultural area results in 374 Litas. Income differences between different municipalities reflect not only different soil quality but


30

utilization of agricultural area and production intensity as well. Low soil productive potential and inefficiency lead to abandonment of agricultural land and eventually to the less total income per region.

Lower income in less-favoured areas is reflected by income from agricultural production per one farming person. Although country average agricultural income per farmer (5.8 thous. litas) is low in general, income of farmers in the less-favoured areas is still considerably lower (i.e. 3.9 thous. litas per year in Alytus county or 4.3 thous. litas per year in Telšiai county).

Another factor, important for the quality of life in a given region is a demographic factor. The lowest density of rural population is in the Eastern and South-eastern parts of Lithuania. In Švenčionys local government population density is the lowest in Lithuania and it reaches only 8.72 people/sq. km. It is also 2 times below the national average and almost 5 times below the densest Kaunas municipality, where population density reaches 40 people/sq. km.

Another important criteria is viability of rural population. Especially low viability coefficient is in the Eastern part of Lithuania. In Ignalina local government rate of deaths is almost three times higher than the rate of births. Unfavourable agricultural conditions lead to higher level of population migration from those areas, lower volumes of agricultural activities, less investments into the sector and eventual abandonment of land. 5.6.4. Farming structure, number of farms and size Improvement of the efficiency of the primary agricultural production depends on three main reasons – size of the farm, trend of development and financial and economical capacity. Currently, 4 different types of farms characterise Lithuania’s farming structure:

• Agricultural companies, public and private companies, co-operative companies, farms of other categories;

• Registered farmer’s farms; • Family farms; and • Household plots.

Agricultural companies, public and private companies, co-operative companies, farms of other categories are large-scale, corporate type enterprises created as a result of the transformation of state and collective farms. In addition to primary agriculture, they are involved in agro-processing and trading activities. According to provisional results of the Census of agriculture 2003 in the Republic of Lithuania, the number of corporate type enterprises reduced sharply. By June of 2003 568 such companies remained active, while in 1995 there were 2611 ones. It was predetermined by the lack of competitiveness. The main reasons for low competitiveness can be defined as follows:

o Outdated machinery and equipment o High operating costs o Lack of investments.

Agricultural companies, public and private companies, co-operative companies, farms of other categories owned 389 thousand ha of land, of which 283,6 thousand ha were agricultural land. The average size of such farms are rather diverse: an average size


31

agricultural company (total number - 293) owned, respectively, 714 and 697 ha, private companies (139) owned 359 and 304 ha and co-operative companies (50) owned 472 and 460 ha on average. After independence the process of creation of farmers’ farms started. The number of farmers’ farms recorded with the Farm Register was 45 thousand. They owned 1269 thousand ha of land, of which 1159 thousand ha were agricultural land. One farm owned on the average 28,2 ha of land and 25,7 ha of agricultural land. The creation of a so-called Family Farms started before Lithuania gained its independence. The number of family farms registered during the census of June 2003 equalled 233 thousand. They owned 1275 thousand ha of land, of which 1093 thousand ha were agricultural land. The average size of such farms was, respectively, 5,5 and 4,7 ha. The fourth type of farms is Household Plots with an average size of less than 1 ha. Household plots are often operated by shareholders of agricultural companies or by rural inhabitants, in order to supplement their income from other sources. They still account for a significant share of income generated by rural inhabitants. According to census date of June 2003 there were 332 thousand household plots instead of 300,4 thousand ones in 2000. They owned 90,6 thousand ha of land, of which 41,1 thousand ha were agricultural land. Table 16: Structure of agricultural holdings, June 20031 Number of

holdings Area cultivated, thousand ha

Average size, ha

Family farms 233 000 1275 5,5 Farmers’ farms 45 000 1269 28,2 Agricultural companies, public and private companies, co-operative companies, farms of other categories

568 389 684,9

Total holdings (1 ha and more) 278 568 2933 10,5 Household plots 332 000 41,1 0,27 Total holdings 610 568 2974,1 4,9 According the Census data, by June 2003 there predominated small in size holdings. Holdings from 2,0 to 9,99 hectares made up 29,0 per cent, from 10,0 to 19,9 hectares – 17,7 per cent of, from 20,0 to 29,9 hectares – 8,6 per cent and from 30,0 to 49,9 hectares – 8,6 per cent of the total number of the farms. Holdings from 50,0 to 499,9 hectares made up 20,7 per cent. Holding more than 500 ha made up 14,3 per cent. It is expected, that by 2006 the average size of farm will reach 18,2 hectares and by 2010 – 22,0 hectares. Thus, the average size of the farm taking into consideration the data about farming structures and the area of land at their disposition, the average size of the farm by June 2003 was 4,9 ha and it is very small if to compare it to the EU average. The small 1 Sources: Lithuanian Department of Statistics, 2003; Provisional results of the Census of Agriculture 2003 of the Republic of Lithuania


32

average size of an agricultural holding is a major problem for the development of a competitive agricultural sector. Establishment of co-operatives is considered as the solution for small producers to strengthen their positions. A large number of co-operatives have a modest membership rate. Despite the measures taken to promote the cooperation, establishment of cooperatives/producer groups is still not popular mainly because of past cooperative experiences. 5.6.5. Age structure of farmers Labour efficiency in agriculture is closely related to the age structure of farmers. Farmers up to 35 years old produce twice as much if to compare to the farmers of retirement age. About 40 percent of people employed in agriculture are of retirement age. About half (49 percent) of the registered farmers are 60 years old or even older, 21 percent are 50-59 years old. Young farmers up to 40 years old make only 14 percent.

Since a lot of the farmers are engaged in milk production (29 %) their age structure and its relation to the farm size an efficiency of the farms will be analysed in more detail. According to the data of Agricultural Information and Rural Business Centre (AIRBC) by 1 of January 2002 there were 224582 dairy cow owners in the Animal Register, more than 95 per cent of which owned less than 5 cows. Persons of retirement age comprise 38 per cent of dairy cow owners and they own 28 per cent of dairy

22%

17%

18%

43% <40 40-50->60

Figure 5: Structure of dairy farmers by age As dairy farms with more than 5 milking cows are suggested to be economically viable, the figure below shows, that economically viable milk production is concentrated in holdings of comparatively younger farmers at the age between 35 and 55 years. Among small (less than 5 cows) dairy farms farmers at the age between 55 and 75 dominate. Moreover, they make more than 50 percent of all milk producers.


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Number of Number of farmers farmers Age of farmers

0

5000

10000

15000

20000

25000

30000

31-35 36-40 41-45 46-50 51-55 56-60 61-65 66-70 71-75 over 75 0

260

520

780

1040

1300

1560

>5 cows<5 cows

Figure 6: Number of dairy farms by the age of farmers As the result, the milk production is in a great demand for structural changes in terms of farmer’s age and farms size. Small milk producers eventually will face milk quality related problems not being able to meet the required standards and requirements. At the same time it is necessary to ensure that elimination of the small milk producers does not result into the escalation of the social problems among milk producers which presently dominate in rural areas and whose main source of income is derived from this type of activity. The fact, that most of the milk producers are over 60 years old make the problem even more sophisticated as people of this age are reluctant to redirect their activities into other economically viable spheres or to restructure their farms in a way that investments and improvements would results in the economic benefits. 5.6.6. Primary production and processing industry Crop production sector In 2001 the area covered by different crops was 2,15 mln. hectares. Table 17: Statistics of Crop Sector, 2002 Total

crops Grain Protein

crops Flax Rape Sugar

beat Pota-to

Field vege-tables

Fodder legumes

Other

Area thous.ha

2152,0 918,0 36,2 9,5 60,0 29,2 99,2 20,7 36,0 943,2

Yield t/ha

2,77 1,74 0,66 1,84 36,0 15,4 12,6 31,6

Grain production Grain production is the main in crop production. The area used for grain production out of the total crop area in 2002 was 44,3 percent.


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50 per cent of grain crops are currently used for feedstuffs, about 20 per cent – for food production, and 12.6 per cent for seeds. Cereal supply exceeds actual demand for cereal in 5 per cent. Consequently, it is expected, that cereal consumption will slow down. The average annual consumption will not exceed 100 kilogram per capita in the nearest future. However, increase in livestock production reasoned by the growing demand for dairy and meat products will support overall demand for cereal. Despite of the drop-off of the grain crops area, especially in poor soil municipalities, the growth of the cereal production must be reasoned by the growth of the productivity. It is supposed, that crop yields must exceed to 3.7 tones per hectare in 2004 and 5.5 tonnes per hectare in 2015 in comparison with 2.7 tonnes per hectare in 2000. Grain production in Lithuania is concentrated in the central part of the country – namely in Šiauliai, Panevėžys and Kaunas counties as well as in the western part, which is of medium productivity. About 50 percent of the grain production comes from the mentioned counties. In the western part characterised by heavy precipitation, unfavourable conditions for winter crop and leguminous plants, the grain area amounts to 40 percent of total crop area. In East Lithuanian conditions for grain cultivation are the most unfavourable. In this area about 60 percent of the total soil are non-humic, and a hilly land prevails. The sandy soil of the south-eastern part is non-productive. The aforementioned conditions are more favourable for cultivation of buckwheat, oats, rye, and lupine. That is why the grain area of East Lithuania amounts to about 35 percent of the total crop area of the region. In 2001 land area covered by cereal made up to 950 thousand hectares. If to compare it to 1997, the area in 2002 has decreased by 22 percent. The main reason of such a development was the fall in procurement prices. About 84 percent of the total land area covered by cereals belongs to farmers and about 16 percent – to agricultural partnerships. The crop farms, which have invested in modern technologies, have already reached the yields comparable to those of EU countries. However, the average productivity of crop farms is rather low. All crop husbandry branches are facing problems related to outdated technologies and high production costs. Farms are lacking specialised knowledge and investment capacities to update production equipment, to use high quality seed and plant protection products.

Rape production Rape is relatively new crop in Lithuania the area under which is rapidly extending on the farms. About 70 percent of Lithuanian soils are suitable for rape cultivation. In 2001, the rapeseed was grown on about 40 thousand hectares. Rape is grown in all municipalities of Lithuania, mainly on farmer’s farms – about 72 percent. Rape is mainly cultivated in small, non-specialised farms, no latest technologies are applied which result in a relatively low yields (about 1,9 t/ha). Rapeseed yield on larger specialised farms that are engaged in more intensive farming is much higher – about 2,5-3,0 t/ha. In the period 1996-1999 there was a significant increase in rape area from 11,8 thousand ha to about 84 thousand hectares as a result of the increasing rape demand in foreign markets and state support for rape growers. In 2002, rape area reduced by more than 45 percent in comparison to 1999. The decline was conditioned by the size of support and lower price on domestic and foreign markets.


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Rapeseed export is one of the most important sales possibilities for Lithuanian farmers, because on the domestic market demand for rape is limited. During the period of 1997-2000 about 45 percent of total rapeseed output was exported. Income from rapeseed export in 2001 made about 51 mln. Litas. Flax production Flax cultivation in Lithuania is based on deep-rooted traditions, favourable climatic and economic conditions, the areas mostly suited for this type of production are situated in western part and in the north-eastern part of the country. The area under flax production in 2002 was 9,5 thousand hectares. About 70 percent of flax is grown on farmers and household farms. One third of these farms specialise in flax growing. Their flax area amounts to more than 30 hectares. They apply more progressive technologies; as a result, their yield is higher. However, a major part of flax is grown in small, non-specialised farms, in areas of 1.0 – 5.0 ha. These flax growers are not able to apply the advanced technologies, thus, high costs and often a poor quality of flax fibre is a result. The situation in the sector is such that Lithuanian farmers can hardly satisfy up to 40 % of local textile industry demand for fibre flax raw material. The main problems are insufficient yields and quality. Obstacles for achieving good yields (and especially – quality) are lack of investments for renewal of fibre flax production technologies, fibre flax and seed treatment as well as lack of investments for purchasing special equipment. Sugar beet production Sugar beets require good quality soils. As the result, the cultivation of sugar beets is concentrated in the central part of the country. 90 percent of the total sugar beet area is located in the following municipalities: Kedainiai, Marijampolė, Panevėžys, Radviliškis, Šiauliai, Vilkaviškis, Šakiai, Pakruojis where there are suitable soils and processing enterprises. In the period of 1995 – 2002 the area used for sugar beet cultivation made up to 24,3 – 29,2 ha. The yield fluctuated from 24,6 up to 36 t/ha .In 2001, 61 percent of the total sugar beet area belonged to the farmers and household plots and there were about 165 agricultural partnerships involved in this type of production. However, the number of agricultural partnerships growing sugar beets is decreasing annually. A major part of farmers cultivate sugar beets on small areas that do not allow using expensive machines, to reduce labour costs and cost per unit. Potato production Agricultural land under potatoes in the year 2001 was 99,2 thousand ha, i.e. 4,6 percent of the total agricultural land area under crops. 99 percent of the area under potato belongs to farmers and household farms. More then 85 percent of farmers involved in potato production grow potatoes on a very small areas of land (average size - 0,3 ha). Only about 0,3 percent of potato growers grow potatoes on area bigger then 15 ha. The average area of specialised potatoes growers is 30,5 ha. Lithuania has favourable potato growing conditions and potato production has further perspectives.


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Some potato growers who apply appropriate agro-technical methods and use appropriate selected varieties can reach 40 t/ha or even higher yields. However, average potato yield in Lithuanian are 14 – 16 t/ha. Potato growing is much more expensive in comparison to other crops – costs of 1 ha of potatoes is by 4-5 times higher then the costs of 1 ha of grain production, 2,5 times higher then the cost of flax production and 1,5 times higher then the cost of sugar beets. Taking into consideration present market prices of potatoes and resources required the potato production is economically viable only if yield is not less then 22 t/ha. Development of the sector is closely related to the establishment of the specialized farms. Vegetable production Vegetable gardening is one of the most important and profitable agricultural sectors in Lithuania. About 10 thousand people are employed in this activity. In the 2002 the share of vegetables in the total agricultural production made up to 8 percent. About 99,5 percent of the vegetables grown in the open air belong to farmers and household plots. And only 0,5 percent of the open air grown vegetables belong to the agricultural partnerships. The latter vegetable growers are more involved in greenhouse vegetable growing. Vegetable growing is more concentrated around cities. Locally produced vegetables make more then half of the local market supply. A team of commercial vegetable growers has not been formed yet, groups of vegetable growers have only started to form. A significant share of manual works employed reduces the productivity of a vegetable growing activity. Progressive technologies are not applied and as a result yield is two times lower then in the EU countries. Smaller vegetable growers are not able to deliver vegetables in larger amounts and to satisfy the needs of supermarkets. The above-mentioned reasons conditioned an increase of vegetable imports. Lack of appropriate storage facilities, grading and packing equipment results in a selling of produce straight from the field and it results in lower prices and further incomes of farmers. The area covered with glass-covered greenhouses hardly reaches 100 ha. The biggest portion of vegetables supplied to the local market grown in the glass-covered greenhouses is provided by 5 enterprises that joined into the Lithuanian greenhouse association. A major part of polyethylene greenhouses is not large – 4-20 a. As a rule the heating is seasonal, therefore, vegetable yield is not rich. In 2000, there were 230 ecological farms, including 20 involved in vegetables growing. The products grown in these farms comprised 12 percent of the total agricultural production. In recent years, their output has been increasing by 15-20 percent per annum. Demand for ecological vegetables has been increasing as well. However, the needs for ecological products have not been satisfied. Because of small and irregular supplies of ecological products, shops specialised in selling ecological products are not profitable and cannot be expanded. The main obstacles for smooth development of the vegetable sector are the following: lack in storage capacities, outdated vegetable growing technologies, low level of producer’s co-operation in sharing special equipment and performing common marketing activities. Fruit and berry production


37

In 2002, orchards and berry plantations in Lithuania covered 41,8 thousand hectares, with 35,9 thousand of ha of yield areas included. This makes up to only 1,7 percent of the total agricultural land area. The greater majority of orchards and berry plantation are small, not commercial varying in size from 0,06 to 0,5 ha. The growers themselves consume almost all the harvest. Commercial orchards and berry plantations make up about 14 percent of the total horticultural areas. The average size of stock companies and agricultural partnerships engaged in industrial horticulture manage the area of 30 to 400 ha. The size of average orchard is about 210 ha and almost all of that size production has all needed equipment and highly skilled personnel. Lithuanian farmers are quite active in horticulture. An average size of a farmer horticultural unit varies from 5 to 20 ha, and in some cases it even reaches 100 ha. Organic agriculture Lithuania’s integration into the EU implies a challenge to produce only competitive goods, i.e. competitive agricultural products. It is also necessity to apply cost effective farming methods, environmentally friendly and socially acceptable arrangements. This gives a task to solve economic, ecological as well as social problems in a complex way. In this regard one of the best management systems is bio-organic agriculture. It is based on natural biological processes and materials in order to ensure sustainable farming and production of high quality agricultural products. All the necessary preconditions for the production of organic products exist in Lithuania: a favourable ecological situation, state support, expanding local and foreign market of organic products, national and international recognition of the certification enterprise ‘Ekoagros’. All that results in possibilities to export organic products. The number of organic farms is constantly increasing (Table 2.). In 1993, the first organic farmers were certified. In 2001, 280 organic farms and 19 processing and trade enterprises were certified.

Table 18: Development of bio-organic farming in 1993-2001 Year 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Number of farms 9 14 36 65 106 144 171 230 280 393

Area, ha 148 267 582 1118 1568 4006 3995 4709 6400 8760

Source: Data provided by ,,Ekoagros” 1993-2001.

Information about organic farms and enterprises is presented in an annual publication by “Ekoagros” - Certified Organic Farms and Enterprises in Transitional Period. The area of certified organic farms is 0.8 per cent of the total area of agricultural land in Lithuania. An average size of the organic farm is 22 ha. In terms of the area of certified land Klaipėda District ranks first, then come Varėna, Biržai, and Molėtai Municipalities. Other producers of organic products are located in different municipalities of Lithuania.


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The major part of certified lands is meadows - 50 per cent and cereals - 40 per cent, 10 per cent of the area is used for vegetables, leguminous, potatoes, berry plantations, orchards, etc. (Figure 7.). The structure of crop area on organic and conventional farms is very similar, the difference lays in the fact that more vegetables, leguminous and potatoes are produced on organic farms. As a rule, organic and conventional farms are mixed, i.e. they produce different products: grain, potatoes, livestock products, fodder, etc. Only a few farms are specialised in producing of vegetables, fruit, berries, mushrooms, or herbs.

Figure 7: The structure of bio-organic crop area in 2002

Source: Data provided by ,,Ekoagros” 2002.

In 2002, the certified organic farmland was 8196 hectares, of which 4864 ha – grasslands, 2152 ha – cereals, 714 ha - leguminous, vegetables, potatoes, 409 ha – orchards, 57 ha – berry plantations. As for livestock production, the major organic product is milk (90 per cent). However, milk as well as beef and poultry are sold as ordinary products, without the mark of organic certification. There is no processing plant producing livestock organic products. Organic products are in greater demand in Lithuania now. Where as before only very few specialised shops were operating in which organic produce was sold, in the year 2003 the biggest supermarkets started placing the organic products on separate shelves and promoting healthier and better quality products. There are attempts to export organic products (berries, honey). On the domestic market 21 per cent of organic products are sold directly in the farms, 40 per cent – in fairs and market-places, 14 per cent - in shops, 25 per cent - in other places. The future will show what form of trade is the most popular. It is probable that selling organic products in supermarkets will stimulate the development of the market of these products. The number of organic farms increases by 20-30 per cent annually. If the certification of land follows the same pattern, in 2006 this area will comprise 0.5 per cent of the total agricultural land.

Cereals40%

Meadows50%

Vegetables, leguminous, potatoes

5%

Orchards, berry plantations

4% Other

1%


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The development of organic farming described above will not be able to meet an increased demand. The goal is to have 2 per cent of the total agricultural land area turned into organic farms before 2006. Therefore, increasing the number of organic farms annually is of prime importance. Processing of crop products Grain processing Currently there are 47 grain-processing companies and 10 of them are the big ones. The capacity of Lithuania’s grain processing industry is over 400 thousand tons of food flour, about 40-50 thousand tons of groats and more then 2 million tons of mixed fodder. The scale of grain processing industry is diminishing as a part of the process of agricultural reform – In the period 1991-2000 mixed fodder output produced dropped by more then 5 times, food flour production declined by about 50 percent. In recent years the largest mills have been undergoing modernisation. Technological lines for cereals preparation and other equipment have been renewed. The upgrade of production facilitates the increase of the output of the highest quality flour, improvement of grain quality and competitiveness in domestic and foreign markets. The mills operate at approx. 50 percent capacity. Mixed fodder producers are operating at about 15-20 percent capacity. Majority of enterprises have high energy consuming technologies designed for large-scale production. As a result, production costs have grown, and output quality has lowered, which reflects on competitiveness. However, some companies that have gradually modernised the process of production have managed to significantly increase their market share. In 2000, about 40 percent of mixed fodder producers covered approximately 80 percent of the total mixed fodder sales. The remaining actors in the field operate at minimum capacity, and in many cases they only meet their own livestock production needs. In order to make grain quality estimation more precise and operational, financial resources have been allocated from the Rural Support Fund to buy INFRATEC equipment, 39 units in total, for determination the quality of cereals, flour, compound feeds and their supplements. All analysers are combined in a network administrated by the MoA. Thus, the support should be given to encourage the consolidation of the grain industry, laboratory equipment and production quality control. Support to flour milling has to be focused on investments in modern laboratory equipment aimed at testing the quality of raw materials. For that purpose support aiming to restructure grain-processing industry under SAPARD programme priority “Improving processing and marketing of agricultural and fishery products” is to be provided. During the programme preparation no project for the investment in grain processing has been approved yet. It is planned to extend the support measure also in the coming programming period. Rape processing Rape processing company "Obeliu aliejus"is the main rape processing company in Lithuania. The processing capacity of this company is processing of 18 tons of rape and production of 6 thousand tons of rape oil and 11 thousand tones of oilcake for the


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fodder. Processing of rape produces valuable oilcake that could be replacing a great part of rather expensive imported soy meals. It is expected that in 2003 a new rape processing company will be opened in Mazeikiai district which plans to process around 30 000 tons of rape a year. The final product is expected to be the bio-diesel. Flax processing The existing network of primary processing of flax is based on the territorial distribution of main flax growers. The processing enterprises have a processing capacity of 50-60 tons of flax straw. However, only about half of the processing capacities are being utilised because of insufficient amount of flax straw. 1999 – 2002 was the period when primary flax processing companies have been improving their technological equipment in order to increase the output of long and short flax fibre. Currently the ratio between long and short flax fibre is 40: 60 instead of 60: 40 as it is in Western Europe countries. Sugar beet processing There are 4 sugar factories in Lithuania. The processing capacity as well as the technical level of all the sugar factories in Lithuania is lower then in those of the Western European Union countries. The sugar factories have been modernised in order to improve the quality of sugar, to increase the processing capacity and to shorten the processing time, to increase the sugar output, to reduce the processing costs and to meet the environmental requirements. Despite this fact the productivity of the factories is still lower than in the factories of the EU countries. Processing of vegetables and fruits There is a big potential for the processing of vegetables in Lithuania. However, due to organisational-economical reasons this potential is not being utilised fully. Most of the processed vegetables are consumed locally. Also import of processed vegetables exceeds exports. The main reasons for the low competitiveness of the vegetable producers are unproductive technologies, outdated storage capacities, undeveloped vegetable preparation, packaging and marketing systems. Most of the problems mentioned also apply to the processing of the fruits and berries. Having presented the processing of main crop products it could be summarised that main problems in relation to processing of crop products are related to modernisation of processing and marketing chain in grain and fodder industry, primary flax processing and fruit and vegetable industry. The majority of industries are facing problems of old technologies, inadequate storage and handling capacities, preparation, packaging and handling of products in the marketing chain. Thus, the problems listed could be ranked as follows:

Table 19: Ranking of problematic areas in the sector (3-high, 2-medium, 1-low) Primary

production Processing Quality

standards Marketing

Cereals 3 3 1 2 Rape 3 1 1 2


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Flax2 3 2 3 1 Fruit-vegetables 3 3 3 2 Livestock sector Before presenting in detail livestock production, some information about size of livestock farms, livestock density is provided below. This information will be further very helpful when the implementation of the EU Nitrate Directive will be presented in section 6.3.2. Agricultural Information and Rural Business Centre (AIRBC) has conducted a questionnaire survey in 2002. In total 187,645 agricultural entities have filled questionnaires. Assuming questionnaires reached all agricultural holdings in Lithuania, which number in the year 2002 was around 270 000, the response rate was approximately 68%. Nevertheless, the biggest part of not responded farms are small household farms. Data on farm sizes according to the number of LU is presented in the table below. There was no distinction made between farmer’s farms and agricultural enterprises. Table 20: Farm sizes according to the number of livestock, 2002 Farm Size (LU) Number of farms Total number of LU 10 – 29 3.329 45.434 30 – 59 267 10.574 60 – 99 85 6.259 100 – 149 32 3.969 150 – 199 36 6.199 200 – 299 26 8.479 >300 80 90.379 Total >10 3.862 171.292 Total Lithuania 745.676 Data in the above table shows that there are almost 4000 farms with 10 and more livestock units in Lithuania, majority of them are small farms with 10-30 livestock units. According to the survey, currently there are 80 farms in Lithuania with 300 and more livestock units and 26 farms with 200-300 livestock units. The territorial distribution of livestock farms depending on the size is also presented in Map 5. Map 5 Territorial distribution of farms having more then 200 LU

2 Primary flax processing


42

Majority of farms having more then 200 LU are situated in the central part of Lithuanian which is characterised by fertile soils. The biggest number of farms having 10-29 LU (over 200 in each) exists in three municipalities - Vilkaviškio, Šilalės and Šilutės. Out of 78 farms with 300 and more LU, 10 are situated in Panevėžys municipality. The average livestock density per ha of agricultural land is far below the maximum allowed according to the Nitrate directive (1,7 LU/ha). The average livestock density in Lithuania is 0,244 LU/per ha of agricultural land in 2002.


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Map 6: Livestock density in Lithuania, 2002

The highest density at present is in Marijampole, Silute and Silale municipalities, respectively 0.38, 0.3 and 0.41LU/ha of agricultural land. Further in Map 7 and Map 8 density of pigs and cattle is presented. Pig density and also the pig production dominates in central and western part of Lithuania whereas cattle dominates in the western and south-western part of Lithuania.


44

Map 7: Density of pigs in Lithuania, 2002

Map 8: Density of cattle in Lithuania, 2002


45

It is obvious from the maps provided above that pig production is more concentrated in the areas where fertile soils dominate – central part of Lithuania. Pig production also slightly dominates in the Western part of Lithuania where soil is better if to compare to the soil in the Eastern and Southern part of the Country. Cattle production dominates also in the Western part and also in the Southern part of the country where more grassland is available. Presently most of the livestock farms do not have manure storages meeting set environmental requirements (more information on the Nitrate Directive implementation and the requirements can be found in section 6.3.2. and Annex 4). Manure storages have to be installed in farms having more then 10 LU. All such farms will have to install new or to reconstruct existing manure pads and slurry tanks, and this is about 227,5 thousand m2 of manure pads and about 1161 thousand of m3 of slurry tanks, including pig farms. For this purpose there will be a need for about 410 million Litas. In the big cattle farms having more then 300 livestock units (there 86 farms of this size) manure and slurry storages will have to be installed first of all and there will be a need for about 85 thousand m2 of manure pads and about 197 thousand m3 of slurry tanks. This all would cost 58,6 million Litas. In the pig farms having more then 300 LU, there will be a need to install 606 m3 of liquid manure storages (the costs will be 121,4 million Litas). Most of manure and slurry storages will have to be installed in Joniskis, Kedainiai, Marijampole, Pakruojis, Panevezys, Pasvalys, Radviliskis, Sakiai and Siauliai municipalities. Milk sector Primary production Milk sector is identified as a branch of agriculture with a comparative advantage. In 2001, milk production made up to 20 percent of the total value of agricultural production, whereas the export of diary products made up to 30 percent of the total exports of agricultural and food products. In 2001 if to compare with the year of 2000 milk productions and procurement of milk increased accordingly by 4 and 5 percent. The increase in milk production is due to increase in productivity – in 2001 average milk yield from cow was 4150 kg and it is by 477 kg more then in 2000. However, milk yield in Lithuania is 30 percent lower then in the EU countries. The number of cows in the 1995-2000 period was decreasing but in 2001 it stabilised. In 2003 there were 445,4 thousand cows Out of this number 409,4 were kept in private farmers and family farms and about 36 thousand in the agricultural companies and enterprises. Small size milk farms prevail in Lithuania – on average each farm has 2,3 cows. 84 percent of milk producers have 1-2 cows, 15,4 percent – 3-9 cows and only 0,6 percent of all diary farms have 10 or more cows. More than 70% of milk is supplied to the dairies by small producers (1 to 5 cows). The average number of cows kept by agricultural partnerships is 183 cows. In 2001 there were 198 agricultural partnerships involved in milk production. Positive structural changes related to the structure of milk farms could be observed in the 1995-2001 period. Number of farms having less then 10 cows in 2001 if to compare in 1998 has decreased by 33,7 thousands and the number of farms having


46

more then 10 cows has increased by 1,9 times. However, the average number of cows in farmer’s and household farms remain quite small – 1,83 cow per farm. The seasonality of milk production is very big – in summer milk production is by 2,5 times bigger then in winter period. It is worth mentioning that in 2001 if to compare to 2000 the quality of milk procured has increased – there were 52 percent of the highest quality milk and 25 percent of the first class quality milk procured. However, the problem of ensuring the quality and hygiene standards as well as the environmental and animal welfare aspects in diary farms remains a big issue that needs further restructuring of the milk production sector and no doubt adequate investments. As the result of State investment support during last years some specialised dairy farms have been strengthened, the quality of raw milk and the yield have been increased significantly. However the scale of this improvement is not sufficient. The major problems in the primary sector are the following: low efficiency of production and difficulties in complying with quality, hygiene, environment and animal welfare standards. In order to solve the problems of dairy sector and to use transition period in the most efficient way, it is necessary to focus on the measures that would encouraged changes in farm restructuring and modernization, improving the quality and extending the external market. Milk processing The dairy industry has been undergoing restructuring during last years. Currently there are 38 milk-processing companies, 17 of which have the EU veterinary number, and are qualified as exporters of dairy products into the EU countries. The main dairy products being produced are: cheeses (soft and hard), yoghurts and kefir, butter, skimmed milk powder, whole milk powder, casein, pasteurised milk, chocolate-coated soft cheese, desserts and canned condensed milk. In order to keep relatively high export level leading dairies focus on the implementation of the new technologies and extending their assortment. It makes Lithuanian dairy enterprises to keep export of dairy products in a relatively high level (34 per cent of the total export volume). The main trade partners are the EU countries, CIS and the USA. This allows dairies to keep a high share of export. Many enterprises have modernised their premises, equipment, and production technologies in accordance with the hygiene requirements of the EU. Enterprises are implementing the control system of HACCP. A new hygiene norm “Food hygiene” has been introduced meeting the requirements of the EU-directive 93/43. Main milk processing enterprises have currently certificates to export dairy products to the EU market, in accordance with directive 92/46. However, the remaining problem in many dairies is quality and environment management systems, as well as improvement of hygiene, animal welfare. The milk processing industry has to strengthen the capacity to cope with increased competitive pressure and market forces in domestic and world markets.


47

According to Lithuanian HN 15, dairies have to introduce the HACCP system in order to increase product quality and competitiveness. It requires considerable investments and know-how, where external means and expertise would be much requested. Support should be given to dairies in order to restructure the product basket, switching from balance products to more value-added products. The alternatives of producing whey and baby-food, which require modern technologies, should be weighed. The possible markets for national specialities should be evaluated. The growing demand for ecological dairy products reveals new possibilities for dairies. Support should be given to acquire new production technologies and equipment for ecological production. Table 21:Ranking of problems in the sector (3-high, 2-medium, and 1-low) Primary


standards Marketing

Dairy 3 1 1 3 Meat production Favourable climate in Lithuania, skilled employees, sufficient fodder recourses and long traditions in cattle breeding and meat processing has created a base to foster a comparative advantage in livestock production. Meat sector plays an important role in agricultural production. The total worth of the breeds in 2000 made up to 17.8 per cent of total Lithuania agricultural output. About 17.4 thousand people are involved in the livestock breeding sector, and 3.9 thousand in the meat processing industry. However, productivity is low in comparison with the EU countries. During the last years meat production fell down. In 2002 there was 173,6 thousand tonnes of meat produced, instead of 202.3 thousand tonnes in 1998 and 192.9 thousand tonnes in 1999. During the last decade beef and veal production reduced by about 3.3 times, pork and poultry production – about 2.9 and 2.7 times respectively. Traditionally two species of breeds – cattle and pigs - dominate in the herds. According statistical data by the beginning of 2002 the total number of the cows amounted to 441.8 thousand ones (according RBDIC data -492.6 thousand). It makes up to 59 per cent of total herd structure, while, beef cattle and half-breeds makes up to 5 per cent. That illustrates revaluation of milk production in Lithuania livestock sector. By the beginning of 2002 the total number of pigs amounted 1010.8 thousand. Majority of livestock farms are small in size. According RBDIC data by the beginning of 2002 there were 239.363 herd owners, 209.557 of which have 1-5 heads. The same figures illustrate the situation in milk sector. Though, in order to keep high quality and hygiene standards and improve competitiveness of the sector it is necessary to encourage farm restructuring and investments into the modern equipment and technologies. Due to the improvement of the quality of the raw material and promoting the competitiveness of meat products, development of cattle breeding is expectable. In


48

order to keep natural landscape and to increase market supplement with dietary meat, development of sheep breeding assume a high importance. Further development of the sector is deeply connected with farm specialization, implementation of progressive technologies.

Meat processing At the end of 2001, Lithuania had 416 slaughterhouses and processing enterprises – 136 poultry and livestock slaughterhouses, 117 mixed meat plants (slaughtering and processing), 122 meat processing enterprises, 2 game enterprises, 1 utilisation enterprise, 38 specialised storehouses-cold storages. However, if to compare to 2000, the number of slaughterhouses and processing industries decreased by 22 percent. Such a change first of all is related to the stricter veterinary supervision and control, applicable in respect of slaughtering, processing, warehousing and supply to the consumer. All food enterprises have to implement the HACCP. By 2000 Lithuania meat processing industry still remained a net exporter. Five meat-processing enterprises have been qualified for the EU veterinary number that encouraged them to export beef and beef foodstuffs to EU countries. However, the production produced in the enterprises mentioned above makes rather small proportion of the total output of the sector. Thus, enlargement of the number of meat processing enterprises, that meet EU sanitary and hygiene standards must be foreseen as a challenge. The industry is hampered by the fact that much of technologies and equipment installed are rather outdated. For example, in the meat-processing sector it is common that slaughtering is still linked with processing. This results in inadequacy of quality and efficiency. Absence of slaughterhouses complying with EU requirements heavily limits competitiveness of Lithuanian meat processing sector, and overall fulfilment of pre-accession economic criteria. From the social point of view, weak competitiveness of the sector will mean loss of employment and decrease in farm income level. Although the meat industry is undergoing restructuring, the market is predominant by rather small size industries, some larger industries are under-exploiting their capacities. The major problems of the sector are: high production costs, low efficiency, difficulties in meeting EU veterinary, hygiene, environment and animal welfare standards. A number of small processing industries have already invested in modern technologies complying with EU requirements using the assistance provided by EU SAPARD programme. Table 22:Ranking of problems in the sector (3-high, 2-medium, and 1-low) Primary


standards Marketing

Meat 2 3 3 3

Food processing industry in general Similar to the primary agricultural sector, processing of agricultural products – food industry being the main out of it - plays an important economic and social role in the


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national economy. The food industry contributes a considerable share to the total Lithuanian industrial output: in 1999, it still accounted for 26.8% of the total industrial output, though its share is continuously decreasing. Milk and dairy sector, and meat processing are the most important ones. These sectors account more than a half of the total Lithuanian food industry output. Especially milk and dairy sector is of high importance for its export opportunities.

26%

6%

13%

10%

1%

1%

4%

20%

19%

Milk products

Fish processing

Meat and meat products

Prepared fodder

Processing of fruits andvegetablesOils and fats

Products of the millingindustryOther food products

Beverages

Figure 8: Structure of sales of the food industry in 2001 Source: Industry 2001.-Dpartment of Statistics under the GoL, 2002 Regarding the social role, the food industry is an important source for employment. In 1999, 22% of the total industrial output was produced by approximately 22,6% of the total industrial employment. The same year 466 Lithuanian food processors and beverage producers employed almost 43,000 employees.3 Table 23: Lithuanian manufactures of food and beverages: number of enterprises and employees, in 19993

Enterprises by number of employees

Total 0-9 10-19 20-49 50-99 100-199 200-

499

500 and over

Number of enterprises 466 63 90 129 77 52 41 14

Number of employees 42792 326 1309 4146 5300 7066 13751 10894

Source: Lithuanian Department of Statistics, 2001. Moreover, manufactures of food and beverages are important for the national economy for their contribution to exports. In 1999, 81% of foodstuffs and beverages produced were consumed in domestic market, and 19% were exported. However, the food

3 Sole proprietorships excluded.


50

industry produces and exports relatively low value-added products. Usually, raw materials are exported, while products of higher value added are imported. Trade balances indicate low level of Lithuanian agri-food industry. Most of the raw materials used in processing have local agricultural origin. For that reason, the processing industry is vital for local producers of raw milk, meat, grain and other primary agricultural produce. For highly competitive processing industry guarantees its farm-suppliers a constant source of income, further development of agri-food industry is one of the principle issues related to rural development. Transition to the market economy has changed the structures of the food industry: processing of agricultural products has become fragmented. Currently, the structure of the food industry is characterised by several large processing units, and a number of small-medium enterprises (with employee numbers up to 50). The large processing units were set up to serve local and former Soviet Union markets. The emergence of small-medium enterprises that mainly work for the local market has reduced the market share of the large processing units. The collapse of the former Soviet Union market and loss of the domestic market resulted in huge over capacities in the large processing units: meat processors use approximately 20% of their capacity, as dairies - approximately 45%. As a result, huge over capacities impair competitiveness of the sectors where economies of scales are important. In order to compete successfully in domestic and external markets, the agri-food industry needs to improve quality of production by conforming to the standards and hygiene-sanitary requirements set by EU. Poor qualities of production limits export opportunities. Furthermore, improvement of the quality is one of prerequisites in finding a niche market in the Common market. To outweigh the agri-food industry disadvantages in quality, efficiency and over capacity, there are competitive advantages to be forged. On one hand, the old traditions in agriculture have created a sustainable raw material base. On the other hand, the traditions have formed the product and technological knowledge resources. Furthermore, Lithuania still remains a country with relatively low labour costs. Considering food industry is labour intensive, this advantage becomes noteworthy. Labour costs remain much lower than in western countries, in average they constitute 10%-15% out of western salaries in food industry. Eastern European wages exceed Baltic ones in average on 20% while productivity levels are quite similar. Finally, according to Lithuanian Development Agency agriculture and food industry are the sectors with lowest salary levels among Lithuanian industries. Figure 9 :Labour Costs

$175

$219

$239

$275

$322

$895

$2,317$2,867

$0 $500 $1,000 $1,500 $2,000 $2,500 $3,000

Russia

Lithuania

Latvia

Estonia

Hungary

Slovenia

Germany

Norway

Labour costs per month


51

Source: International Yearbook of Industrial Statistics, 1997 In conclusion, to increase its competitiveness Lithuanian food industry can benefit from public investment support programs. Thus, it can substantially contribute to rural development by providing sources of income to the farm-suppliers. Investment volume in agriculture and food industry During the period of 1995-1998, capital investment volume in both agricultural and food sectors have been steadily increasing. The investment volume in agriculture jumped in 1998: it exceeded 166 million Litas (approximately 40 million EUR). The stimulus for investment activities was due to the started Rural Support Fund operations, increased market potential for agricultural products, and speeding up of land reform. However, in 2000 the capital investments in agriculture, hunting and forestry decrease by 51 percent. Manufacturers of foodstuffs, beverages and tobacco steadily invest in restructuring of enterprises in order to meet new market requirements and has the increasing tendency year by year. The huge investment volume (in both agriculture and food processing industries) is still required to continue the industry restructuring. Public support to capital investment will speed up the restructuring and fostering of industry competitiveness. Table 24:. Capital investment volume, 1995 -2000, mill. Litas 1995 1996 1997 1998 1999 2000 Agriculture, hunting and forestry

140.0 143.1 149.5 166.3

110.8 85,0

Manufacturing of food, beverages and tobacco

204.8 306.2 351.5 435.4

440.6

453,1

Source: Lithuanian Department of Statistics, 2002 5.7. Forestry 5.7.1. Forest cover Forests in Lithuania cover approximately 2 million hectares, or 31% of the total Lithuanian surface area. Despite the increasing forest cover during the second half of the last century, Lithuania from this perspective still remains behind its Baltic neighbours (47.1% in Latvia and 48.7% - Estonia (FAO 2001). Increase in forest cover in Lithuania has been announced as one of the main national goals.


52

21,819,7

22,623,9

26,427,9

30,1 30,3 30,9

15

20

25

30

35

1938 1948 1956 1961 1973 1983 1993 1998 2001

Years

Fore

st c

over

, %

Figure 10: Forest cover change in Lithuania from 1938 to present Source: Centre of forest economics Conifer stands make up to 59,9 per cent, soft broadleaves up to 35,3 per cent and hard broadleaves make 4,8 percent of the total forest area. Forest stands area by dominant tree species is provided in Figure 11. Intensive natural regeneration of forests is followed by species substitution in favour of soft broadleaves. More then two thirds of naturally expanded area are occupied by soft broadleaves (birch, grey alder, black alder).

36,6%

23,1%

20,0%

6,2%6,0% 2,8%

2,7%

1,8%

0,8%

Figure 11: Forest stands area by dominant tree species Source: Lithuanian forest assessment 01 01 2001 Commercial forests make up some 73% of Lithuania's forests. Protected areas occupy 11,5 per cent of the whole territory of Lithuania. They consist of 4 strict reserves, 5 national parks, 30 regional parks, 265 state reserves, and 662 protected landscape objects. According to Lithuanian Forest Assessment, by 1 January 2001 forests in protected areas account for 50,4 per cent of protected areas and 18,8 per cent of forest


53

territory. In addition, 293,000 ha of forests are under restricted forestry activities. Thus, the area of protected areas and other forests with restricted economic regime makes up to 33,3 per cent of the whole Lithuania’s forest cover. In Lithuania only 22 percent of forests have been artificially established and the remaining 78 percent are natural or semi-natural forests. It results into much bigger biodiversity in Lithuania if to compare it to that of other countries. 5.7.2. Forestry in the national economy Forestry and forest industry play an important role in Lithuanian economy. During recent years value added in forest sector was increasing steadily, annually contributing about 3 per cent of gross domestic product in Lithuania. Share of the forestry sector from the gross national product in the year 2000 was 0.7%, which constituted 269.4 million LTL. In recent years, Lithuania annually produced more than 5.0 million m3 of wood. Export of round wood and forest industry products in the year 2000 made up 11 % from the total value of the country’s export. Fellings in forest available for wood supply in state, private and other forests in 2000 constituted 5.3 mill.m3, of which 3.9 mill.m3 were harvested in the state forest enterprises and national parks and 1.4 mill.m3 – at private forests. At present, only 61.6 % of the net annual increment of Lithuanian exploited forests are harvested. Number of employed in forest sector was rather stable and totalled 50-55 thousand during 1992-1999. This figure represents 3 per cent of total employment in the country and 8 per cent of total employment in agriculture, forestry and manufacturing industry. The above-mentioned number of employed does not fully reflect employment in forest sector, as many people are temporarily involved in forestry activities, particularly private sector. Besides that, many enterprises of other sectors (construction, agriculture, forestry, etc.) also are involved in timber processing activities (saw milling, carpentry, etc.), which is not their main activities and therefore workers of these companies are not covered by this statistics. Most of workers work in primary forest industries (sawmilling, wood-based panels) – 56 % percent of total employment in forest industries. Number of employed in furniture industry is 34 % of total employment of forest industries. Employment in paper industry reduced by almost 50 percent – from 6.7 in 1989 to 3.6 thousand in 1999.

Data on average labour income in forestry and forest industries as such provides that earnings in total forest sector are increasing. It can be clearly observed from the ratio of average labour income in forestry and forest industries of average labour income for all sectors. Table 25: Earnings in public forestry, 1996-2000

Average monthly earnings, Lt Of which:

Year All sectors

Total forest sector Forestry Saw milling Workers

Ratio: All sectors/ Forestry

1996 618 720 722 727 652 0.86


54

1997 778 847 861 795 766 0.92 1998 930 992 1014 847 838 0.94 1999 987 1061 1088 870 878 0.93 2000 1,008 1095 1118 884 899 0.92

Source: Centre of Forest Economics 2001 (department of forests and protected areas); S. Starkevičiūtė 2001. Most of the primary forest industries are located in rural areas and therefore this economic activity is perceived as a potential for increase of working places and further income in rural areas. For that purpose enhancement of forestry sector to promote the benefits of social, economical and ecological nature is set as one of the priorities in rural development. 5.7.3. Forest ownership Forest area under the public ownership in Lithuanian is 1,002 thousand hectares (50%). There are 458 thousand hectares (23%) in private ownership, and 560 thousand hectares (27%) in the process of being restituted/privatized. The Lithuanian private forestry is characterized by large number of small private forest holdings. At the end of the first half of 2001, there were about 150.000 of legitimated private forest holdings with the average 3.4 hectares per holding. As regards the development of the private forestry it should be mentioned that co-operative relations among forest owners are increasing. In 1993 Lithuanian Forest Owners Association was uniting 100 whereas in 2002 – 1700 forest owners. The main services that FOAL is providing for its members are:

• information and consultancies about private forestry; • education in silviculture and forest management of private forest owners; • representation of private forest owners.

The awareness campaigns organized by FOAL on a continuous basis aiming at promoting sustainable forestry result in an expansion of the FOAL and further to a management of private forests in a sustainable manner. Being a public organization Association is actively promoting process of private forest owners cooperation. Now there are eleven forest owners’ cooperatives, Private Forest Extension Centre witch are successfully providing commercial and extension services for private forest owners. The main objectives of forest owners’ co-operatives are these:

• to benefit the members of private forest cooperatives and FOAL due to sustainable way of forest management activities;

• increasing efficiency of private forest holding management; • defence of private forest owners economical interests; • representation of forest owners towards business partners.

Through forest owner’s cooperatives as well as through Lithuanian Forest Owners Association the relations with economic partners engaged in timber harvesting, wood processing and wood trading are being maintained and it is of great importance for the development of a private forestry.


55

5.7.4. Legal basis On the 17th of September, 2002, Minister of Environment approved the Lithuanian Forest Policy and Implementation Strategy (No. 484). The document spells out clearly formulated principles of forest policy, which reflects and balances the interests of the state and the individual citizens or their interest groups related to the forest sector, and defines a strategy for implementation of such policy. The Lithuanian Forest Policy has been formulated taking into account the following principals:

• responsibility for the sustainable use of forest resources, • compliance with national legal base and international agreements, • participation of and cooperation with all interested stakeholders, • diversity and equality of forest ownership forms, • complexity of forestry, • promotion of traditions in forestry.

The Forest Policy is implemented through four main directions, namely: • general forest policy direction which covers protection and improvement of

forest resources, diversity of forest ownership forms, public awareness raising about forestry and it’s participation in decision making process, development of forestry science and education, strengthening and development of international relations;

• economic direction which promotes rational and sustainable forest use and increase in forest productivity and quality of wood as well as effectiveness of forestry,

• ecological direction which emphasise the sustainability of forest ecosystems and protection of biodiversity and improvements in forest health status

• social direction under which public needs related to forests are met and both public and private forestry is developed in the rural development context.

The Forest Policy and Implementation Strategy became the most comprehensive document describing the future development of the forest sector. Moreover, the document puts forestry in the broader rural development context as it plays a significant role both in economic and social life of rural community. Adoption of this document has strengthened the forestry position in social, economical and ecological life of the nation. Lithuanian Forest Policy and Strategy is also aiming at implementation of international initiatives related to sustainable forest management. Below the key international initiatives are listed.

Implementation of recent resolutions on the protection and management of European forests (Strasbourg, Helsinki, and Lisbon)

Lithuania has signed Strasbourg (1990), Helsinki (1993) and Lisbon (1998) Ministerial Conferences on Protection of Forests in Europe Resolutions.


56

To develop sustainable forest management important changes in the forestry sector have been made successfully during last decade in Lithuania. Such changes include legal and regulatory frameworks, the institutional framework, economic policy, financial instruments and information. Implementation of H1. Lithuania has prepared general national guidelines for sustainable forest management, which were included into up-dated National Program for Development of Forestry and Forest Industry, approved by the Government of Lithuania in 1996. Forest Law embodies basic principles of sustainable forest management in a broader sense. The implementation phase of general guidelines on regional level was started via improving forest management planning methods and corresponding forest management activities. Implementation of H2. The enhancement of biodiversity in Lithuania is being considered as an essential element of sustainable forest management. All activities aimed at implementation of H2 have very close relations to other Helsinki and Strasbourg resolutions - particularly H1, S2, S6. The network of nature protection areas was strengthened within the last few years. Structural and protection quality improvements were followed by the increase of protected area. Guidelines for Conservation of Biodiversity in Commercial Forests were prepared in 1996, Recommendations for Conservation of Rare Forest Habitats and Proposals for the Improvement of the Protection of Rare Forest Birds’ Nesting Sites, in 1996. Lithuania is a member of EUFORGEN since 1995 and participates in the program activities. As a result of such co-operation Guidelines for the Conservation of Genetic Resources were developed in 1996. Consequent actions towards education and rising of public awareness in relation to the conservation of biodiversity are being implemented. Educational curricula, programs of various courses for university and college degree forestry students, state forestry employees, forest owners and forest workers as an important part also includes biodiversity conservation issues. These activities are aimed not only at forestry professionals and forest owners but also cover broader auditorium, e.g.: schoolchildren, students with environmental background, forestry-related institutions and NGO’s. Work-programme on the conservation and enhancement of biological and landscape diversity in forests. The commitment of the European governments in the conservation of biological diversity has been expressed in Resolution H2. Therefore a "Pan-European Biological and Landscape Diversity Strategy" has been developed which addresses the conservation of biological diversity at all levels. Lithuanian Biodiversity Conservation Strategy and corresponding Action Plan was prepared by the Ministry of Environmental Protection and approved by the Parliament in 1998. This strategy and Action Plan follow-up a "Pan-European Biological and Landscape Diversity Strategy" and are based on the Helsinki resolution H2. Criteria and indicators for sustainable forest management. Lithuania has not developed any of its own special criteria and indicators for sustainable forest


57

management. Most criteria and indicators have come directly from the Pan-European system. These criteria where officially approved for use by the former Ministry of Forestry in 1995. Only one additional criterion, the percentage of private forests, is being used. The reason for this is a regularly increasing share of private forests and significant influence of the private forest sector on sustainable management of the country's forests. 5.7.5. Multiple use of forests Forests in Lithuania are one of the most important components of natural environment, landscape formation and protections, as well as the subject to recreation and hunting. Recreational forests cover 89,000 ha or 4 % of all Lithuanian forests. Non-wood products account for more then 10-15 % of income from all forest products including wood. Main non-wood forest products are mushrooms, berries and fruits, medicinal plants, game meet, Christmas trees, etc. In some regions like South and South East Lithuania the value of collected mushrooms and berries is close to and even higher than that of wood. Consumption of mushrooms and berries increased considerably during 1990-es, Increasing exports of mushrooms and wild berries was the main reason for expanding market demand. During last years there was an increase in import of mushrooms and berries from Russia, Belarus and other countries. Most of imported mushroom and berries are re-exported to Western countries as it can be observed from the data provided above. Table 26: Market supply with forest berries, mushrooms and medical plants, 1996-2000 Production 1996 1997 1998 1999 2000 Mushrooms 1933 2648 3386 840.6 2187 Berries 1614 3668 2162 202.9 838.5 Medicinal plants 53.6 52.9 68.0 56.9 59.3 Source: Centre of Forest Economics 2001. Table 27:. Exports of mushrooms and wild berries, 1995-2000

Total Production Year

Tons 1000 Lt 1995 1964.8 37372.3 1997 2159.8 29591.3 1999 2301.4 32664.0

Mushrooms, fresh or chilled (HS: 070951)*

2000 5489.9 64882.6 1995 530.4 3295.4 1997 1731.0 7667.5 1999 202.5 724.2

Fresh cranberries, bilberries, cowberries (HS: 081040)*

2000 95.5 485.4 Source: Centre of Forest Economics 2001 (Statistics Lithuania). *Commodity code of Harmonized system.


58

In the 1999-2000 season, there were 4,5 million ha of land used for hunting in Lithuania. Fields, shrub land and water areas account for major share in total area used for hunting – 2,5 million ha. Forests occupying 1,9 million ha are also used for hunting; private forests here account for 0,4 million ha, the rest is state and reserved for restitution forestland.

Up to 30 species of medicinal herbs are harvested in Lithuanian forests. Juniper berries, bearberry leaves and black alder bark are the most popular and of the greatest demand. Though Lithuanian forests are rich of medicinal herbs, the existing resources are insufficient to meet the current demand. Since the most of the forests occupy areas where soil productivity is low, forestry (in terms of both wood and non-wood products) provides opportunities as an important source of additional income for farmers and rural dwellers. For that reason, forestry is considered as one of diversifying activities in the rural areas able to contribute to provision of additional employment. At the moment, especially non-wood forest product utilization provides a sound basis for rural development initiatives, which aim to increase income-earning opportunities while maintaining environmental quality. 5.7.6. Afforestation of agricultural land Along with changes of economic and social conditions in Lithuania, after land reform has started, the trends of decreasing land use for agriculture became visible. This process is particularly significant in the regions where poor soils are abundant and as a result are not longer being cultivated. Afforestation process and increase of forest cover in Lithuania, considering environment protection, landscape ecology criteria, maintenance of cultural heritage as well as factors of rational use of agricultural land and fulfilment of other ecological, social and economic functions, is a very important task in Lithuanian forest and environmental policy. In the Lithuanian Environmental Strategy, action Programme (Ministry of Environmental Protection, 1996) under “Priorities” is mentioned that it is an environmental protection priority “to increase the country’s forest area by green planting in territories not suitable for agriculture, primarily in those with damaged agricultural landscape and nature frame territories.” Provisions related to the forest increase in Lithuania had been changing in the last decades. In 1986 the optimal ecological forest cover was estimated to be 33-35 percent. In 1997 the Government of Lithuanian supported the planned increase in forest cover by 2-3 percent reaching 32-33,3 percent. The draft General Plan of Lithuania foresees the increase in forest area by 7,5 percent. The Minister of Environment has approved the Lithuanian Forestry Policy and its Implementation Strategy (Nr. 484, approved 17th of September, 2002). The document outlines that the aim is to increase the forest cover in the coming 20 years period by 3 percent. In order to fulfil this objective the Lithuanian Forest Increase Programme 2003-2020 in November 2002 has been approved. The aim of the programme is to foresee the forest cover increase tendencies and volume in Lithuania taking into


59

consideration the factors influencing the process, forest structure and it’s territorial distribution as well as accumulated experience in Lithuania and other countries. In order to reach the 3 percent goal there is a need to afforestate about 196 thousand hectares of land, meaning about 10.9 hectares a year. However, taking into account the developments during the last 20 years, it is realistic that about 4-5 thousand hectares a year will naturally regenerate and until 2001 the natural forest would make up to 81 thousand hectares. Additionally about 115,5 thousand hectares of forests should be planted meaning 6415 hectares a year. In October 2001, the Ministry of Environment of the Republic of Lithuania together with the Lithuanian – Danish project “Afforestation of agricultural land based on sustainable land use planning for afforestation and environmentally sound forest management” organized an international conference “Afforestation in the Baltic Sea Region – experience, current activities, and future trends”. The conference raised a big interest among interested parties not only from the Baltic countries but also others which are already engaged or are planning to be engaged in afforestation on a broader scale. Moreover, international organizations such as World Bank, FAO have introduced their actions both past and forthcoming in relation to afforestation. The Minister of Environment in his conference opening speech declared that “increase in forest cover of Lithuania is a highly important objective of the Lithuanian forest and environmental protection policy.” The following benefits arising from afforestation of agricultural land to the society and environment have been listed by the Minister:

• it is a gain for the protection of biological diversity • it creates an important infrastructure for recreational purposes • forests play an important carbon sequestration role • it is an effective measure for underground and of surface waters protection • reduces water and wind erosion

Data on afforestation is presented in Table 29. After restoration of independence of the Republic of Lithuania, over the first few years, afforestation activities were minor – only some tens of hectares a year. Afforestation gained a significant importance starting with 1998 – 562 hectares, 1999 – 787, 2000 – 822. The process took place mainly on abandoned or degraded agricultural lands. It should be noted, however, that most of afforestation has taken place on public land by State forest enterprises. Afforestation of private land was until some 1997 not a popular land use form amongst landowners mainly because of the land reform, traditions in agriculture as well as uncertainty about the future of agriculture. Table 28:Average annual afforestation area during the period of 1941-2000 (thousand hectares) Year Afforestation on non- forest

land Total planted forest (incl. reforestation)

1941-1950 1.5 ? 8.1 1951-1960 11.8 17.6 1961-1970 11.8 14.2 1971-1980 3.0 10.6 1981-1990 3.2 10.3 1991-2000 0.25 7.9

As regards data about afforestation of private land, it should, therefore, be noted that there were landowners afforestating their land and not reporting about that to the local


60

land management authorities. The main reason was that they were not motivated to do so as in the past it required to change the proper land use purpose that was complicated and costly procedure. The procedure has been changed and currently doesn’t constitute beurocratic and expensive obstacles. Table 29: Afforestation of private agricultural land in 1998-2001, ha Year Afforested area, ha 1998 27 1999 76 2000 70 2001 30

To conclude, Lithuanian forestry sector is important to the country development, though not as much as the agriculture sector. Compared to the agriculture sector, the forestry is less important in terms of contribution to the national economy and employment. Currently, the state forests play a major role in the sector and the role of private forestry is continuously increasing. Thus, the support for the development of a private forestry is of great importance in promoting such a development that in turn will secure long-term sustainable financial resources for the forest owners and at the same time will substantially contribute to the social life of the society and enrichment of natural values. No doubt, forestry sector is important in its ‘alternative to agriculture’ role: development of small-medium enterprises (mostly, sawmills), non-wood forest products, opportunities for recreation and tourism, alternative use of abandoned agricultural land. 5.8. State of the environment – agriculture and forestry Taking into account the diversity of natural resources of Lithuania, the following ecologically sensitive territories are identified:

• Particularly sensitive, very sensitive and sensitive territories. Their area amounts to about 1934 thousand ha. The largest area of these territories is in East Lithuania, especially in the territories of Lazdijai, Utena, Ignalina, and Trakai Municipalities. Sandy soil sensitive to erosion, characterised by the most intensive infiltration of precipitation prevail.

• Protection zones of water bodies cover the area of 195 thousand hectares. Within this area the economic activity is limited in order to reduce discharges of food substances into water bodies and their pollution, to slow down the processes of water eutrophication, and to preserve the stability of their banks;

• Karst region of Northern Lithuania is an area of 193.5 thousand hectares. It includes 61 per cent of Pasvalys District area, 46 per cent of Biržai District area, 16.9 per cent of Panevėžys District area and 6.1 per cent of Radviliškis District area. Direct pollution of underground water is especially dangerous in this territory;

• The Nemunas River water-meadow region – 52.4 thousand ha, including 47.6 thousand ha of Šilutė District area and 4.8 thousand ha - of Klaipėda District area. 75 per cent of the water meadows is agricultural land;

• Ecological protected territories. There are 1062 protected territories in the country (773903 hectares or 11.9% of the national territory): 5 state strict reserves (24004 ha),


61

including 4 natural and 1 cultural reserves, 5 national parks (152294 ha), 30 regional parks (436000 ha), 258 state nature reserves (150299 ha), 101 municipality nature reserves (11186 ha), and 662 protected items of a natural landscape. Further in this chapter an assessment of the key components of the environment, namely soil, water, air/climate, biodiversity and landscape are presented in the light of strengths, weaknesses, opportunities and threats. These elements of the surrounding environment are concurrent parts of agriculture, as economic activity, as well as rural life. 5.8.1. Soil In assessing quality of agricultural soils, their properties, and their changes in particular, it is necessary to take in to account absolutely different farming conditions, which prevailed before the re-establishment of independence of Lithuania and after it has been re-established. During those periods use of fertilisers and pesticides as well as soil liming differed significantly. 160-200 thous. ha of acid soils were annually limed in the period 1965-1990. Liming was stopped at all in the middle of 1990. Use of pesticides and fertilisers has decreased several times since 1990. Decreased volumes of liming and use of pesticides and fertilisers had a considerable effect on the change in agrochemical properties of Lithuanian soil. Data on changes in the amount of pesticides used in agriculture are presented in Figure 12. Figure 12: Changes in the use of agricultural pesticides

00,5

11,5

22,5

33,5

Kg/ha

1990 1993 1997 2000

Changes in the use of agricultural pesticides

Farming landsArable lands

The data show that during that period the quantity of pesticides used in arable lands decreased from 3.3 kg/ha (by the preparation) to less then 0.5 kg/ha, that is, by more then 6 times. Besides, the quality of pesticides used improved considerably. Quantities of mineral fertilisers have also decreased notably. Prior to independence, an abundant use of mineral fertiliser prevailed in Lithuania. The use of mineral fertilisers had been increasing steadily until 1991. E.g. in 1988, approximately 700 thousand tonnes of fertilisers (active substance) were used for agricultural purposes in Lithuania.


62

In 1996 the use of fertilisers decreased to approximately 51 thousand tonnes only. The Statistics department did not collect data between 1998 and 2000. In 2001 the total amount of fertilisers used in Lithuania was smaller than in 1997, however the amount of fertilisers applied per ha of agricultural land has increased (Table 30). This suggests that fewer farmers use fertilisers, but there are farmers who use significantly bigger amount of fertilisers. Table 30: Use of mineral fertilisers (in active substance) Use of mineral fertilizers in agricultural companies and enterprises 4 1995 1996 1997 1998 1999 2000 2001 Total amount of fertilisers applied, thou t:

51,7 51,1 56,4 … … … 39,5

Nitrogen 28,8 29 32,6 … … … 24,3 Phosphorus 10,9 10,5 11,1 … … … 6,8 Potassium 12 11,6 12,7 … … … 8,4 All fertilisers per one ha of agricultural land, kg

54 67,9 84 … … … 144,7

Amount of Nitrogen per one ha agricultural land, kg

8,5 8,6 9,7 … … … 7,2

Source: Statistical Yearbook of Lithuania, 2002, p. 375 Agrochemical properties of soil and their effect on plants have been regularly investigated in Lithuania since 1965. The Agrochemical Research centre of the Lithuania Institute of Agriculture performs this kind of work. According to the soil research in the period 1963-1967, the percentage of relatively acid soils (pH 5.5 and less) accounted for 40.7 % in Lithuania, including 27.7 % of soils with pH lower than 5.0. Acidity of those soils decreased significantly due to intensive liming, and according research data in 1985-1993 the percentage of acid soils (pH <5.5) decreased to 18.7 %, including 8.5 % soils with pH lower then 5.0. However, the acidification of the soils is presently increasing again. Though acidification of soils is rather slow with respect to the whole Lithuania, and pH of agricultural soils changed from 6.12 pH to 6.06 pH during the period 1988-1999, but this process is much faster in the soils artificially deacidificated earlier. Seeking to maintain the productivity of those soils liming will have to be started again. Mobile phosphorus and potassium do not only have an impact on the yield of plants and its quality but they also determine efficiency of fertilisers. According to the data of 1985-1993 agrochemical research, amount of mobile phosphorus in humic layer of one-fifth (20,3 %) of agricultural soils was very low (up to 50 mg/kg). Large areas of soils – 41.5 % contained low amount of phosphorus (51-100 mg/kg), 22,3 of soils contained medium amount of phosphorus (101-150 mg/kg) and the quantity of phosphorus was sufficient (over 159 mg/kg) only in 15.9 % of Lithuanian soils. Lithuanian soils are better supplied with mobile potassium. Soils containing low (35.4 %) and medium (33.4%) amount of potassium prevail. Soils containing a

4 The data was not collected in 1998-2000


63

sufficient amount of potassium (over 150 mg/kg) account for 23,6 %, whereas soils containing very small amount of potassium (up to 50 mg/kg) constitute 7,6 %. Change of mobile phosphorus and mobile potassium in agricultural soils is presented below in Figure 13 Figure 13: Change in the amount of mobile phosphorus in Lithuanian soils

0

10

20

30

40

Area,%

up to100

102-150

151-200

>200

Amount , mg/kg

Changes in the amount of mobile phosphorus in Lithuanian soils

19952000

The data shows that that amount of mobile phosphorus in agricultural soils changed insignificantly during the last decade. Even a certain increase in the areas of soil relatively rich in phosphorus has been recorded. Changes in the amount of mobile potassium were somewhat different: areas of soil containing a small quantity of potassium have been on the decrease in nearly all objects observed, whereas areas of soil containing medium and sufficient quantities of potassium have increased insignificantly in the most objects were research was carried out ( Figure 14) Figure 14: Changes in the amount of mobile potassium in Lithuanian soils


64

05

101520253035

Area, %

up to100

101-150

151-200

>200

Amount, mg/kg

Changes in the amount of mobile potassium in Lithuanian soils

19952000

Summing up the data presented in Figure 13 and Figure 14, the following conclusion can be drawn: despite the decrease in fertilisation, agricultural soil is not exhausted during the recent period. In the conditions of normal farming it can produce sufficiently rich harvest. In the climatic conditions of Lithuania the amount of humus in surface mineral layer depends mainly on the type of soil, its texture and moisture and the degree of soil cultivation. Automorphic sandy soils contain the smallest amount of humus (0,5-1,5 %), whereas clay soils contain the greatest amount of humus (over 4 %). In the other types of soil the amount of humus most often ranges from 2 to 4 %. During the Soviet time intensive anthropogenic factors such as land reclamation, land cultivation, liming and fertilising did not only speed up formation of humus but also accelerated its decomposition. However, farming that prevailed in the soils of normal moisture did not upset the balance of this process. Intensified land cultivation and liming as well as abundant fertilisation speeded up decomposition of humus, however, the harvest that increased due to the mentioned factors enriched the soil with organic matter. Therefore, during the past 40-50 years the amount of humus in these soils remained almost unchanged. In drained soils saturated with organic matter before drainage, oxidation processes intensified and due to increased harvest larger quantities of organic matter decomposed there. Hence, though due to the drainage, harvest increases, the amount of humus decreased up to the level of 2-3 %. Moreover, the content of humus in eroded soils of arable areas is on the decrease. After the process of soil erosion intensifies, the humic layer of soil is carried from higher parts of the relief to its hollows. The quantity of nitrogen in the soil is closely related to the content of humus. According to the data of State Land Survey Institute, the quantity of total nitrogen in humus layer of soil in the country varies from 0,06 to 0.37 %. Its quantity is lower in sandy soils. The largest quantity of organic nitrogen is accumulated in the complex compounds of humus. According to the 1989-1990 research data, the amount of mineral nitrogen in one-fourth (25.4 %) of the agricultural areas was very low (up to 30 kg/ha), in 61,1 % of the areas its amount was low (30 – 60 kg/ha), in 12,2 % of the areas – medium (60-90


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kg/ha) and in 1,3 % of the areas – high and very high (>90 kg/ha). The amount of mineral nitrogen in soils is insufficient to produce rich harvests; therefore it is necessary to supplements its quantity by fertilising soil with mineral and organic fertilisers. In accordance with the soil monitoring programme, not only the amount of nutrients but also the concentration of heavy metals (Cr, Cd, Pb, Ni, Cu, Zn) and residuals of pesticides are determined in the soil. Having summed up the 1993-1997 soil monitoring data, it has been established that the humic layer of soil (0-20 cm) contains on average 10.7 mg/kg of chrome, 0.46 mg/kg of cadmium, 11.9 mg/kg of lead, 9.9 mg/kg of nickel, 6.9 mg/kg of copper and 28.6 mg/kg of zinc. The content of heavy metals mostly depends on the soil texture: when the quantity of physical clay particles (<0.01 mm) increases, the quantity of heavy metals increases, too. In the Central Lithuania because of heavier texture and quite big areas of soil of limnological origin, the amount of heavy metals is higher. Certain quantities of heavy metals get into soil together with mineral phosphorus and potassium fertilisers. However, the analysis shows that mineral fertilisers used permanently for a long time change the concentration of heavy metals in the soil rather insignificantly. Larger quantities of copper and zinc are found in the surface layer of garden soils (0-5 cm) as a consequence of pesticides earlier used in large quantities. In most cases the quality of those pesticides in the Soviet time did not conform with the requirements and harmful residuals were remaining stable in the environment for a long time. Some earlier used pesticides were extremely dangerous to the environment (as DDT) and residuals of those pesticides are still found both in the soil and underground water. This particular pesticide use is forbidden since 1970. Luckily, the quantities found are decreasing – for example, the quantity of alpha (a) hexachlorane, in the period 1990-2001 as compared to 1989-2001 has decreased by about 43 times. The residuals of most pesticides currently used remain in the soil for a short time – from several weeks to 6 months – and pose an incomparably smaller threat to the environment and human beings. Decomposition of modern pesticides is very fast, therefore the danger of polluting the environment has decreased. One more environmental soil-related concern is soil erosion. Until 1990 the intensity of agricultural production was not balanced with environmental considerations. Because of consolidation of fields, destruction of farmsteads and green plantations about 14 per cent of agricultural land is affected by erosion, resulting in a loss of valuable topsoil and productivity. The average loss of soil from agricultural land is approximately 1.8-2.5 tonnes per ha. Approx. 19 per cent of the area of the country are lands sensitive to deflation. This phenomenon is particularly typical of the coastal areas of the Baltic Sea. The elevated areas of western and eastern municipalities of Lithuania are mostly damaged by water and wind erosion. In order to prevent the soil erosion the requirements to implement certain crop rotation systems are defined. For example, the farmers should ensure that in hilly areas the anti-erosion crop rotations are being implemented. If the slope is less then 5°, perennial grasses in the rotation system should make not less 35-40 % from the total area, if slope is from 5 to 7°, perennial grasses should make not less then 50 % from total areas, if slope is from 7 to 10°, perennial grasses should make 65-80 %, and if slope is from 10 to 15 only perennial grasses should be grown. Also, afforestation in these areas is given a


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priority. Ecologically sensitive areas (included areas affected by erosion) are provided below in Map 9.


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Map 9: Ecologically sensitive areas


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With regard to the natural differences, it should be noted that there are 24 types of soil in Lithuania, which are further classified into 15 agronomic types of soil according to the locality, topographic and climate specifics. Each type of soil is creating different agricultural conditions and requiring different farming approach. The quality of soil is reflected by the soil productivity grading system (lowest – 30 points, highest – 50 points). In accordance with this system it can be seen that soil quality Lithuania varies approximately 1.65 times on the level of local governments.

The most consistent region in terms of soil quality is Central Lithuania, with smallest proportion of low quality soil. Soils which fertility is 35 points and less is considered as a bad quality soil. The greatest concentration of the poor soil quality areas is in the Eastern, South – eastern and Western parts of the country. Below in Map 10 and Map 11soil granulometric texture and soil fertility expressed in fertility factors is presented.


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Map 10: Granulometric texture of the soils


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Map 11: Soil fertility factors on regional level (1998 data)


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Having presented the soil conditions above, the following strengths, weaknesses, opportunities and threats could be identified as regards soil. Strengths:

1. Use of fertilisers in agricultural land has significantly decreased during the past decade, however agricultural lands are not exhausted.

2. The amount of phosphorus and potassium in the soil is almost unchanged, and even a slight increase in the quantity of soil enriched with phosphorus and potassium are observed.

3. Soil pollution with pesticide residues has been significantly reduced due to a decreased use of pesticides and stricter regulation on the stock.

Weaknesses: 1. Soil in Lithuania is rather acid. 2. Soil erosion

Opportunities:

1. Gradual self-cleaning is expected to come with the expansion of ecological farms and introduction of more environmentally friendly farming in traditional farms.

1. Expansion of territories covered with forest on the expense of non- productive land and territories covered with perennial vegetation will reduce the area of lands affected by erosion.

Threats:

1. Growth of productivity in agricultural crops may have a significant influence on the increased use of pesticides and mineral fertilisers that will, in turn, endanger soil contamination with pesticide residues and increase leakage of nitrogen compounds into groundwater and surface water bodies.

5.8.2. Water Lithuania abounds in rich water resources. Open internal water bodies cover 2.6 thousand square kilometres. That accounts for about 4% of the whole territory. The total length of Lithuanian rivers is about 63,700 km, that is, one kilometre of rivers per square kilometre of the territory. All Lithuanian rivers fall into the Baltic Sea either directly or through the territories of the other countries. All the six main river basins in Lithuanian are transboundary. Lithuanian also is also rich in underground water resources. The total annual amount of underground water consumed constitutes only one-fourth of the amount of underground water possible to use. Water consumption in the period 1990-2000 decreased from 940 to 240 million m3 per year that is almost four-fold. One of the reasons was decline in economy as regards water consumption by industry as well as growth of water prices and newly introduced system for accounting at municipal sector. As regards water consumption, the structural changes


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are presented in Table 31. It shows that after general water consumption decrease, the structure of water consumption changed comparatively insignificantly. Table 31: Structure of water consumption, % Water consumers 1990 2000 Municipal sector 43 45 Industry 32 33 Fishery 24 21 Agriculture 1 1 With the decrease in water consumption, the amount of polluted water during the transitional period decreased several times – in the year 2000 its total amount constituted about 170 million cubic meters and this is 2.6 times less then in 1990. During this period not only the total amount of wastewater but also the level of its treatment changed significantly. If in 1990 over 27 % of the total wastewater were discharged into the surface water bodies consisted untreated wastewater, over 50 % - insufficiently treated wastewater and only 22 % - wastewater treated up to the established standards, currently almost 99 % of wastewater is treated before its discharge in to the surface bodies (mainly rivers). Surface water quality studies in Lithuania are carried out following the Law on Environmental monitoring and the State Monitoring Programme. According to this programme the water quality is being studied in 105 sites of rivers, in 13 lakes and 1 reservoir. Water quality is assessed on the basis of more then 70 indicators. Lithuanian rivers are characterised by a high degree of pollution with organic matter and nutrients. According to water quality classification used based on pollution with organic matter, the concentration of nitrogen and phosphorus as well as bacteriological pollution, about 10 % of Lithuanian rivers are attributed to relatively clean rivers (Quality class I-II), about 70 % - to rivers polluted to an average degree (Quality class III-IV) and about 20 % - to heavy polluted rivers (Quality Class V-VI). It should be noted that even though the river pollution has decreased several time (Table 32), the quality of river water changed insignificantly during the past decade. Partly this can be accounted for by secondary pollution of rivers by bottom sediments and non-point agricultural pollution. Table 32: Amounts of pollutants discharged into surface water bodies (tons per year) Year Organic

matter (BOD)

Suspended solids

Total nitrogen

Total phosphorus

Oil products

Iron Heavy metals

1991 36 200 39 000 390 177 98 1992 31 900 36 900 10 600 1438 340 172 109 1993 27 920 30 430 10 280 1534 270 101 97 1994 34 500 38 500 10 733 1502 280 166 93 1995 21 000 26 000 7663 1183 220 71 59 1996 16 600 17 900 6446 960 160 30 48


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1997 15 000 15 000 5401 879 150 10 46 1998 13 000 14 000 4545 795 130 4.4 36 1999 10 000 9000 3923 750 100 2.9 24 2000 7000 7000 3671 645 60 1.9 29 Pollution of Lithuanian rivers with oil products in not considerable. Pollution with oil products is rather pronounced only downstream the large cities and in some places it exceeds the allowable standards by 2-3 times. According to the hydro biological indicators, the water quality of rivers changed insignificantly during the past five years. By phytoplankton about 90 % of water in the sites under study was polluted to an average degree and about 10% - heavily polluted. According to the data of the state lake monitoring, water of lakes is much cleaner than that of rivers because lakes are not polluted with wastewater and they are subject to non-point pollution only. In the water of monitored lakes BOD values varied from 1.0 to 3.35 mg O2/l. The concentration of phosphates varied from 0.010 to 0.044 mg/l and that of total phosphorus was 0.01-0.072 mg/l. Lakes are not polluted with either ions of heavy metals – Cu, Pb, Cr, Cd and Ni or chlorine organic pesticides or phenols. According to phytoplankton research data, lake water is polluted very insignificantly. The Curonian Lagoon is draining approximately 6% of the Baltic Sea watershed, and 74 % of Lithuania. Thus the eutrophication status of the lagoon and the role of nitrates in the eutrophication are central issues in the implementation of the Nitrate Directive in Lithuania. Concentration of nitrate nitrogen in surface waters started to decrease from year 1993, but remains higher compared with data before 1990. Increase of nitrate nitrogen concentration was registered in 1997, caused by increased agricultural production. Average of nitrate nitrogen concentration reached 2.5 mg/l of rivers in 1998. Concentration of phosphorus and nitrogen significantly decreased in the rivers of Lithuania during 1990 – 2001 because decreased usage of fertilisers and quantity of stock. Concentration of phosphorus has decreased below levels causing eutrophication (0.05 mg/l). Concentration of ammonium nitrogen has decreased below maximal permitted level 0.39 mg/l. Quantity of phyto-plankton, which indicates level of water eutrophication, increased in the Curonian lagoon during the past 15 years by 20 percent and level of the eutrophication shows tendency for further increasing. Despite the fact that agricultural production, number of livestock and usage of fertilisers significantly decreased during the last decade, the amount of some kinds of algae which are typical for eutrofied waters has increased, bigger areas of water are blooming because of increasing amount of blue algae. In the last 50 – 60 years the quantity of blue algae has increased 10 times. No doubt pollution from agriculture of water sources is of great concern. The research shows that 1 m3 of slurry contains 1-2 kg of total nitrogen. If the slurry tanks are not installed each year from the farms having more then 10 LU about 500 – 1000 t of total nitrogen reach surface and ground water.


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Lithuania is perhaps the only European country using only underground water to provide population with drinking water. Therefore the quality of underground water requires special attention. In 1989, when underground water consumption was maximum, city residents consumed 50-75 % of all underground water resources surveyed. After consumption of drinking water and consumption of water for industrial needs decreased, only 20-30 % of the underground water resources were consumed in 2000. Water abstraction sites in Lithuania supplying drinking water to the population in a centralised way usually abstract underground water from deep compresses aquifers and the quality of this water is suitable for drinking by all indicator. These aquifers are relatively protected from surface pollution. The dug wells to extract drinking water is mostly used in rural areas. The quality of ground water in rural areas where water from dug wells is used, poses problems. According to the monitoring data, over 950 thousand rural inhabitants use water of dug wells. 40-50 % of well water is polluted with nitrates exceeding maximum allowable concentration, and sometimes it amounts to 100 mg/l and more. The polluted wells are scattered evenly throughout the whole territory of the country. Most of them are located close to dwelling houses, barns, toilets, heavily fertilised orchards and gardens. Main reason of pollution of the well water with nitrates is inadequate distances from the barns, dunghills and toilets. It is expected that Action programme for the implementation of the EU Nitrate Directive will contribute significantly in reducing the problem related to the high nitrate concentration in the drinking water from dug wells. More information about the Action programme and overall strategy an actions foreseen in relation to the implementation of the Nitrate directive are spelled out in chapter 6.3.2. and Annex 4. As regards water as one of the key environmental domains, the following strengths, weaknesses, opportunities and threats are identified: Strengths:

1. Lithuania is rich in water resources 2. With the reduced water consumption, the amount of polluted wastewater has also

decreased and it results into cleaner surface waters. 3. Centrally supplied drinking water is of good quality

Weaknesses:

1. Most of the houses in the countryside are not connected to the drinking water supply network and sewerage systems. Most of them use water from dug well for drinking and in most cases the quality of water is not meeting the requirements.

Opportunities: 1. Implementation of the EU directives regulating water policy will provide the

possibility of using the EU structural funds for construction and modernization of wastewater treatment plants, renovation of drinking water supply networks and sewerage systems, etc.

2. Investments coming to agricultural sector will significantly contribute to minimising pollution of water from agricultural sources due to implementation of modern


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technologies, construction of manure storages as well as thanks to gradual expansion of ecological farming.

Threats: 1. If further investments into wastewater treatment, sewerage systems as well as drinking water supply in the countryside are not made there is a threat that with the increase of economy the human health as well as the quality of our surface waters might be threatened. 5.8.3. Air and climate The territory of Lithuania is situated in the northern part of the moderate climate zone. The average annual temperature in the territory varies from 6,5-7,1°C at the sea-side to 5,5°C on the north east. January is the coldest month of the year almost in the whole country except the sea-side. July is the warmest month (except at the Sea shore August is considered the warmest month) in Lithuania. The average temperature in July is 16,5-17,5 °C. After Lithuania re-established its independence, as a consequence of economy decline, emission of pollutants in to the air has decreased substantially. Monitoring data on the main pollutants (sulphur dioxide, nitrogen oxides, carbon monoxide, nin-methane volatile organic compounds and solid particles) show that total emissions of these pollutants decreased from 1.1. million tons to 430 thousand tons, that is by 2.5 times. The analysis shows that trends of emission from stationary (industry, energy sector) and mobile (vehicles) sources of pollution are different. In the period 1990-2000 emission from stationary sources was on permanent decrease and only in 1998 a temporary increase was recorded. During the ten year period emissions from stationary sources decreased by 4 times, whereas emissions from mobile sources decreased as little as twice in the same period due to the fact that transport sector was recovering much faster. After emission of pollutants in to the air had decreased, the quality of air improved considerably in the past years. Agriculture is the second largest source (the energy sector is the largest) of greenhouse gases, emitting 48% of all methane and 82 % of nitrogen oxide emissions. However, it should be noted that annual methane emission during the period 1990-2000 decreased from 350 to 230 thousand tons, that is, by one-third. More information about the relationship air/agriculture/ forestry is provided in chapter 6.3.2. It should be said, that until now a very small amount of data is available about air pollution of agricultural origin in Lithuania because contribution of agriculture to air pollution is considerably small, so all initiatives have been concentrated on pollution originating from industry and transport. However, the reduction of methane and ammonia emissions from inappropriate storage and use of fertilisers and liquid manure is one of the key objectives in implementing the Action programme within the framework of the EU nitrate directive. As majority of the farms lack proper manure storage capacities, methane and ammonia emissions and outdoor pollution are quite common. Due to the lack of financial resources for the investments into animal husbandry technologies this sector remains still big sources of air pollution, as regards methane and ammonia emissions, at the moment.


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Strengths: 1. Air pollution has decreased dramatically and is into imposing danger to the

environment Weaknesses: 1. Due to the lack of financial resources for the investments into animal husbandry

technologies this sector remains still big sources of air pollution, as regards methane and ammonia emissions, at the moment.

Opportunities: 1. Upcoming possibilities to use EU funds create favourable conditions for investments

into the technologies in the key sectors, causing air pollution, namely transport, industry as well as agriculture and others.

2. Expected increase in wider use of biofuel as well as extensive use of renewable energy sources will significantly contribute in decreasing greenhouse gas emissions. Threats: 1. In case of failure to modernise technologies in the key sectors causing pollution of air

today, the danger of increase in pollution could be a result of this. 5.8.4. Biodiversity Lithuania can be characterised by a wide biodiversity, because there are 24-25 thousand species living in it. There are as many as 15 000 species of insects in Lithuania, over 7000 species of fungi. Out of this variety over 200 species of flora, 200 species of fauna and nearly 100 types of mushrooms are rare and are approaching extinction, therefore, they are included into the Lithuanian Red Data Book. It regulates the protection in accordance with the international practice. In the Red Data Book there are 28,7 % of Lithuanian reptiles, 26,5 % of mammals, 23 % of amphibian, 22% of birds, about 15 % of higher plan species are included. This percentage shows a serious danger to the most important species. During the Soviet period, biological diversity was most adversely affected by land drainage, which resulted in the drying out of natural meadows and wetlands, small rivers were canalised, river valleys were damaged, small plantations in fields and single farmsteads were removed. Changes of agricultural intensity in any direction causes a certain fluctuation of biodiversity structure and species numbers. For this reason, any farming activities have direct impact on the environment. Most often intensive farming has a negative impact on biodiversity, although in recent years the opposite process is also taking place in Lithuania. After restoration of independence the agricultural activity has been decreasing. The agricultural crisis speeded-up the degradation of meadow and other “open” habitats. This happened due to the decline (and in many cases – abandonment) of farming activities in some areas. After regaining independence, with decreased agriculture


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and increased fuel prices, use of meadows and pastures has significantly decreased. First of all the less favoured, most often wet areas that were at further from farms, were abandoned, and these areas were the most valuable ones from the biodiversity point of view. In such wet areas that were mowed and grazed, rare species of waders and other meadow birds that are protected in Lithuania and the EU were breeding. Currently successional processes are taking place in those abandoned areas, and the open areas are becoming overgrown with bushes and tall grasses. Such conditions lead to local losses of these habitats, and thus of the rare bird populations. Wetlands/forest/meadow ecotones are of particular importance to animals. The biological diversity of invertebrates and other animals observed in these transitory areas is the highest. The mosaic of ecosystems in Lithuania is a result of centauries-long economic activities. A natural trend in the ecosystem changes is the successional growth of forests over open areas, with a decrease in the diversity of ecosystems. The anthropogenic change in the ecosystems’ mosaic is highly dependent upon the social and economic conditions. With the collapse of the soviet “kolkhoz” system, vast stretches of land were split into plots, and the ecological mosaic increased. During the first stage of the decline in the agricultural sector there was an increase in the area of extensively used meadows and pastures; later on they grew over with shrubs and forest. Anthropogenic increase in afforestation primarily occurs at the expense of coniferous trees, which does not favour biological diversity. Agrarian ecosystems occupy the largest area (53.7%) in Lithuania are very impoverished from the biodiversity point of view. They are all particularly insufficiently studied: only some of their functional aspects are known. Of late, with land privatisation and less intense agriculture, with an increase in the areas’ disintegration and their diversity, with a certain part of previously cultivated lands lying fallow and becoming overgrown with meadows and shrubs, with a reduced or even nearly no use of mineral fertilisers and chemicals as well as with the disappearance of consequences of land reclamation, the ecosystems of agrarian environment are becoming suitable for an increasing number of plant, fungi and animal species. It is believed that in the near future conditions in this ecosystem will not deteriorate. Natural meadows ecosystems, particularly in forests and river valleys, typically boast the richest diversity of plants and related invertebrate and fungi. Unfortunately, during the last 30 years the area of natural meadows has decreased: in 1956 meadows covered 19.6% of the country’s territory, whereas in 1980 they accounted for only 6.5%. Particularly reduced in numbers are natural continental meadows that were intensely cultivated or planted with forests. The diversity of meadow communities is high. They belong to 5 classes: saline (Asteretea tripolii), steppe (Festuco-Brometea), fertile (Molinio-Arrhenatheretea), barren (Nardetea), forest meadows on slopes (Trifolio-Geranietea sanguinei) and belong to 45 associations. Communities of fertile (Molinio-Arrhenatheretea) meadows prevail and steppe (Festuco-Brometea) meadow communities reach the northern limits of the distribution area. Natura 2000


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Like any other country in the world, Lithuania has a moral obligation to protect its share of biodiversity. This obligation forms the basis for the most important pieces of EU legislation on nature conservation, the Birds and Habitats Directives. According to these directives, Lithuania must protect species and habitats, which are rare or threatened at the European level. A number of species must be strictly protected all over Lithuania, and in addition we must designate a number of areas to be included into the EU network of protected areas - Natura 2000. Since the beginning of 1999, the first steps in the implementation of Natura 2000 in Lithuania has been the responsibility of a EU approximation project supported by the Danish governmental funding agency Dancee in co-operation with the Lithuanian Ministry of Environment. Since 1999 until now (2004), the project has been intensely working in order to provide a solid scientific and legal basis for the final selection of sites to be protected under the Natura 2000 network of Lithuania. A thorough legal analysis has been carried out in order to identify gaps in existing Lithuanian legislation on nature conservation compared to the requirements of the EU. On the basis of this analysis, a number of legal amendments have been proposed. Some of these proposals have already been adopted by the Lithuanian Parliament and enforced. Also, an assessment of the costs of implementing the two Directives in Lithuania was carried out. An analysis of the major differences between the national classification system of habitats and the classification system used by the EU was carried out. On the basis of this analysis, important changes to the national system were proposed in order to create a unified system that will work within Lithuania and would be compatible with the EU classification system. A large number of scientific researchers and field workers have been involved in gathering data in order to determine the current status and distribution of Lithuanian species and habitats covered by the EU Habitats and Birds Directives. Data has been gathered through fieldwork as well as literature searches. Furthermore, the project made a special assessment of already protected territories and areas defined as Important Bird Areas (IBAs) by the Lithuanian Ornithological Society. On the basis of thorough scientific work including field investigations as well as literature studies, a list of proposed Natura 2000 sites which are suitable for the protection of the species and habitats covered by the Habitats and Birds directives was produced. The list of Habitats to be protected under Natura 2000 will be submitted to the European Commission for consideration at the date of accession.

The Natura 2000 territories have been selected according the national criteria for selecting the Sites of Community importance (SCI) and Special Protected Areas (SPA). By the order No. 219 of the Ministry of Environment on 20/04/2001 were adopted the criteria for selection of pSCIs. By the order No. 22 of the Ministry of Environment on 9/01/2001 were adopted criteria for selection of sites for protection of birds (SPAs). At this moment all together 83 Natura 2000 territories for protection of wild birds have been selected in


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Lithuania. 24 of them are designated (or certain parts of those territories are important) for protection of nesting meadow birds (corncrake (Crex crex), great snipe (Gallinago media), aquatic warbler (Acrocephalus paludicola)). Protection of these bird species requires to keep possible higher the percentage of meadows and pastures. Through establishment new protected areas or introduction new restrictions in existing protected areas, which are relevant for meadow birds’ protection, there is planned to secure meadow and pasture areas at least on the same level. The total area of meadows and pastures to be saved in these 24 territories is approximately 30 000 ha. There are more restrictions foreseen to be set in these territories (see information provided below), but most important and causing lost of farmers income is prohibition of meadow and pastures transformation to arable land. In cases of great snipe and aquatic warbler protection areas are wet, so it is important to leave hydrological regime as natural as possible.

Altogether, about 380 separate sites are now included on the list of Natura 2000 proposed by scientists and technical experts. Preliminary, these territories occupy an area of 606 000 hectares. Out of total number of proposed 380 sites, 83 are SPAs (286 430 ha), while 300 – SACs. Firstly the protected areas for bird protection will be established (until the day of accession). In case to follow the requirements of protection of such areas the stakeholders will need to keep new nature protection restrictions, which will be applied in these territories. The protection of 3 bird species: corncrake (Crex crex), great snipe (Gallinago media), aquatic warbler (Acrocephalus paludicola) will impact use of agricultural land, because they are breeding in agricultural lands. For the protection of these birds it is planned to restrict to plough up meadows and pastures in 24 territories. The map with the locality of these areas and table providing information about size of territories are included in Annex 10.

Existing protected areas in Lithuania cover almost 12% of the country. Almost two thirds of potential NATURA 2000 sites are located in the existing network of protected areas. Natura 2000 territorial distribution is provided in Map 12.


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Map 12: Natura 2000 territories


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Recommendations for new guidelines for the management of Natura 2000 species were provided. A template for management plans covering Natura 2000 habitats was produced. The template plan covered the Daubėnai area, which has been proposed by the project as a candidate Natura 2000 site. The database systems for handing the large amount of data gathered on habitats and species was set up ensuring its compliance with the requirements of the reporting procedures to the European Commission. Due to the complexity of Natura 2000 and its interaction with agriculture and forestry, it is necessary to involve several ministries in finding the best solutions for the implementation of the Natura 2000 network. Organising round-table discussions and informal meetings involving staff from the Ministry of Environment as well as staff from the Ministry of Agriculture, including the Department of Forestry, are facilitating such co-operation. Strengths: 1. Rich biological diversity 2. Low use of fertilisers, pesticides and other chemicals harmful to the biodiversity Weaknesses: 1. The agricultural crisis speeded-up the degradation of meadow and other “open”

habitats. This happened due to the decline of farming activities in some of these areas. 2. Some valuable areas overgrow with low value shrubs and bushes. Opportunities: 1. With assistance of EU and other international funds it will be possible to implement

protection measures outlined in the Biodiversity Conservation Strategy. Threats: 1. Intensive economic development will more and more endanger biodiversity if certain

protective measures are not implemented in the right time. 5.8.5. Landscape and protected areas The most valuable Lithuanian landscapes are seashore (the Curonian Spit, the Nemunas river delta, the continental Baltic seashore), Zemaiciai highlands (the mosaic of forests and cultivated fields between massive hills), Aukstaiciai highlands (forest islands, massifs of small and bigger lakes between hills), Dzukai highlands (entire forest massifs, big river valleys, lakes and continental dunes) and the Middle Nemunas (picturiuos Nemunas river valley, forests, meadows and pastures). Lithuania abounds in many natural and semi natural areas with species of plants, mushrooms and animals extincted in the countries of Western Europe. In protecting traditional Lithuanian landscape, primary objectives are its traditional use, fostering of its traditional diversity, protection of mounds, parks, nature monuments and unique complexes.


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The structure of the landscape is subject to an active impact of land management. Currently they are impacted to a great extent by the land reform and the restoration of private ownership, development of land market and democratic relations, and changing economic priorities. Significant and rapid economic changes taking place during the recent decade determined a more intensive change in the structure of the landscape. Due to collectivisation and intensive land-reclamation in the past, natural meadows and pastures as well as most wetlands, homesteads of farmers have been destroyed, large open spaces atypical to Lithuanian landscape were formed, some rivers and streams were regulated and changed to channels. After independence, private ownership of land with a small size private plots came back. Due to this fact, with the increase in the share of private land, contours of land management increase, the degree of fragmentation land use grows. Where re-naturalisation has become more active due to the agricultural recession, a minor pattern of farming lands creates preconditions for the increase in natural territory development. However, with the changes of land use destination, new conflicts between the environment protection and development arise. Recently the number of the owners, who acquired land property in the most valuable areas in relation to nature and recreation, is increasing. Most of the landowners use the re-claimed land here or wish to use it not for agricultural or forestry purposes, but for active recreation and/or new constructions. A rapid and essential change in land use changes traditional landscape structure, visual expression, threatens natural and cultural values. The network of protected areas (natural parks, reserves, etc.) in Lithuania was developed in the last ten years. The system of legally protected areas of Lithuania is aimed at the conservation and where possible restoration of: • Nature and cultural heritage features, • Landscape ecological balance, • Biodiversity, • Gene pool for restoration of biota resources. Also, it creates conditions for the development of interpretive, research and the promotion of nature and cultural heritage protection. There are 4 categories of protected areas:

- Conservation areas- strict nature reserves or culture reserves, protected landscape features (nature or culture monuments), nature or culture reserves,

- Protection areas- protection zones for various purposes (buffer zones for strict reserves, national or regional parks, nature or culture monuments, water bodies, roads and railways, recreational areas, etc.),

- Restoration (recuperation) areas- sites where natural resources are protected or restored,

- Integration areas- national parks and biosphere monitoring areas. In 2002, specially protected areas covered 773.9 thousand hectares, equalling 11.9 per cent of total country area. There were 1,062 protected sites listed in total, including 5


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national parks and 30 regional parks. Most of the protected areas are concentrated in the Southeast Lithuanian regions. Table 33: Protected areas, in 2002

Number Area (1000 ha) Share of total area %

Integrated areas: National parks (IUCN II) 5 152.3 2.3 Regional parks (IUCN V) 30 436.0 6.7 Conservation areas: Strict nature reserves 4 23.8 0.4 Strict culture reserves 2 0.3 0.0 Reserves ( IUCN IV ) 258 150.3 2.3 Municipality nature reserves 101 11.2 0,2

Landscape objects 662 . . Total of above listed data 1032 773.9 11.9 Territorial distribution of protected areas is provided in Map 13.


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Map 13: Protected areas of Lithuania


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With the factual development of the system of particularly protected areas before land reform, good preconditions for the conservation of landscape and biodiversity in Lithuania have been created. In 1983, in the national Integrated Nature Protection Scheme, the idea of Lithuania’s Nature Frame was raised and approved. Lithuania proposed the concept of Nature Frame, which became the concept and approach for the conservation and protection of Lithuania’s natural landscape. The Nature Frame, which offers a universal approach, was put forward and legally established under the relevant laws of the Republic of Lithuania on environmental protection and protected areas. The Nature Frame links all natural protected areas with other ecologically valuable or relatively natural areas which underpin the general stability of landscape, to form a landscape system of geoecological compensation zones. It is aimed not only at development of a complete system for natural buffering and connecting natural protected areas, but also at conservation of natural landscapes, biodiversity and natural recreational resources. It does so by providing guidelines and conditions for recovery of forests, optimising the structure of agrarian landscape from the geoecological point of view, regulating development of agrarian activities and defining sustainable urbanisation. It is a concept based on catchments and biologically important areas. The Nature Frame, however, is not a continuous network of green belts. Instead, it is an integrated process for all land use, management and protection. Currently, the Nature Frame covers about 60% of Lithuania varying from 35 to 80% depending upon natural conditions and land use. The increasing environmental threats of a local, regional, national and international kind requires territorially unified nature conservation system in Europe, allowing combination of individual countries’ efforts in preservation, reproduction and growth of national resources. The concept of ecological network represents the process of integration of conservation and environmental aspects into different sectors, such as agriculture, regional planning, transport, etc. In 2000, an operational concept of national ecological networks (NECONET) in Lithuania, was created, as well as its implementation strategy that conform to European standards. The implementation of ecological network is necessary for ecologically balanced development of the region and for implementation of the principles of sustainable development, maintenance of landscapes and biodiversity, as well as implementation of the EU Habitat and Bird Directives (Natura 2000 areas), Agri-Environmental programmes, as a process of the EU accession, and also Biodiversity and Bern Convention (EMERALD network). The general structure of ecological network - core areas, corridors, buffer zones and stepping-stones - is accepted in the country. Development of the national ecological network provides Lithuania a tool for setting priorities in biodiversity protection and will start integration of general and cross-sectoral policies, applying concepts of European and Regional Ecological Networks.


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The increased amount of natural territories (forests, natural meadows) is one of the most important measures to increase ecological stability of landscape. From the point of view of the ecological stability of landscape, forest are needed most and the priority is given to establish them in the parts of Lithuania where forest cover is less. Strengths: 1. Lithuanian landscape is very well balanced in terms of natural and traditional

diversity, characterised by richness of natural values as well as cultural values such as mounds, parks, nature monuments and unique complexes.

2. Well developed network of protected areas. Weaknesses: 1. A rapid and essential change in land use changes traditional landscape structure, visual

expression, threatens natural and cultural values. # 2. Due to collectivisation and intensive land-reclamation in the past, natural meadows

and pastures as well as most wetlands, homesteads of farmers have been destroyed, large open spaces atypical to Lithuanian landscape were formed, some rivers and streams were regulated and changed to channels.

Opportunities:

1. Participation in the development process of European ecological networks will help to gain assistance from international programmes as well as experience of other countries for the development of the national protected areas system and the formation of the Nature frame.

Threats: 1. Intensive economic development will more and more endanger elements of the natural landscape, protected and recreational areas.

2. Ongoing changes in the purpose of land use might bring more new conflicts in the management of landscape.

5.9. SWOT analysis Based on the analysis of the situation in rural areas, agricultural sector and forestry, below are listed the strengths, weaknesses, opportunities and threats which are key elements based on which the agricultural and rural development objectives, strategy and priorities are formulated. There has been a sufficient time and efforts devoted in preparation of SWOT analysis as it is seen as a crucial tool for the further strategic planning process and it lays down the lines in defining and selecting the measures to be implemented, including establishment of the specific objectives for each selected measure. The SWOT analysis is an integral part of the National Agricultural and Rural Development Strategy adopted by the Parliament of the Republic of Lithuanian on the 13th of June, 2000, No. VIII-1728.

The SWOT analysis as it itself requires has been performed on two levels – external and internal. At the external level the opportunities and threats relevant to the fulfilment of the overall objectives and which cannot directly be influenced were analysed whereas at the


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internal level the strengths and weaknesses, which are directly influenced by the strategies and actions conducted, are presented. Hence, the external analysis components – opportunities and threats - have been evaluated in respect to their importance (i.e. attractiveness of opportunities and seriousness of threats) and the probability that one or another is going to take place. In order to make the SWOT analysis more illustrative, especially what relates to the internal strengths and weaknesses, for each of the components of the internal analysis the precise and verifiable indicators to the extent possible have been developed in order to ensure coherence among the chapter describing the current situation, the following chapter related to the strategy and objectives and the SWOT analysis. It is, no doubt, of great importance in further monitoring of the designed programme were clarification of whether the strengths/weaknesses which prevailed during the programme preparation were used/prevented in the best manner. In addition, internal part of the SWOT-analysis is divided into the following headings which form a basis for the sustainable development in rural areas:

• Economic development • Social development • Environmental development

5.9.1. External analysis The following opportunities and threats in the context of the overall objective for agriculture and rural development have been identified. Opportunities • Promotion of modern technologies • New markets for Lithuanian agricultural products • Strengthened pre-accession effort will increase the funding opportunities for

Lithuanian agriculture • Increasing migration of population lays down the favourable conditions for

diversified activities in rural areas (rural tourism, need for different services) • WTO negotiations • Lithuanian legislation harmonised with the EU aquis will favour the rights and interest

of rural community • Conditions for long term planning and development are created

Threats • Intensified competitive environment might threaten economic progress in Lithuania,

including rural development • Unequal treatment of new member states in the EU in relation to the CAP • Social stability and environment might be threatened by the external push for market

efficiency • WTO negotiations • Brain drain


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5.9.2. Internal analysis Based upon the findings in performing the external analysis and subject to the overall objective, the below presented internal analysis evaluates the internal strengths and weaknesses of Lithuanian agriculture and rural development. Table 34: SWOT analysis

Strengths Baseline data (to fill in the numbers)

Economic Agriculture and forestry sector accounts for an important part of the national economy

• Agricultural land –51,6 % of total area • Forests cover 30.6 % of total territory • Contribution of sector to GDP-6,9 %

(2000) Favourable natural conditions and experience for development of livestock sector

• Value of livestock and poultry production-19% of Gross agricultural output (2001)

• Milk production-20%. of Gross agricultural output (2001)

Strengthened positions of food industry in international markets, increase of export

• Share of export to EU, EFTA, CEFTA and BFTA countries - 59,0 % (2000m.)

• Export of dairy products- around 50% from total dairy produce

Ecological Available resources of drained land and high fertility of soil

• Agricultural land-3,37 million ha • Drained land-3,01 million ha

Rather low contamination of soil, water and air

• Pesticide residues in soil within restrictive limits • Water contamination by nitrate

nitrogen within restrictive limits Attractive landscape creates a high potential for tourist activities

• Priority in South-eastern and Western regions

Social Established network of advisory and training institutions

• Offices of advisory service established in all municipalities

Increasing initiatives of rural communities and self-governance

• Number of agricultural associations-above 40

• Pilot community development projects Even rural-urban distribution of population

• 3 counties with an above average urban population, as well as 3 counties with an above rural population and 4 counties with about average.


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Weaknesses Indicator Economic Unfavourable farm structure and small size of agricultural holdings

• Average size of an agricultural holding-4,5 ha

• Large number of small fairly competitive holdings

Outdated technologies, high costs and low efficiency of primary production

• Average yield per cow-4,86 t/year (2002)

• Average yield of cereals- 2,56 t/ha (2001)

Unfavourable investment environment • Low level of investment in agriculture sector

Low modernisation level of processing industry

• Meat, grain, fruit-vegetable industries lacking behind

Majority of farms and industries are facing difficulties in meeting EU environmental, hygiene and animal welfare standards

• Meat and dairy farms- above 80 %. • Meat processing industries- above 80

%. (2002m.)

Uncompleted land reform, limited land market

• Restored 81,5 % of land ownership rights (2002)

Poor technical and environmental status of water management systems (canals, drainage systems, hydraulic structures)

• Drainage and water canals covering an area of 3,01 million ha – depreciated by 50%

• Investment of 80 million Litas a year is lacking for recovering depreciation and environmental update of structures

Limited number of tourist and other alternative businesses

• Number of rural tourist undertakings-229 (2002)

Unfavourable structure of private forest holdings

• Number of private forest holdings- 521 thousand.

• Average holding size -4,4 ha (2002) Low incomes in rural areas, particularly in LFA.

• Income per family member in rural areas per month 310 Litas

Low population density in LFA • Population density in rural areas 18 persons/sq.m whereas in some LFA regions it is only 8,8 person/sq.m

Social •


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Still not sufficiently developed rural communities, lack of leader initiatives

• Inadequate support to development of rural communities

Poorly developed services among rural population and rural businesses

• Self-governing agricultural associations are lacking support

• Inadequate support to marketing of high quality products

Inadequate professional skills among farming and other rural population

• N.a.

Poor supply of quality drinking water and sewage handling

• 30% of rural inhabitants use poor quality drinking water from contaminated dug wells

Limited road and electricity connection to newly establishing holdings

• Problem for newly establishing holdings

Ageing of rural population • Old aged farmers dominate, especially in diary sector

•

Ecological • Intensive farming using fertilisers, pesticides and chemicals cause substantial environmental damage, e.g. soil and water pollution through erosion, and contamination with heavy metals

• Average quantity of nitrates in soil (and/or drinking water)

• Average quantity of heavy metals in soil

Contamination of drinking water from dug wells with nitrates

• Percentage of farmers.rural dwellers respecting the protective zones around dug wells

• Number of facilities for animal manure on farms and capacity of these

Big areas of abandoned land result in loss of existing values in those areas

• Amount of abandoned land – about 600,000 ha

Utilisation of strengths As we can see from the described current situation in agriculture and rural development it is obvious that agriculture and forestry are of outmost importance to future socio-economic development of rural areas. Taking this fact the further development in rural areas should be targeted in a way, which would enable the best use of available resources aiming at the maximum benefits to the rural community. Favourable natural conditions as well as experience in agriculture, especially in livestock production are of great importance and therefore require special attention in order to maintain and to increase the benefits which come from this type of activity. Rich soil creates also good condition for growing crop production. Thus, the Government of Lithuania foresees further support both to the primary production aiming at meeting the quality requirements and to the processing industry in order to ensure production of value-added products both for the domestic and foreign markets. The clean, ecologically and


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culturally rich environment, forest resources as well as scenic values lay a sound basis for the development of alternative activities in rural areas, support for which will be provided both from EAGGF Guidance and Guarantee section. Due to low contamination of soil, water and air organic production is seen also as one of the alternatives to traditional agriculture and it is expected that it will make quite a significant part in the structure of agricultural output. Aiming at utilisation of this strength support for organic farming has been included as one of the programmes under agri-environmental scheme to be co-funded from EAGGF Guarantee section. As regard strengths in terms of social development, the established network of advisory and training institutions is an obvious strength as existing resources. What is needed is reallocation of resources, as in educational institutions the main emphasis has been on teaching and therefore the changes in the existing curriculum to adjust it to the changing farming practices and market tendencies therefore is needed. It also obviously relates to the environmental aspects of farming, in particular to the implementation of the Code of Good Agricultural Practice. Development work is impossible without active participation of the local residents. Although in general the perception in the country is that rural population is indifferent and very passive however quite a few positive initiatives have been observed. The so called Local action groups evolve continuously and taking into consideration the fact that few years ago it was hardly possible to even imagine that such a movement will start so it is considered as an important strength, which should be further reinforced. The LEADER + programme it is expected will contribute substantially for this particular development. Measures maintaining and developing rural environment, physical and social structures create a positive atmosphere in villages and help to prevent the threat of mental paralysis. Also, it creates a positive atmosphere for entrepreneurship, which is a precondition for the development of diversified activities in rural areas. Nice and cosy living and working environment, it is expected, will attract young population and therefore would contribute to solving the ageing rural population trend. Preventing weaknesses The main weaknesses of rural development are significant and constitute pressing problems for rural Lithuania. The most serious weakness in terms of economic development, especially if we bare in mind our overall agriculture-related objective to increase competitiveness of agricultural sector is the small size of agricultural holdings. The small farm size creates serious obstacles for improvements in farms due to lack of investments needed to comply with quality requirements. This weakness is extremely closely related to another one stating that outdated technologies are used in primary agricultural production and therefore it results in low efficiency and high costs. To prevent this weakness it is foreseen to implement the Early retirement scheme by encouraging the older farmers to give up farming and to transfer their holdings to the younger ones and in such a way also a problem of ageing farmers would be prevented.


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Also measures, which will support investments in agricultural holdings and will provide assistance to young farmers are of great importance in restructuring the farm size and making the primary agriculture more competitive and at the same time providing a better quality products for the processing industry. The processing industry (especially meat, grain, fruit and vegetables) still requires substantial investments in order to meet the quality, environmental, hygiene and animal welfare standards. Thus even though a substantial support has already been provided from the SAPARD programme further assistance in modernising the processing is still needed and therefore will be supported. Furthermore, the necessary framework conditions (land market, infrastructure) are not functioning in an optimal manner and the support for the adaptation and development of rural areas will be provided. Forestry is considered as an important activity in diversifying activities in rural areas and therefore is perceived as integral part of rural development. However, the existing structure of forest holdings as well as the fact that many forest owners are not themselves familiar with sustainable forest management are not in favour for sustainable development and therefore assistance targeted to forest owners cooperation activities in terms of both forest management and further marketing of forest products are to be enhanced and promoted. Also the fact, that currently Lithuania has vast areas of land not being utilised for agriculture and which daily overgrow naturally with low value shrubs and bushes and thus threaten the survival of the existing natural values in those territories, is to be taken in a consideration. Moreover, the economic value of such agricultural holdings is decreasing on a daily basis. Afforestation of such areas is considered to be an important alternative land use where other restrictions are not to be applied thus it is foreseen to substantially contribute within this programme to solving this economically-socially-and ecologically sensitive issue. In terms of social development, rural disposable household income is lower than in urban areas. The issue is even bigger in the areas classified as Less favoured areas and therefore it is foreseen to provide the farmers in those areas with compensatory allowance in order to keep their incomes as close as possible to the level of those farming a good conditions. The low incomes in rural areas no doubt are very closely linked to the over-dependence of rural population on agriculture. So diversification of rural activities and increase in employment opportunities are very vital. This will be increasingly important when the agriculture and processing sectors become more efficient. So, further support for diversification of activities in rural areas will be provided. As it was mentioned above while discussing the strengths, the physical infrastructure is very important part of rural life and therefore it should be given an adequate attention – water supply and sewage systems, roads and electricity installations. The lack of such infrastructure at the 21st century should be out of question and therefore this issue will be also dealt through the measure related to adaptation and development of rural areas. Finally, it must be considered an essential weakness (or even threat) that current – and future – intensive farming in the areas mostly suited for agriculture causes considerable environmental damage through, inter alia, the use of fertilisers and pesticides. Our strength of clean and safe environment should not be destroyed to the benefit of more


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competitive agriculture and therefore the enhancement of competitiveness will be carried out in parallel with the ambitious agri-environmental scheme. Utilization of opportunities The integration process of Lithuania into the EU has itself opened a great possibilities for the country to take advantages of the existing experiences in EU countries that relate to economic, social or ecological development. Thus, Lithuania as all other new member states have a unique possibility to learn from the development lessons that present member states have gone through and therefore it is expected that whole development process will be fostered in such a manner and would help to avoid mistakes that the country could face if there was no sharing of experiences amongst countries. No doubt, that concept of rural development is a new one as it is in all the member states and therefore the harmonisation of Lithuanian legislation with EU aquis will be in favour for our rural society. Participation in the EU co-funded programmes open possibilities for the rural population to become more socially active and at the same time to increase the economic viability in rural areas. Moreover, the general concept of narrowing the development gaps between rural and urban areas is one of the core elements in defining the actions. Preparation of Programmes like this one with financial resources planned creates conditions and possibilities for a long term planning and development which is very important to make sure that rural community believes in actions planned and in return results with active participation in the programme. Thus, the awareness rising about the programme during the programme preparation has been taken very seriously in order to spread the information as wider as possible through economic-social partners. The increase of competitiveness of Lithuania’s agriculture is one of the overall objectives of this programme and, no doubt, it is impossible without restructuring of the sector and investments into new technologies. These actions in return result in to a lower production costs, better quality products and further to the entry of new markets and at the end to a higher income and living of rural population. Having put those aspects as one of the priorities, we support restructuring of both - primary production and processing industry - which could be called as traditional actions and at the same time encourage people to engage themselves into an alternative actions bearing in mind that opened market will bring benefits not only through traditional products but also through alternative ones, including services. Thus, further development of tourism sector, crafts and other alternatives is promoted. Preparing for threats Promotion of new technologies being as one of the opportunities Lithuania identifies, and no doubt, is aiming at, might result in an increase of unemployment knowing that new technologies very often mean less man-work. Bearing in mind this two-sided effect of the opportunity, in parallel to the measures proposed to take advantages of the new


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technologies other measures encouraging development of alternative business are being introduced. The need to increase the market efficiency might also have a negative impact on the existing environmental values which we list as our strengths and therefore the implementation of well timed and adequate measures ensuring that the ecological balance is not harmed are of outmost importance. Also, in relation to social aspects in rural areas, rural population despite quite a lot of awareness raising regarding the pros and cons of Lithuanian’s accession into the EU are not sure which ones – pros or cons - will take over. Especially, taking into consideration the fact that the EU CAP is undergoing reforms as well and it is undefined presently. Moreover, the facts that new member states will have different CAP support level but the market rules will be the same ones applied make Lithuanian producers very tensed both psychologically and no doubt, economically. The negotiations currently running in the World Trade Organisation (WTO) are another external factor that proposes threats as well as opportunities for Lithuania. Becoming member of the EU, Lithuania will be subjected to the agreements on agricultural trade between EU and the rest of the world. Given that EU policies are under pressure for being too protective, it is likely that the WTO negotiations will push the reduction in import tariffs, export substitution and trade distorting support further. It is difficult to determine how the WTO negotiations will affect Lithuania and its competitive position, but it is an external factor that can and most likely will affect Lithuanian agriculture. The threat named as “brain drain” is very serious in the entire country and not only in relation to agriculture and rural development. Young generation tends to leave rural areas especially and move to cities or to other countries. The reasons being the unemployment, unattractive living and social environment are being addressed through support of initiatives in creating alternative sources of incomes as well as of the improvement of social and physical infrastructure in rural areas. 5.10. Key problems in agriculture and rural development Having presented the baseline data characterizing situation in rural areas and agricultural as well as forestry sector and consequent SWOT analysis, the following key problems are considered to be the most important problems to be addressed presently in order to foster the sustainable development of rural areas.

1. Small average farm size. This problem leads to a low efficiency in agricultural sector, high production costs. 2. Low income and lack of sources of income (overdependence on

agriculture) It results into the low household incomes and further into the low living standards in rural areas. 3. Lack of technology both in primary production and processing sector.


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This problem closely relates to the production and processing methods used and therefore it results in a much lower quality of produce and difficulties in meeting EU standards related to the environment, hygiene and animal welfare. On the other hand, improvements in technology can lead to the decreased employment opportunities. 4. Insufficient social infrastructure. This problem is closely related to the age structure of farmers and rural population in general, low educational level, high unemployment of young generation, low degree of involvement and initiative. 5. Insufficient physical infrastructure. The problem of insufficient water supply, sewage, roads, telecommunications infrastructure result in rural areas being depopulated especially by young generation. 6. Threats towards the environment and cultural heritage. Intensive agriculture in certain areas and abandonment of other agricultural areas threaten the environmental and cultural values.

5.11. Impact from the previous programming period (title) Below the support in relation to the measures which will be implemented in the framework of this RDP is described. It should be noted, that Early Retirement scheme is a new mechanism to be implemented in Lithuania and therefore the country has no previous support/experience in this particular area. No experience from SAPARD in implementing the Afforestation and Agro environment measures (which are also the measures within this Rural Development Plan) could be presented at this stage as both measures have not been started to be implemented in Lithuania yet. If the implementation of these two measures starts before this Rural Development Plan enters into force, then the implementation of both – Agri-environment and Afforestation measures will be terminated once this Rural Development Plan is approved by the European Commission. However, a lot of administrative experience and knowledge was accumulated in implementing the SAPARD programme. In general, the administrative capacity on administering EU rural development support has been developed to a great extent through the implementation of the SAPARD programme. This capacity is a necessary precondition for a successful administration of the current programme. A national paying agency, a monitoring committee and a managing authority within the MoA has been established, and these institutions will also be used for the coming implementation of this programme.


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The implementation of SAPARD also gives important experience on how big an administrative capacity it takes to implement one measure with a given amount of requirements and funds. Through this can it be assessed how much capacity is needed for the implementation of this programme and if the above-mentioned institutions have sufficient staff and competences. Some of the more specific experience with the individual measures is reported below. 5.11.1. Less favourable areas Lithuania has a big diversity of natural environment factors. In many cases it results into territorial unevenness of intensity and efficiency of agriculture as well as into different level of incomes of subjects of agriculture and majority of rural population. Incomes of agriculture in less favourable areas are one and half time less, than in other agrarian areas. Support for the less-productivity5 areas in Lithuania has been started after the Rural Support Fund (RSF) has been established. Factors for establishment of land productivity was as follows: • Genetic type of soils, • Mechanical composition of soils, • Status of land reclamation (not drained, drained, irrigated), • Reaction of soils (pH), • Amount of the nutritious matters in arable lay, • Climate conditions • Stoniness, bushiness, swamping, • Amount of humus. In 1997, under the provisions of the RSF it has been planned to support priority investment programmes, among them, reorganisation of agricultural activity in the less-productivity areas. 3% of the RSF funds had to be allocated for this measure. In 1998, 2% of the RSF funds has been utilised for reorganisation of agricultural activity in the less-productivity areas. Objective of the measure was to encourage alternative agricultural activity, increase employment of rural population and, thus, income of rural inhabitants. According to Order No. 39 of the Minister of Agriculture as of 1999 regarding order of buying of peas, buckwheat and rape crop, buckwheat sales quota (7 thous. tones) was distributed with respect to the less-favoured areas in the counties (see table below). Price for 1 tone of buckwheat was set at 800 Lt., subsidy per 1 tone – 400 Lt., total – 1200 Lt. per 1 tone.

5 The title of support was "support to farming in less-productivity areas". Later "less –productivity areas"where renamed into "less favoured areas".


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Table 35: Distribution of buckwheat quota in 1999 County Quota, tones

Alytus 1800Kaunas 400Klaipėda 200Marijampolė 200Panevėžys 400Šiauliai 140Tauragė 160Telšiai 50Utena 1100Vilnius 2550

In 2001 according to the Special Programme for Rural Support, it has been set a direct payment of 150 Lt. for sowed in 2001 and declared hectare of winter rye as well as 300 Lt. for buckwheat in the less-productivity areas. From January 7 of 2002 came into force the new order of the Minister of Agriculture on procedure for the Selection of Less-Favoured Areas (Order No. 3 of the Minister of Agriculture of the Republic of Lithuania (January 7, 2002)) and for confirmation of Less-Favoured Areas (Order No. 4 of the Minister of Agriculture of the Republic of Lithuania (January 7, 2002)). In 2002 there are being paid compensatory allowances for the farmers in the less-favoured areas from the Special Programme for Rural Support. Farmers and agricultural entities in the less-favoured areas are paid a compensatory allowance of 40 Lt./ha for the declared utilisable agricultural area of winter rye, buckwheat, leguminous crop, grassland or natural pastures (abandoned areas are not eligible). Besides, compensatory allowance of 250 Lt. was set per declared hectare of sowed in 2002 and matured buckwheat and 150 Lt. per declared hectare of sowed in 2002 and matured rye. In accordance with the order of one-time direct payments, 100 Lt. per year direct payment is made for the ewes in the less-favoured areas. Consider the results from previous support should be mentioned that Rural Support Fund paid direct payments for different cereals in sowed and declared hectare. This order wasn’t effective because of close relation to particular types of agriculture products. Detailed allocation of funds for support in the less-favoured areas is presented in Annex 3.

Less favoured areas for the period 2004 - 2006 programming period are to be attributed in compliance with the provisions of Regulation 1257/1999. When implementation of Rural Development Plan for 2004-2006 starts, national support scheme is to be stopped and farmers will get compensatory allowances according to the RDP.


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5.11.2. Agri-environment The first pilot program of transition to organic agriculture was prepared in 1987-1993. Implementation of the program was started in the north-eastern part of Lithuania (in area of 194 thousand ha), in 1993. It was operated by Tatula’s Fund. In 1997 it was reorganised into the public institution “Tatulos programa”. ‘Tatula’ was the first program officially approved and sponsored by the Government with an average annual allocation of 600,000 EUR. 50% of the funds allocated to the program are interest-free credit and subsidies for the elimination of pollutants, the other 50% is for the elimination of pollutants at certain points (e.g., processing factories). The programme involves more than 100 farmers and more than 30 agricultural enterprises and partnerships. The programme aims at transforming about 5% of agricultural land in the Karst region into organic agriculture by 2005-2010. Since 1997, the project in the Karst region has been spread throughout Lithuania, and state support for organic agriculture has been provided. The Rural Support Fund approved support to farmers taking up organic agriculture activities as a priority investment programme. Through this Fund, 171.8 thousand Litas was paid for implementation of investment projects and subsidising organic farms in 1997. In 1998, 389.2 thousand Litas was spent for this purpose, in 1999 - 423.4 thousand Litas, in 2000 – 446 thousand Litas, in 2001 – 900 thousand Litas. In 2002, allocations for organic farming through the Special Rural Support Programme (previous Rural Support Fund) was 1.5 million Litas, from which 1 million Litas was paid to farmers (total number of beneficiary farms – 393). In 2002, the certified organic farmland was 8196 hectares, of which 4086 ha – grasslands, 2152 ha – cereals, 714 ha - leguminous, vegetables, potatoes, 409 ha – orchards, 57 ha – berry plantations and 778 ha of fallow land. This support has induced the growth of organic production. The area of certified lands increased by 2.5 times in 1998 in comparison with 1997. However, during recent years this process slowed down because of various reasons. Only 50-60 per cent of organic farm owners received direct payments. In general, the volume of state support was reduced from Litas 1.4 million in 1998 to Litas 0.45 million in 2000. As a result, pointing out to the reason of insufficient state support some farmers refused to continue their engagement in organic farming Pilot agri-environmental measure was included in Lithuanian SAPARD Programme. Taking into account the complexity of the measure and its nature of pilot action, this measure was defined under the consultation and agreement with the Commission. The implementation of the measure has not started yet even though this measure was approved in the STAR committee in June 2003. The implementation of this measure is hold back by the fact that the National Paying Agnecy has not been accredited for the implementation of this measure yet. Therefore, it was not possible to draw lessons learned for the agro- environment scheme from SAPARD in the course of preparation of this Rural Development Plan. However, some related activities are implemented in Rusne island (one of the SAPARD pilot areas) since 1998. They are being implemented in the framework of a programme


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carried out by Lithuanian Fund for Nature. The main goals of the project include: to manage abandoned grasslands on Rusne island in order to make them more suitable for breeding and migratory birds, to manage breeding habitats of the Aquatic warbler on Rusne island and neighbouring areas, to encourage environmentally sound and sustainable agriculture, to promote environmental ecological education among local people, to develop ecological tourism. Within these projects farmers get payments for environmental services they provide (mostly management of meadows, cutting trees and bushes, etc.). Now each year some 50 hectares of abandoned grasslands are mowed, and cleaned from bushes. The main economic impact of the project is connected with silage production. Rusnė Fund for Nature has received some agricultural machinery (tractor, etc.) that is used for project purposes. The farmers that agree to comply with environmentally friendly farming practices can use this machinery and technologies. Grass mowed from abandoned meadows and from places with environmental restrictions (late mowing dates because of breeding birds) is of low quality as fodder. The project offers to participating farmers to make from this grass high quality fodder – silage. In 1996 – 2 silage clamps were produced, in 1997 – 1 clamp, in 1998 – 7 clamps, in 1999 – 4, since 2000– 3 clamps every year. It is a good fodder, milk production increase 2-3 litres from a cow. The quality of milk also increases that will allow competitiveness in the EU markets. But economic effect is not big, since milk prices have dropped by ~30%. Participating farmers get paid for the environmental services done (mowing of abandoned meadows). The amounts paid for farmer per year differ subject to the area mowed, but farmers get several thousand Litas as additional income. In the areas that are managed by farmers participating in the project, biodiversity and landscape values increase. The main results are restoration of meadow habitats and increase of plant diversity in meadows. Later mowing dates allow successful hatching of meadow breeding birds. Since 2002, the members of Rusnė Fund carry out a monitoring of meadow plant species and birds for Nature and staff of the Regional Park. In a couple of years monitoring data will allow to make conclusions and evaluate real environmental effects of his project. Unfortunately, the areas that are managed in environmentally good farming are very small comparing to the total area of the project territory. Beside farmers that get additional income for mowing the abandoned meadows (5 to 8 persons per year), one small local company is being contracted which additionally employs the same amount of people. The farmers that make silage are bigger and stronger ones. They still can sustain themselves, although others are decreasing their animal stocks. A milk buying co-operative was established which is about to start buying milk from its member farmers. Three more people are employed in this co-operative. Two persons have submitted applications to start organic farming. The project is very nice example how farming with nature can be implemented in Lithuania. It really activated local people who are determined to continue their activities. However, quite a number of drawbacks can be pointed. First, the number of active people


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is not big, due to share of elderly people in the population and poor economic state of farmers. Such big areas of meadows will not be needed for local farmers. Surplus grass could be used for fuel. Another thing is that only bigger farmers can benefit from silage production. The smaller ones need to co-operate due to lack of machinery, and this results in big distances. It is not possible to make new farmers; activities can only be aimed at supporting of those willing to farm by providing them knowledge and material support. This support was not very big until now. 5.11.3. Afforestation of agricultural land There have been already a number of initiatives taken to increase country’s forest cover through afforestation of agricultural land. In 1996, the Government approved the “National Programme for Development of Forest Sector and Wood Industry” according to which woodenness of the country shall be increased by 2 to 3 % at the expense of afforestation of abandoned agricultural land. In 1998 the order of the Ministry of Agriculture and Forestry has set the targets in afforestation for the period 1998-2000 and allocated funds to carry out the afforestation. It should, however, be stressed that this plan contained only afforestation of state land. The General Forest Enterprise was entitled to organise the afforestation and to control survival of the forests established. The state forest enterprises and national parks were ordered to establish and maintain forests in the areas foreseen by the project. Regrettably, only 50 % of the areas foreseen to afforest by this Project in 1999 were actually afforested. In 2000, forests were established only in 600 ha of the 1062 ha foreseen for afforestation by the Project. As regards promotion of afforestation on private land, in 1998-1999 the Minister of Environment has issued an order according which the nurseries of forest enterprises were obliged to sell seedlings for private owners for half a price. However, taking the fact that in 1998 only some 25 ha and in 1999 some 41 ha of private agricultural land was afforested it could be stated that this initiative didn’t contribute significantly to promotion of afforestation. The reason mainly was the lack of awareness rising about such a possibility and afforestation in general as a potential land use amongst landowners. In 1999, July 29th, the Ministers of Agriculture and Environment have approved "Main principles for increase of the country's woodenness and the their implementation over the period from 1999 to 2003". The document set out the means to implement the principles for increase of the country's woodenness during the period from 1999 to 2003. However, not all of the means foreseen are being implemented, as they should be yet. Particularly those that relate to the foreseen hectares of land - both public and private taken together - to be afforested. As related afforestation of public land the unfinished land reform and the fact that it is not clear which areas will actually remain free after the land reform hinder the process. As relates to afforestation of private land private owners are reluctant to do that because of no support for that activity and, no doubt, they are awaiting of the possibilities that the EU accession will bring in relation to agricultural activities. In general, it could be concluded, that these failures to implement the planned initiatives in


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relation to afforestation are attributable to the lack of funds and a number of problems related to not well-solved organisational, technical, legislation issues. It should also be noted that in the past years the interest of landowners in turning their land into forest has increased a lot. Landowners are exploring the possibilities and even though until now very limited number of hectares of agricultural land has been afforested, it is expected that with the support possibilities available under this Rural Development Plan, the landowners will be able to realise their plans. As regards organisational, technical and legislation issues that hindered afforestation in the last years it is important to mention that in the last 2 years Forest owners organisations, such a associations, cooperatives have become extremely active in promoting afforestation and also in providing services – consultations, trainings, development of afforestation plans, soil preparation, planting, fencing, etc. Also State Forest Enterprises which have their own nurseries have increased their stock of seedlings in order to meet the demand once the financial support becomes available. Thus, it is expected that implementation of the Afforestation measure under this Rural development plan will contribute significantly in meeting the targets set in the National Forest Increase programme. In November 2002 Lithuanian Forest Increase Programme 2003-2020 has been approved. The aim of the programme is to foresee the forest cover increase tendencies and volume in Lithuania taking into consideration the factors influencing the process, forest structure and it’s territorial distribution as well as accumulated experience in Lithuania and other countries. The programme foresees that about 115,5 thousand hectares of forests should be artificially planted in the period 2003-2020 meaning 6415 hectares a year. Thus, it is expected that substantial support provided for afforestation of agricultural land through this Rural Development Programme will enable the fulfilment of the set targets. In addition, other lessons already learnt in relation to awareness rising, availability of seedlings, technical knowledge, etc. should be taken into consideration. Danish – Lithuanian project “Afforestation of agricultural land based on sustainable planning and environmentally sound forest management. In order to promote the sustainable planning and establishment of new forests on agricultural lands in Lithuania, the project “Afforestation of Abandoned Agricultural Land Based on Sustainable Planning and Environmentally Sound Forest Management” was initiated in May 1999 by the Lithuanian Ministry of Environment, with financial and technical support from the Danish Ministry of Environment and Energy (presently Ministry of Environment). Thus the project implementation was focused on: 1. Formulation of policies and strategies at the national level, favouring sustainable afforestation, and a significant contribution to the establishment of a revised framework and procedures concerning legislation and planning for sustainable afforestation; 2. The development of proper land use planning procedures, and the promotion of decentralised land use planning and mapping processes from the national to the county


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and regional levels. Examples of sustainable land use planning for the designation of afforestation areas will be carried out in the two pilot municipalities; 3. Criteria and methods for afforestation, and the development of appropriate technical methods and approaches to afforestation of marginal agricultural land. The project will test different silvicultural techniques and establish demonstration forests under different management objectives, on both public and private land in Utena and Lazdijai region; 4. Awareness raising about afforestation through information, campaigns, training, study tours to neighbouring countries and within Lithuania for policy makers, technical staff and landowners. The project was implemented in May 1999-December 2001 at national and regional levels the latter being Utena and Lazdijai municipalities. Implementation of the project at regional levels was focused both at land use planning for afforestation aiming at the most optimal land use for afforestation and at the practical afforestation of the agricultural private and public land as well as awareness raising about afforestation. Below are presented the key findings and lessons learned by the project which are taken into consideration in the programme preparation in general and particularly in developing the afforestation measure. Base line survey amongst landowners One of the activities carried out by the project at a starting phase, was the base line survey among landowners in Lazdijai and Utena municipalities on socio–economic factors determining present land use, awareness about afforestation as a potential land use and motivating factors for afforestation. The survey was conducted by the Lithuanian Forest Research Institute. The survey results can be used to asses the possibilities for afforestation as well as interest of the landowners in afforestation in another municipalities of the country as well.

Conclusions drawn based on the survey results. The following main socio–economic factors determining land use were identified: • fertility of agricultural land and its suitability for agricultural or other activities; • effectiveness of agricultural activities (profitable, unprofitable, detrimental). About 20 % of respondents in the survey area do not use agricultural land in their possession. These lands are abandoned and could be afforestated. The main reasons for not using their land is poor quality of the land and unsuitability for agricultural activities. This was especially important in Lazdijai region (13 respondents of 17 do not use their land because of low fertility). More than 28% of respondents (of those who do not use agricultural land) think that the business related to the production of agricultural products is unprofitable. Over 50% of respondents intended to afforest their land. This decision is influenced by new socio–economic conditions (unstable situation in agriculture,


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unprofitability of the activities related to the agricultural production, and etc.). Main reasons influencing this decision were: (1) it is the best way to use abandoned lands; (2) ongoing natural regeneration of land; and (3) increase of land value by afforesting it. Most of the respondents are willing to allocate about 3 ha out of their estate for afforestation purposes (average size of the holding was 11,3 ha). At the same time they also want to maintain agricultural activities on their land or at least to be left with a possibility to engage themselves into agriculture in the future if economic situation in relation to the integration into EU changes to the better. 32.7% of respondents (25.6% in Lazdijai region and 40.0% in Utena region) do not intend to afforest their lands. The two reasons for this decision were: (1) agricultural land should be used for agriculture; and (2) respondents do not want lose the possibility in the future to use all their land for agriculture. Main factors encouraging (or hindering if absent) afforestation were identified and cover: • state financial support for afforestation (62% of respondents); • low prices of or free planting material (40.9% of respondents); • tax breaks (26% respondents). Two factors directly hindering afforestation are the lack of: (1) financial resources to carry out afforestation (reported by 62.6% of respondents); and (2) knowledge and support of specialists (25.1% of respondents). Survey also assessed the level of knowledge possessed by landowners concerning afforestation. It was reported that 50.8% of respondents were interested in different information presented both in mass media and other sources of information about afforestation. As there is not enough information of this type, one of the most important reasons hindering afforestation is the lack of knowledge on the topic. Larger amounts of information as well as the attractive presentation would encourage landowners to afforest abandoned lands. The most effective and easily accessible means for the dissemination of information to the potential participants of afforestation process is press. Television, radio and consultations by specialists are also effective enough. Actually, in solving the awareness problem, the project has produced a number of technical information available nation-wide such as technical notes, brochures, booklets, video, has organized a number of national campaigns.

Generally, one of the lessons learned from this survey is that, with an average agricultural holding of roughly 10 hectares, it may be expected that half of the farmers will be willing to afforest about 3 hectares of agricultural land in their possession. Also, that fertility of land and its suitability to agricultural activities plays an important role in making the decision to use the land for afforestation or not. Thus, it is expected that most of afforestation will take place in the areas were conditions for agriculture are not in favour. And finally, that financial support for afforestation is perceived as the key factor aiming at promoting afforestation of agricultural land. Establishment of demonstration areas on both private and public land Establishment of demonstration areas in the pilot municipalities Utena and Lazdijai has


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been of utmost importance. The possibility to show in reality the effect and consequences of different, new and sometimes forgotten ways of doing things has been crucial in order to overcome scepticism which very often is faced in forestry. Moreover, the scientifically based regulations are not always able to meet the wishes of the landowners. Therefore, establishment of demonstration forests on private and public land provided the opportunity to test how the approved regulations are able to meet the visions not only from an afforestation point of view but also from laws and regulations on ownership and land use purpose. In total demonstration forests were established on 36 ha of private and on almost 100 ha of public land in both municipalities. The following practical lessons learnt could be pointed out as the most important ones to be taken into consideration when promoting demonstration activities and larger scale private and public sustainable afforestation in Lithuania: 1. Up till now state forest owned nurseries within the country have mainly been growing

seedlings to satisfy their own needs for reforestation as afforestation so far has been in a small scale. This means that mainly conifer seedlings have been grown in the nurseries (broadleaves very well naturally regenerate in forests). The project has maintained the idea of establishing mixed forests with forest edges with a number of native trees and bushes. This has become not only the project’s philosophy but also the general trend in afforestation. Also it is part of the recommendation developed for the initiatives of private landowners and the new regulations on re- and afforestation. Therefore, the demand for broadleaved trees and bushes will increase due to the awareness raising. It is necessary for the nurseries to adjust to this demand.

2. Initially most established scientists and professional foresters had very low expectations

of the ability of the private owners to plan and influence their own forestry plots. However, although most owners has no specific forestry knowledge, the project has show that the average landowner has very clear ideas of what he or she would like to create and also a reasonable overview of what is possible and realistic. Also the wishes of the owners are very diverse, ranging from pure fast growing timber stands to forest stands with high landscape and biodiversity value or recreational potential. Future afforestation on private land will only be successful if it acknowledges the owner’s wishes and ideas and involves the owners in planning and maintenance.

3. Landowners have very limited knowledge on practical afforestation (planting trees).

During the project 3 workshops in each region were held on seedlings, quality of seedlings, mixing of stands, creating forest edges, equipment for planting, training in planting, weeding, protection against wildlife, future management and evaluation. The landowners took part in these workshops, and clearly all landowners learned from the workshops. Future afforestation must be supported by extension e.g workshops and extension directly to landowners.

6. Description of the strategy proposed, its quantified objectives, the rural development priorities selected and the geographical area covered


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This chapter outlines the strategy, objectives and priorities for rural development as well as the geographical area of Lithuania covered by this Rural Development Plan in the 2004-2006 period. The rural development objectives, strategy and priorities have been outlined on the basis of the situation in Lithuanian rural areas and in particular the problems identified following the SWOT analysis. Before describing the objectives, strategy and priorities for the agriculture and rural development it is important to mention that the two key legal documents governing agriculture and rural development and defining the relation among the two were adopted, namely the Agricultural and Rural Development Strategy and Law on Agriculture and Rural Development. The Agricultural and Rural Development Strategy has been approved by the Parliament (Seimas) Resolution No VIII-1728 of 13 June 2000. The Strategy sets forth agricultural and rural development trends for the years 2000 – 2006 as well as the objectives, principles and priorities for agricultural and rural development. Law on Agriculture and Rural Development was adopted by Seimas on 25 June 2002 by Resolution No. IX-987. The provisions of the law are in compliance with the EU Common Agricultural Policy and the main EU legal acts regulating the agricultural sector and rural development. The law provides for the first time in legal documents embodied definition of rural development and it is spelled out as follows: “Rural development is the improvement of life quality of rural population, rural economic and social structures, development of social (communal) relations which are all together targeted at insurance of economic and social cohesion, creation of working places in rural areas and maintenance, protection and enhancement of ethno culture, landscape and nature values.” Thus, the below presented objectives, strategy and priorities have already been assigned a legal status, have gone through political debates and, no doubt, have been broadly discussed and finally agreed among politicians, social-economic partners playing the key roles in agriculture and rural development. Furthermore it should be outlined that practical experience accumulated by political, administrative authoritative as well as farmers in implementing the SAPARD programme as well as EU CAP-like nationally funded measures has been to a great extent taken into consideration while drafting this documents and in particular measures aiming at implementation of the defined strategy. 6.1. The objectives hierarchy for Rural development

The problems related to agriculture and rural development identified in the chapter 5.10 are the core elements constituting the base for the formulation of the objectives and further


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strategy for rural development and agriculture in Lithuania. Below in Figure 15 a coherence between the objectives set in the Single Programming Document and Rural Development plan is presented following the objective hierarchy logic. The objectives laid down in the two main programming documents indicate a vertical consistency between the operational, specific and overall objectives within the RDP and SPD respectively. The overall objective in the RDP corresponds to the specific objectives set in the SPD and it is considered a very important aspect in ensuring that activities carried out within both documents are aiming at fulfilment of the same objectives. Additionally, it secures that operational objectives contribute to the specific objectives and further to the overall objectives for rural development in Lithuania. Thus, in order to reach the defined objectives in both programming documents the measures taken all together are designed so in order to address the identified problems in a coherent and synergy-based manner. Moreover, the National support programme will also be available and the all three available sources, it is expected, will remedy the identified problems in the most efficient way. Further in the Chapter 6.2.1. a more detail presentation of the overall SPD document as well as measures to be implemented in relation to rural development, agriculture and fisheries is provided. Chapter 6.2.2. details the Special Rural Support Programme. The objectives of individual measures to be implemented within the scope of this RDP are detailed in the section 6.2.3. The extent to which the strategy takes into account the problems identified and what measures from the existing programming documents and how will contribute to the improvements in rural development and agriculture are tackled in Chapter 6.2.


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Figure 15: Hierarchy of objectives6

Measure 2:

6 Fishery sector is not further elaborated in this Rural Development Plan as it is addressed by the Single Programming Document

Creation of the competitive EU market-oriented agriculture, encouraging of food safety and development of marketing allowing to use the existing possibilities more effectively and to ensure employment in rural areas;

Overall objective for Rural Development and Agriculture in SPD On the basis of natural resources and existing residents’ traditions, to seek creation of the modern agriculture and fisheries and to mitigate negative social and economic consequences in the rural

and coastal areas caused by modernisation.

Specific objectives for Rural Development and Agriculture in SPD

Creation of possibilities to diversify economic activities in rural areas, and for agricultural producers – to engage in additional economic activities by fostering the biological diversity, landscape and environment;

Overall RDP objective Competitive agriculture, possibilities for diversification of activities, protection

of environment

Specific objectives of RDP • Iimprovement of agricultural structures and competitiveness • Improvement of incomes for farmers • Improvement of the environment • Provision of alternative sources of income through afforestation programme, compatible with the

protection of natural values • Alleviation of cash flow constraints in the semi - subsistence farms • Assistance for agricultural producers to cover the expenses they must incur to take their production

and livestock farming facilities into compliance with applicable EU requirements. • Awareness raising and capacity building

Measure 3: Agri-Environment

Measure 4: Afforestation of agricultural land

Measure 5: Support to semi-subsistence farms undergoing restructuring

Measure 2: Less-favored areas and areas with environmental restrictions

Measure 1: Early retirement

Measure 6: Meeting EU standards

Creation of the resource-based and market-oriented modern and competitive fisheries sector complying with the EU requirements by lightening social consequences of the restructuring.

MEASURES

Measure 7: Technical Assistance


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6.2. Overall Rural Development Strategy and Priorities Lithuanian rural development strategy aiming at fulfilment of the objectives set above and in the short run softening whereas in the long run eliminating the key problems identified is expressed in the three main strategic guidelines for rural development and is formulated as follows:

Modernisation of agricultural production sector;

Improvements of life of rural population by investing in engineering, business and services infrastructure and by providing rural people with favourable conditions to be involved in alternative activities and receive additional income;

Development of human resources for adapting to changes in the countryside and

promotion of initiative of rural communities; which are further transformed into the concrete measures (priorities) to be implemented within different programmes, namely SPD, RDP and Special Rural Support Programme (SRSP) which is funded nationally (state aid from 2004 May 1)7 Rural Development Plan has been prepared in the context of the Single Programming Document and the measures proposed in the Rural Development Plan complement the Single Programming Document measures as well as the SASP in order to ensure that proposed actions interplay with one another to obtain synergy and sustainable results for rural development. The current chapter presents in detail the scope and the measures to be implemented within the Single Programming document (section 6.2.1..), SRSP (section 6.2.2.) and in much greater detail the role of the Rural Development Plan (section 6.2.3.) as well as objectives of the individual measures implemented within this Rural Development Plan. Table 36 provides a summary list of all the measures to be implemented in the period 2004-2006 with the financial allocation for each of the measure. Further the Table 37 presents the compatibility and coherence between the mentioned documents and shows how the key issues highlighted in section 5.10. will be addresses through all available measures within the period 2004-2006. It can be easily observed that this RDP will in one or another manner address most of the problems identified. It is important to emphasize ones again that none of the Programming documents mentioned is in the position of solving the identified problems alone and therefore the programmes are designed in a manner which would ensure that the measures taken all together result in to a maximum benefit to the process of softening and eliminating the identified problems.

7 The approval of the list of the state aid measures will be a subject to a separate procedure and therefore at this stage in this Rural Development Plan only an indicative list of the state aid measures is provided.


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All the measures included in the Single Programming Document, Special Rural Support Programme and this Rural Development Plan are integral with the agriculture and rural development policies both at the European and national levels. It is in line with the Common Agricultural Policy aiming at gradually reducing direct subsidies for production while expanding measures which support the maintenance of an environmentally responsible, competitive and sustainable agriculture. The measures are defined in a way that would help to establish such farming conditions which would enable those engaged in agriculture and forestry to meet the challenges of the reformed CAP.

Table 36: List of measures in 2004-2006 and allocated financial resources Measures Total Public

Funding, million EUR

EU Contribution million. EUR

Single Programming Document Measure 1: Investment in agricultural holdings 111,623 40,613 Measure 2: Setting up of young farmers 16,334 12,250 Measure 3: Improving processing and marketing of agricultural products 66,920 22,210 Measure 4: Promoting adaptation and development of rural areas 88,293 39,164 Measure 5: Forestry 8,656 4,630 Measure 6: LEADER+ type measure 2,715 2,036 Measure 7: Training 2,659 1,995 Measure 8: Fishing fleet related actions 12,159 7,276 Measure 9. Protection and development of aquatic resources, aquaqulture, fishing port facilities, processing and marketing, and inland fishing

10,312 3,716

Measure 10. Other (fisheries related) activities 1,500 1,125 TOTAL 321,171 135,015

Rural Development Plan Measure 1: Early Retirement 90,231,640 72,185,312 Measure 2: Less favoured areas and areas with environmental restrictions 177,137,105 141,709,684

Measure 3: Agri-environment 94,652,010 75,721,608 Measure 4: Afforestation of agricultural land 6,965,405 5,572,324 Measure 5: Support for semi-subsistence farms undergoing restructuring 7,691,960 6,153,568

Measure 6: Meeting standards 107,309,430 85,847,544 Measure 7: Technical assistance 5,725,775 4,580,620 Measure 8: Top-ups for direct payments 119,411,240 95,528,992 Projects approved under Regulation (EC) No. 1268/1999 2,750,435 2,200,348

TOTAL 611,875,000 489,500,000 Special Rural Support Programme8 Measure 1. Aid for the acquisition of breeding animals

8 The table lists indicative measures to be supported from national budget, which may be subject of further change. Financial allocations at the stage of the preparation of the RDP were not finalised, therefore those are not included in the current draft of the RDP. Detailed description of indicativeindicative measures is provided in chapter 6.2.2.


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Measure 2. The breeding programme Measure 3 Aid for the acquisition of propagating material of certified plants

Measure 4. Compensation for credit interest Measure 5. Partial compensation for insurance premiums Measure 6. Support in providing guarantees Measure 7. Support for production of high quality agricultural and food products as well for promoting the sale of such products

Measure 8. Scientific research Measure 9. Implementation of the system of licensed storage depots (formation of the compensation fund)

Measure 10. Aid for aquaculture Measure 11. Funding of preventive measures as regards bovine spongiform encephalopathy

Measure 12. Funding of animal waste management Measure 13. Support for partial compensation of costs of the procured energy resources by the modernised winter greenhouses

Measure 14. Aid to agricultural entities engaged in commercial fruit and berry production

Measure 15. Funding of the programme for the control of transmissible diseases of animals

Measure 16. Support for applied research in Fisheries sector

Measure 17: Farmer's training and consultation services Measure 18. Organisation of national and international agricultural exhibitions, fairs and contests

Measure 19. Maintenance of land reclamation installations

Measure 20 Aid for the purchase of state-owned and private land

Measure 21. Aid in the event of a disaster Measure 22. For the implementation of eradication system of potato diseases (potato ring rot, ralstonia solanacearum)

Measure 23. Aid for commercial horticulture and potato production

Measure 24. For direct payments to milk producers Measure 25. Biofuel production development programme

Measure 26. Compensation for natural and legal body's claims for agricultural production bought for processing by undertakings that went bankrupt or are next door to bankruptcy


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Table 37: Compatibility and coherence between measures in relation to the key problems in agriculture and rural development Problem SPD measure RDP measure SASP measure 1. Small average farm size

M.1. Investment in agricultural holdings M 2. Setting up of young farmers M. 7. Training

M.1. Early retirement Measure 4. Compensation for credit interest Measure 5. Partial compensation for insurance premiums Measure 6. Support in providing guarantees Measure 20. Aid for the purchase of state-owned and private land Measure 23. Aid for commercial horticulture and potato production

2. Low income and lack of sources of income (overdependence on agriculture)

M.1. Investment in agricultural holdings M.2. Setting up of young farmers M.5. Forestry

M. 2. Less favoured areas and areas with environmental restrictions M. 4. Afforestation of agricultural land

Measure 4. Compensation for credit interest Measure 5. Partial compensation for insurance premiums Measure 10. Aid for aquaculture Measure 14. Aid to agricultural entities engaged in commercial fruit and berry production Measure 17. Farmer's training and consultation services Measure 18 Organisation of national and international agricultural exhibitions, fairs and contests Measure 23. Aid for commercial horticulture and potato production Measure 24. Direct payments to milk producers Measure 25/Biofuel production programme Measure 26. Compensation for natural and legal body's claims for agricultural production bought for processing by undertakings that went bankrupt or are next door to bankruptcy.


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3. Lack of technology both in primary production and processing sector

M.1. Investment in agricultural holdings M.2. Setting-up of young farmers M.3. Improving processing and marketing of agricultural products

M. 5. Support for semi-subsistence farms undergoing restructuring M.6. Meeting standards

Measure 1. Aid for the acquisition of breeding animals Measure 2. The breeding programme Measure 3 Aid for the acquisition of propagating material of certified plants Measure 4. Compensation for credit interest Measure 5. Partial compensation for insurance premiums Measure 6. Support in providing guarantees Measure 7 Support for production of high quality agricultural and food products as well for promoting the sale of such products Measure 8. Scientific research Measure 9. Implementation of the system of licensed storage depots (formation of the compensation fund) Measure 11. Funding of preventive measures as regards bovine spongiform encephalopathy Measure 12. Funding of animal waste management Measure 13. Support for partial compensation of costs of the procured energy resources by the modernised winter greenhouses Measure 14. Aid to agricultural entities engaged in commercial fruit and berry production Measure 15. Funding of the programme for the control of transmissible diseases of animals Measure 16. Support for applied research in Fisheries sector Measure 17. Farmers' training and consultation services Measure 18: Organisation of national and international agricultural exhibitions, fairs and contests


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Measure 22. For the implementation of eradication system of potato diseases (potato ring rot, ralstonia solanacearum

4. Insufficient social infrastructure

M.4. Adaptation and development of rural areas M. 6. LEADER+ action M.7. Training

M.7. Technical assistance Measure 17. Training and consultation services for farmers

5. Insuficient physical insfrustructure

M.4. Adaptation and development of rural areas

Measure 19. Maintenance of land reclamation installations

6. Threats towards the environment and cultural heritage

M.1. Investments in agricultural holdings M.5. Forestry M.7. Training

M.2. LFA and areas with environmental restrictions M.3.Agrienviroment M. 4. Afforestation of agricultural land

Measure 12. Funding of animal waste management Measure 17. Farmers' training and consultation services Measure 19. Maintenance of land reclamation installations Measure 25 Biofuel production development programme


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6.2.1. Single Programming Document The Single Programming Document outlines the overall development objectives and strategy for the country as a whole with a view to narrowing the development gap between Lithuania and the EU countries. The overall objective of the set out in the Single Programming Document for the period 2004-2006 is defined as follows: Strengthen the preconditions for growth in long-term national economic competitiveness and rapid development of knowledge-based economy in terms of GDP and employment growth, leading to increasing well-being and higher living standards in the entire country for its all inhabitants. Thus, the baisis of the national economy development strategy is rapid GDP growth which in the long run would create favourable conditions both for the increase in employment and income. The strategy aiming at reaching the above mentioned overall national development objective stands on the three specific tasks: The specific objectives of the development plan are set out below: • to develop physical infrastructure that would allow to encourage new, and use the existing,

movement of goods, services and people through and in Lithuania to its full extent, and would also allow environmentally sustainable economic development;

• to develop adaptable labour force, eliminating deficiency of its qualifications (first of all, among the unemployed and youth) and providing it with the required abilities;

• to strengthen potential of economic competitiveness through providing preconditions and promoting a more viable setting up and development of businesses and more active economic restructuring;

The Development Strategy set out in the SPD seeks to ensure that resources are invested in such a way as to maximise the potential benefits for the implementation of the longer-term vision. The national development strategy focuses on:

1. Investments into physical infrastructure in order to create possibilities for maximal use of the favourable country’s geographical location which determines big potential for the trade (export) as well as transit;

2. Further implementation of the policy orientated to the lately achieved macroeconomic stability, which is the key precondition for the substantial growth of the economy;

3. Investments into society’s know-how and abilities to adjust themselves in a rapidly changing economic environment;

4. Investments into social integration oriented to the immediate restructuring of the existing poverty zones in rural and urban areas and elimination of the social disjuncture.

The strategy will be addressed through four priority areas:

• social and economic infrastructure of the economy, • human resources,


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• manufacturing sector and services, • agriculture, rural development and fishery.

The SPD envisages total expenditure of 1.341,084 million EUR over the 3 years programming period with 792,100 million EUR of that amount coming from the EU. As it can be seen, the rural development is perceived as one of the core areas successful development of which is of utmost importance aiming at the fulfilment of the above-defined national development overall objectives. Total financing (private and public) foreseen in the SPD for the rural development and fisheries makes 321,171 million EUR where EU funds will amount to 135,015 million EUR, national funds and private funds – 186,156 million EUR respectively. In addition, rural areas will also substantially benefit from investments proposed across the country as a whole related to employment and training, roads, housing, health, transport etc. Below it is presented how SPD priority „Agriculture, rural development and fishery“ will address the identified problems and contribute to the rural objectives set and strategy defined. Creation of the competitive agriculture, encouraging of food safety and developments of marketing Investments supported within SPD will be targeted at improvement of the farm structure and ensuring of the development of economically strong and competitive agricultural units. It will also be sought that the production efficiency at farms would be increased, modern equipment and technologies would be purchased, production quality and safety would be ensured and hygienic and environment standard would be complied with. In addition to that, it will be sought to diversify agricultural activities. The expectations are that the quality of agricultural products will improve and income of residents employed in the agricultural sector will increase as a result of these initiatives. The adaptation of new technologies and development of human resources will create conditions for the enhancement competitiveness in the farm sector, resident income growth and improvement of life quality in rural areas. When improving the farm structure, the growth in the number of young farmers will be promoted in order to enhance competitiveness in the farm sector as young farmers tend to adapt better to modern technological changes and new competitive environment. Also, it will be aimed at stabilising the demographic situation in the countryside, as young people will be encouraged to remain in rural areas. The greatest attention will be paid to farm restructuring. Mainly, the following three inter-related Measures will be aimed at achieving this objective: • “Investment in Agricultural Holdings”, • “Setting up of Young Farmers” , and • “Reparcelling” activity of the “Adaptation and Development of Rural Areas” Measure. The Measure “Investment in Agricultural Holdings” will create conditions for the implementation of one of the objectives of this priority: to create a market-oriented competitive primary agriculture


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ensuring food safety and marketing development which allows to use more effectively existing multi-functional sector possibilities and to ensure employment in rural areas. The Measure support will create conditions for the strengthening and growth of farms as well as more favourable conditions – for enhancement of their competitiveness. The implementation of the Measure “Setting-up of Young Farmers” is aimed at the increase of the number of young farmers. Simultaneously, it is sought to improve competitiveness in the farm sector as young farmers are able to adapt more effectively to the changes in modern technologies and new competitive environment. Also, this Measure will help to stabilise the demographic situation in the countryside, as young people will be encouraged to remain in rural areas. Support provided by the Measure “Improving Processing and Marketing of Agricultural Products” is aimed at further modernising companies processing meat, grain, fruit and vegetables, milk and other products, reducing production costs, implementing quality and environment management systems, improving hygienic conditions and product quality as well as product marketing. This will allow to improve competitiveness of the industry. Creation of possibilities to diversify economic activities in rural areas by fostering biological diversity, landscape and environment With the view to achieve the goals of the balanced development of rural areas in Lithuania, particular attention will be paid to the improvement of the infrastructure and promotion of alternative economic activities. The following measures have been foreseen to achieve this objective: “Forestry” and “Adaptation and Development of Rural Areas”. The latter comprises a wide range of activities such as reparcelling, agricultural water resources management, services to farms and businesses, promotion of tourism and crafts activities and restoration of the rural (ethnographic) heritage. Restructuring of the multifunctional agriculture is closely linked with all the groups of rural residents. Therefore, this Measure comprises support intended for the adaptation and development of rural areas by creating appropriate conditions for rural residents to engage in farming or other activities ensuring income and appropriate standard of life and creating additional jobs in the countryside. In the course of the agricultural reform small and fragmented land plots has been formed, and therefore, particular attention will be provided to land plot consolidation projects which will be intended for reorganisation of land plots in order to enlarge them, to form rational land use in farms and to improve their structure, to create the necessary rural infrastructure and to implement other goals and tasks of the agricultural and rural development and environmental policy. A major focus will be put on the improvement of the rural engineering infrastructure, which is a must for successful farming, engagement in other activities or ensuring of proper living. This includes the renovation and improvement of settlement and field drainage systems for common use, water network and their hydro-technical structures. A great number of farms do not keep their books and accounts and farmers find it complicated to obtain the most recent information, but they will have to comply with stricter land management obligations as


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part of new cross-compliance requirements, which will be applied to the standards established in the fields of environment protection, food safety, animal welfare and health and work safety. Taking into consideration the aforesaid circumstances, it is necessary to activate the provision of advisory services. The development of activity related to rural tourism and crafts, as well as that of other alternative businesses, comprises support intended for the development of services in rural areas, creation of conditions suitable for the diversification of activities and provision of possibilities to rural residents to earn additional income and improvement of life and work conditions in the countryside. Support for the preservation of ethnic cultural values will not only help to retain the uniqueness of the Lithuanian rural municipalities, but it will also promote tourism in the country’s ethnographic regions and contribute to the development of the economy of rural areas and creation of attractive image of the country’s regions. The Measure “Forestry” is targeted at the economic, ecological and social value of forests in the development of rural areas by focusing the main attention on the capital investments in the private forest holdings. This Measure is scheduled to create conditions for the development of private forests by providing them with investment support not only for the improvement of the forest infrastructure, but also for logging and primary wood processing. The intentions are to create new jobs by promoting investments, and thus, to reduce unemployment in rural areas. Benefit derived from other forest products (animals, mushrooms, berries, herbs, Christmas trees) also gives an opportunity to rural residents to obtain additional income.

In addition to that, start-up support will be provided to newly established forest owners’ associations, which would help their members to implement modern forest management methods and ensure production sales, as the network of organisations uniting forest owners is insufficient at present. Significant attention will be paid to the principles of the harmonious forest sector management and improvement of the landscape and environment. In compliance with the EC Revised Common Draft Position, support is scheduled for forest fire prevention measures. This support will be provided under the Forest Fire Prevention Plan drafted by Lithuania which classifies forest areas according to the risk of a fire. In compliance with the provisions of Chapter VIII of the EC Regulations No. 1257/1999, support will be provided for prevention measures to be taken in forests with the high and average fire risk. Implementing the provisions of the General Plan of the Territory of the Republic of Lithuania approved by the Resolution No. IX-1154 of the Seimas (Parliament) of the Republic of Lithuania and those of the Lithuanian forestry policy and its implementation strategy approved by the order No. 484 of 17 September 2002 of the Minister of Environment regarding the expand the country’s woodlands, support will be also provided for afforestation of non-agricultural land and it will supplement the measure included in this RDP dealing with afforestation of agricultural land. . The following two Measures have been foreseen to foster human resources and to strengthen self-confidence of rural residents, namely, “Leader plus type activities” and “Training”.


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Lithuania intends to apply the model combining the two alternatives of the implementation of LEADER plus initiative proposed by the EC to candidate countries. The essence of this model is that the actions of preparation for the implementation of this initiative will be taken. These actions will comprise the institutional and methodological preparation, area studies and development of integrated rural development strategies and creation of local action groups as well as the actions of the second alternative by implementing strategies formulated on the territorial basis in pilot areas. This choice is based on the fact that the actions of Lithuanian institutions and self-government organisations, which have been carried out together with international support projects until the present, allow to believe that certain preparation work has already been done in the country, in particular pilot areas in which partnership groups (prototypes of local action groups) are being formed and they are ready to help to resolve issues of territorial rural development. Human resource development in the countryside is one of the most important factors in implementing the main tasks of rural development. Therefore, the “Training” Measure has been developed; this Measure comprises development of rural residents’ abilities to adapt to the technology and market changes, which is necessary for active participation in all Measures intended for rural development. Training of farmers and other persons related to agricultural, forestry or alternative activities is necessary in order to acquaint persons employed in the agricultural sector with the most recent quality, environmental, hygienic, bio-diversity and landscape preservation requirements, new production technologies, economic farming methods and alternative activities in rural areas as well as to provide other knowledge required for the adaptation to the quality and quantity changes taking place in the countryside. The SPD will also significantly contribute to the Creation of Modern and Competitive Fisheries. Since none of the measures to be implemented under this Rural Development Plan has direct relation to the measures dealing with Fisheries, it has been decided for the sake of consistency and conciseness not to present the Fishery measures in detail. Thus, having presented the role of the measures within SPD, in summary, it should be stated that investments under the rural and fisheries development priority taking into consideration the EU regulations stipulating the rules for the use of funds of the “Guidance” Section of the European Agricultural Guidance and Guarantee Fund and the Financial Instrument for Fisheries Guidance, have been scheduled in the following Measures: Measure 1: Investment in agricultural holdings Measure 2: Setting up of young farmers Measure 3: Improving processing and marketing of agricultural products Measure 4: Promoting adaptation and development of rural areas Measure 5: Forestry Measure 6: LEADER+ type measure Measure 7: Training Measure 8: Fishing fleet related actions Measure 9. Protection and development of aquatic resources, aquaqulture, fishing port facilities, processing and marketing, and inland fishing


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Measure 10. Other (fisheries related) activities 6.2.2. Special Rural Support Programme Additionally, National support under Special Agricultural Support Programme is foreseen for the following indicative measures, which are a subject to separate procedure of approval: Measure 1. Aid for the acquisition of breeding animals Measure 2. The breeding programme Measure 3 Aid for the acquisition of propagating material of certified plants Measure 4. Compensation for credit interest Measure 5. Partial compensation for insurance premiums Measure 6. Support in providing guarantees Measure 7. Support for production of high quality agricultural and food products as well for promoting the sale of such products Measure 8. Scientific research Measure 9. Implementation of the system of licensed storage depots (formation of the compensation fund) Measure 10. Aid for aquaculture Measure 11. Funding of preventive measures as regards bovine spongiform encephalopathy Measure 12. Funding of animal waste management Measure 13. Support for partial compensation of costs of the procured energy resources by the modernised winter greenhouses Measure 14. Aid to agricultural entities engaged in commercial fruit and berry production Measure 15. Funding of the programme for the control of transmissible diseases of animals Measure 16. Support for applied research in Fisheries sector Measure 17: Farmer's training and consultation services Measure 18. Organisation of national and international agricultural exhibitions, fairs and contests Measure 19. Maintenance of land reclamation installations Measure 20 Aid for the purchase of state-owned and private land Measure 21. Aid in the event of a disaster Measure 22. For the implementation of eradication system of potato diseases (potato ring rot, ralstonia solanacearum) Measure 23. Aid for commercial horticulture and potato production Measure 24: For direct payments to milk producers who sell their milk for processing Measure 25: Biofuel production development programme Measure 26: Compensation for natural and legal body's claims for agricultural production bought for processing by undertakings that went bankrupt or are next door to bankruptcy.


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Below it is provided short description on the measures Lithuania wishes to maintain in rural development and agriculture after accession and which will be nationally funded. Measure 1. Aid for the acquisition of breeding animals Application period The measure has been applied since 1994. The end of the application period has not yet been projected. Objective of aid The objective of rendering aid for the acquisition of breeding animals shall be to encourage farmers, agricultural companies and other economic entities to raise animals of better breeds so that the products manufactured were competitive due to an improved quality. Measure 2. The breeding programme Application period The measure has been applied since 1992 and is planned to be continued. Objective of aid The aim of financing in the breeding sector shall be to encourage animal breeders to improve the genetic potential of animals, to improve the performance of animals and to expand the number of animals of high performance through the application of modern breeding technologies as well as to conserve the existing gene pool of animals. Measure 3 Aid for the acquisition of propagating material of certified plants Application period The measure has been applied since 1994 and is planned to be applied until 2007. Objective of the measure The objective of the measure is to create more favourable conditions to land users to provide themselves with propagating material of good quality having regard to a great importance of the quality of propagating material to the yield of agricultural plants, to the competitiveness of produce and to the complexity of the production of such material. Measure 4. Compensation for credit interest Application period The measure has been applied since 1992 and is expected to be continued. Objective of the measure The aid under this measure aims at creating more favourable conditions for farmers to make use of loans as well as to increase and promote investments in the development of the agricultural sector. Measure 5. Partial compensation for insurance premiums Application period The measure has been applied since 1999 and will be continued. Objective of the measure The objective of the measure is to promote voluntary insurance whereby insurance undertakings would compensate to a greater extent agricultural entities for the losses incurred as a result of an accident, thus to reduce the part of state funds earmarked for the support of the victims.


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Measure 6. Support in providing guarantees Application period The measure started to be implemented in 1998 and will be continued. Objective of the measure The objective of the measure is to provide guarantees to farmers in obtaining loans as well as to ensure stable functioning of the Rural Credit Guarantee Fund. Measure 7. Support for production of high quality agricultural and food products as well for promoting the sale of such products Application period The measure has been under implementation since 2001, it is to be continued Objective of the measure The objective of the measure is to encourage the improvement of the quality of agricultural products, implementation of a modern composition and quality testing system, ensure the hygiene, environmental, plant, animal and food safety requirements. Measure 8. Scientific research and development Application period The measure has been applied since 1990 and is to be continued until 2007.. Objective of the measure Support will be provided to educational and science, scientific research institutions, groups of scientists that are engaged in agricultural scientific research as well as implementation of the results of such research and are involved in promotion of the outcomes of the research. Measure 9. Implementation of the system of licensed storage depots (formation of the compensation fund) Application period The measure started to be applied in 2003. At least 7 years the licensed storage depots alone will not be financially capable of establishing the Compensation Fund of a sufficient amount, therefore in 2003-2010 aid must be granted from the national state aid funds until contributions and payments of the licensed storage depots to the Compensation Fund even with aid granted for the implementation of the said measure from the national funds. Objective of the measure 1. The main objectives of the Compensation Fund shall be as follows: 1.1. to accumulate funds in order to ensure the rights of claim to the commercial banks and other credit institutions resulting from the crediting relations and compensate for the losses resulting from the loss or damage of goods incurred by the owners of the stored goods that will not be compensated by a storage depot or/and insurance company; 1.2. to compensate for the losses incurred by the holders who lost storage certificates, double storage certificates or mortgage certificates separated from double storage certificates (hereinafter referred to as „the beneficiary of the compensation“). Upon the establishment of the Compensation Fund, credit institutions (commercial banks or credit unions) while extending short-tem loans to the holders of double storage certificates or mortgage


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certificates separated from double storage certificates shall not require to give any additional guarantees in respect of mortgaged goods kept in the licensed storage depots. Measure 10. Aid for aquaculture Application period 2002-2010 Objective of the measure The objective of the aid is to reduce the morbidity of fishing ponds, to eradicate certain decease's and parasites, to improve the conditions of fish farming, to improve the quality of fish products as well as the competitiveness both in the domestic and foreign markets. Measure 11. Funding of preventive measures as regards bovine spongiform encephalopathy Application period Implementation of the measure started in 1997 and is being continued. Objective of aid The objective of the aid is to adopt control measures with regard to transmissible spongiform encephalopathies in the Republic of Lithuania. Measure 12. Funding of animal waste management Application period The measure has been applied since 2002 and is planned to be continued. Objective of the measure The objective of the measure is to collect all animal waste and to recycle in order to prevent pollution, transmission of deceases. Measure 13. Support for partial compensation of costs of the procured energy resources by the modernised winter greenhouses Application period Aid granted since 2001 and is expected to be continued until 2007. This measure has been applied since 2001 and is planned to be applied until 2007. Objective of the measure Aid from the state budget would enable agricultural entities, which operate modernised heated greenhouses, to acquire grading and packaging equipment, packages, labels, etc. Measure 14. Aid to agricultural entities engaged in commercial fruit and berry production Application period Aid paid since 2002 and is expected to be continued until 2007. Objective of the measure Aid for commercial fruit and berry production would enable agricultural entities to introduce advanced production technologies, would stimulate the production of high quality dessert fruits and their adaptation to environmental requirements, and would accelerate the introduction of the provisions of compulsory quality requirements. Fruit and berry production would serve as a partial solution to acute social problems of rural areas as this sector would employ a particularly large workforce.


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Measure 15. Funding of the programme for the control of transmissible diseases of animals Application period In accordance with archival data, the control of transmissible diseases of pigs has been carried out from 1946. In the future, it is planned to carry out this measure continuously. Objective of aid The Programme objective is to define surveillance and control requirements for transmissible diseases of animals taking into consideration epizootic situation of transmissible diseases, the analysis of risk factors, prevention measures and the health status of animal herds. Measure 16. Support to applied research in Fishery sector Application period 1995-2010 Objective of the measure The aim is to ensure scientific technological progress in fishery sector, dissemination and application of novelties, to increase competitiveness of fishery sector in the domestic and foreign markets. Measure 17: Farmer's training and consultation services Application period Implemented since 1990 and is foreseen to be continued until 2007. Objectives of the measure The aim is to assist farmers in improving the quality of their produce, implementing novelties, developing alternative activities. Measure 18. Organisation of national and international agricultural exhibitions, fairs and contests Application period State aid for the organisation of international and national exhibitions, fairs and competitions and for the participation thereof has been granted since 1990. Is foreseen to be continued until 2007. Objectives of the measure Support for the organisation of agricultural exhibitions, fairs and competitions as well as the participation thereof of the agricultural enterprises, organisations and other legal entities is aimed at the promotion of the development of agriculture and food industry, providing conditions for Lithuanian agricultural and food products to compete successfully on the EU market; presenting agricultural and food products produced in Lithuania, the promotion of new technologies; market research for Lithuanian agricultural and food products, development of a long-term and mutually beneficial cooperation, the promotion of competition as well as the introduction of the latest research and know-how. Measure 19. Maintenance of land reclamation installations Application period Aid provided since 1921. Support for land reclamation in private land will be continued until 2005, no limitations for implementation are foreseen in terms of period for the state land.


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Objective of aid To preserve land reclamation systems installed by the state funds, to provide their proper maintenance with the ultimate objective – to ensure suitable soil moisture conditions necessary for plants. Measure 20. Aid for the purchase of state-owned and private land Application period 2004 - 2011. Objective of aid To provide favourable conditions for the purchase of agricultural land in order to carry out land consolidation, to define rational land use, to facilitate land market processes and to create competitive agriculture. Measure 21. Aid in the event of a disaster Application period Aid in the cases of disaster has been granted since 1992; aid in cases of disaster is to be granted continuously. Objective of the measure Intended for partial compensation of damage sustained by agricultural entities due to fires and other natural disasters. Measure 22. Support for the implementation of eradication system of potato diseases (potato ring rot, ralstonia solanacearum ) Application period This a new measure and its application is planned from the year 2004 until 2007. Objective of the measure To eradicate the sources of the agents of potato diseases and to preserve the Lithuanian seed potato production (this measure is intended for rendering support to the Lithuanian seed potato farms in which the sources of potato diseases (potato brown rot and potato ring rot) have been detected, to temporarily stop potato production (for 3-4 years) on such a farm. Measure 23 Aid for commercial horticulture and potato production Application period Aid to agricultural entities engaged in the growing of vegetables and potatoes will be applied from 2003 and will continue to be granted until 2006. Objective of aid Granting of aid from the state budget during the transitional period is necessary in order to introduce new agri-technical elements in the production of vegetables and potatoes – new fertilisers, plant and produce protection products; introduction of integrated sustainable and biological plant protection, acquisition of the highest quality seed and planting material, training of producers. Horticulture and potato production are manual labour–intensive. Decline of horticulture will result not only in the reduction of income of farmers who engage in horticulture and potato growing, but also in the rising unemployment rate in rural areas.


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Measure 24: For direct payments to milk producers who sell their milk for processing Application period Aid will be implemented until 2005. Objective of aid To avoid decrease in the income of milk producers in 2004. Measure 25: Biofuel production development programme Application period Will be implemented since 2004 and will be continued. Objective of aid To promote production of biofuel, to create employment possibilities in rural areas, To ensure that at the end of 2005 biofuel makes 2 % from the overall fuel consumption and at the end of 2010 – 5. 75 %. Measure 26: Compensation for natural and legal body's claims for agricultural production bought for processing by undertakings that went bankrupt or are next door to bankruptcy. Application period 2001 – 2006. Objective of aid To compensate partially the income lost by farmers due to the fact that produce from them was procured by the undertakings which are on bankrupt or are next door to bankruptcy. In such a way the social tension will be minimised in rural areas, farmers will have circulating assets to procure material for production (fuel, seeds, fertilisers, etc). 6.2.3. Rural Development Plan Having presented the Single Programming Document and the Special Rural Support Programme, in this section the detail presentation of the role of the Rural Development Plan in implementing the defined strategy is presented. The Rural Development Plan reflects seven structural measures proposed in the 2004-2006. Nevertheless, the Plan is of fundamental importance and, in terms of both financial and policy impact, it is as important as other structural measures proposed for the rural development and agriculture. Out of the seven measures three are optional measures proposed by the Commission aiming at addressing the specific needs of the new member states and have been chosen by Lithuanian to be implemented in the period 2004-2006. As the result the following measures of the Rural Development Plan

• early retirement, • less-favoured areas and areas with environmental restrictions • agri-environment • afforestation of agricultural land • Support for semi-subsistence farms undergoing restructuring • Meeting standards • technical assistance • top-ups for direct payments


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The measures are specifically targeted at certain problems identified in the chapter 5.10 and include proposals to address those as follows:

• Improvement of agricultural structures by attracting young people into farming • Improvement of incomes for farmers in designated disadvantaged areas through the

EU annual income support payments • Improvement of the environment through an ambitious agri-environment programme • The provision of a further source of income and employment opportunities for

farmers and rural dwellers through access to a substantial sustainable managed afforestation programme, compatible with the protection of natural values

• The income support and alleviation of cash flow constraints in the semi - subsistence farms that produce both for their own consumption and for the market through a flat rate annual aid aiming at turning those farms into commercially viable units.

• Assistance for agricultural producers to cover the expenses they must incur to take their production and livestock farming facilities into compliance with applicable EU requirements.

The aim of the additionally proposed “Technical assistance” measure is to increase awareness within the rural population about the possibilities available through the implementation of this Rural Development Plan as well as the requirements needed to be met. This measure is also extremely important in building and increasing the capacities both in absorption of the available funds and the administration of funds. Also, it will significantly contribute to ensuring close co-operation between the European Commission and competent national authorities, social and economic partners. It is expected that this co-operation will result not only in making the measures provided under this Rural Development Plan available to the public, but also in supervision of efficiency of the implementation of the measures and effects on agriculture. Additionally, as it has been agreed during the negotiation process with the EU, Government of Lithuania has decided to allocate certain part of the Rural Development budget for the direct payments. The aim is to annually reduce the allocation of the Rural Development funds for the direct payments meaning maximum of 25 % in the 2004, 20 % in 2005 and 15 % in 2006. Lithuania has decided not to implement the additionally to the new members states proposed measure “Assistance in establishing producer groups”. This conclusion has been reached after thorough consultations with key economic and social partners which consider this measure in comparison to the others proposed and available of a comparatively low priority and most important - lack of interest in this measure in rural society which it is expected would result into a very limited number of applicants. Objectives of Individual Measures under the Rural Development Plan and the expected impact In this chapter the expected impacts and results from the measures of the Rural Development Plan related to the overall objectives, specific and operational objectives is presented. Since one of the aims of the quantification of the objectives is to evaluate the effectiveness of the programme (ex-post evaluation), the quantification was carried out in a close coordination with the Commission guidelines for monitoring indicators and questions to be used during mid-term and ex-post evaluation.


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In order to standardise the programme evaluation procedures – both mid-term and ex-post - the Commission provides a set of guidelines for definition of monitoring indicators as well as for evaluation questions, judgement criteria and indicators across all measures. In defining the monitoring indicators the following EU documents have been used: VI/43512/02 FINAL:26.2.2002 and VI/12004/00 Final. The first document was used in defining the Input and Output indicators whereas the latter one for the definition of Result and Impact indictors. As the result, in the Annex 5 are listed physical and financial as well as result and impact indicators in the format produced by the Commission for each of the measures included in this Plan. It should be noted, that there has been a difficulty in defining the baselines for some of the indicators because of lack or no experience in implementing the measures thus the baselines have only been established for those indicators where certain experience exists or a starting position could be identified. Also, as requested by the guidelines the targets where possible are set. It is expected that both – the indicators and targets missing – could be possible to a certain extent to be established in the course of the programme implementation and if not, then the implementation of the measures will enable this process to be carried out in the drafting the following programming documents. Below a summary of the results and impacts for each of the measures in relation to the objectives hierarchy is presented. As it was already indicated in the beginning of this chapter, impacts relate to the overall objectives of this RDP, results to specific objectives and outputs to operational objectives. Early Retirement The overall objectives for the early retirement measure are • Improving of the farm and social structure; • Ensuring a certain income level for elderly farmers who decide to stop farming and for elderly farm

workers who lose their employment as a result of a farmer’s early retirement; • Increasing competitiveness of agricultural sector due to improved economical viability of the

transferred agricultural holdings. Further the specific objectives for the early retirement measure are: • Encourage about 30000 farmers beyond 55 years to stop commercial activities (30.000 holdings, 105.000 ha of land and 240.000 tones of Milk quota transferred to young farmers. • Average size of holding being transferred by transferor – 3,5 ha • About 5 per cent of land released for non agricultural purposes The operational objectives are the immediate output of the measure: 30000 farmers receive early retirement support each allocating an average of 3,5 ha of land and 8 tones of milk quota to be released. Of these, 75 per cent are small dairy farm holders, who are able to enter ERS beyond the normal retirement age. The above could be inserted into a table in order to provide a comprehensive and condensed picture of the impact of the measure.


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Table 38: Quantified objective hierarchy for Early Retirement measure Measure Output

(Operational objectives)

Result (Specific Objectives)

Impact (Overall objectives)

Early retirement

30000 farmers enter ERS, each allocating an average of 3,5 ha of land and 8 tones of milk quota to be transferred. 75 percent of benefit-ciaries are small dairy farm holders, who are able to enter ERS beyond the normal retirement age.

30.000 farmers and 600 farm workers and family helpers older than 55 stop comercial activities and receive income support 105.000 ha of land released and transferred to young farmers 240.000 tones of milk quota disposed on State Milk Quota Reserve and transferred to young farmers 5000 ha non-commercially viable land released for non-agricultural purposes (5 percent of 105.000)

Improving of the farm and social structure by

• increasing average farm size from 13,7 to 15,9 ha • increasing average herd of milk cows per holding from 2,26 to 3 • reducing the number of elderly farmers (over 55) from 60 to 45 percent • increasing the number of young farmers ( up to 40) from 14,4 to 16,7 percent Ensuring a certain income level for elderly retiring farmers, farm workers and their family helpers. Increasing competiti-veness of agricultural sector due to improved economical viability of the transferred agricul-tural holdings.

Less Favoured Areas and Areas with Environmental Restrictions The overall objectives for the LFA measure are: • to ensure sustainable use of agricultural land and thereby contribute to the maintenance of a viable

rural community, • to maintain farming in LFA and to maintain the countryside • to improve environment in LFA considering compliance with Good farming practice • to ensure implementation of the environmental restrictions and proper farming in areas with

environmental restrictions


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The specific objectives for the LFA measure are: 70000 farmers in LFA comply with good farming practice

• Maintenance of farming in LFA • Maintenance of farming in territories with environmental restrictions The operational objectives of the LFA measure:

26000 farmers in HDA with a total area of 301 305 ha enters the LFA scheme 44000 farmers in LDA with a total area of 1 165 678 ha enters the LFA scheme 5000 farmers will apply environmental restrictions in Natura 2000 areas for bird protection.

Expected impacts and results for LFA measure Measure Output




LFA 26000 farmers in HDA with a total area of 301 305 ha enters the LFA scheme 44000 farmers in LDA with a total area of 1 165 678 ha enters the LFA scheme 5000 farmers will apply environmental restrictions in Natura 2000 areas for bird protection

70000 farmers in LFA comply with good farming practice Maintenance of farming in LFA Maintenance of farming in territories with environmental restrictions

Ensuring the sustainable use of agricultural land and contribution to the maintenance of a viable rural community, Maintenance of farming in LFA and maintenance the countryside Improvement environment in LFA considering compliance with Good farming practice Ensuring implementation of the environmental restrictions and proper farming in areas with environmental restrictions.

Agri-environment The overall objectives for the agri-environment measure are the following: - Improvement of the environment (water quality, biodiversity, soil and landscape; preservation of

semi-natural agricultural habitats and other important ecological important areas) and production of healthy food;

- Provision of further source of income to farmers supplying environmental services resulting from the adoption of environmental-friendly farming practices going beyond usual good farming practice.


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- Reduction of the anthropogenic (of agricultural origin) load on the environment; - Improvement of the quality of surface and underground water, reduction of negative impact on the

environment of plant protection products; - Restoration or preservation of the traditional landscape of the Lithuanian countryside (meadows,

wetlands, marshes); - Production of good quality agricultural produce, while maintaining healthy environment for future

generations; - Increase of income of the rural population, improvement of their working and living conditions; - Keep and rear local endangered breeds of native domestic animals on farms - Increase farmers’ awareness of more environmentally friendly production practices.

The specific objectives for the agri-environment measure are: • Decrease in run-off by N and a following reduction in eutrophication • Decrease of temporary not used land; • Decrease of erosion; • Farmland under organic farming occupies 2% of all agricultural land. The operational objectives of the measure: 3 000 farms with a total of 60 000 ha enters the agri-environment scheme. Table 39: Expected impacts and results in Agri-environment Measure Output




Agri-environmnet

3000 farms with a total of 60 000 ha enters the agri-environment scheme.

Decrease in run-off N and a following reduction in eutrophication Decrease of temporary not used land Decrease of erosion Farmland under organicfarming occupies 2% ofall agricultural land 3000 farmers trained onagri-environmental schemes’ implementation

Improvement of the environment (water quality, biodiver-stiy, soil and lands-cape; preservation of semi-natural agricultural habitats and other important ecological areas) and production of healthy food. Provision of further source of income to farmers supplying environmental services resulting from the adoption of environmental friendly farming practices going beyond usual good farming practice. Building capacity and increase of farmers’ awareness of more environ-menttally friendly production practices.


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Afforestation of agricultural land The overall objectives for the forestry measure are: • Reduce dependency on agriculture of rural people • Increase of economical, ecological and social value of land holdings • Conservation of the environment, maintenance and promotion of biodiversity, enrichment of

landscape • Provision of new and long-term employment opportunities in rural areas • Provision of further source of income The specific objectives for the forestry measure are: • Increase in forest area (12.000 ha of land afforested) • Not less than 20 per cent of the afforested area is broadleaves species • Approximately 20 per cent. of the afforested area actualise priority function to contribute to the

protection of soil, air, water bodies and rural areas. The operational objectives of the measure are: • About 2500 landowners receive afforestation support allocating an average 4-5 ha of land to

afforestation. Quantified objective hierarchy Measure Output

(Operational objectives) Result (Specific Objectives)


Afforestation of agricultural land

About 2 500 landowners receive afforestation support allocating an average 4-5 ha of land to afforestation

Increase in forest area (12.000 ha of agricultural land afforestated) Not less than 20 per cent of the afforestated area is broadleaves species Approximately not more than 10 per cent of overall afforestated area is short rotation forests Approximately 20 per cent of the afforested area actualize priority function to contribute to the protection of soil, air, water bodies and rural areas

Reduce dependency on agriculture of rural people Increase of economical, ecolo-gical and social value of land holding Conservation of the environment, maintenance and promotion of bio-diversity, enrichment of landscape Provision of new and long-term employment opportunities in rural areas Provision of further source of income


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Support for semi-subsistence farms undergoing restructuring The overall objectives for the semi-subsistence measure are the following:

• Increased farm size and improved structure; • Increased competitiveness of farms, improvement of market- orientated sector.

The specific objectives for the semi-subsistence measure are:

• Increased income and improved liquidity; The operational objectives are:

• 14000 semi-subsistence farmers receive investment support (1000 EUR per year). Farmers also receive practical skills of participation in an investment scheme (preparation and submission of business plan, planning and implementation of investments, submission of requested documents proving the investments, to the NPA).

Table 40:Expected impacts and results for Support for semi-subsistence farms undergoing restructuring measure Measure Output




Semi- subsistence

14 000 semi- subsistence farmers receive support (1000 EUR per year)

Increased income and improved liquidity; increased machines, buildings and land

Increased farm size and improved structure Increased competitiveness of farms, improved of market- orientated sector, correspond-ding to EU agri- environmental requirements.

Meeting standards

The overall objectives for the measure Meeting standards are the following: • 2700 farms in compliance with EU requirements of Nitrate Directive; • 8000 farms in compliance with EU requirements regarding milking, milk storage and

transportation; • Improvement of the environment due to reduced nitrogen outlet • Improved competitiveness due to improved quality of milk and adoption of EU standards The specific objectives for the Meeting standards measure are:


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• 2700 manure storage facilities in accordance with EU requirements with a total capacity of 150.000 tons established

• 7000 milking equipment installed • 8000 milk storage facilities established The operational objectives of the measure: • 2700 farms with a total of 100 thousand LU enter the Meeting standards – Nitrate Directive

scheme; • 8000 farmers with a total of 75 thousand cows receive support for milking, milk storage and milk

transportation under the Meeting standards – Milk Directive scheme. Table 41: Expected impacts and results for Meeting standards measure Measure Output



Meeting standards

2650 farms with a total of 100 thousand LU enter the Meeting standards – Nitrate Directive scheme 8000 farmers with a total of 75000 cows receive support for milking, milk storage and milk transportation under the Meeting standards scheme

2650 manure storage facilities in accordance with EU requirements with a total capacity of 150 thousand tons established 8000 milking equipment installed 8000 milk storage facilities established

2650 farmers in compliance with EU requirements of Nitrate Directive 8000 farmers in compliance with EU requirements regarding milking, milk storage and transport (Milk Directive) Improvement of the environment due to reduced nitrogen outlet Improved competitiveness due to improved quality of milk and adoption of EU standards

Technical Assistance The overall objective of the measure is to ensure the efficient implementation of the Rural Development Plan at national, regional and local levels. The specific objectives are aiming at:

• Distribution of information on the support provided for in the Rural Development Programme and conditions of eligibility to potential support beneficiaries;

• Provision of technical support to institutions implementing installation, running and linking of computerized management, monitoring and assessment systems;

• Provision of technical support to institutions related with programme implementation targets and those carrying out the programme implementation monitoring;


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• Support to programme surveys and related visits, seminars; • Ensuring support of external expertise; • Provision of technical support in carrying out programme assessment; • Notifying the society on the implementation and role of the programme.

As emerge from the tables provided above the quantification of the objectives has only been carried out for the specific and operational objectives. The overall objectives are of a more qualitative nature and are therefore difficult to quantify. In a Table 42 below an estimate of a number of applicants expected to participate in the defined measures and financial allocations in the programming period for each of the measures are summarised. In respect to the economic impact of all the measures taken together with the financial resources assigned, they will no doubt have a considerable impact on incomes in rural areas, particularly if the multiplier effect is taken into account. Table 42: Estimated number of applicants and allocated financial resource for measures, 2004-2006 Measure Estimated

number of applicants

Total Funds allocated 2004-2006, mln. EUR

Early retirement 30000 76,541419 Less Favoured Areas and areas with environmentalrestrictions 70000 179,948871

Agri-environment 3000 68,091538 Afforestation of agricultural land 2500 13,032901 Support for semi-subsistence farms undergoingrestructuring 14000 9,970450

Technical assistance 5,921000 Projects approved under Regulation (EC) No. 1268/1999 3,371062 Meeting standards 10700 134,547759 Top-ups for direct payments 120,450000

6.3. Extent to which the Strategy takes into account the specific features of the areas concerned and compliance of the strategy with other EU policies It has already been outlined above how the objectives set and the strategy defined will address the identified key problems in rural development and agriculture. However, it is important to emphasise that this Rural Development Plan particularly will address the following problems or to be more precise aspects of the problems listed in the chapter 5.10. Thus, the defined strategy takes into account the following key features of the identified problems:

Age structure of farmers which is not in favour aiming at increasing average farm size, efficiency as well as competitiveness of agricultural sector, level of incomes – about half of the registered farmers are over 60 years old, 21 percent – 50 - 59 years old, and only 14 % – farmers up to 40.


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The income disparities between those farming in the less favoured areas and normal areas and depopulation in LFA. Also cash flow constrains in the semi-subsistence farms aiming at turning into a viable commercial units will be addressed as it tremendously relates to problem of lack of income in rural areas.

Difficulties in meeting EU standards related to the environment, hygiene and animal welfare as well as lack of technology in primary production. The fulfilment of those requirements is a prerequisite for a sufficient quality of produce and the increase of income is impossible without the improvements in the methods, technology and further in the quality of the agricultural production.

The need to ensure sustainable development with a particular emphasis on environmental aspects.

Possibility to increase areas of natural resources through afforestation programme and at the same time to guarantee additional sources of income in rural areas.

All measures in this particular CAP Plan are to be applied on a national basis. The overall strategy described earlier is targeted at solving all the rural development issues which are in demand to be addressed in the period 2004-2006 in relation to agriculture and forestry, including those falling within the terms of the EAGGF Guidance Fund. 6.3.1. Integration of Women and Men in the Strategy Equal opportunities have been and is considered a very important aspect both in the preparation of this Rural Development Plan and further in the implementation stage. The aim is not only to ensure equal opportunities for men and women but also to secure equal access for all people to use all possibilities offered by the Plan. The integration of women and men in the strategy is foreseen following the State Programme on Equal Opportunities for Men and Women. This Programme covers many areas thereby consolidating gender equality aspect in all areas of political and socio-economic life and implementing the provision\statement of the Government of Republic of Lithuania:

“To ensure equal opportunities for men and women in seeking education, in upgrading their skills, in employment, promotion, setting the salaries; to enable women to participate on equal conditions in all areas of political and public life and high-prestige activities, to occupy leading positions in public administration institutions”.

The main objectives of the National Programme for Equal Opportunities are to create equal opportunities for men and women to participate in all spheres of public life, to increase the representation of men and women in these areas where they do not participate equally, to achieve that services and financial resources as much as possible equally reach both women and men, to identify and seek to solve specific problems both of women and men.

Elimination of all forms of discrimination in all spheres of activity is the essential precondition to ensure human rights and welfare of everybody. Lithuanian legislation de jure provides for equal opportunities for men and women. However, it is even more important to ensure practical realisation of legal provisions. In this regard it is expected that this RDP will make a real contribution to the achievement of


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this aim by establishing equal opportunities for everybody to participate in implementation of measures of this programme. All the measures proposed in this Rural Development Plan are open to men and women equally. However, it should be noted that historically ownership of land in most cases is in the hands of men, they very often have the deciding role in investment development which take place on farms. However, the situation is slowly changing and more and more women are getting involved into farming. As stated above, all support available under this programme are available to applicants regardless of sex, once they satisfy defined criteria. 6.3.2. Future Environmental Obligations Lithuania adhered to the international initiatives and processes related to environment and is actively engaged in cooperation with European and other countries of the world, with an intent to ensure the sustainable use of natural resources as well as their preservation for future generations. During the last decade, following the restoration of Lithuanian independence, the country became an active participant in international legal collaboration. During this period Lithuania signed and ratified a number of legally and non-legally binding instruments and joined the whole range of global and regional processes. The environmental sector is probably one of the sectors, which has been mostly influenced by international conventions and treaties, establishing a framework for environmental protection and sustainable development on global and regional levels. Thus in the preparation process of this Rural Development Plan the international obligations that Lithuanian has a responsibility to fulfil as well as initiatives in relation to the environment have been taken into consideration. Further the review of the key international obligations having direct impact on the development of agriculture and forestry are presented. Greenhouse gasses Lithuania signed the Kyoto Protocol at the International Climate Change Conference in 1997 and committed itself to the agreement to reduce greenhouse gas emissions into the atmosphere at global level by 5,2 % until 2008-2012. Many European countries, including Lithuania, will have to reduce their greenhouse gas emissions by 8% until this period. A reduction of carbon dioxide emissions is possible provided if less organic fuel is combusted, renewable energy sources are used more effectively, energy efficiency increases, and structure of fuel balance is regulated. Forests are an extremely important carbon sink in Lithuania and, according to calculations produced by the Ministry of Environment; forests absorb one fourth of the total carbon dioxide emissions produced by fossil fuel combustion. Forests occupy one third of the country’s territory, and three fourths of this forested area is used for the production of timber. Pursuant to the provisions of the National Energy Strategy and the revised National Energy Efficiency Programme, Lithuania has amongst other objectives the following ones which directly are related to the development of agriculture and forestry to reach:

• Promote use of wood, forest and agricultural as well as household waste and other types of local fuel by applying economic, legal and institutional means.


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• Seek that the percentage of energy produced from local and renewable energy resources by year 2010 comply with the requirements of the EU Directives.

• Encourage and educate the agricultural and forestry sectors to grow such cultures that could be used in the production of energy resources.

• To introduce a compulsory use of local energy resources supplied by a newly built or renovated small-scale energy entities of local importance.

The annual wood fuel c consumption potential is about 3 million solid cubic metres (or 1.4 million solid cubic metres of logging waste in forests, 0.6 million solid cubic metres of industrial waste and 1 million solid cubic metres of firewood). Nowadays about 2 million solid cubic metres of firewood and wood waste are utilised for energy production by thermal power plants, which supply heat to centralised networks. Their aggregate capacity is about 100 MW. Wood is also burned in small local thermal units and installations. The 2 million solid cubic metres of wood combusted instead of heavy fuel oil reduce the emissions of CO2 by 1000 thousand tonnes, SO2 - by 15024 tonnes, NOx - by 1397 tonnes, and particulate matter - by 69 tonnes a year. During certain period wood fuel actually was not used in Lithuanian power plants. Today, with the assistance of PHARE programme and with the help of the Swedish, Danish and other governments, the total installed capacities of wood-based energy production exceed 110 MW. This would be equivalent to the combusted 99000 tonnes of heavy fuel oil, and it would cost 8.8 million US dollars. A move from heavy fuel oil combustion towards generation of an equivalent amount of energy from wood fuel would reduce the emissions of CO2 by 322839 tonnes, SO2 - by 4851 tonnes, NOx - by 495 tonnes, and particulate matter - by tonnes 89 per year. As it can be seen future development of forestry is of great importance in meeting the international obligations related to the reduction of gas emissions. As regards agricultural practices, these are also very important in climate change mitigation issues. The requirements set in the Code of Good Agricultural Practice (the key ones are presented in Annex 4) in the field of tilling and growing of agricultural crops could be one of the examples. The protection of the environment through the development of plant-growing agriculture, intensive, protective and organic agriculture, plants with longer vegetation period and intermediate plants; mechanical soil cultivation; types of organic fertiliser, their characteristics, nutrient substances in the manure, application of organic fertilises and the maximum recommended density of animals; times and technologies for manure and slurry spreading; norms and times for the application of mineral fertiliser; plans and other fertilisation measures; land liming; plant protection and dangers of pesticide usage; the reduction of pesticide consumption by alternative measures; pesticide consumption technologies; measures of safety and protection of the environment when consuming pesticides are very important factors to be seriously considered while farming as they, if properly applied, contribute significantly to the climate change mitigation.


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Animal husbandry practices are not less important - setting of grassland and pastures as well as proper maintenance of them, forage preparation and storage, building of animal shelters, sustainable feeding, proper manure/slurry storages are very important in minimising the evaporation of ammonia. Currently an intensive training of farmers is taking place as regards considerations of environmental requirements in farming in which the basis is the Code of Good Agricultural Practice. The time and also sufficient funds are needed for all farmers to comply with the defined requirements and this is a gradual process. However. Already today positive changes are observed in the sector as there are quite many measures which do not cost a lot to be implemented and the most important is to know how and when to undertake required actions. Therefore, training is the starting point and is being intensively undertaken both by consulting services and the farmers themselves. Having stated the nationally accepted principals related to the development of natural resources – both in term of increase and consumption – it is expected that measure “Afforestation of agricultural land” within this Rural Development Plan together with the investment instruments related to forestry, processing and use of wood within the EAGGF Guidance Section will contribute to the implementation of Lithuanian Forest Increase Programme 2003-2020 and further to the obligations related to the reduction/absorption of carbon dioxide emissions. As it was stated before this strategy aims at increasing Lithuanian forest cover by 3 percent in 20 years Biodiversity Lithuania has joined or ratified six conventions and one international agreement regarding protection of nature and biodiversity. Lithuania has acceded to the Convention on Wetlands of International Importance (Ramsar Convention) in 1993 as well as the Convention on Fisheries and the Protection of Fish Resources in the Baltic Sea and Protection Belts (Gdansk) in 1992. The Lithuanian Government has ratified the Convention on Biological Diversity (Rio de Janeiro) in 1995, the Convention on the Conservation of European Wildlife and Natural Habitats (Bern Convention) in 1996, CITES - the Convention on International Trade in Endangered Species of Wild Fauna and Flora (Washington Convention) in 2001, CMS - the Convention on the Conservation of Migratory Species of Wild Animals (Bonn Convention) in 2001, and Agreement on the Bat Protection in Europe in 2001. Recently Lithuania has implemented a state programme “Gene pool” that corresponds the European Council Directive 1467/94. Lithuania is one of 34 European countries participating in the European Co-operative Programme for Crop Genetic Resources Networks (ECP/GR) and one of 30 European countries taking part in the European Forest Genetic Resources Programme (EUFORGEN).

With the ratification of the Rio de Janeiro (1992) Convention on Biological Diversity (CBD) in July, 1995, Lithuania undertook an obligation to start implementation of the Convention. This includes preparation of the country study and action plans. The National Environmental Strategy of Lithuania approved in 1996 was the first step in preparing the action plans for biodiversity conservation, and was used as the background for the Action Plan for Biological Diversity Conservation.


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The National Biodiversity Strategy and Action Plan was approved in 1996. The document is prepared for 20 years although most of the actions are meant for 5 years (1998-2002). Below the key elements of the strategy and action plan related to the impact of agriculture on natural values are presented. With regard to agricultural environment ecosystems, the National Biodiversity Strategy and Action Plan states that any programme aimed at the restructuring of agriculture, including sustainable farming, sustainable or bio-organic agriculture should contain special sections and include measures for the preservation of the biological diversity. In areas which are highly valuable from the biological diversity protection point of view agricultural activities can be either regulated or totally prohibited. Considerable delimitation of agricultural activities should be compensated to juridical and physical persons. With the aim to ensure stability in biodiversity, the main arrangements in agriculture are the following:

• in developing agriculture organic agriculture should given a great priority. • cultivation systems of relatively low intensity should be applied to many agricultural crops

traditionally grown in Lithuania, • traditional technologies of cultivation which were in use before the boom period of mineral

fertilisers and pesticides application should be used more widely again, • to preserve and enlarge areas of natural grasslands and pastures, combining harvesting with

protection of biological species (plants, fungi, animals), • to stimulate interest in activity which decreases the speed of succession processes in

grasslands and wetlands, and which does not contradict the principles of biota protection, • to increase the abundance of fungi and fauna, their variety and activity in tillage area, • to form and sustain mosaic landscapes, • to minimise negative effect on the environment from elution of fertilisers and pesticides.

The main economic arrangements for supporting biodiversity within the agricultural landscape: • support of ecological farming by supplying reduced or cut credits; • making official agreements on ecological farming, which should foresee limitations (on

draining, landscape transformation etc.) necessary to product biodiversity in special (“sensitive”) places;

• in areas highly valuable for biodiversity, farming activity should be strictly regulated. In very special cases some activity should even be prohibited. Compensation for the losses which occur due to the regulation will be provided.

As regards forestry, the following tasks were set in this document to facilitate conservation of biodiversity:

• increase of woodenness in the country, • to balance the spatial distribution of forests in the country, • to promote establishment and maintenance of multi-specific forests, • to balance age structure of the forests, • to subdivide the forests according to the function,


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• to prepare technical guidelines for management towards greater biodiversity on forest tract and forest stand level.

Having highlighted the importance of sustainable activities in agriculture and forestry as well as in rural development it is obvious that Agri-environment, Afforestation and also measure to be applied in Less Favoured Areas and Areas with Environmental Restrictions in particular as well as all other measures in which undertaking of environmental requirements is obligatory is of great importance in ensuring protection and enhancement of biodiversity. Water policy Regarding the water resources and quality, the legal basis is being intensely managed in accordance with the requirements set by the EU water sector. A number of directives of the EU water sector have been transposed. In 2003 a new Law on Water (first adopted in 1997) has been approved by the Parliament which complies with the requirements of the new EU Water Policy Framework Directive and other EU water sources directives. So is the new Law on Water Management (2002, No. 36-1544). The strategy for water resources and protection has three basic directions – international, related to the reduction of the Baltic Sea pollution, national – reduction of pollution of interior surface and underground waters as well as the reduction of international water pollution to and from other countries. The principal provisions of the strategy for water resources consumption and protection are as follows:

• to reduce water pollution with household and industrial wastewater; • to improve the quality of drinking water; • to reduce water pollution with toxic substances; • to reduce water pollution from agricultural sources; • to improve the condition of waters for recreation; • to improve the condition of water ecosystems; • to rationally consume water energy resources; • to reduce pollution of the sea; • to seek to reduce the impact exerted by the neighbouring countries on Lithuanian water

resources.

Nitrates Directive (EU Council Directive 91/767/EEC) The Nitrates Directive is one of the most important directives in the environmental chapter of the negotiations of Lithuania’s accession to the EU. Lithuania has developed Code of Good Agricultural Practice which was submitted to the Commission in 2000 and is currently under implementation. Detaileddescription of the measures laid down in the CGAP are presented in Annex 4. Aiming at implementation of the EU Nitrate Directive Lithuania committed to fully implement the requirements of the Nitrate Directive through implementation of two action programmes. The first Action programme for the period 2004-2008 will be implemented in the entire territory of Lithuania.


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This means that the whole country is designated as the Nitrate Vulnerable Zone. In 2002, a working group was established at the Ministry of Agriculture that was responsible for the preparation of the Programme for protection of waters from pollution with nitrogen compounds from agricultural sources. The first Action Programme was approved by the GoL on 26th August 2003 No. 1076 and will come into force at the date of Lithuania’s accession to the EU. Beside the mandatory measures related to proper fertilisation by organic and mineral fertilisers, land use, crop rotations, the installation of proper manure/slurry storages will be mandatory to be installed in the livestock farms which have more then 300 LU and in all new farms being established. Further in the second action programme also smaller farms will have to obligatory install the manure storages. Currently, the joint order of the Ministry of Agriculture and Ministry of Environment is under preparation regarding the distribution of functions between the two ministries in implementing the Action programme and is expected to be approved in the 1st quarter of 2004. A summary of the Action programme is provided below. Long-term objective of the programme is – to implement Nitrate directive, to reduce water pollution, paying the biggest attention to nitrates and other chemical factors, which could negatively affect health of inhabitants, biological diversity, trespass traditional landscape, also to protect water against eutrophication in the Republic of Lithuania. Short-term objective is to create institutional capacity and first of all to implement measures laid down in the Nitrate directive, to reduce water pollution in the farms, which have more then 300 livestock units, to develop water pollution from agricultural sources monitoring and information system. The measures to be implemented under the first Action programme are divided in to 5 components, namely: I. Competence building The aim of the measures under this component is to increase capacities of the specialists of the institutions such as Ministry of Agriculture, Ministry of Environment, National Paying Agency under the Ministry of Agriculture, Lithuanian Agricultural Advisory Service as well as of the Regional Environmental Protection Departments and of farmers participating in the implementation of this Programme - to organise their training, to establish demonstration objects, farms which should be used for sharing the production experience and where the most suitable pollution prevention measures would be defined. A special attention is given to the problem related to the bad quality of drinking water in dug wells in the countryside – to raise awareness in public about measures needed to undertake to minimise/eliminate the problem to the extent possible. II. Measure related to the elimination of pollution from livestock farms. The measures under this component are aiming at elimination of pollution caused by livestock farms, first of all installing manure and slurry storages in the livestock farms having more then 300 livestock units. The decision was made by the Government of Lithuania to focus on the big farms in the first stage of the implementation of the Nitrate Directive as it is expected that those farms will remain in the


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future and therefore the costly investments made will be worth. Whereas at the present time, when structural changes are still taking place and smaller farms are still not clear whether they will remain in the future, are not obliged in the first period to make huge investments related to manure storages. It is expected that in the further period – 2008 – 2011 – the structure of farms will be more settled and by this period only farms economically viable will remain and therefore these investments will be possible also in smaller farms. Even though the priority for pollution minimisation from livestock farms is given to big farms, the smaller farms are also encouraged to install manure storages meeting the set requirements. However, newly established farms regardless their size are obliged to install proper manure storages. III. Implementation of sustainable agricultural system The measures under this component are aiming at proper fertilisation by organic and mineral fertilisation, land use management in order both – to protect the nutrient losses, improve environmental conditions and to economically benefit the farmers. IV. Pollution from agricultural sources, monitoring The measures under this component are devoted for the proper water monitoring. V. Collection of information, scientific research Measures under this component relate to scientific research which will asses the impact on the environment of the implemented measures, identify most suitable measures, develop further recommendations regarding implementation of the measures in applying the novelties of science and technique. A very important measure under this component relates to the establishment of the data collection about the implementation of the measures in the farms and on the national level. This data will allow to analyse to what extent the measures are being implemented and will provide a sound basis for the development of the second action programme.

As regards water monitoring to asses the impact of the Action programme on the water quality, a state monitoring programme, water monitoring is a part of, is being revised. The Project Long-Term Assistance in the Transposition and Implementation of the Nitrate Directive in Lithuania (financed by the Danish government) assists the MoE in its transposition of EU Nitrate Directive requirements. The approach for the monitoring programme is to identify stations in rivers collecting water from catchments with intensive agricultural activity for source apportionment to establish the extent of nitrate loss pr. hectare arable land in the catchment/watershed. The project has developed a proposal regarding the revisions of water monitoring – both surface and groundwater. As regards improvement of surface water monitoring the following proposal was put forward. To investigate the influence of nitrate from agriculture on the eutrophication status of water bodies monitoring stations will be needed in the Curonian lagoon and in the Kaunas Reservoir. It has not been possible to identify any suitable lake candidates in the relevant municipalities with an agriculture dominated catchment. The surface water monitoring focus on 15 municipalities in which agricultural land makes more then 60 % of the total land area, mostly in the central part of Lithuania. This is the most intensive agricultural


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areas at present and is expected to be in the future. In total, 14 stations have been identified, 4 of these for calculation of natural background load, and 10 for calculation of nitrate loss from agricultural land. Of the 14 proposed stations 5 are included in the present monitoring programme for surface waters. The proposal for monitoring includes specification of stations, parameters and sampling frequency. In addition it is proposed to include monitoring of nitrates and total nitrogen in the river transport stations within the new surface water monitoring programme in line with the requirements of the Water Framework Directive. As regards groundwater monitoring, at present the highest density of stations (0.126) is found in the municipalities with the lowest land-use level. To meet the requirements of the Nitrate Directive, the number of monitoring stations has to be increased to at least 0.2-0.25 per 100 km2 – 81 additional monitoring stations are proposed to be installed. With the data contribution from the 47 economic entity monitoring (livestock farms > 500 LU), the national monitoring network would cover 191 monitoring stations used for shallow groundwater observations. Then the density of monitoring stations in the municipalities with especially high land-use level (60–80%) would go up to 0.35-0.45 stations per 100 km2. As required by the Nitrate Directive, the variation of the nitrates, nitrites, ammonium will be observed in the shallow groundwater. Depending on the depth of shallow groundwater occurrence and lithology of the aeration zone and water-containing rocks, water samples are to be taken: once per year (clayey sediments, intensive land use), once per two-year period (sandy sediments, low land use). More details on the Action Programme for the implementation of the Nitrate Directive are provided in Annex 4 6.4. Areas covered by Specific Territorial Measures Measures introduced under Chapter V of Regulation 1257/1999 will apply only in Less Favoured Areas designated and approved alongside the adoption of this Plan and in Natura 2000 sites during the period 2004-2006. This Rural Development Plan covers entire territory of Lithuania and therefore there are no territories where specific measures will be applied within period 2004-2006. 6.5. Timetable and uptake The implementation of the measures in Lithuania based on this Rural Development Plan starts after the approval of this Plan by European Commission after the date of accession. This RDP will be implemented till the end of 2006. The expected uptake under the measures is shown under the Physical and Financial indicators provided in the Annex 5.


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7. Indicative overall financial allocations For the implementation of the priorities set within the defined rural development and agricultural strategy the following financial allocations have been assigned to the measures. Table 43: Indicative overall financial table, including EU contribution (EUR)

Programming period 2004 - 2006 Total public expenditure

EU contribution

Priority A –Environment and Less Favored Areas Measure A1 – Agri-environment 94,652,010 75,721,608Measure A2 – Less Favored Areas and areas with environmental restrictions 177,137,105 141,709,684

Measure A3 – Meeting standards 107,309,430 85,847,544Total A 379,098,545 303,278,836

Priority B – Alternative use of agricultural land Measure B1 – Afforestation of agricultural land 6,965,405 5,572,324

Total B 6,965,405 5,572,324Priority C – Farm restructuring Measure C1 – Early retirement 90,231,640 72,185,312Measure C2 – Support for semi-subsistence farms undergoing restructuring 7,691,960 6,153,568

Total C 97,923,600 78,338,880Other Actions Technical assistance 5,725,775 4,580,620Complementary national direct payments 119,411,240 95,528,992Projects approved under Regulation (EC) No. 1268/1999 2,750,435 2,200,348

Total, other actions 127,887,450 102,309,960Total Plan 611,875,000 489,500,000

Table 44 Annual programming (EU contribution in EUR million) 2004 2005 2006 Total Plan 147,300 164,100 178,100

The considerations about the balance between the measures available are provided in Chapter 14.


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8. Appraisal showing the expected economic, environmental and social impact The Ex-ante evaluation of this Rural Development Plan has indicated the importance of the considerations regarding the width of the strategy made and recommended to reflect how the aspects of marginal utility, administrative and absorptive capacity have been integrated in developing this Rural Development Plan. Seen in the context of the rural development marginal utility has to do with the utility of the funds used. The funds should be allocated in a way that gives the highest utility for the Lithuanian rural areas as a whole. It should of course be kept in mind that rural development funds are tied to certain measures and cannot be allocated and spent without being in line with the requirements for those measures. However, marginal utility consideration can still be useful inside the framework of the rural development measures since there is some of room for manoeuvring inside the framework. Measures can be left out or chosen and varying shares of the total funds available can be allocated to each of the chosen measures. Which measures to chose and how to allocate funds among the chosen measures are to a great extent dependent on the marginal utility expected from the different measures. The funds should in principle be allocated where they give the highest marginal utility, which again gives the highest total utility. This exercise has been to a limited extend carried out during the programme development process (Early retirement and Afforestation measures) and still remains to be carried out in more detail in the course of the programme implementation. Another aspect which besides the marginal utility can be worth considering when choosing how to allocate the funds for rural development is the absorptive capacity since a limited absorptive capacity can lead to bottlenecks and unused funds. Having considered this aspect it has been decided not to implement the measure related to the support to producer groups within the framework of this Rural Development Plan for 2004-2006. In relation to the administrative capacity it should be emphasised that a lot of technical experience has already been accumulated in implementing SAPARD programme, especially in relation to the project selection procedure, monitoring and control. However, measures under this Rural Development Plan are very new not only to the beneficiaries but also to the administrative authorities and therefore further training and capacity building will be required in order to ensure as good as possible administration of the funds available. The expected impacts for each of the measure are detailed in chapter 6.2.3. in which quantification of targets is presented.

9. Description of the measures The detail description of the measures to be implemented under this RDP and their financial allocations (Million Euro) are as presented in Annex 1


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10. Need for any studies, demonstration projects, training or technical assistance operations In order to ensure an effective and correct implementation with high degree of realising set objectives and to ensure proper monitoring and evaluation of the plan it has been identified a need of support during the whole programming period and concerning all the measures in the plan. In SAPARD agri-environment had a pilot character, while the scope of this measure within the RDP is conciderably broader. Moreover, taking into account limited experience of agri-environment in Lithuania, it has to be ensured that the implementation of this measure is carried out in the most effective way and that support is directed to the areas where it is mostly needed. Furthermore, in order to establish appropriate and efficient monitoring and evaluation system it is necessary to ensure maintainance and training of the staff, which administers the implementation of the plan. Also it is necessary to develop mechanisms, which are harmonised throughout Lithuania and it is necessary to coordinate administrating between national and local bodies. Prospects and potential of women in ecological farming or other perspective spheres will be analyzed in 2004 – 2006. It will be made in light of ongoing analysis made by FAO, which stress role of women in agriculture. Demographic processes, employment rates and income trends in rural areas is another concern the attention will be paid at. Measures of RDP will make certain impact on rural areas and this impact should be evaluated. Membership in EU, increased income of farmers and ability for legal persons to buy agricultural land may highlight new trends in land market related to formation of farm structure. 11. Designation of competent authorities and bodies responsible It is requested from the Commission that the following three units are established and in operation in order to implement the Rural Development Programme: • Ministry of Agriculture (MA)

Address: Gedimino 19, 01103 Vilnius-25, Lithuania

• National Paying Agency (NPA) Address: Gedimino 19, 01103 Vilnius-25, Lithuania

• Monitoring Committee (MC)


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The relations among the Ministry of Agriculture, National Paying Agency and the Monitoring Committee are outlined as follows: • The National Paying Agency is responsible for the day-to-day implementation of the programme

and will inform the Ministry of Agriculture on a regular basis of the progress of the implementation;

• The Ministry of Agriculture will work as secretary for the Monitoring Committee. This would include providing the Monitoring Committee with information on the status of the Rural Development Programme implementation;

• The Monitoring Committee may ask the Ministry of Agriculture (secretary) to provide in dept analyses or additional information/data from the National Paying Agency on specific issues, if needed.

It is important to emphasise that the National Paying Agency does not have any direct contact to the Monitoring Committee as demand and supply of information must pass through the secretariat. This is illustrated below:

Figure 16: Chain of Command in Implementing the Rural Development Plan A more in dept description of the tasks and responsibility of the three units is described below. 11.1. Ministry of Agriculture The ultimate responsible authority for implementation of this Plan will be the Lithuanian Ministry of Agriculture; however, implementation of certain measures (projects or actions) might be delegated to other responsible bodies designated by the Ministry of Agriculture. Ministry of Agriculture is responsible for the efficiency and correctness of management of this Rural Development Plan. The Ministry of Agriculture shall: 1. control setting up a system to gather reliable financial and statistical information on implementation

of the program its compliance with the monitoring and financial indicators as well as ex-post evaluation of the results from the aid;

Monitoring Committee

Ministry of Agriculture

National Paying Agency


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2. follow-up submission of information under the previous paragraph to the European Commission; 3. at the request of the Monitoring committee or on its own initiative, propose adjustments of the

programme to the Monitoring committee, without changing the total amount of the contribution from the funds granted to the priority concerned nor its specific targets;

4. after approval by the Monitoring Committee shall inform the Commission of the adjustments under the previous paragraph within one month;

5. amend the programme, except for the cases described under point 3, upon receiving a Decision of the European Commission and after the approval of the Monitoring Committee;

6. prepares the annual and final implementation reports of the programme; 7. organises the mid-term and final evaluation of the programme; 8. ensures compliance with the obligations concerning information and publicity. 11.2. National Paying Agency National Paying Agency is responsible for: • call for applications; • project selection; • checking of applications for approval of projects against terms and eligibility conditions, eligibility against the content of the Programme, including, where appropriate, public procurement provisions; • laying down contractual obligations between the Agency and potential beneficiaries and the issue of approval to commence work; • execution of on-the-spot checks both prior to and following project approval; • follow-up action to ensure progress of projects being implemented; • reporting of progress of measures being implemented against indicators; • checking of payment claims; • execution of on-the-spot checks to establish eligibility for payment; • authorisation of payment; • execution of payment; • accounting of commitment and payment; • executing control on beneficiaries after payment of aid to establish whether the terms and eligibility conditions of the grants continue to be respected. Part of the authorisation and control function are delegated to branches of the National Paying Agency, which are in all 10 counties of Lithuania. These bodies will be responsible for collection of Applications for support and Payment claims. Also they will perform check–on-spot function before submitting all collected information to the Agency. The Agency will ensure decent allocation of funds and sound financial control in accordance with strategic priorities and measures as well as in accordance with selection criteria and procedures set out in this Plan.


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National Paying Agency will be responsible for administration of public expenditure from both sources: Special Agricultural Support Programme, which will be used for national co-financing purposes and EU EAGGF Guarantee Fund assistance. 11.3. Monitoring Committee The final unit important to include here is the Monitoring Committee. A Monitoring Committee shall be established for each rural development programme in compliance with Article 35 of Regulation (EC) No 1260/1999. The aim of the Monitoring Committee is to assess the effectiveness and quality of the overall implementation of the Programme. The Monitoring Committee shall moreover examine the results of the Rural Development Programme, in particular the achievement of the targets/objectives set for the different measures and the progress on utilisation of the financial allocations to those measures. Furthermore the Monitoring Committee examines the allocations to the sub-measures where relevant. In this regard, the Ministry of Agriculture shall ensure that all relevant information on the progress of the programme inclusive the measures and, as appropriate, sub-measures, is made available to the MC. The Monitoring Committee will be in a position at its first meeting to set down its Terms of Reference. The Committee: • shall satisfy itself as to the effectiveness and quality of the implementation of the program; • shall confirm or adjust the program, including the physical and financial indicators and proposes

them to the European Commission for approval; • shall consider and approve the criteria for selecting the operations financed under each measure

within six months of approval of the assistance • shall periodically review progress made towards achieving the specific objectives of the assistance • shall examine the results of implementation, particularly achievement of the targets set for the

different measures • shall consider and approve the annual and final implementation reports before they are sent to the

European Commission; • shall consider and approve any proposal to amend the contents of the Commission Decision on the

contribution of the Funds. The composition of the Monitoring Committee will be approved by the order of the Minister of Agriculture and will include (but will not be limited to):

• representatives of government, • other ministries (such as Ministry of Finance, Ministry of Environment, Ministry of Social

Affairs and Labour, Ministry of Economy, Ministry of Internal Affairs, Ministry of Foreign Affairs as well as other ministries),

• a representative (or representatives) of the European Commission in his/her/their capacity of an advisor(s) to the Committee,

• local authorities, environmental (such as Lithuanian Fund for Nature)as well as other NGO’s and socio-economic partners in the relevant sector and rural areas (such as meat and processor’s associations, association of agricultural enterprices, Lithuanian Farmer’s Union, Chamber of Agriculture and others).


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12. Monitoring and control, evaluation and publicity 12.1. Controls and Sanctions Monitoring of the implementation of this Rural Development Plan will be carried out in line with the Working document for monitoring the Rural Development Plans (VI/43512/02 Final of 26 February 2002). The Ministry of Agriculture/National Paying Agency is responsible for the control of rural development measures of the Rural Development Plan. The control of the development measures presented in this programme consists of several phases. The control will be conducted with administrative and on-the-spot checks. The administrative and on-the-spot checks will be conducted so that the compliance with the eligibility and payment criteria for support is secured and the effectiveness and appropriateness of implementation is verified. 12.1.1. Administrative checks The administrative checks include:

• checks to be carried out in connection with the handling of support application, and if necessary, the related on-the-spot checks in order to verify the compliance with eligibility criteria;

• checks to be carried out in connection with the handling of each payment application, and if necessary, the related on-the-spot checks in order to verify the compliance with the criteria and provisions of support payments;

• cross-checks, inter alia, in order to reveal the unfounded overlapping of supports. Administrative checks will be exhaustive and will include cross-checks wherever appropriate, inter alia with data from the integrated administration and control system. This means that administrative checks will cover all applications for aid, whether initial application to join a scheme or subsequent application for payment and that all the eligibility elements related to application will be subject to an assessment. The measures for which cross-checks with the IACS will be appropriate will be those where plots and/or animals, included in the IACS system, will be elements of the application. All the checks carried out will documented on a detailed and standardised check list. Administrative checks will be performed by the Rural Development Programme Department under the National Paying Agency for the measures "Early retirement", "Afforestation of Agricultural Land", "Support for semi-subsistence farms undergoing restructuring", "Meeting standards", "Technical assistance". For the measures " Less favoured areas and areas with environmental restrictions" and "Agri-environment" administrative checks will be performed and applications collected by the institutions which are selected in accordance with national legislation.


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12.1.2. On-the-spot checks The checks imply that the eligibility of expenses related to the measures presented in the programme as well as the fulfilment of all the obligations and commitments of the beneficiary due to the measures presented in the programme are checked. In addition, the correctness of support and payment decisions is checked, which also contributes to the verification of the functioning and effectiveness of administrative and control system. The checks are conducted in accordance with check lists confirmed for this purpose. On-the-spot checks can be conducted on the following grounds:

• random sampling • risk analysis • cross-checks or • additional control based on discretion and other specific reason.

On-the-spot checks will cover at least 5% of beneficiaries each year and all the different types of rural development measures set out in this Rural Development Plan. Checks will cover all the commitments and obligations of a beneficiary which can be checked at the time of the visit. The Control Department under the National Paying Agency selects the beneficiaries to be checked centrally and based on separate risk analyses for each development measure. The risk analysis takes into account, inter alia, the amount of paid support, observations during previous checks, etc. Risk analysis will be applied for the selection of beneficiaries to be checked on-the-spot for all measures and will include all risk criteria provided for by Article 19 of Regulation (EC) No.2419/2001. The selection of beneficiaries for on-the-spot checks will also include an element of representativeness, such as certain percentage of random selection (20-25%), in order to avoid the exclusion "a priori" of any beneficiary from possible selection. On-the-spot checks based on sampling cover all the rural development measures presented in the programme. On-the-spot checks will be documented on detailed and standardised control reports as defined in the Article 20 of Regulation (EC) No. 2419/2001. The beneficiary subject to an on-the-spot check shall be informed in advance so that he/she can fulfil the beneficiary’s assistance and information obligations which contribute to the appropriate conduct of the check. However, according to the discretion of the National Paying Agencyconducting the check, the information at the latest, if this is considered indispensable in order to secure the purpose of the check. Should shortcomings or irregularities be found during the check, the related observations shall be notified to the National Paying Agency which grants the support, makes the payment decision, and is competent to take measures required in the rules for the reimbursement of support and imposition of eventual sanction. 12.1.3. Control of measures In the control it shall be verified that the project or activity meets all the eligibility requirements related to rural development measures as stipulated in national or European Community provisions and in stipulations based on these provisions, and that it has remained eligible. The control is conducted and the issues listed are checked in the control as is stipulated concerning each control measure. The control is carried out and the listed matters are checked in the control according to how it is. The


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fulfilment of requirements for the payment of support are checked in administrative checks carried out in connection with the handling of payment application, based on original receipts, copies of these or a confirmed, itemised declaration or a declaration concerning estimated costs. In the on-the-spot checks defined above, it is also verified that the confirmed declarations presented by the beneficiary are correct and the requirements for the payment of support are met, based on original receipts. 12.1.4. Sanctions The sanctions related to the support measures of rural programme have been defined in Article 72 of Commission Regulation (EC) No 817/2004. Sanctions will be implemented in those cases where participating farmers: • fail to abide by the terms and conditions of the measure; • knowingly make false or misleading statements to obtain payment under the measure; • withhold essential information. The Paying Agency/Ministry of Agriculture will define the most appropriate sanction system for implementation. The nature of the sanctions will depend upon the nature and seriousness of the offence and may include: • the withholding of some or all of the payment due to participating farmers • the reimbursement of payments already made to the farmer • exclusion of the farmer from further participation in the measure • liability to prosecution (in the most serious cases of non-compliance) In the event of undue payment, the individual beneficiary under a rural development measure shall be under an obligation to repay the amount in accordance with the Article 49 of Regulation (EC) 2419/2001. The Ministry of Agriculture will reserve the right to:

• deduct payments due for reimbursement from other aid due to the farmer, • take whatever other action is necessary for the recovery of payments due for reimbursement. The Ministry of Agriculture will also define the most appropriate system for farmers to appeal against penalties imposed upon them. The integrated administrative and control system introduced by Council Regulation (EEC) No. 3508/92 shall be used. False declaration According to Article 72 of Commission Regulation (EC) No 817/2004, ”Any beneficiary found to have made a false declaration as a result of serious negligence, shall be excluded from all rural development


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measures falling under the relevant chapter of Council Regulation (EC) No 1257/ 1999 for the calendar year in question. Where a false declaration was made intentionally, the beneficiary shall be excluded for the following year as well. This penalties shall apply without prejudice to additional penalties provided for under national rules.” If a beneficiary of support in accordance with the plan is found to have made a false declaration as a result of serious negligence, the support granted in accordance with the concerned chapter of Council Regulation is not paid for the year when this is detected. The decision on these measures shall be made by the National Paying Agency which has also made the decision on granting support. The following are additionally proposed details on controls and sanctions for the measures. Early Retirement Scheme Control procedures include:

• Full administrative checks that provide determination of the persons eligibility to enter the scheme

• On spot checking, that enables to define are the conditions concerning the transfer of the land/holding kept

Administrative checks addressed to transferor include applying to the:

• The Agricultural and Rural Development Registre, • State Social Insurance Fund Board.

Administrative checks addressed to farm worker include applying to the:

• State Social Insurance Fund Board

Administrative checks addressed to transferee include applying to the: • Agricultural and Rural Development Register

On spot inspections on transferors and transferees emphasize on determination of: • The use of accommodation plot retained and livestock or crops kept (Conditions concerning

transferor and released land); • Transfer (reassignment of the use) of the land/holding in accordance with the Law of the

Land (Conditions concerning transferor) • The maintenance of plant cover on released land reassigned by the transferor to be used for

non agricultural purposes: checks that no livestock is being kept on this land or no crops are being grown (Conditions concerning transferor, transferee, farm worker and land released)

• Location of the transferees holding in the case of land/holding release to farming transferee (Conditions concerning transferee);

• Situation of land transferred to non-farming transferee (Conditions concerning transferee).


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Sanctions applied under the Early Retirement Scheme Table 45: List of sanctions in case of Transferor Offence Sanction

Incorrect disclosure of lands Less than 5 per cent –reduction of 20 percent of annual pension Between 5-10 per cent – reduction of 40 per cent of annual pension More than 20 per cent – reduction up to 100 per cent of annual pension

Farming transactions in transferor’s name after approval for ERS Engaged in farming activities on date of visit Commercial farming on the retained land Use of retained buildings for commercial farming

First offence – reduction of 20 per cent of annual pension Second offence- cancel of the agreement

Table 46: List of sanctions in case of Transferor of Small Diary Farm Offence Sanction Number of cows (during check on spot) exceeds the stated number of cows


Marketing agricultural production, continuing commercial farming


Table 47: List of sanctions in case of Farm Worker Offence Sanction Works as a farm worker First offence – reduction of 20 per cent of

annual pension Second offence- cancel of the agreement

Table 48: List of sanctions in case of Transferee Offence Sanction Cessation of the agreement concerning the duration of obligations in the farm

Cancel of the priority and one year suspension to apply for participation in other RDP measures


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Less Favoured Areas Support for the less-favoured areas and areas with environmental restrictions scheme will be subject to the Integrated Administration and Control System (IACS). All applicants for compensatory allowances must submit Aid application setting out the area available to the producer for the year in question. All parcels will be identified individually. Details of the land parcels are entered into the system, which identifies those parcels of land which are regarded as Highly Disadvantaged Area and Least Disadvantaged Area. During the period covered by a commitment, parcels receiving support may not be exchanged. All land parcels are subject to cross-checks with a view to ensuring that the same parcel is not claimed by two or more applicants. In addition, other computerised and office checks will be carried out and 5% of all applications will be subject to on-the-spot controls. All applications are date stamped upon receipt in each local agricultural division and recorded. Applications are initially checked for obvious errors, which are brought to the attention of applicant and are to be corrected. 5% of applications will be given on-farm inspections to ensure eligibility of applications. Selection of applicants for on-farm inspections will be performed on a random basis. Applications found to be in order following the completion of checks are prepared, certified and authorised for payment. Table 49: List of sanctions to be applied for Less favoured areas and areas with environmental restictions measure

I. General inconformity

Offence Sanction If applicant doesn’t follow requirement to remain in farming at least for 5 years from the first payment of compensatory allowance

Applicant is dismissed from RDP support for two years (only new applications, except transferors from the Early retirement measure)

Application form submitted behind time For any date behind time calculated amount of support is decreased 1 per cent (if neccesary after sanctions). Application form submitted after 25 artificial days of the last submission day is reject.

II. Sanctions for over declaration

Offence Sanction

When the over declaration is either 3% or two hectares but not more than 20%

Actual area is decreased by double difference (between declared and actual size). Compensatory allowances calculated for decreased area

When the over declaration is 20% - 50% Support will not be provided in current year When the over declaration is more than 50% Applicant is dismissed from measure for two years


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(support will not be provided in current and next year).

In case of deliberate infraction Applicant is dismissed from measure for two years (support will not be provided in current and next year).

III. Sanctions for incompliance with Good Farming Practise

Offence Sanction (calculated in the holding)

4.Non farming in accordance with requirements of Good Farming Practice

Annual payment is reduced by 10 percent in the first occasion, by 30 percent in second occasion; if beneficiary repeats offence once more, support shall be ceased.

IV. Sanctions for incompliance with Good Agrarian Condition

Offence Sanction (calculated in the field)

In case of one infraction (incompliance with Good agrarian condition)

For any incompliance set sanction of 5% (support will be provided for field area decreased by 5 per cent). Total amount of these sanctions not above 5 per cent of all declared areas.

In case of deliberate infraction (deliberate incompliance with Good agrarian condition)

For any deliberate incompliance set sanction of 20% (support will be provided for field area decreased by 20 per cent). Total amount of these sanctions not above 100 per cent of all declared areas.

If applicant doesn’t keep deliberately all requirements of Good agrarian condition in the field

Support will not be provided for the field in which there is incompliance with good agrarian condition

If applicant doesn’t keep deliberately all requirements of good agrarian conditions and that area is more than 50% of all declared area in the application form

Support will not be provided for all area declared in the application form

The above sanctions are applied except for the cases of force majeure Agri-environment The implementation of an effective control system for the agri-environment measure is essential and will have four main objectives:

• to ensure that the agri-environment measure achieves its overall objectives; • to prevent fraud or over-payments and to contribute to an efficient use of financial resources; • to ensure compliance with the relevant national and EU regulations regarding the use of

EAGGF co-financing; • to provide data on the actual implementation of the agri-environment measure measures at farm

level.


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Although the main aim of the agri-environment control system relates to the checking of compliance with the agri-environment contracts, it also produces valuable farm level data that can be used in the evaluation of the agri-environment measure. The payment shall be made after a necessary checking has been carried out. The control system should:

• be responsible for administering day-to-day procedures for applications and payments; • ensure that AEP achieves its original objectives; • contribute to the efficient use of financial resources by preventing fraud or over-payments; • ensure compliance with the relevant national and EU regulations regarding the use of public

funds, and; • provide national data on the implementation of the measures at a farm level (can be used for

monitoring and evaluation). Checking shall be carried out by the inspectors of the Paying Agency and Programme consultants with a view to ensure the fulfilment of the conditions laid down in the agreement during the entire period of the agreement. The subdivisions of the Paying Agency shall be responsible for the on-site checking of the farms participating in the Programme. The subdivisions shall be also responsible for the checking of the annual applications for the participation in the Schemes, monitoring of the implementation of agreements and obligations in the selected farms. Farms applying organic agriculture measure shall be checked by certification bodies in accordance with the procedure provided for in the rules of the organic farming. The assistance may be terminated if the entity submits misleading or incomplete data or fails to fulfil the commitments undertaken under the agreement. In this case the entity may be obliged to repay all or a part of the payments made to him. It shall not be required to return the payments made if the commitments were not fulfilled due to force majeure. The entity must, within 20 days, inform the Paying Agency in writing about the force majeure and describe the circumstances. The Paying Agency shall adjust the payments taking into account the circumstances caused by force majeure. In the scheme good farming practice is in compliance with the enacted essential national environmental requirements. The supervision of the compliance with the national environmental requirements is carried out in accordance with the procedure established by legal acts. Table 50: Sanctions – Agri-environment

Violation Sanction

1.If during the check it is found that committed area, in which Agri-

Support is calculated for the actual size (stated during the check) area.


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environment measures are implemented, decreased by less than 10 % If found, except in force majeure cases, that: i) committed area decreased by more then 10 % but less than 20 % ii) committed area decreased by more than 20% If found, that payments are made for the area larger than declared

One annual payment is reduced by 50%. Support is not paid, obligation will be ceased and the beneficiary shall pay support back. Overcompensation shall be paid back.

2.If doesn’t comply with the deadlines stated in the obligation

In the year of violation support is not paid. If beneficiary repeats offence, support shall be ceased, beneficiary loses right to present application by the measure one forthcoming year.

3.Forbidden means (actions) are used

In the year of violation support is not paid. Support shall be ceased, beneficiary loses right to present application by the measure one forthcoming year.

4.Non farming in accordance with requirements of Good Farming Practice

Annual payment is reduced by 10 percent in the first occasion, by 30 percent in second occasion; if beneficiary repeats offence once more, support shall be ceased.

5.Knowingly false or deceitful information is presented

Support shall be ceased, beneficiary loses right to present application by the measure one forthcoming year.

6 In case the beneficiary initiates the cease of the obligation earlier

25% of all paid support must be paid back (except force majeure cases)

7. If beneficiary is late to present documents needed, as established by the Ministerial Order of 30 March 2005 No 3D-182 “On the Ministerial Order of 13 August 2004 No. 3D-482 „On the administrative rules of measure „Agri-environment“ of Rural development plan 2004-2006“ recast“

Annual payment is reduced by 2 % for every day behind the deadline of submission

8. If beneficiary doesn’t keep number animal of rare breed, indicated in application

In the year of violation support is not paid. If beneficiary repeats offence, support shall be ceased, beneficiary loses right to present application by the measure one forthcoming year

9.If beneficiary is not granted an organic farming certificate

In the year of violation support is not paid. If beneficiary repeats offence, support shall be ceased.

10.If beneficiary doesn’t follow programming requirements, indicated in application

In the year of violation support is not paid. If beneficiary repeats offence, support shall be ceased, beneficiary loses right to present application by the measure one forthcoming year.


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Support shall be stopped: Than research of violations and decision of disputes are needed. Paying agency reserves the right:

- to deduct payments from other support assigned to the farmer; - in accordance with regulation 747/96 if support is not repaid till the stated deadline, the

interest may be started to calculate from the deadline date for the repay of support; - initiate other means necessary for the repay of support.

Beneficiary, who ceases his/her obligation before the end (foreseen in the application) 25% of paid support must be paid back, except force majeure cases. Beneficiary shall within 20 days inform PA about force majeure and describe it. All issues are pending by lawful rights. Afforestation of agricultural land All participating in the afforestation scheme will be subject to pre-payment checks and compliance checks. In the case of non-compliance, penalties are imposed, the nature of which depends on the conditions not fulfilled. In case of a serious breach, participants may be excluded from the scheme and full refund of all aid previously paid. Interest may also be charged. Penalties range from 10 to 100 % of the payment. The sanctions to be applied are as follows: If the areas actually determined is found to be less that that declared, the area actually determined on inspection shall be used for calculation of aid. However, except in cases of force majeure, the area actually determined on inspection shall be reduced by twice the difference found if this is more than 3 % or two hectares but not more then 20 % of the determined area. If the difference found is more then 20 % of the determined area no aid shall be granted. Additionally, in all cases where it is found that aid has already been paid on an over declared area, such aid shall be reimbursed. Table 51: List of sanctions to be applied in Afforestation measure

Offence

Sanction

1. If the afforested area is over declared (more than 7 %)

1.1. when the over declaration is 7% - 15%

The payment for forest establishment is decreased by 20%.

1.2. when the over declaration is 16% - 20%



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1.3. when the over declaration is more than 20%


2. The quality of the forest establishment works

2.1. the quality of soil preparation 2.1.1. If the quality of soil preparation is satisfactory


2.1.2. If the quality of soil preparation is bad


2.2. the quality of seedlings (seeds)

2.2.1. the quality of seedlings (seeds) is satisfactory


2.2.2. the quality of seedlings (seeds) is bad


2.3. the quality of planting (seeding) works

2.3.1. the quality of planting (seeding) is satisfactory


2.3.2. the quality of planting (seeding) is bad


2.4. the compatibility to the density requirements (evaluation takes according to afforestation project)

2.4.1. the density of established forest is satisfactory

The payment for forest establishment is decreased 10%.

2.4.2. the density of established forest is bad

The payment for forest establishment is decreased 30%.

3. The quality of the forest maintenance

3.1. the quality of the forest maintenance is satisfactory

The Lost incomes premium after the inspection is canceled for one year.

3.2. the quality of the forest maintenance is bad

The Lost incomes premium after the inspection is canceled for five years.

4. The evaluation of the established forests in 5-8 years after planting (in 5-6 years after planting evaluation of deciduous trees, in 7-8 - coniferous and rigid deciduous)

4.1. the plantation was evaluated as satisfactory

The Lost incomes premium after the inspection is decreased 50 % for one year.


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4.2 the plantation was evaluated as bad (the afforested area can not be assigned as forest)

The Lost incomes premium after the inspection is canceled at all.

Remarks:

1. the evaluation foreseen at the paragraphs 2 – 4 will be implemented in accordance the

Methodology for the evaluation and Inventory of forest seedlings and Afforestation works, approved by the order No. 659 of The Minister of Environment on December 18, 2003.

2. the sum of all sanctions, foreseen in the paragraphs 1-2 should not exceed 100%. 3. the sum of all sanctions, foreseen in the paragraphs 3-4 should not exceed 100%.

Support for semi-subsistence farms undergoing restructuring The following sanctions are to be applied in case of incompliance with obligations. Table 52: List of sanctions to be applied to a beneficiary in measure Support for semi-subsistence farms undergoing restructuring

Offence Sanctions

Not implementing the business plan as stated during the check after the 3rd year of support

The support for the subsequent 2 years shall not be granted.

Meeting standards The following sanctions are to be applied in case of incompliance with obligations. Table 53: List of sanctions to be applied in Meeting standards measure

Offence Sanctions Not following the commitments declared in action plan

After first violation penalty of 20% of yearly support for next year; in case of a subsequent violation - support will be stopped.

It is found that factual figure of LU is less than was declared in application.

Factual figure of LU is reduced by 20 %.

It is found that factual figure of cows for which support is granted is smaller than was declared in application.

Factual figure of LU is reduced by 20 %.

It is found that factual figure of LU is bigger than was declared in application.

Payments are made only for LU declared in application

It is found that factual figure of cows for which support is granted is bigger than

Payments are made only for are declared in application


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was declared in application. The applicant did not submit annual report of investment

Support for running year is not granted.

The applicant did not submit copies of bookkeeping records

The applicant loses the right for support and payments already paid must be returned

The applicant receives support under RDP measure Early retirement

The applicant loses the right for support and payments already paid must be returned

After investment period the farm is not in line with requirements of Council Directive 92/46/EEC

The payments must be returned

Implementing Council Directive 91/676/EEC after investment period: 1. animal density in farm exceeds 1,7 livestock units per hectare of UAA; 2. storage vessel is not built or its capacity is less than 25 percent of required amount for manure storage; 2.1. in case possessed manure storage vessel is not sufficient to store the manure of cattle, horse and sheep for at least 6 months or the manure of pig and poultry for at least 8 months and stores:

• from 25 to 49,99 per cent of manure



3. the amount of livestock manure inserted into the soil each year, including manure of animals making to the soil during the grazing period, exceeds 170 kg of nitrogen per 1 ha of UAA; 4. organic fertilizers (manure, sewage sludge etc.) are spread from 1 December to 1 April; 5. the farm is not in line with all requirements stated in this measure of the Directive.

Aid amount is reduced by 10 per cent Aid amount is reduced by 60 per cent Aid amount is reduced by 40 per cent Aid amount is reduced by 20 per cent Aid amount is reduced by 10 per cent Aid amount is reduced by 10 per cent Aid amount is reduced by 10 per cent The payments must be returned


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After investment period the beneficiary has not reached the planned increase of heard in cows

The difference between the payment received and the payment calculated for the actual herd in cows has to be returned; the payment calculated for the actual herd in cows is reduced by 20 %, and this part also has to be returned.

After investment period the beneficiary has not reached the planned increase of heard in LU

The difference between the payment received and the payment calculated for the actual herd in LU has to be returned; the payment calculated for the actual herd in LU is reduced by 20 %, and this part also has to be returned.

12.2. Financial circuits The movement of applications for rural development measures as well as financial means is as following: • National Paying Agency (NPA) is the authority responsible for payment of support for all measures

in the Rural Development Plan 2004-2006. National Paying agency will be accredited paying agency.

• Applications will be submitted by financial beneficiaries to one of ten (10) Regional units of NPA for all RDP measures other than LFA and “Agri-environment” measures, for which collection of application will be done by the institutions which are selected in accordance with national legislation).

• Once the applications reached the Center, the staff of Rural Support Programmes Unit (RSPU) starts the detailed checks. If the checks are successful, the processing officer will recommend the application for payment to the authorizing officer. The authorizing officer will carry out certain other specific checks and if the results of these prove satisfactory, the application will then be authorized for payment.

• In the case of two rural development measures: “Afforestation of agricultural land” and “Technical assistance” payments will be made after evaluating and approving payment claims (when expenditure is made and declared by final beneficiary). This is the responsibility of Payment claims unit of Finance and accounting department (FAD) of NPA.

• Once the payment is authorized, it is then passed by electronic means to Support Programmes Accounting and Reporting unit (SPARU) of FAD. FAD staff responsible for making payments will carry out checks to ensure that only authorized payments are processed.

• FAD will be responsible for accounting of creditors, execution of payments and reporting. When the payments have been made (by Payments unit of FAD), the data will be passed from Payables System to General Ledger. In order to get interim payments, FAD will be responsible for preparing and submitting Applications for interim payments. Also FAD will be responsible for preparing and submitting Application for payments of the final balance.

• The system and organization structure ensure that the three functions of authorization, execution and accounting for payments are separated in NPA.


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• In operating the measures NPA will ensure that the necessary detailed accounting information is recorded and maintained for the purpose of the clearance of EAGGF Guarantee accounts. For the purpose of the clearance of accounts FAD will be responsible for preparing and submitting to European Commission:

(a) annual expenditure summarised by rural development measure; (b) a table showing the differences between the expenditure declared under (a) and that

declared for the purpose of the interim payments; (c) a table, extracted from the debtors' ledger, showing the total debts identified but not yet

recovered at the end of the financial year for rural development measures. Irregularities and reimbursement of irregularities will be reported in accordance with agreed

procedures. FAD will prepare reports of irregularities according to Regulation Nr. 595/91. FAD will be responsible for holding Debtors ledger.

12.3. Publicity Rural development measures to be implemented in Lithuania will be made public in the following way: making potential beneficiaries aware of the possibilities for support; making the general public aware of the co-financing role of the EU in this plan. Information and publicity is based on Article 32 of Council Regulation (EC) 2082/93. Potential beneficiaries are informed of the rate of support and the application procedures. Information on the measures and the eligibility criteria will be provided by the National Paying Agency. Application forms for all measures with the exception of the measures Agri-environment and Less favoured areas and areas with environmental restrictions will be available at on of ten Regional units of National Paying Agency. For the latter measures application forms will be available at the institutions which are selected in accordance with national legislation. Information is made available to the public through: - annoucements in the press; - information on the websites of Minsitry of Agriculture and National Paying Agency; - press releases by the Ministry of Agriculture and National Paying Agency; - the public is informed by way of seminars, conferences and exhibitions; - publications. If the number of applications at the mid-stage of the call for applications is less then expected, it is envisaged to strengthen the usual publicity about the measures available, aiming at providing the rural population with more information both about the possibilities available as well as the requirements to be fulfilled.


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12.4. Evaluation There will be no mid-term evaluation of the programme as there is no such an obligation to the countries that enter the EU in the year 2004. The ex-post evaluation of the programme will be carried out by the independent evaluators selected by competitive tendering in accordance with national and EU rules. The evaluation will be carried out as prescribed in the Commission Regulation (EC) 1257 Articles 48 and 49 as well as Commission Regulation (EC) 817/2004, Articles 62-65, also in accordance with VI/12004/00 of December 2000 (Common Evaluation Questions with Criteria and Indicators). An ex-post evaluation as defined by the Commission Regulation (EC) 817/2004 Article 64(2) will be carried out and reported to the Commission not later then two years after the end of the programming period – by the year end 2008. The evaluation will have regard to the issues and data comprising socio-economic and environmental analysis and specifically will address the following aspects: • the original validity and continuing relevance of the plan rationale • the degree to which objectives have been achieved relative to the timing of the evaluation and the

expected final achievement • the progress made by beneficiaries selected for aid in meeting EU standards. • management and administrative issues • an estimate of economic, social and environmental benefits in net terms where possible and their

sustainability • the public expenditure/resource costs involved • overall conclusions and recommendations concerning costs in relation to net benefits, qualitative as

well as quantitative. Also any actions needed to improve value for money or management and whether or not there is a continuing need for further intervention.

The evaluation will be performed in line with the Commission guidelines VI/43512/02 FINAL of February 26, 2002 on common evaluation questions, criteria and indicators. 12.4.1. Ex-ante evaluation The report of the Ex-ante evaluation carried out in January-February 2003 is presented in Annex 7. The conclusions presented to the Ministry of Agriculture by the Evaluator are spelled out below. Also, how the recommendations for improvements were incorporated in to the final documents are shortly presented. “As stated at the outset of the evaluation, it is the impression of the evaluator that the current draft represents a considerable progress compared to the SAPARD RDP. The description of rural areas and disparities to be addressed as well as the SWOT analysis and the quantification of targets constitute substantial improvements. It is the firm impression of the evaluator that the RDP is relevant, in the sense that is addressing important and major needs and problems of rural Lithuania.


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The RDP as a product is basically in compliance with the EU requirements to the preparation of the plan and the process leading to the draft RDP is considered effective. The utility of the plan when implemented as a programme is assessed to be high, but the evaluator finds that there is a need for an elaboration of the marginal utility of the specific measures chosen, the resources allocated to each of the measures and the quantified targets stated in the RDP. The implementation of the RDP is realistic and the RDP can as such be considered sustainable. As it is emphasised in the evaluation there is room for improvements, which can help a successful implementation of the Lithuanian RDP. The main deficiencies in the draft RDP have to do with the following matters: 1. Insufficient ranking of disparities 2. Analysis of previous results could be elaborated and used more proactively in the current

programming phase 3. The expected impacts and results could be presented in a more systematic way following the

objectives hierarchy as recommended by the Commission 4. Reflections on absorptive capacity in the rural areas, administrative capacity in MoA and NPA and

marginal utility of the funds used for rural development could ensure that these aspects are taken into consideration in the programming phase.

5. The general readability of the RDP could be improved by carrying out some editorial improvements that tighten up the structure and the clarity of the RDP.

The conclusions made in the ex ante evaluation are itemized in 47 recommendations, which can be used by the MoA in the finalization of the RDP. “ The Ministry of Agriculture has taken into consideration all 47 recommendations provided by the ex-ante evaluator. The table below provides how the main deficiencies listed above were taken into consideration by the Ministry of Agriculture. Table 54: Ex-ante evaluation findings and the Actions taken by the Ministry of Agriculture Ex-ante evaluation main findings Ministry of Agriculture action 1. Insufficient ranking of disparities A more clear, condensed and structured ranking of

disparities and problems within the sector carried out and presented in chapter 5.10.

2. Analysis of previous results could be elaborated and used more proactively in the current programming phase

To the extent possible the analysis of previous results was carried out in a manner which would reveal the lessons learnt in the past in order to have them considered in the development of this documents. In particular an experience accumulated in implementing the SAPARD programme (including the procedures for the monitoring and evaluation) have been taken into


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consideration.

3. The expected impacts and results could be presented in a more systematic way following the objectives hierarchy as recommended by the Commission

The expected impacts and results have been presented on each measure basis in the light of the objective hierarchy for each measure. It is expected to contribute significantly in preparing and carrying out mid term and ex-post evaluations of the programme.

4. Reflections on absorptive capacity in the rural areas, administrative capacity in MoA and NPA and marginal utility of the funds used for rural development could ensure that these aspects are taken into consideration in the programming phase.

The consideration on the marginal utility of the chosen measures has to a limited extent been taken into consideration in the programme preparation. The calculations have been exercised for the Afforestation and Early retirement measures and are expected to be carried out also in the course of the programme implementation for other measures. It is expected that this exercise will contribute significantly in the preparation of the following programming documents. As regards the absorptive and administrative capacity those were seriously considered both by the Ministry of Agriculture and the National Paying Agency in order to ensure that the capacities are in place and would not result into the mismanagement of funds or insufficient amount of applicants. As the result of this analysis the measure related to Assistance to Producer groups was left out and not included in the framework of this programme.

5. The general readability of the RDP could be improved by carrying out some editorial improvements that tighten up the structure and the clarity of the RDP.

The structure of the document was adjusted aiming at improving the readability. Also, the editorial improvements were carried out.

13. Resuls of consultations and designation of associated authorities and bodies as well as economic and social partners The entire process of preparing this Rural Development Plan was based on the dialogue with the social and economic partners. There have been in total 3 rounds of circulating the draft Rural Development Plan to the key partners in order to get their views on the document. Also, during the entire course of the preparation of the document ongoing informal coordination of the document preparation was taking place with the key stakeholders, which not only commented on the draft document but also significantly contributed to the development of certain sections of the document. The most active social


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and economic partners taking part in the development of this Rural Development Plan were the Ministry of Environment, Ministry of Economy, Ministry of Social Security and Labour, Lithuanian Forest Owners Association, Lithuanian Fund for Nature, Farmer's Union, Chamber of Agriculture, Water Management Institute and others. Apart from informal collaboration, the draft Rural Development Plan was circulated to the number of institutions and organisations directly or indirectly affected by the implementation of this document. Further, all the institutions were called for a meeting in which their comments were received and discussed. The list of the social and economic partners consulted during the document preparation process is provided in Annex 8. For designing a good working agri-environmental schemes, it is very important to have consultations with farmers. A lot of consultations with farmers took place while preparing agri-environmental scheme for the pilot area (Rusne island) within the project “Agri-environmental programme in Central and Eastern Europe". Some simple measures were practically tested in the area since 1998. Later, the area became a pilot area for SAPARD agri-environmental measure. During preparation of the draft national agri-environmental programme, farmers organisations were consulted through Chamber of Agriculture, whose representative was a member of the national working group. Other stakeholders were: Ministry of Agriculture, Ministry of Environment, Lithuanian Agricultural University, Lithuanian Agricultural Consulting Service, Lithuanian Water Management Institute, Lithuanian Institute of Agriculture, Lithuanian Institute of Agricultural Economics, Institute of Geography, Environmental NGO's such as Lithuanian Fund for Nature, Lithuanian Ornithological Society, County administrations. Thus, the preparation of the agri-environment measures was extremely focused on as close as possible contacts with the farmers. There have been no essential differences in the views of social and economic partners in relation to the draft Rural Development Plan. The consultation process was more of a questions-answers nature where social and economic partners seek for more clear definition of the requirements for the applicants as well as clear definitions of the eligible actions under each of the measures. Thus, this process was extremely important in ensuring that the document is easy to understand for the beneficiaries and that the ambiguity is avoided. Early retirement Consulta-tion date

Social partner

Content Accepted Comments

August 2003

SoDra Regards the calculation of the constant part of the compen-satory allowance (proposal to use the average retirement payment foreseen for 2004-2006 (instead of the average of 2001-2002) as a basis)

Yes


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September 2003

Lithuanian Institute of Agrarian Economics

Regards the checks of the retrospective number of cows

Yes

October 2003


Regards the elaboration of the checks of the retrospective number of cows

Yes Following a previously expressed observation, a single date for the checks of the number of cows has been adopted (1 January 2003), in particular, the checking date in the Animal Register is moved with every year of application submission (the date for applications of 2004 is 1 January 2003, the date for applications of 2005 is 1 January 2004, the date for applications of 2006 is 1 January 2005.

Less favorable areas and areas with environmental restrictions

Consulta-tion date

Social partner

Contents Accepted Comment

October, 2003

Ministry of Environ-ment

Proposal concerning the inclusion of the protection of the dwelling places of birds mentioned in Natura 2000 into the Plan

Yes The proposal has been approved to include 24 localities with protected dwelling places of birds. It has also been approved which localities have to be included

January, 2004

Lithuanian Institute of Agrarian Economy)

Methodology to determine less favorable areas has been elaborated

Yes Rural development plan makes uses this methodology

Agri-Environment

Consulta-tion date

Social partner


October 2003

Institute of Water Economy

Ministry of Agriculture together with Institute of Water Economy has prepared a training programme for farmers.

Yes

October 2003; December

Lithuanian Agricultural Advisory

Presented observations on the description of the measure and establishment of the amount of


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2003 Service the direct payments: 1. Programme for protective shore belts of surface water bodies: is the payment for the management of the protective shore belt of a surface water body paid only for the mandatory protective belt or is it also paid for its management? 2. As regards sanctions in relation to the area declared, a larger bias should be allowed since it will be difficult to calculate and check the area declared.

Yes

Yes

The payment is paid for the management of the protective belt since the establish-ment of the belt is mandatory under the national legislation. The bias increased from 3% up to 10%.

December 2003

Lithuanian Fund of Nature

Has presented observa-tions on the description of the measure: 1. The payments proposed in the draft do not meet the actual management costs, e.g. in the Landscape stewardship scheme, costs of mowing 1 ha of meadow/wetland and removal of mowed grass are higher than 221Lt. 2. Landscape stewardship scheme: meadows should be mowed not earlier than September 1st.

Yes

Yes

Calculations for substantiating all payments have been made. Accepted.

December 2003

„Tatulos programa”

Specify the amounts of payments under the Organic Farming scheme

Yes Accepted; all substantiations for the amounts of organic farming payments have been specified.

January 2004


Substantiations for the calculation of the payments under the measure have been made.

Yes These calculations are used.


Consulta-tion date

Social partner

Contents Accepted Comment

September 2003

Ministry of Environ-

Proposal to make amen-dments in the conditions for the

Yes


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ment payments for forest maintenance and protection

November 2003

Lithuanian Association of Forest Owners

Proposal concerning the rate for labor cost in the case if a person makes himself the works of forest planting and maintenance

Yes

December 2003


Revision of priority points Yes

January, 2004


Proposal to review the list of the kinds of trees and shrubs to be used in forest planting and to recalculate the labor cost rates for reforestation works taking into account the current situation

Yes Kinds of trees have been determined, prices have been recalculated

Support for semi-subsistence farms undergoing restructuring

Consulta-tion date

Social partner


2002 Lithuanian Institute of Agrarian Economics

Methodology has been prepared establishing criteria for the size of a semi-subsistence farm as well as several groups of semi-subsistence farms according to their specialisation

Yes The methodology is used when drafting the description of the measure

December 2003


Proposals on forms of business plans

Partly

January 2004

Lithuanian Institute of Agrarian Economics (LIAE)

Proposals on forms of business plans - the LIAE proposed indicators to be included into the business plan. These indicators would be used in estimating economic viability of farms. The Lithuanian Institute of Agrarian Economics is prepared to carry out forecasting work required.

Yes The form of the business plan has been drafted together with the National Paying Agency and the Lithuanian Institute of Agrarian Economics


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14. Balance between the different support measures The table below provides the weight of each of the measure in the total Rural Development package. Further an explanation of the balance between the measures is provided in order to justify the distribution of funds among the measures chosen. Table 55. Distribution of funds among measures, 2004-2006 Measure Total public funds, EUR % allocated for

each measure Total EU contribution Early retirement 90,231,640 72,185,312 15 Less favoured areas and areas with environmental restrictions 177,137,105 141,709,684 29

Agri-environment 94,652,010 75,721,608 15 Afforestation of agricultural land 6,965,405 5,572,324 1 Support for semi-subsistence farms undergoing restructuring 7,691,960 6,153,568 1

Meeting standards 107,309,430 85,847,544 18 Technical assistance 5,725,775 4,580,620 1 Complimentary national direct payments 119,411,240 95,528,992 19

Projects approved under Regulation (EC) No. 1268/1999 2,750,435 2,200,348 1

TOTAL 611,875,000 489,500,000 100 As it can be seen two measures namely Early Retirement and LFA are the most funds consuming measures. The use of Early Retirement scheme to restructure milk production sector is of vital importance aiming at increasing the competitiveness of agricultural sector in general and milk production in particularly. The Government of Lithuania has decided to take advantage of using this possibility in the period of 2004-2006, moreover, that it is a derogation from the EC Regulation 1257/1999 rules governing implementation of the ERS and will only be applied in the period 2004-2006. Ensuarance of certain living standard in rural areas particularly in relation to the incomes of farmers is very important aiming at solving the problem of depopulation. As Lithuania has quite a big area of agricultural land classified as LFA it is very important to seek that those areas are not being left abandoned due to adverse farming conditions. Especially, when incomes of those farming in LFA and those farming in relatively good conditions differentiate enormously. Thus, income support for those farming in LFA is crucial in reaching the overall and specific objectives of the programme. Although the environmental status can be regarded in Lithuania as in a quite favourable condition it has still been decided to allocate substantial amount of available funds for the implementation of the Agri-environment measure. As it has already been indicated, the experience of other countries emphasises


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that a proactive rather then reactive approach should be maintained in relation to the environment protection. Thus, the measure will address the problems related to the status of environment and at the same time will ensure that already existing values protection and enhancement of which is needed or desirable today are protected in a sustainable manner. Since Lithuania has quite good conditions for further development of livestock production, especially milk production, it is considered that it is vital to allocate, in addition to the funds available from EAGGF Guidance section, a sufficient amount of rural development funds for the development of production which meets the EU requirements in relation to the milk quality and also in relation to the environment protection requirements as regards protection of waters from pollution by nitrates. The latter requirement will be implemented through installation of manure/slurry storages. 15. Compatibility and consistency with EU policies Article 12 of the Council Regulation 1260/1999 laying down the general provision on the Structural Funds requires that all measures be compatible with Community policies on “environmental protection and improvement and on the elimination of inequalities and the promotion of equality between men and women”. Both of these issues have been covered in detail in Chapter 6.3. 16. Additional state aid No additional state aid it is intended to provide in addition for the measures to be implemented within the scope of this Rural Development Plan and for which the Community support will be granted.


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Annex 1: Technical sheets per measure Measure 1. Early retirement This measure implements articles 10-12 of Council Regulation (EC) No 1257/1999 of 17 May 1999 on support for rural development from the European Agricultural Guidance and Guarantee Fund (EAGGF) and amending and repealing certain regulations. 1.1 Introduction Implementation of the early retirement scheme is an important measure targeted to improve farm structure by promoting extension of the farm size due to termination of agricultural production on small-scale agricultural holdings, consolidation of the agricultural plots in order to improve the economical viability and competitiveness of remnant agricultural holdings. This will also positively influence farmers’ age structure, as encourage the replacement of elderly farmers by farmers able to improve effectiveness of agricultural production. The aid is targeted to ensure elderly farmers to stop commercial activities by transfer of the holding to younger farmers with special education in agriculture or to economically viable agricultural enterprises.

Problem of small dairy farms is defined as a problem of a great importance. According to the data of Agricultural Information and Rural Business Centre (AIRBC) by 1st of January 2002 there were 224.582 dairy cow owners in the Animal Register, more than 95 per cent of which owned less than 5 cows. The structure of dairy farms according to the number of dairy cows shows, that among small (less than 5 cows) dairy farms holders at the age between 55 and 75 dominate.

Lithuania has addressed the request for funding a programme for the termination of milk production in small-scale farms within the framework of the early retirement scheme as provided in Regulation (EC) No.1257/1999. As the major part of small dairy farm holders are over normal retirement age it is granted to Lithuania to include individuals who already are of normal retirement age but not yet 70 years old. This should stipulate the improvement of the structure of dairy farms through the elimination from the market of small-scale milk producers failing to meet hygiene requirements for dairy farms after the date of accession and the end of period of grace (2007). 1.2. Description of the measure Support under this measure includes retirement grant to be paid to cover income loss for farmers, who decided to stop commercial farming for a period of up to 15 years (the period will vary depending on the applicant’s age on the date of application). An annual allowance per hectare shall be paid to differentiate income compensation in order encourage medium size farmers to participate in early retirement scheme. The aid amount depends on the released land area.


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Small dairy farm holders are defined as certain target group. The aid amount depends on the individual milk quota size (production index). There is a possibility to receive a certain part of state social retirement pension in advance payments, foreseen in national legislation (Law on Advance Payments of State Social Retirement Pension9, coming into force from 1st July 2004). A person who has not more than 5 years left till the normal retirement age, complies with other requirements, and is entitled to a state social retirement pension when reaching normal retirement age, can receive a certain part of state social retirement pension in monthly advance payments. When such person reaches normal retirement age, his/her state social retirement pension is decreased by 0,4 percent for every month he/she has received the advanced payments of state social retirement pension. Concerning the normal retirement age in Republic of Lithuania, it has been set10 as 62.5 years for men and 60 years for women, and a transition is foreseen, during which the actual retirement age is gradually increased by 0.5 years annually until reaching the normal retirement age (it has already been reached for men (transfer from 60 to 62.5), and for women it shall be reached in 2006 (transfer from 55 to 60)). So, for the duration of this programming period, the actual retirement age for women is 59 years in 2004, 59.5 years in 2005, and 60 years in 2006, reducing the initial 5 years difference between retirement aged for men and women from 5 to 2.5 years. Thus in 2006, at the end of the programming period of this document (RDP), the reform on the increase of the retirement age, which was begun in 1995, shall be concluded. To exclude the possible overcompensation the constant part of the annual allowance is reduced by the annual amount of social payments received (state social retirement pension or advance payments of state social retirement pension in this case). 1.3. Definitions For the purposes of this measure: ‘Agricultural activities‘ shall mean activities related to producing, processing and marketing of agricultural production, produced in private agricultural holding. It involves provision of agricultural services as well. ‘Agricultural holding’ shall mean all production units managed by a farmer situated within the territory of Lithuania. ‘Agricultural enterprise’ shall mean legal person engaged in agricultural activities, whose annual income from agricultural production constitutes more than 50 % of all annual income.

9 State Gazette, 2003, Nr. 114-5116 10 The Law on State Social Retirement Pension (State Gazette, 1994, No. 59-1153)


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‘Compensatory allowances’ shall mean an aid provided to cover income loss in holdings where commercial farming is terminated. ‘Farmer’ shall mean an individual agricultural producer, alone or with partners involved in agricultural activities and forestry. ‘Farmer’s partners’ shall mean persons involved in agricultural activities together with the farmer, according to the written partnership agreement. ‘Farming transferee’ shall mean the person who succeeds the transferor as the head of the agricultural holding or a farmer who takes over all or part of the land released by a transferor in order to expand his own agricultural holding; ‘Non-farming transferee’ shall mean any other person or body who takes over all or part of the released land to use it for non-agricultural purposes, forestry or the creation of ecological reserves; ‘Normal retirement age’ – this age in is Lithuania 62.5 years for men and 60 years – for women11. ‘Small dairy farm holder’ shall mean an individual milk producer with a herd of less than 5 cows. ‘Transferor’ shall mean a farmer who stops all commercial farming activity definitively pursuant to this early retirement scheme. ‘Worker’ shall mean a paid farm worker who was employed on a transferor’s agricultural holding before his early retirement and who is entitled to the old age pension. 1.4. Objective Hierarchy for the early retirement measure The overall objectives for the early retirement measure are defined as follows: • Improving of the farm and social structure; • Ensuring a certain income level for elderly farmers who decide to stop farming and for elderly

family helpers and farm workers who lose their employment as a result of a farmer’s early retirement;

• Increasing competitiveness of agricultural sector due to improved economical viability of the transferred agricultural holdings.

The specific objectives for the early retirement measure are: - Encourage about 30000 farmers beyond 55 years to stop commercial activities (30.000

holdings, 105.000 ha of land transferred to young farmers or agricultural enterprises and 240.000 tones of Milk quota released);

11 As defined in The Law on State Social Retirement Pension (State Gazette, 1994, No. 59-1152)


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- Average size of holding being transferred by transferor – 3,5 ha; - About 5 per cent of land released for non agricultural purposes. The operational objectives are the immediate output of the measure: 30000 farmers (landowners and small dairy farm holders) receive early retirement support each allocating an average of 3,5 ha of land and 8 tones of milk quota to be released. Of these, 75 per cent are small dairy farm holders, who are able to enter ERS (transfer the individual milk quota and land) beyond the normal retirement age. Measure Output




Early retirement

30000 farmers enter ERS, each allocating an average of 3,5 ha of land and 8 tones of milk quota to be transferred. 75 percent of beneficiaries are small dairy farm holders, who are able to enter ERS beyond the normal retirement age.

30.000 farmers and 600 farm workers and family helpers older than 55 stop commercial activities and receive income support 105.000 ha of land released and transferred to young farmers or agricultural enterprises 240.000 tones of milk quota disposed on State Milk Quota Reserve 5000 ha non-commercially viable land released for non-agricultural purposes (5 % of 105.000)

Improving of the farm and social structure by - increasing average farm size from 13,7 to 15,9 ha - increasing average herd of milk cows per holding from 2,26 to 3 - reducing the number of elderly farmers (over 55) from 60 to 45 percent.- increasing the number of young farmers (up to 40) from 14,4 to 16,7 percent. Ensuring a certain income level for elderly retiring farmers, farm workers and their family helpers. Increasing competitiveness of agricultural sector due to improved economical viability of the transferred agricultural holdings.

1.5. Type of aid Early retirement aid granted to transferors consists of two parts – constant and variable. Constant part of the grant consist of:


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- Retirement grant, calculated as an average annual old age pension prognosis for the period 2004-2006. The retirement grant is a flat rate per annum for equivalent in national currency of 1290 Euros per transferor. - Extra-allowance in the case of dependant spouse (the spouse must be between ages of 55 and

normal retirement age, unemployed, and receive no state social payments). In the case of attending of the dependant spouse, extra allowances not dependent on the land released at an annual rate 645 EUR should be paid to the transferor. The extra-allowance can not be provided in the case if the spouse enters farm worker early retirement scheme or is employed under a labour contract or if the spouse gets incomes from national social insurance funds (old age pension, disability or invalidity pension). Extra-allowance is paid until the dependant spouse reaches normal retirement age.

As the aid grant goes beyond normal retirement age, after transferor has reached it, the constant part of the retirement grant is decreased by the amount of national retirement pension to which the transferor is entitled. Variable part of the grant consists of: - Milk Quota premium (compensation for the income forgone is calculated basing on the individual milk quota valid for the date of application). In order to encourage small dairy farmers cease commercial farming an annual Milk Quota premium will be paid in the form of lump sum of 175 EUR per ton of Milk quota released for the first year of participation in the scheme. The sum shall gradually decrease, and for the second year in the scheme 150 EUR per ton of Milk quota released shall be paid, and 125 EUR per ton of Milk quota released for the third year and 80 EUR per ton of Milk quota released for subsequent years in the scheme. - Annual allowance per hectare of released land. In order to induce farmers, especially small and medium size farm holders, to stop farming an annual allowance per hectare up to 24 ha of released land will be paid to compensate the income loss. Annual allowances per hectare make 90 EUR. Only beneficiaries satisfying both the criteria for transferor-farmer and transferor-small dairy farm holder are entitled to the variable part of the grant, consisting of both annual allowances for hectares of released UAA land and milk quota premium. Transferor-small dairy farm holder can receive the annual allowance for hectares of released land if he/she corresponds to all criteria for the transferor-farmer, except the latter’s age criteria. Early retirement aid forms

Amount, EUR Beneficiaries Duration of the aid

Retirement grant per beneficiary

1290 Applicants from 55 years of age until retirement age (excluding farm workers)

15 years but shall not go beyond the 75th birthday of transferor

Retirement grant per beneficiary

1290 Applicants from 55 years of age until retirement age (farm workers)

7,5 years but shall not go beyond the retirement age of the beneficiary

Extra-allowances in the case of dependant spouse

645 Applicant with a dependant spouse

10 years but shall not go beyond the normal retirement age of the dependant spouse


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Annual allowance per hectare

90 Land transferors (both transferors-farmers and small dairy farm holders)


Lump sum per ton of Milk quota released

175 in 1st year 150 in 2nd year 125 in 3rd year 80 in subsequent years

Individual milk quota transferors


1.6. Eligibility criteria 1.6.1. Transferor: Transferor must stop commercial farming definitively. Transferor may retain the use the buildings and the area on which the buildings in which he/she lives are situated, which may not be used for commercial purpose. Transferor - farm worker cannot return to the farm worker’s work. Transferor may retain 1 dairy cow, which may not be used for commercial purpose. Excess cows shall be sold, and they can not be sold to a transferor’s spouse. The sale of the remaining 1 cow shall not be considered the return to the commercial farming. Transferor-farmer must transfer the holding or part of it by sale, or gift to a farming transferee satisfying certain conditions. Individual milk quota is returned to the national milk quota reserve with no additional compensation payment. If the farming transferee cannot be found, the holding may be disposed without quota rights to non-farming transferee to be used for non-agricultural purposes, forestry or the creation of ecological reserves or can be reassigned by transferee to be used for non-agricultural purposes, forestry or the creation of ecological reserves. An applicant (applying to transferor-farmer, and to transferor-small dairy farm holder) who is not the owner of the farm (agricultural holding) involved will be admitted to the scheme only if he/she is in actual joint management with the owner. Only one of the partners will be payable.12 In case of spouses in actual joint management both partners have to cease commercial farming. In case of transferor-small dairy farm holder – all criteria are individual, except the criteria defining number of cows registered (cumulative - checked and summarised for all partners). An application to participate in the ERS from the applicants/beneficiary’s spouse can be submitted only in case of transferor-farm worker. 1.6.1.1. Farmer (on the date of submission of application): - A male transferor must be between ages of 55 and 62 and 6 months, a female transferor – between

55 and 60. - Has practised farming for the 10 years preceding transfer;13

12 EC No 817/2004 13 EC No1257/1999 Chapter IV, Article 11(1)


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- Has declared, according to the determined order, tillage and/or cattle for not less than 4 years preceding the application to the Scheme.

- Has practised farming on the area no less than 1 hectare of UAA; - must be have a right to receive state social retirement pension when he/she reaches the normal

retirement age; - Agricultural holding must be on Agriculture and Rural Development Register. - If the beneficiary dies within the period of the early retirement support, the support may be payable

to his or her spouse/dependant. Entitlement to the early retirement support for the balance of the period will be contingent on full compliance with the conditions of the scheme by the transferor’s spouse/dependant and the transferee. The inheritance of the entitlement applies to all eligible applications received in 2004-2006.

- If the beneficiary dies after the submission of application but prior the decision for support is taken, the early retirement support may be payable to his or her spouse/dependant for the balance of the period, provided the conditions of the scheme continue to be met. The inheritance of the entitlement applies to all eligible applications received in 2004-2006.

1.6.1.2. Owner of a small dairy farm (on the date of submission of application) - Must be from 55 till less than 70 years of age for both genders; - Has practised farming for the 10 years proceeding transfer; - Has less than 5 cows registered in the Cattle Register (for the applications of 2004, the date of

check is 01/01/2003, for the applicants of 2005 - 01/01/2004; and for the applicants of 2006 - 01/01/2005);

- Must be notified in Milk Quota Register with an individual milk quota assigned; - Agricultural holding must be on Agriculture and Rural Development Register.

- If the beneficiary dies within the period of the early retirement support, the support may be payable to his or her spouse/dependant. Entitlement to the early retirement support for the balance of the period will be contingent on full compliance with the conditions of the scheme by the transferor’s spouse/dependant and the transferee. The inheritance of the entitlement applies to all eligible applications received in 2004-2006.


1.6.1.3. Farm worker On the date of submission of application of the transferor, a farm worker must: - be employed in the farm the holder of which have entered the early retirement scheme; - be aged between 55 and 62 and 6 months (a male farm worker) or 55 and 60 (a female farm

worker); - have devoted no less than half of his working time as a family helper or farm worker in the 5

years14 preceding the early retirement of the transferor;

14 EC No1257/1999 Chapter IV, Article 11(3)


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- and have worked on the transferors farm for at least the equivalent of two years full time during the four year period preceding the early retirement of the transferor15;

- have a right to receive state social retirement pension when he/she reaches the normal retirement age.

- When a worker dies within the period of support the early retirement support is payable to his spouse/dependant for the balance of the period, provided the conditions of the scheme continue to be met. The inheritance of the entitlement applies to all eligible applications received in 2004-2006.


1.6.2.Transferee: 1.6.2.1. Farming transferee On the date of submission of application of the transferor transferee must: - be up to 50 years old, except in the case of free and definitive transfer of the holding to a family

member (the holding can not be transferred to a transferor’s spouse); - Succeed the transferor as the head of the agricultural holding or to take over all or part of the land

released.16 - Possess occupational skills and competence.17 - Undertake to practice farming on the agricultural holding for not less than five years; at the end of

these five years shall present the documents proving that (one of the following): • the surface area of holding has increased (compared with the data of the year entering

the Scheme as transferee) by 5% for specialized farms, 10% - for non-specialized farms; • the volume of works (livestock heads, tillage area, number of farm workers, the

volume of contracted works) has increased, compared with the data of the year entering the Scheme as transferee;

• the income has increased, compared with the data of the year entering the Scheme as transferee;

• transferee has attended vocational training courses equivalent to minimum 100 hours; - Notify the Agriculture and Rural Development Register; - shall have no taxing arrears.

Released land may be included in a re-parcelling operation or in a simple exchange of parcels. In such cases, the conditions to released land must be applied to areas equivalent to those of released land.

1.6.2.2. Non-farming transferee On the date of submission of application of the transferor transferee must: - be up to 50 years old, except in the case of free and definitive transfer of the holding to a family

member (the holding can not be transferred to a transferor’s spouse); 15 EC No1257/1999 Chapter IV, Article 11(3) 16 EC No1257/1999 Chapter IV, Article 11(2) 17 EC No1257/1999 Chapter IV, Article 11(2)


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- must take over the released land and use for non-agricultural purposes, forestry or the creation of ecological reserves for not less than five years;

- at the end of period of five years shall present the documents proving that (one of the following): • the surface area of holding has increased (compared with the data of the year entering the Scheme as transferee) by 5%; • the volume of contracted works has increased, compared with the data of the year entering the Scheme as transferee; • the income has increased, compared with the data of the year entering the Scheme as transferee; • transferee has attended vocational training courses equivalent to minimum 100 hours;

- notify the Agriculture and Rural Development Register; - shall have no taxing arrears. 1.6.2.3. Agricultural enterprise On the date of submission of application of the transferor transferee (legal person): -has practiced farming at least for full 10 years preceding transfer; -has no taxing arrears; -can prove economic viability corresponding to the economic viability required18 from the applicant for support under the SPD measure Investments in agricultural holdings; -at the end of period of five years can prove economic viability corresponding to the economic viability required19 from the applicant for support under the SPD measure “Investments in agricultural holdings” and shall present the documents proving that (one of the following):

• the surface area of holding has increased (compared with the data of the year entering the Scheme as transferee) by 5% or there were at least 10 transferors succeeded during the period; • the volume of contracted works has increased, compared with the data of the year entering the Scheme as transferee; • the income has increased, compared with the data of the year entering the Scheme as transferee.

1.7. Duration of the payments Early retirement support shall not exceed a total period of 15 years and shall not go beyond the 75 birthday of a transferor. In the case of early retirement of farm worker early retirement support shall not exceed 7,5 years and shall not go beyond the applicant’s normal retirement age. Indicative financial allocations for 2004-2006, EUR

18 State Gazette, 2004, No.34-1112, Decree of minister of agriculture on the regulations for the establishment of economic viability for the natural persons applying for support under the rural development and fisheries priority under the SPD 19 State Gazette, 2004, No.34-1112, Decree of minister of agriculture on the regulations for the establishment of economic viability for the natural persons applying for support under the rural development and fisheries priority under the SPD


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Year Total public

cost % EU

contribution % National

contribution %

2004 30,125,000 100.00 24,100,000 80.00 6,025,000 20.00 2005 32,327,155 100.00 25,861,724 80.00 6,465,431 20.00 2006 27,779,485 100.00 22,223,588 80.00 5,555,897 20.00

2004-2006 90,231,640 100.00 72,185,312 80.00 18,046,328 20.00 Measure 2. Less-favoured areas and areas with environmental restrictions This measure implements articles 13-21 of Council Regulation (EC) No 1257/1999 of 17 May 1999 on support for rural development from the European Agricultural Guidance and Guarantee Fund (EAGGF) and amending and repealing certain regulations. 2. 1. Introduction

Due to natural, social, economic, traditional and other circumstances regional differences emerged in Lithuania. Crop production, animal production and, accordingly, income and quality of life varies up to 3-4 times among the regions. It has also been observed a tendency of worsening demographic indicators and more intense migration of population from the poor regions, which in certain areas lead to critical level of depopulation.

With regard to this situation and arising problems, thorough analysis of regional disparities has been performed considering all the major factors determining quality of life in different regions. As a result of the analysis the Eastern, South – eastern and Western parts of the country were designated as less-favoured.

It has been made a strategic decision by the Ministry of Agriculture of the Republic of Lithuania to provide focused and systematic support to these designated areas by including this measure into the Rural Development Plan of Lithuania 2004-2006. Under this measure farmers in the less-favoured areas will be supported by compensatory allowances as provided by Article 14 of Regulation (EC) No 1257/1999.

Due to the implementation of nature protection requirements, the Natura 2000 network will be established in Lithuania. The components of this network will be areas designated for protection of wild birds and natural habitats. Firstly the protected areas for bird protection will be established. To follow the requirements of protection of such areas the stakeholders will need to adhere to new nature protection restrictions, which will be applied in these territories. The protection of three bird species: corncrake (Crex crex), great snipe (Gallinago media) and aquatic warbler (Acrocephalus paludicola) will have impact on the use of agricultural land, because they are breeding in agricultural land. For the


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protection of these birds it is planned to restrict to plough up meadows and pastures in 24 sites. A map indicating these areas and a table providing information on their size are included in Annex 10.

2.2. Delimitation and types of the less-favoured areas

The legal basis for delimitation of less-favoured areas and areas with environmental restrictions is Regulation (EC) No 1257/1999.

According to Regulation (EC) 1257/1999, less-favoured areas may include:

mountain areas (Article 18) of which there are none classified in Lithuania;

other less-favoured areas (Article 19) characterised by:

the presence of land with poor soil productivity,

production which results from low productivity of the natural environment which is appreciably lower than the average;

low population density.

Other areas affected by specific handicaps (Article 20).

2.2.1. Less favoured areas according Article 19

Less favoured areas for the programming period 2004 - 2006 are attributed using the following indices:

• the yield of cereals is lower than 80 per cent of the national average,

• the value of total agricultural production per capita employed in agriculture is lower than 80 per cent of the national average,

• the population density is lower than 50 per cent of the national average,

• the percentage of active population engaged in agriculture is more than 15 per cent,

• the rate of population regression is 0.5 per cent per year or more.

• The presence of land of poor productivity;

The land productivity has substantial impact on the production and economic results of the farming (particularly in crop production). Yield of crops varies more than 3 times in the land with different soil productivity. The tendency of crop yield variation caused by soil productivity shows its significant impact on the efficiency of cereal production.


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According to data from the Lithuanian Department of Statistic the average yield of cereals was 2.73 ton/ha in 2002. The yield of cereals not exceeding 80 per cent of the national average is considered to be considerably below the national average (2.18 ton/ha). According to this criterion the yield of cereals is defined as considerably below the national average in 26 municipalities, of which 6 municipalities have reported the yield of cereals less than 60 per cent of the national average and 9 municipalities less than 70 per cent of the national average (Table 1, Annex 3).

• The agricultural production per capita is appreciably lower than the national average;

The criterion of the value of total agricultural production per capita employed in agriculture is taken

to justify a lower efficiency of production. The total agricultural production is calculated in current prices and covers the value of production of the gross yield harvested in year, of production of perennial grasses and decorative seedlings, of livestock and poultry products, fish catch in artificial ponds and breeding animals for fur production. It comprises products sold to the public institutions, at market places and other places; products consumed, products used as raw material in processing, by-products (straw, downs, etc.) and variation of the residual value of work-in-progress goods at the beginning and at the end of the year (Table 2, Annex 3).

• A low or dwindling population predominantly dependent on agricultural activity, the accelerated decline of which would jeopardise the viability of the area concerned and its continued habitation.

The criteria of population density, rate of regression and percentage of population engaged in agriculture were used to justify third criteria of Article 19.

The low population density criterion is defined as 50 per cent below the national average. In the beginning of 2003 the average population density in Lithuania was 30.7 inhabitants per square kilometre (excluding cities and townships). According to this criterion 22 municipalities with the lower population density than 50 per cent of the national average have been selected (15,4 people per square kilometre) (Table 3, Annex 3).

The critical rate of regression has been set at the level of 0.5 per cent or more. A total of 36 municipalities during 2000 – 2003 had corresponding regression to this criterion (Table 4, Annex 3). The share of active population engaged in agriculture exceeding the limit of 15 per cent has been observed in 49 municipalities (forecast data of Population and housing census 2001) (Table 5, Annex 3).

After evaluation of economic, social and demographic criteria in different rural areas 19 municipalities have been designated as less favoured areas of Article 19 of Regulation 1257/1999.

Four municipalities marginally do not match the criteria on population density (Salcininkai, Šilutė, Pagegiai) and rate on population regression (Plunge). However, these municipalities play an important role in terms of protection of landscape and biodiversity (see Annex 3). Moreover, they are designated as less favoured areas as well. Šilutė municipality and Pagegiai municipality are also attributed to the areas vulnerable to flooding, where floods occur on regular basis. These areas are important in terms of living environment for local people and in terms of native environment for Lithuania itself as well as for all Baltic countries. The meadows of Nemunas lower reaches serve as a filter for silt and pollution from the Nemunas catchment’s area. Flooded parts of lower reaches of Nemunas river’s meadows and


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lagoon are the main spawning areas for fishes from the Curoonean sea. Besides, in the autumn and spring time flooded meadows serve as resting areas for migrant birds.

Table 1. Summary of calculations Criterion National

average Target value for LFA’s

Number of municipalities which fulfil criterions

Yield of cereals, ton/ha 2.7 2.18 26 The value of total agricultural production per capita employed in agriculture, Lt/year

21 500 17 200 19

Population density, people/km2 30.7 15.4 22 Share of active population engaged in agriculture, %

> 15 49

The rate of population regression, %/year

> 0.5 36

Table 2. Municipalities according Article 19

Municipalities Agricultural area, ha

Švenčionys r. 45537

Molėtai r. 62675

Zarasai r. 49041

Ignalina r. 60065

Trakai r. 37146

Varėna r. 46841

Rokiškis r. 98591

Utena r. 60882

Anykščiai r. 96097


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Ukmergė r. 74489

Rietavas 21253

Šalčininkai r. 64690

Širvintos r. 49571

Lazdijai r. 57392

Telšiai r. 72063

Plungė r. 55068

Pagėgiai 37613

Šilutė r. 80900

Elektrėnai 24958

LFA according to 19 Article (atmunicipality level)

1094872

The significant contrasts of the Lithuanian demographic situation and land productivity can be observed. Therefore it is essential to attribute to less favoured areas also some areas on ward (NUTS 5) level. The wards which meet the demographic criteria and the criterion of yield of cereals are listed below (Table 3). Table 3. LFA in ward level

Ward Yield of cereals, ton/ha

Population density 1 /km2

Rate of regression

Population engaged in agriculture and forestry, %

Agricultural area, ha

Alytus r. Daugai 2,04 14,2 -3,9 19,5 8101Raitininkai 1,17 12,4 -2,6 53,4 4196Druskininkai r. Leipalingis 1,86 10,5 -0,8 33 7239Viečiūnai 1,63 7,9 -0,5 15,6 1350Jonava r. Dumsiai 1,47 10,8 -0,7 22,8 1656Upninkai 2,03 10,9 -1,7 19,7 5089Kaunas r. Zapyškis 11,5 14,9 -0,5 28,4 3627Kaišiadorys r.


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Nemaitonys 1,69 15,1 -2,7 48,6 4187Kruonis 1,76 13,4 -0,6 42,5 10469Palomenė 1,91 12,3 -5,6 42,0 6925Paparčiai 1,69 12,9 -1,4 57,8 4529Prienai r. Stakliškes 1,85 13,4 -1,3 45,0 10846Klaipėda r. Dovilai 1,74 15,3 -19,4 28,5 8294Priekulė∗ 1,49 22,6 0,7 29,7 7912Raseiniai r. Šiluva 1,83 14,4 -2,8 52,9 8737Skuodas r. Barstyčiai 1,88 8,1 -1,8 55,1 4643Notėnai 2,15 14,8 -1,7 80,8 6569Kazlų Rūda Jankai 2,17 9,19 -4,0 59,6 4216Šakiai r. Lekėčiai 1,95 10,8 -1,3 44,6 2369Vilkaviškis r. Vištytis 1,63 9,3 -2,5 34,7 7093Gražiškiai 2,16 10,1 -0,6 69,7 8254Kupiškis r. Kupiškis 2,02 15,1 -0,5 15,7 15473Panevėžys r. Karsakiškis 2,13 10,6 -0,5 34,7 11225Akmenė r. Kruopiai 2,1 11,9 -7,3 33,6 6738Kelmė r. Vaiguva 2,03 14,7 -2,9 61,9 5477Užventis 2,18 14,9 -0,5 56,5 13279Kražiai 2,16 9,9 -0,5 57,5 14997Šaukėnai 1,94 15,2 -0,9 56,5 11846Pakražantis 2,11 14,8 -0,6 60,8 9955Radviliškis r. Šiaulėnai 1,76 11,98 -2,1 50,6 9823Jurbarkas r. Viešvilė 2,01 13,6 -0,6 24,2 2521Šilalė r. Bijotai 1,79 15,2 -0,9 74,7 4939Bilionys 1,37 13,7 -1,3 61,9 2786 ∗ Priekule does not meet criteria of population density and rate of regression but as flooding area is important to the biodiversity and its richness, to landscape protection.


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Kaltinėnai 1,62 14,2 -0,5 53,2 9295Kvėdarna 1,47 15,4 -0,5 29,3 7234Laukuva 2,02 15,2 -0,6 50,8 10615Palentinys 1,33 11,6 -3,8 61,1 1841Šilalė rural 1,8 15.2 -0.5 40,6 7565Teneniai 2,0 6,3 -1,2 52,3 2146Traksėdis 1,69 15,2 -0,5 40,6 4480Upyna 1,65 15,4 -0,5 72,5 6768Žadeikiai 2,14 14,4 -0,8 50,7 3324Tauragė r. Gaurė 1,93 12,1 -1,4 41,7 7702Batakiai 1,9 14,3 -4,1 47,2 5119Lauksargiai 1,94 14,4 -2,1 65,3 5143Žygaičiai 1,76 12,6 -1,7 72,9 10869Mažeikiai r. Seda 2,14 15,4 -2,0 35,5 7254Vilnius r. Buivydžiai 1,8 11,3 -0,6 42,4 3444Dūkštai 1,36 13,2 -0,5 40,2 5024Medininkai 0,91 13,5 -1,2 31,5 4019Sužionys 1,49 13,5 -0,7 46,2 7988Total 345190

A total of 42,7 % or 1 440 062 ha of agricultural land is attributed to LFA under Article 19.

2.2.2. Areas affected by specific handicaps (Article 20)

The Extreme Karst zone in which the Karst phenomena constitute natural handicap to farming has been designated as less-favoured area. Karst process and the phenomena related with it spread in one third of the world land. The deliquescent solid and internal water streams are the necessary factors for the Karst process. Distinctive relief and underground Karst formations are the outcomes of the Karst process and as a result they cause the restrictions to farming aiming to protect underground water from pollution. North Lithuanian Karst zone differs and is composed of Karst protection zone and Extreme Karst zone. Considering the criteria of ecological vulnerability, different crop structure, different plant fertilization and protection systems in the Extreme Karst zone are recommended. Parts of Biržai and Pasvalys municipalities are designated as Extreme Karst zone by the resolution of Lithuanian Government No 589 of 1991. Agricultural activities in Extreme Karst zone is regulated by this resolution. According to it the limits of 40-50 per cent of grain and 40-60 per cent of perennial grass are set in crop structure. In some cases only meadows must compose the crop structure. Planting of cultivated crops (potatoes, vegetables, sugar beat) is forbidden or can be limited up to 10 per cent of crop structure. In some cases the use of fertilizers is forbidden or it is under restrictions (can not go beyond the limits of 60 – 80 kg/ha of


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azote, phosphorus and kalium). The use of chemical plant protection materials in some cases is forbidden; in other cases it is limited only to particular chemicals.

Due to the restrictions of using manure and chemicals or due to prohibition of using them the yield of agricultural plants in extreme Karst zone decreases by 20 – 50 per cent. (Table 8, Annex 3). The yield of cereals in extreme Karst zone is below 80 per cent of the national average (2,18 ton/ha). Due to these additional requirements that go beyond the Nitrates Directive the cereal yield decreases and therefore it has an effect on the farms’ economical results.

Municipality and ward Karst zone in agricultural land, ha

Biržai municipality

Nemunelio Radviliskis 1243

Pabiržė 6786

Pačeriaukštė 1871

Parovėja 1632

Širvena 6829

Pasvalys municipality

Krinčinas 2072

Smilgiai 1921

Pasvalys 4567

Total 26921 A total of 0,8 % or 26 921 ha of the agricultural land in Lithuania falls within areas affected by specific handicaps (Article 20).

The total less-favoured utilisable agricultural area covers 1.466,983 ha or 43.5 % of the total utilisable agricultural area in Lithuania, which is 3.369,9 thous. ha. The map showing all designated less favoured areas is presented in Annex 3.

2.2.3. Areas with environmental restrictions (Natura 2000 areas)

The Natura 2000 territories have been selected according the national criteria for selecting the Sites of Community Importance (SCI) and Special Protected Areas (SPA). By Order No. 219 of 20 April, 2001 of the Minister of Environment the criteria for selection of pSCIs were adopted. By Order No.22 of 9 January, 2001 of the minister of Environment the criteria for selection of sites for protection of birds (SPAs) were adopted. At this moment all together 83 Natura 2000 territories for protection of wild birds


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have been selected in Lithuania. The list of special protected areas (SPA) and list of potential sites of Community importance (pSCI) were submitted to the Commission on the 30 of April 2004.

24 of 83 sites (or certain parts of these sites) are designated to protect nesting birds in meadows (corncrake (Crex crex), great snipe (Gallinago media), aquatic warbler (Acrocephalus paludicola)). The locations of these protected habitats of birds vere approved by the order No. D1-270 of Ministry of Environment in May 17, 2004. Protection of these bird species requires keeping the possibly higher percentage of meadows and pastures. Therefore it is planned to preserve existing meadows and pastures through the establishment of new protected areas or introduction of new restrictions relevant for protection of meadow’s birds in existing protected areas. The total area of meadows and pastures to be saved in these 24 sites is approximately 30 000 ha. The other restrictions to be set in these territories (as provided in the text below) are foreseen as well. The most important restrictions set is the prohibition to transform meadows and pastures into arable land and the prohibition to mow grass until 15 of August. In cases of great snipe and aquatic warbler protection areas are wet, so it is important to leave hydrological regime as natural as possible (See Annex 10).

2.3. Objectives of the measure

As already mentioned the overall objectives for the LFA measure are: • to ensure sustainable use of agricultural land and thereby contribute to the maintenance of a viable

rural community, • to maintain farming in LFA and to maintain the countryside • to improve environment in LFA considering compliance with Good farming practice • to ensure implementation of the environmental restrictions and proper farming in areas with

environmental restrictions The specific objectives for the LFA measure are: 70000 farmers in LFA comply with good farming practice

• Maintenance of farming in LFA • Maintenance of farming in territories with environmental restrictions The operational objectives of the LFA measure:

26000 farmers in HDA with a total area of 301 305 ha enters the LFA scheme 44000 farmers in LDA with a total area of 1 165 678 ha enters the LFA scheme 5000 farmers will apply environmental restrictions in Natura 2000 areas for bird protection.

Expected impacts and results for LFA measure Measure Output



LFA 26000 farmers in HDA with a total area of 301 305 ha enters the LFA

70000 farmers in LFA comply with good

Ensuring the sustainable use of agricultural land and contribution to the maintenance of a viable rural


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scheme 44000 farmers in LDA with a total area of 1 165 678 ha enters the LFA scheme 5000 farmers will apply environmental restrictions in Natura 2000 areas for bird protection

farming practice Maintenance of farming in LFA Maintenance of farming in territories with environmental restrictions

community, Maintenance of farming in LFA and maintenance the countryside Improvement environment in LFA considering compliance with Good farming practice Ensuring implementation of the environmental restrictions and proper farming in areas with environmental restrictions.

2.4. Eligibility criteria

Compensatory allowances will be paid to private or legal persons registered on Agriculture and Rural Development Register.

Compensatory allowances will be paid on an area basis. An eligible hectare of land is each declared hectare of utilizable agricultural land (arable land, pastures, and permanent crops) in the designated less-favoured areas subject to a minimum of one hectare. Forest area will not be eligible for support.

An eligible hectare in areas with environmental restrictions is each declared hectare of meadows, pastures to a minimum of one hectare.

So in order to be eligible for compensatory allowances:

Private or legal person must to declare utilizable agricultural land (arable land, pastures, permanent crop);

farm or part of it on which compensatory allowance is claimed must be registered in the designated less-favoured area or area with environmental restrictions;

a minimum area to be farmed in less favoured areas is 1 hectare; a minimum area of meadows, pastures in areas with environmental restrictions is 1 hectare; farmer must undertake to remain in farming for 5 years from the first payment of compensatory

allowance; legal persons have not debts to the budget of the Republic of Lithuania, to the budgets and

funds of municipalities, farm in accordance with the principles of Good farming practice, the land in less favoured areas must be of good agricultural condition (except areas with

environmental restrictions).

After the beneficiary enters Early Retirement scheme granting of support under this scheme should be stopped.


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Beneficiaries receiving support for Natura 2000 are not eligible for support under Landscape stewardship and Protection shore belts of surface water bodies in meadows and arable land schemes in Agri-Environment measure.

Environmental restrictions applied on agricultural land in the Natura 2000 areas for bird protection:

prohibited to change objective land purpose prohibited to transform meadow and pastures to arable land prohibited to change hydrological regime, if for that, the area’s protective conditions will get

worsen prohibited to plant forest prohibited to mow grass until 15 of August.

The supervision of proper pursuance of these restrictions will be checked by The National Paying Agency.

2.5. Differentiation

Article 15 of Regulation (EC) No. 1257/1999 provides that compensatory allowance payments shall be duly differentiated taking into account:

• the situation and development objectives peculiar to the region;

• the severity of any permanent natural handicap affecting farming activities;

• the particular environmental problems to be solved;

• the type of production and economic structure of a holding.

In Lithuania the aid will be differentiated to reflect different levels of severity of permanent natural handicap experienced within LFAs. Analysis of the Lithuanian LFAs showed significant differences within these areas. Therefore, LFA land will be further subdivided into two land classification categories as follows:

• Highly Disadvantaged Areas (HDA)

• Less Disadvantaged Areas (LDA).

The municipalities that fall under category HDA and LDA are presented in Table 6 of Annex 3. The areas attributed to LFA at ward level and areas affected by specific handicaps fall under category LDA.

2.6. Compensatory allowances


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As it is stated by the Article 15 of Regulation (EC) No. 1257/1999, compensatory allowance shall be fixed at a level which is sufficient in making an effective contribution to compensation for existing handicaps and avoids overcompensation.

One of the objectives of this measure is reducing differences of income levels between non-LFA areas and less-favoured areas. To identify income differences and to calculate compensation allowances the data of the value of gross production per hectare (in constant prices) has been used (Table 7, Annex 3).

The compensatory allowances are provided in the table below:

Compensatory allowance Area

EUR

HDA 75.3

LDA 56.4 If only a part of holding (several blocks or fields) is attributed as LFA, compensation allowances will be calculated for this part. Areas with environmental restrictions cover LFA and non-LFA areas. The compensatory allowance is set at 89 EUR/ha (308 Lt/ha) and will be paid starting 2005.

The amount of compensatory allowance in these areas calculated setting the difference between usual practice and practice with restrictions (Table 10, Annex 3). The case of usual agriculture practice is comparing with set restriction not to mow grass until 15 of August.

2.7. Indicative financial allocations, EUR

Year Total public cost

% EU contribution

% National contribution

%

2004 47,000,000 100.00 37,600,000 80.00 9,400,000 20.00 2005 48,000,000 100.00 38,400,000 80.00 9,600,000 20.00 2006 82,137,105 100.00 65,709,684 80.00 16,427,421 20.00

2004-2006 177,137,105 100.00 141,709,684 80.00 35,427,421 20.00


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Measure 3. Agri-Environment This measure is in accordance with Articles 22-24 of Council Regulation 1257/1999 3.1 Introduction

The aim of implementation of common environmental objectives is to guarantee the balanced development in the country’s territory, to form healthy and harmonious living environment, natural and cultural landscape elements and ecological stability. Also to differentiate country’s management according to the differences in socio-cultural, economical conditions and distribution of resources. Lithuania traditionally is agricultural country that rural landscape and culture are of utmost important for forming natural and cultural individuality. These facts were considered establishing agricultural policy. Aim of this policy is to use the appropriate structure of the use of land, to stop the decay of ecosystems, to protect the natural shore of rivers and lakes, natural meadows, recreation environment, to optimise natural resources and to preserve landscape and biodiversity, to decrease the negative effect of agricultural activities and to establish a healthy natural environment. 3.2 Evaluation Of Agrarian Environmental Situation Of Lithuania

The area of agricultural land is 53 % of total area of the country. Therefore situation of agrarian ecosystem is very important. The changes of land use restitution of land ownership rights decrease areas of agricultural land and not such intensive farming also scarce use of agricultural engineering made the conditions for the increase of temporary not used agricultural land for production, for the bad land management. Most affected meadows were used intensively and were impoverished. The area of remaining meadows is decreasing, either because these meadows accrete by low value forest and/or bushes. Economically strong farms use these meadows intensively for the pastures and impoverish them, because the economical – juridical basis for the protection of meadows is not created yet. In some regions there is temporarily not used agricultural land, which transforms itself with time into a not tended, shrubby meadow. The rearing of animals of local breeds in danger of extinction is designed to assist in the conservation of rare breeds. These breeds might otherwise become extinct, were no support made available. Main source of drinking water is underwater (groundwater). About 2/3 of Lithuanian population use water-supply system, feeding by drinking water and about 1/3 of inhabitants (mostly in countryside) store for drinkable water individually from dig wells (in Lithuania is about 300.000 of dig shaft wells). In 1/3 of them concentration of nitrates is better than allowable norm. Imputed wells are located gradually in all Lithuanian territory. Main reasons for the pollution of water wells are wrongly chose location of well, infraction of protection and sanitary zones from dangerous pollution sources. The most problem quality of water wells is in countryside. In surface water bodies from 1993 concentration of nitrates started to decrease, but was still better than 1990. In 1997 was registered increase concentration of nitrates. In 1998 concentration of nitrates


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reached middling tainted rivers level 2.5 mg/l. Last 15 year in Kuršių sea quantity of fitoplancton, which signify level of water eutrofication, increased 20% and has trend to mount. Agriculture and agri-environment are inseparable and experience of various country shows that most agri-environmental effect maybe achieved in using methods of agriculture production, which are best for country. In Lithuania dominant small and medium size of that farms is 9.1 ha. Number of such farms is 230.00 or 83%. Size of average farm is 10-50 ha, number of such farms - 43.000 or 15%. Changes of farming system, decrease of size of farms and decrease of use of pesticides make good conditions for organic farming. In different country’s places were made some researches and they shows that in food number of pesticides and number of heavy metals in milk, potatoes, in carrot, in bitterroot, in flour of rye and wheat, in egg, in chicken meat, in beef meat is allowed by hygiene norms.

Organic farming in Lithuania started in 1990, and the certification system was established. From 1997 organic farmers receive direct payments from national budget. Certificated areas in year 2003 increased to 23244 ha (0.8% of total utilised agricultural area), or to 3 times the area in year 2002. This shows the expedience of promotion and development of organic farming, and expedience of improvement of conditions of agrarian environment. Organic farming, implemented by modern environment-friendly technology, will motivate: the produce of high quality agricultural products; increase the fertility of soil, reduce of environmental pollution, preserve the biodiversity, keep food production of natural quality, provide favourable conditions for social living conditions in rural areas. 3.3 Objectives of measure

The overall objectives for the agri-environment measure are the following: - Improvement of the environment (water quality, biodiversity, soil and landscape;

preservation of semi-natural agricultural habitats and other important ecological important areas) and production of healthy food;

- Provision of further source of income to farmers supplying environmental services resulting from the adoption of environmental-friendly farming practices going beyond usual good farming practice.

- Reduction of the anthropogenic (of agricultural origin) load on the environment; - Improvement of the quality of surface and underground water, reduction of negative impact

on the environment of plant protection products; - Restoration or preservation of the traditional landscape of the Lithuanian countryside

(meadows, marshes (wetlands)); - Production of good quality agricultural produce, while maintaining healthy environment for

future generations; - Improvement of rural population working and living conditions; - Keep and rear local endangered breeds of native domestic animals on farms; - Increase farmers’ awareness of more environmentally friendly production practices.

The specific objectives for the agri-environment measure are: • Decrease in run-off by N and a following reduction in eutrophication; • Decrease of erosion;


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• Farmland under organic farming occupies 2% of all agricultural land. The operational objectives of the measure: 3 000 farms with a total of 60 000 ha enters the agri-environment scheme. Expected impacts and results

Measure Output (Operational objectives)



Agri-environment

3000 farms with a total of 60 000 ha enters the agri-environment scheme.

Decrease in run-off N and a following reduction in eutrophication Decrease of temporary not used land Decrease of erosion Farmland under organicfarming occupies 2% ofall agricultural land

Improvement of the environment (water quality, biodiversity, soil and landscape; preservation of semi-natural agricultural habitats and other important ecological areas) and production of healthy food. Provision of further source of income to farmers supplying environmental services resulting from the adoption of environmental friendly farming practices going beyond usual good farming practice. Building capacity and increase of farmers’ awareness of more environmentally friendly production practices.

3.4 Motivation of selection of schemes

Scientific research shows that leaving of an unattended protection belt alone does not solve all environmental problems. Unattended belts overgrow with lush vegetation, bushes. This results in the changes in the traditional agrarian landscape, whereas due to left over fallen plants the washing of nutrients into surface waters increases. In implementing reclamation works equipped 65.000 trench, which protected shore belts unattended suitably and don’t accord theirs purpose. Countryside, agriculture and agri-environment are inseparable, because of pollution emerged by nitrates and pesticides and caused by agricultural activities impoverishes environment. Therefore to all countryside’s problems shall be viewed like to social and organic integer. One of most popular social-economical and agri-environmental measure of solution in countryside is organic agriculture production. That hang of farming helps to solve not only employment of dwellers, agriculture production and supplementary incomes questions and but also influence like preventive agri-environmental measure.


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3.5 Scope of the Measure

The agri-environmental measure consists of the following schemes: 1. Protection shore belts of surface water bodies in meadows and arable land and prevention of soil erosion; 2. Landscape Stewardship Scheme; 3. Organic Farming Scheme; 4. Rare Breeds Scheme. 3.6 General requirements for the participation

Beneficiaries:

Farmers, private or legal persons on own or tenant land (land lease contract must be signed at least for 5 years) which are registered their agricultural holding in Agriculture and Rural Development Register.

Requirements for beneficiaries:

- Size of owned or leased farm – minimum 1 hectare; - Agricultural holding must be registered in Agriculture and Rural Development Register; - Shall accept agri-environmental obligations for at least five years; - Fill in a standard application and undertake to meet the requirements laid down in the

Scheme; - Shall commit to adhere Good Farming Practice requirements throughout the farm.

If applicant decides to participate in several schemes of the measure the payments can be paid only for activities carried out in the different fields of the farm (this provision does not apply for Rare breeds scheme);

If applicant during the period of participation in the scheme wishes to join another scheme, then filling in a new standard application form is required.

3.7 Procedure for submission of application

Applicant shall present: - document proving land ownership or land lease contract (land lease contract must be signed

at least for 5 years); - filled standard application form and the plan of farm, which provides the marked area where

the scheme is to be implemented.


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3.8 Description of Schemes

3.8.1 Protection shore belts of surface water bodies in meadows and arable land and prevention of soil erosion Scientific research shows that leaving of an unattended protection belt alone does not solve all environmental problems. Unattended belts overgrow with lush vegetation, bushes. This results in the changes in the traditional agrarian landscape, whereas due to left over fallen plants the washing of nutrients into surface waters increases.

The problem of installing of protective shore belts of surface water bodies especially actual in the northern part of Lithuania, distinguished for a peculiar geological composition and geological phenomena, characterised by Karst process in the surface of the ground. Due to intensive farming and cattle rearing in Karst areas the pollutants with surface water flow penetrate rather easily trough sinkholes and porous soil into underground waters and cause the deterioration in the status of the underground water. Installation of protective shore belts in meadows and in arable land is necessary for protection of water pollution by nutritional load. It is very important to avoid negative effect of soil erosion. Harm caused by water and wind erosion varies very much: washout of fertile soil layer and nutrients from slopes, destruction of crop fields in eroded slopes and in arable land, destruction of ditch slopes and roads, blocking of ditch bed with sediments, silting of water bodies and water pollution. Installation of protective shore belts decreases soil erosion, especially in the most affected areas. Specific requirements:

• Protection shore belts of surface water bodies (hereinafter referred to as protection belts) shall be installed on the banks of natural or regulated rivers and streams, melioration ditches, the shores of lakes and quarries ;

• The total length of protection shore belts along a water bodies must be at least 50 metres; • All surface water bodies in farm should be covered by the action; • Protective shore belt in meadows and in arable land shall include the obligatory protection shore

belt (the one obligatory according to the national regulations defining protection zones of surface water bodies and protection shore belts) and additional extension according with this scheme, which has to be marked on farm map.

Applicant shall: to install the following width of protection belts:

- when width of protection shore belts according national legal acts are till 5 metres additionally leave 1 metres width belt;

- when width of protection shore belts according national legal acts are from 5 to 10 metres additionally leave 2 metres width belt;

- when width of protection shore belts according national legal acts are from 10 to 25 metres additionally leave 3 metres width belt;


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- when width of protection shore belts according national legal acts are more than 25 metres additionally leave 5 metres width belt;

• additional protective belt in arable land shall be installed by sowing it with mixtures of perennial grasses not later than 1 July in the first year of the participation in the programme; • grazing on the protection belts and on the slopes of the shores of surface water bodies is prohibited; • ploughing, use of fertilisers, use of plant protection products, cutting of trees on the protection belt is prohibited. Grass mowing shall be made once a year (start mowing not earlier than 15 of August and end not later than 30 of September); • mow the slopes of melioration ditches once a year (start mowing not earlier 15th August and end not later than 30th of September) cut bushes; • remove mowed grass and cut bushes from the protection belt or the slope of the shores of surface water bodies not later than 15th of October.

Beneficiaries receiving support for Natura 2000 under Less favoured areas and areas with environmental restrictions are not eligible for support under Protection shore belts of surface water bodies in meadows and arable land scheme.

Payment rates: For management of protection shore belt of surface water body and of slopes of melioration ditches in accordance with the national legal acts - 206 EUR/ha; For management of protection shore belt additionally installed meadow - 93 EUR/ha; For management of protection shore belt additionally installed arable land –140 EUR/ha. 3.8.2 Landscape stewardship scheme The objective of this Scheme is to maintain meadows, especially natural and semi-natural meadows, marshes (wetlands). This scheme is very important for the protection of biodiversity, biotopes, natural and semi-natural meadows. As agricultural landscape with insertions of natural components comprises biggest part of Lithuanian territory, farmers will help a lot in conservation of biological diversity and restoration of traditional landscape. By implementing of this scheme the whole complex of living organisms species, their habitats and genetic diversity will be preserved. Marsh (wetland) – is a soggy area distinguished for typical vegetation, where waterlogging is in process Natural or semi-natural meadows mean meadows, which have been established more than for 2 years before entering the scheme.

Specific requirements:

- actions shall be applied only in meadows, marshes (wetlands); - minimum 0.5 ha of land should be covered by the action.

Applicant shall:


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- not use pesticides and fertilizers in meadows marshes (wetlands), to move them every year, start of moving not earlier than 15th of August, but not later than 30th of September;

- preserve traditional biotypes in the meadows by not ploughing and re-sowing with cultural grass species;

- retain isolated trees in meadows, cut bushes; - not graze in the marshes (wetlands); - mowed grass and cut bushes must be removed (till 15th of October); - not install new drain systems near marshes, ponds, situated on the farm.

Beneficiaries receiving support for Natura 2000 under Less favoured areas and areas with environmental restrictions are not eligible for support under this scheme.

Landscape stewardship scheme can be implemented either on a part of holding or on all holding.

Payment rates: For management of marshes (wetlands) - 229 EUR/ha; For management of meadows - 89 EUR/ha. 3.8.3 Organic farming scheme

The aim of this scheme is to support organic farming as the production system that provides both environmental and socio-economic benefits for rural areas and produces quality food products with good and increasing market potential.

Support is given for the organic farms and farms in transitional period to organic farms for the certified and declared area of land used for the production of organic food products.

Scheme of organic farming can be implemented either on a part of holding or on all holding. Applicant shall:

- follow the rules of organic production in accordance with the national legal requirements of organic farming and requirements of the EU Regulation 2092/91;

- yearly present certificate of organic farming; - not reduce certified area of organic farm; - yearly declare tillage.

Administration for year 2004: In order to get payments for Organic farming scheme for year 2004 Organic farming certificate issued by the competent certification body shall be presented. The certificate will approve that applicant has implemented the requirements of the Organic farming programme that year. The payments for the year 2004 for organic farms will be maid till the end of calendar year 2004 on the basis of the certificates presented. Payments rates: For cereals (including legumes and protein crops) – 416 EUR/ha;


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For vegetables and potatoes – 551 EUR/ha; For orchards plantations –752 EUR/ha; For berry plantation –734 EUR/ha; For perennial grass –118 EUR/ha; For herb plantations –456 EUR/ha. 3.8.4 Rare Breeds Scheme

This scheme is designed to preserve the local breeds of animals in danger of being lost to farming. The objective of this measure is to encourage keeping and rearing of local endangered breeds of native domestic animals.

Potential beneficiaries are allowed to breed animals by the pure-breeding only, i. e. using animals for breeding inside race only, in accordance to the breeding plan.

Participants of the programme may renew the animal herds purchased from Gene Fond herds only, or typical animal races, find during speditions, organised by competent authorities. Number of animals involved in a programme established by recommendations of the competent authorities, depending on breeds. Number of animals indicated in a commitment.

The local breeds in danger of being lost to farming and the number of breeding females according to the Register of gene fund on 12th of December 2003 are the following:

• Žemaitukai horses (Also Big Žemaitukai) – 188 females; • Lithuanian Weighted horses – 280 females; • Lithuanian Rufous – 100 females; • Lithuanian Black and White cattle (local found) – 100 females; • Lithuanian Ash-Grey – 680 females; • White-Backed cattle – 493 females; • Lithuanian White pigs (old genotype) – 86 females; • Lithuanian Native (Wattle) pigs – 150 females; • Lithuanian Native Coarse woollen sheep – 554 females • Lithuanian Blackhead sheep (old type) – 950 female; • Vištinės geese – 300 females.

Specific requirements:

• The participant shall participate in breeding programme; • The participant shall present note from competent authorities regarding the number of supported

animals.

Applicant shall: • keep number of animals indicated in a commitment; • follow animal health and zoohygiene requirements, also animal welfare standards; • yearly present note from competent authorities regarding the number of rare breeds animals

in the farm.


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Payment rates: - Žemaitukai horses –191 EUR/livestock unit - Big Žemaitukai horses –197 EUR/livestock unit - Lithuanian Weighted horses –148 EUR/livestock unit - Lithuanian Ash-Grey and White-Backed cattle –180 EUR/livestock unit - Lithuanian Rufous and Black and White cattle (local found) –180 EUR/livestock unit - Lithuanian White pigs (old genotype) –186 EUR/livestock unit - Lithuanian Native (Wattle) pigs –186 EUR/livestock unit - Lithuanian Native Coarse woollen sheep –200 EUR/livestock unit - Lithuanian Blackhead sheep (old type) –200 EUR/livestock unit - Vištinės geese –188 EUR/livestock unit 0,83 horse = 1 livestock unit; 1 cattle = 1 livestock unit; 2,86 pig = 1 livestock unit; 7,14 sheep = 1 livestock unit; 56 geese = 1 livestock unit. This definition is to be applied exclusively for the implementation of this measure. Payments will be made for the animals of maturity age. This age for each breed will be determined in national legislation. Participant may expand the animal herd by own discretion and payments may be made for the number of animals committed (annual payment). 3.9 Administration of measure

Implementing authority shall be the National Paying Agency under the Ministry of Agriculture. The payment shall be made after a necessary checking has been carried out with a view to ensure the fulfilment of the commitment conditions during the entire period.

Farms applying Organic agriculture measure shall be checked by certification bodies in accordance with the procedure provided for in the Rules of the organic farming. Farms applying for the Rare breeds scheme shall be controlled by the competent authorities.

3.10 Control

The implementation of an effective control system for the agri-environment measure is essential and will have main objectives:

- to prevent fraud or over-payments and to contribute to an efficient use of financial resources;


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- to ensure compliance with the relevant national and EU regulations regarding the use of EAGGF co-financing.

3.11 Selection Criteria

Upon receiving an application, the scheme administrators will check to ensure that it is eligible, that it includes all the required information and has been submitted with the necessary supporting documentation. After application evaluation will be made, the applications will be ranked according to certain selection criteria (see below) and those applications with the highest ranking (i.e. those capable of delivering the most significant environmental and other benefits) will be selected. No. Priority criteria Points

1. Location of the farm in a protected area (if at least one part of farm is in protected area, all farm is in protected area)

50

2. Organic farm 30 3. Area, in that is implementing agri-environmental obligations - or each

supplement ha – 1 point, maximum 20 points 20

Total 100 In case of equal number of priority points, priority is given to the earlier submitted projects.

3.12 Indicative financial allocations, EUR

Year Total public cost % EU

contribution % National contribution %

2004 15,000,000 100.00 12,000,000 80.00 3,000,000 20.00 2005 22,981,200 100.00 18,384,960 80.00 4,596,240 20.00 2006 56,670,810 100.00 45,336,648 80.00 11,334,162 20.00

2004-2006 94,652,010 100.00 75,721,608 80.00 18,930,402 20.00


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Measure 4. Afforestation of agricultural land

This measure implements articles 29-32 of Council Regulation (EC) No 1257/1999 of 17 May 1999 on support for rural development from the European Agricultural Guidance and Guarantee Fund (EAGGF) and amending and repealing certain regulations.

4.1. Introduction

Afforestation of agricultural land is considered an important measure for diversification of agricultural activities in order to reduce dependency on agriculture and improve environmental conditions in rural areas. This measure is very important in international point of view, seeking to reduce environmental pollution, because forests play an important role absorbing the pollutants discharged to the environment. In addition, sustainable forest management contribute to the maintenance and enriching of biodiversity, landscape entertaining and conservation of cultural heritage. Council Regulation (EC) 1257/1999 based on which the Rural Development Plan is being prepared and where this measure is included, article 29(1) emphasizes that support for forestry, including afforestation of agricultural land, shall contribute to the maintenance and development of the economic, ecological and social functions of forests in rural areas. 4. 2. Description of the measure As stated in the Council Regulation (EC) 1257/1999 article 29(3) support under this measure shall be granted only for areas owned by private owners or by their associations or by municipalities or their associations. The article 31(1) of the same Regulation sets that support shall be granted for the afforestation of agricultural land provided that such planting is adapted to local conditions and is compatible with environment.

Support under this measure in addition to planting costs (afforestation grant scheme) will also include (Council Regulation 1257/1999 article 31):

- an annual premium per hectare afforested to cover maintenance costs (forest maintenance premium scheme) for a period of up to five years, and

- an annual premium per hectare to cover loss of income (lost income premium scheme) resulting from afforestation for a maximum period of 20 years for farmers or their groups (associations) thereof who worked the land before its afforestation for agricultural purposes, or for any other private physical or legal person.

The article 31(2) of the same Regulation states that support for afforestation of agricultural land undertaken by public authorities will be provided only according to the afforestation grant scheme - only the costs of forest establishment will be covered. In the case of fast growing species cultivated in the short term (meaning that the period between two harvest cuts on the same parcel is less than 15 years – as defined in the Commission Regulation 817/2004 article 33(2)), support for afforestation shall be granted for planting costs only (according to EC Regulation 1257/1999 article 31(3)). According to the same article 31(3) no support will be provided in respect of the planting Christmas trees and for those benefiting from early retirement scheme.


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The premium for establishment and maintenance of afforested land compensate actually made expenditures of planting and maintenance costs occurred, not exceeding the maximum eligible amount defined in this measure. This afforestation measure proposed under Rural Development Plan will be complemented by a Forestry measure under the Single Programming Document for Lithuania 2004 – 2006. 4.3. Objectives of the measure The aim of the measure is to promote afforestation of agricultural land as an alternative land use, to promote the development of forestry activities on the farm and also to help to solve the unemployment problems in rural areas. These in turn will contribute to an eventual improvement of forest resources and form of countryside management more compatible with environmental balance. Hence, the overall objectives of the measure are as follows. The overall objectives for the forestry measure are: • Reduce dependency on agriculture of rural people • Increase of economical, ecological and social value of land holdings • Conservation of the environment, maintenance and promotion of biodiversity, enrichment of

landscape • Provision of new and long-term employment opportunities in rural areas • Provision of further source of income The specific objectives for the forestry measure are: • Increase in forest area (12.000 ha of land afforested) • Not less than 20 pct. of the afforested area is broadleaves species • Approximately 20 pct. of the afforested area actualise priority function to contribute to the

protection of soil, air, water bodies and rural areas. The operational objectives of the measure are: • About 2500 landowners receive afforestation support allocating an average 4-5 ha of land to

afforestation. Quantified objective hierarchy Measure Output




About 2 500 landowners receive afforestation support allocating an average 4-5 ha of land to afforestation

Increase in forest area (12.000 ha of agricultural land afforestated) Not less than 20 pct. of the

Reduce dependency on agriculture of rural people Increase of economical, ecological and social value of land holding


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afforestated area is broadleaves species Approximately 20 pct. of the afforested area actualize priority function to contribute to the protection of soil, air, water bodies and rural areas

Conservation of the environment, maintenance and promotion of biodiversity, enrichment of landscape Provision of new and long-term employment opportunities in rural areas Provision of further source of income

4. 4. Definitions The chapter provides the definitions of “agricultural land “ and “farmers or associations thereof“ as required by the Commission Regulation 817/2004 Annex II. The EC Regulation 817/2004 article 32 defines that under this measure only afforestation of agricultural land is a subject for support. This article requests to name what agricultural land could be afforested. Therefore, the support is provided for afforestation of agricultural land, which has the agricultural purpose status:

- Arable land - Meadows - Pastures - Other land, which is registered in the Real Estate Cadastre as those having agricultural

purpose status. According to the EC Regulation 1257/1999 article 31(2) and the Annex of this Regulation request, the applicants will be divided into two categories, namely “farmers and association thereof“ and “any other private law person”. Definition of “farmers or association thereof” in relation to lost income premium scheme is defined according to Article 33 of Commission Regulation (EC) No. 817/2004.

4. 5. Eligibility criteria The applicant must be the farmer, agricultural company, cooperative company (cooperative) or another subject of agriculture activity, any other private law person, which are owner of agricultural land, municipality or their association. For this measure a “farmer or associations thereof” will be attributed to a private person or legal entity if they fulfil these conditions:


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1) At least 2 years prior forest establishment have declared their own utilised agricultural land (the

land must be of good agricultural condition) to be afforested and agricultural holding to be afforested must be on Agriculture and Rural Development Register.

2) Have been doing bookkeeping for at least for 2 years prior forest establishment in accordance with national legislation or provide confirmation of local authority or other documents directly proving the land to be afforested had to be used for production of agricultural output. 20

The applicant who falls into this category also: l. Must have no taxing arrears to the state budget of the Republic of Lithuania, budgets of municipalities or other funds, into which taxes are collected and administrated by State Tax Inspectorate, also is not indebted to State Social Insurance Fund Board. 2. Farmer shall have take bookkeeping in accordance with national legislation. 3. Farmer will not be granted support under this measure if he/she claims support under “Early Retirement” measure. All other applicants outside the “farmers and associations thereof” category fall under “any other private law person” category and therefore qualify for the “any other private law person” rate in the case of the lost income premium. Their land must be of good agricultural condition. The status of agricultural condition will be checked by the National Paying Agency. The requirements for good agricultural condition are these:

1. Arable land shall be planted with agricultural plants or it shall be left as green or black fallow. Black fallow shall be cultivated periodically in order to free it from weeds and to improve the quality of the soil.

2. Meadows and pastures as well as perennial grasslands and pastures shall be maintained in good condition,

used for grazing animals or/and the hay shall be harvested at least once a year (till the 15th of July).

3. Hay or green mass shall be got in trim and removed from the field till the 1st of August. Hay, straws and remnant plants may be mowed up on the edge of the field.

4. Arable land, meadows, pastures as well as perennial grasslands and pastures shall be free from trees and

scrubs, except in the case of the area of detached trees and bushes or a group of trees and bushes which is not to be deforested and not eligible one (i.e. excluded from the eligible area).

5. Agricultural land shall be free from remnant herbs (hard herb plants - wormwood, thistle, and others). The

presence of detached weed or herb humps on the field shall not be considered as non-eligibility.

20 The "association" in this context means associations of forest or land owners, cooperatives or other structures established by land or forest owners. All requirements are also valid for associations aiming at receiving higher Lost income premium.


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The applicant who falls into this category also has to register agricultural holding to be afforested in Agriculture And Rural Development Register and have no taxing arrears to the state budget of the Republic of Lithuania, budgets of municipalities or other funds, into which taxes are collected and administrated by State Tax Inspectorate, also is not indebted to State Social Insurance Fund Board. Afforestation Grant Scheme To qualify for an afforestation grant an applicant must fulfil the following criteria:

- Permission for afforestation must be obtained from the local land management authorities. In addition, the afforestation plan should be prepared which has to be approved by state officer of forests21. Both documents together with application form should be submitted to the responsible authority.

- The area for afforestation and it’s borders, tree species, their composition, densities and

amounts to be planted according to the tree species, afforestation techniques, soil preparation pattern as well protection means to be used and the purpose of forest according to the Forest Law of the Republic of Lithuania should be described in the afforestation plan. There should be at least 20 percent of broad leave species and bushes in the planted forest. No support should be given to the establishment of pure conifer stands.

- Afforestation plan should be prepared in line with the guidelines established by the Ministry

of Environment. In selecting tree species soil conditions should be considered.

- Selection of the protection means to protect forest from wildlife should be made choosing the most cost effective and environmental friendly method depending on the species planted.

- No support should be given for afforestation of areas less then 1 ha. In the case if newly

established forest becomes a part of already existing forest min size restriction is not applied.

- No support for the establishment of shelterbelts.

Forest Maintenance Premium To ensure that planted forest is being maintained and supervised in a sustainable manner the following criteria should be fulfilled in order to qualify for a forest maintenance grant:

- The plantation must be adequately planted and protected and be in line with the afforestation plan. That should be approved by state officer of forests during 1 month after planting.

- Inventory of the planted forest carried out in first and third year after planting and the results of the inventories signed by the owner or his legitimate representative and state officer of

21 The list of state officers of forests is approved by the order No. 427 of Minister of Environment on August 19, 2003.


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forests. - In the case of not satisfactorily survival of the planted seedlings/sowed seeds (if more then 15

% of planted seedlings/sowed seeds die) replanting/resowing should be made in order to fulfil the approved afforestation plan.

- The applicant must submit the certificate of the forest seedlings/seeds origin. - Afforestation must be carried out and further maintenance of the stand should be compatible

with the protection of the environment and comply with the regulations and guidelines issued by the Ministry of Environment.

- The condition of protection means applied (fences, individual tubes) are of satisfactory condition.

Lost Income Premium Scheme This scheme applies to those who plant some or all of their land under the afforestation grant scheme.

The lost income premium is paid for 20 years for farmers or associations thereof who worked the land before its afforestation or for any other physical or legal person. To qualify for the farmer rate of premium applicants must comply with the definition of farmers or associations thereof (see definition above). 4. 6. Description of eligible actions

Afforestation grant scheme All undertaking afforestation of agricultural land may apply for afforestation grant. The afforestation can be done using different forest establishment methods such as planting of seedlings, sowing.

The afforestation grant scheme is applicable all over the country and covers the following costs:

- Preparation of afforestation plan - Site preparation - Seedlings/seed costs (including transportation of seedlings) - Planting/seeding of seedlings/seeds

Forest maintenance grant scheme

The forest maintenance and protection grant is paid on the yearly basis to all who afforested their land and received afforestation grant for the period of up to 5 years after the date of afforestation on condition that eligibility criteria described above are fulfilled. The premium covers the following forest maintenance costs:

- Protection of plantation against browsing animals and rodents (fences, repellents, individual protection means etc.)

- Weeding, mechanical removal of trees and shrubs shading planted seedlings - Plantation supplementing


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- Protection against diseases and pests, mechanical damages, fire protection - Mounting of fire prevention shelter belts

Lost income premium scheme Lost income premium will only be paid to the applicants who received afforestation grant and will be paid on a yearly basis. Compensation will be paid for 20 years after the completion of afforestation. 4.7. Provisions ensuring that actions are adapted to local conditions and are compatible with the environment Local land management authorities are in charge of issuing the permits for afforestation. In the cases when land afforestation should be considered to avoid negative effects on social - ecological values prior issuing the permission local authorities consult appropriate institutions. Institutions in different cases to be consulted and the field of their competency is listed below: Valuable wildlife habitats Administrations of Regional and National parks, State

Service of Protected Areas Culture heritage objects Local Culture Heritage Departments Land reclamation systems Local agricultural divisions Outstanding landscapes Municipality architecture specialists 4. 8. Aid Intensity and/or amount and differentiation applied

The amount of aid is actually made expenditure in the case of afforestation grant and forest maintenance premium, not exceeding maximum grant level given in the table.

Forest maintenance premium** Total grant Afforesta-tion grant * 1st year 2nd year 3rd year 4th year 5th year

EUR/ha EUR/ha EUR/ha EUR/ha EUR/ha EUR/ha EUR/ha

Conifer stand with broadleaves up to 30 %

1009

885

101

101

101

63

2260

Conifer stand with broadleaves 31 - 50 %

1158

915

122

122

122

80

2519


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Broadleaves in the stand make up 51 - 80 %

1394

962

152

152

152

92

2904

81 - 100 % broadleaves stand

1548

992

203

203

203

161

3310

* The afforestation grant is cost-based up to the maximum grant levels presented in the table and is paid after the forest was established and invoices proving the eligible costs submitted. In case if landowner performs afforestation activities himself (prepares afforestation plan, performs site preparation, plants seedlings/seeds) and doesn’t submit invoices proving the eligible costs, compensation covers 60 percent of maximum grant level.

** Forest maintenance premium is cost-based up to the maximum grant levels presented and will be paid on a yearly basis. The premium covers the following costs:

- supplementary planting costs (up to 30 percent of the afforestation grant (see table above) for supplementing the planted seedlings/sowed seeds and planting/sowing costs, except for the costs for development of an afforestation project and land preparation)

- weeding costs (manual weeding - 60 EUR/ha; - costs of protection against browsing animals - 650 EUR/ha (fences, individual protection

tubes, repellents, etc.); - costs of maintenance of protective measures in proper conditions (if repellents were used,

costs of their purchase and use); - installation of fire prevention shelter belts. In accordance with legislation of the Republic of Lithuania, in the event of major emergencies,

forest plantation supplement may be compensated in as far as it is needed for complete regeneration of the forest but no more than 100 percent of expenses for plants and/or seeds to be planted and expenses related to plant transportation as well as planting and/or sowing foreseen in the support contract (expenses for the development of an afforestation project and land preparation shall not be compensated). Moreover, no more than 100 percent of forest maintenance premium in the first year provided in the support contract but not used can be allocated for the maintenance and protection of the forest under regeneration

Plantation supplementing should be done during one year after inventory of planted forest. The protection means should be specified in the afforestation plan including their costs. Fences and individual protection tubes are compensated only for the first year. Fire prevention shelter belts are compensated for first year under 15 EUR/km. The premium for tending and protection of the established stand for another 2 - 4 years is to cover the weeding and protection of the stand against browsing animals and rodents (fixing of the built protection means, purchasing and application of repellents if those were used), diseases and pests, mechanical damages, fire protection. Chemicals and work with chemicals are not eligible under support. In case if owner of established forest performs forest maintenance activities (supplement of seedlings/sowed seeds, weeding, installation of fences, individual protection tubes, use of repellents etc.) himself, compensation covers 60 percent of maximum eligible expenditures mentioned above, except eligible expenditures for seedlings/seeds or


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material for protection needs, that are compensated 100 percent up to maximum grant level according to invoices proving the costs submitted. Afforestation grant The maximum afforestation grant levels are derived using the following maximum allowed densities of seedlings/seeds and their cost per ha. Activity Unit EUR/1000

seedlings Max density, seedlings /ha

Full cost EUR/ha

1. Elaboration of the afforestation plan

EUR/ha 25

2. Site preparation EUR/ha 1203. Costs for seedlings of main coniferous trees species*:

Pine – Pinus sylvestris L. EUR/1000 seedlings

35 5500 193

Spruce - Picea abies (L.) H. Karst.

EUR/1000 seedlings

115 3500 403

Larch – Larix Mill. EUR/1000 seedlings

225 2000 450

4. Costs for seedlings of main deciduous trees species*:

Oak – Quercus robur L., Quercus petraea Liebl.

EUR/1000 seedlings

345 4100 1415

Birch – Betula pendula Roth. EUR/1000 seedlings

88 4100 361

Ash – Fraxinus excelsior L. EUR/1000 seedlings

170 4100 697

Lime tree – Tilia cordata Mill., EUR/1000 seedlings

750 3500 2625

Maple – Acer platanoides L.

EUR/1000 seedlings

750 4100 3075

Black alder – Alnus glutinosa L. EUR/1000 seedlings

88 3500 308

Poplar - Populus tremula L. (only selection)

EUR/1000 seedlings

1160 2000 2319

5. Costs for seedlings of other deciduous trees and bushes species*:

Rosa dumalis Bechst., Rosa majalis Herrm., Rosa canina L.,

EUR/1000 seedlings

500 400 200


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Crataegus oxyacantha L., Crataegus monogyna Jacq., Padus avium Mill., Pyrus communis L., Pyrus pyraster Burgsd., Malus sylvestris (L.) Mill., Euonymus europaea L., Euonymus verrucosa Scop., Viburnum opulus L., Lonicera xylosteum L., Cornus sanquinea L., Ribes nigrum L., Ribes rubrum L., Ribes alpinum L., Prunus spinosa L., Cerasus vulgaris Mill. Ulmus glabra Huds., Ulmus minor Mill., Carpinus betulus L., Rhamnus catharticus L., Sorbus aucuparia L., Ulmus laevis Pall., Corylus avellana L.

EUR/1000 seedlings

1100 400 440

6. Costs for seedlings of other coniferous trees and bushes species*:

Juniperus communis L. EUR/1000 seedlings

500 400 200

7. Fast growing species*: Poplar - Populus tremula L. EUR/1000

seedlings 43 10 000 430

Willow - Salix L. EUR/1000 seedlings

43 20 000 860

8. Seeds: Pine seeds EUR/1kg 270 0,5 135Spruce seeds EUR/1kg 200 0,5 100Acorns EUR/1kg 2 60 1209. Planting costs for coniferous EUR/1000

seedlings 30 4500 135

10. Planting costs for deciduous EUR/1000 seedlings

40 3900 156

11. Transportation of seedlings**

EUR/1km 0,65 300 195

12. Sowing of coniferous’ seeds EUR/1kg 50 0,5 2513. Sowing of acorns EUR/1kg 1,5 60 90

* Species are named in English and/or Latin. The amount of seedlings/seeds per ha is derived according the species composition and the costs accordingly calculated.


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** Max compensated distance is up to 300 km. Lost Income Premium Rates The Lost Income Premium will be paid for 20 years. The Lost Income Premium rates will be differentiated between the various types of agricultural land to be converted to forests broadly reflecting differences in income foregone from the typical agricultural activity, with the more productive land attracting the higher rate of payment. The rates for any other private law persons are 4 times lower than the rates for farmers or associations (According the Annex of Council Regulation (EC) No 1257/1999). The rates are as follows: In case of a “farmers or associations thereof : Areas Highly Disadvantaged

Areas (HDA) Less Disadvantaged Areas (LDA)

Outside HAD and LDA

EUR/ha/year 72.40 91.23 147.7

In case of “any other private law person”: Areas Highly Disadvantaged

Areas (HDA) Less Disadvantaged Areas (LDA)

Outside HAD and LDA

EUR/ha/year 18.10 22.80 36.92

4.9. Priority criteria

The following priority criteria are to be applied in case more applicants then the amount of funds for the measure are allocated apply: No. Priority criteria Score 1 Afforestation takes place in less favoured area 35 2 Percentage of deciduous planted (for every

additional (higher then 30 percent) 5 percent of deciduouos species – 1 additional point )

max 14

3 No chemical use foreseen in the establishment and maintenance of forest

5

4 Afforestation area is more then 1 ha (for each ha above 1 ha – 0,5 points)

max 15

5 Applicant falls under the category farmers and 15


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associations thereof 6. Applicant is the member of association22 5 7. Application submitted by a group of applicants

who afforest neighbouring land 11

Total 100

4.10. Linkage between proposed actions and national/sub-national forest programmes or equivalent instruments The measure of agricultural land afforestation proposed under Rural Development Plan would contribute to implementation of Lithuanian Program on Increase of Forest Coverage, adopted by the joint Ministers’ of Environment and Agriculture order Nr.616/471 adopted in 2002 the 2 of December. This measure will be complemented by “Forestry” measure under the Single Programming Document for 2004 – 2006. The structural funds will support the following actions:

- Investment in forests aimed at significant improving their economic, ecological or social

value - Restoration of forest areas damaged by natural disasters and fire and introducing appropriate

prevention instruments - Investment to improve and rationalise the harvesting and logging of round wood - Afforestation of non-agricultural land.

4.11. Indicative Budget

The budget calculations have been made in relation to the National afforestation programme which sets the target afforestation volume of 4000 ha a year in the period 2004-2006. It is expected that in 2004 – 3000 ha, in 2005 – 4000 ha and in 2005 – 5000 ha will be afforested within this programming period. Indicative financial allocations, million EUR



2004 2,000,000 100.00 1,600,000 80.00 400,000 20.00 2005 4,425,200 100.00 3,540,160 80.00 885,040 20.00 2006 540,205 100.00 432,164 80.00 108,041 20.00

2004-2006 6,965,405 100.00 5,572,324 80.00 1,393,081 20.00 22 The "association" in this context means associations of forest or land owners, cooperatives or other structures established by land or forest owners.


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Measure 5. Support for semi-subsistence farms undergoing restructuring This measure implements article 33b of the Accession Treaty. 5.1 Introduction Land reform in Lithuania started in 1991. Land ownership rights have been restored to 87,8 percent of the area indicated in citizens’ requests as of March 1, 2004. The main aim of agricultural and rural development is to fulfil principles and measures of common agricultural policy of the EU. Great attention is paid to the creation of market orientated, competitive and to the diversification of economical activity in rural areas. The producers of agricultural production are stimulated to cherish the environment, biological diversity and landscape. Since Lithuania’s average farm size is small and uncompetitive in comparison with EU, support for semi-subsistence farms would help to enlarge them and would increase their competitiveness at the same time. At the mean time semi- subsistence farms are one of the factors, impeding agricultural and rural development. Support would help to develop agriculture, stimulate alternative activities in rural areas; also attention will be paid to the implementation of agri- environmental requirements. Analysis on farms’ economic activity shows that small farms in Lithuania can not be described as temporary and vanishing. Most farms in the country are small and keep producing agricultural production and breeding livestock in traditional ways even if it is of low benefit. It is difficult to strive for more effective farming without support. According to the survey23 data, farmers with farms smaller than the stated 10.9 ha of UAA average make about 81 percent of all the questioned farmers, and their land – accordingly 28 percent of the area indicated by the survey. 13 percent of these are commercial farms, 40 percent market some part of their production, and 33 percent are subsistent farms. There are about 34 thousand farmers corresponding to the farm size and production criteria for semi-subsistence farm (survey data). The real number (corresponding to all the set criteria) of farmers applying for support at this measure is estimated then at 14 thousand. 5.2. Description of the measure Making semi-subsistence farming commercially viable is one of the ways for speeding up the restructuring process and promoting competitiveness in the agricultural sector. This measure will help farmers to enlarge their farm and to develop it. Farmers who apply for support to

23 Survey (circa 188000 questionnaires, data of 2002), conducted by the Agriculture Information And Rural Business Center in 2003;


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“Investments in Agricultural Holdings” from SPD may also apply for support to semi- subsistence farms as long as they correspond with all the requirements below. 5.3. Definitions For the purposes of this measure: Agricultural activities‘ shall mean activities related to producing, processing and marketing of agricultural production, produced in private agricultural holding. It involves provision of agricultural services as well. ‘Agricultural holding’ shall mean al production units managed by a farmer situated within the territory of Lithuania. ‘Farmer’ shall mean a natural person (alone or with partners) involved in agricultural activities, with an agricultural holding registered in Agricultural and Rural Development Register. ‘Farmer’s partners’ shall mean natural persons involved in mutual agricultural activities according to the partnership agreement. ‘Semi-subsistence farm’ shall mean the agricultural holding with an income from selling a part of the production allowing some minor investments for the restucturisation to be made.

5.4. Objective hierarchies for the Support for semi-subsistence farms undergoing restructuring measure The overall objectives for the semi- subsistence measure are the following:

• Increased farm size and improved structure; • Increased competitiveness of farms; • Improvement of market- orientated sector.

The specific objectives for the semi-subsistence measure are:

• Increased income and improved liquidity; improved machines, buildings and land. The operational objectives are:

• 14000 semi-subsistence farmers receive income support (1000 EUR per year). Farmers also receive practical skills of participation in an investment scheme (preparation and submission of business plan, planning and implementation of investments, submission of requested documents proving the investments, to the NPA).


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Expected impacts and results Measure Output




Semi- subsistence farms undergoing restructuring

14 000 semi- subsistence farmers receive investment support (1000 EUR per year)

Increased income and improved liquidity; improved machines, buildings and land

Increased farm size and improved structure Increased competitiveness of farms Improvement of market-orientated sector, complying with EU agri- environmental requirements.

5.5. Eligibility criteria The farmers aiming at getting support under this measure at the date of submission of application for support must comply with the following criteria:

1. Farm size24: 5-20 ha, 5-10 cows - for mixed production; 4- 8 ha – for horticulture (specialization in vegetables); 1- 4 ha – for horticulture (specialization in fruit and berries).

2. Agricultural holding must be on Agriculture And Rural Business Register; 3. Farmer shall have bookkeeping from the day of application for support; 4. The applicant must have no taxing arrears; 5. Farmer has to submit an appropriate business plan.

5.6. Beneficiaries Beneficiaries of this measure can be farmers targeted to the commercialisation of their agricultural holdings, especially those overtaking agricultural holdings (transferee – Early Retirement Scheme), and able to submit business plans. 5.7. Financial provisions Flat rate aid - 1000 Euro per annum. The aid would be payable for up to 5 years, with a review after 3 years. If farmer enters the Early Retirement Scheme as a transferor while the semi- subsistence aid is paid, the latter aid shall be stopped.

24 Evaluation by the Lithuanian Institute of Agrarian Economics


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Indicative financial allocations, million EUR



2004 2,494,000 100.00 1,995,200 80.00 498,800 20.00 2005 4,004,000 100.00 3,203,200 80.00 800,800 20.00 2006 1,193,960 100.00 955,168 80.00 238,792 20.00

2004-2006 7,691,960 100.00 6,153,568 80.00 1,538,392 20.00 5.8. Business plan Every candidate for support shall present an appropriate business plan. This plan shall: a) demonstrate the future economic viability of the farm; b) contain details of investments required; and c) describe specific milestones and targets. The recommendations to the preparation of business plans are set by national legislation25. The net profitability prognosis in the submitted bussines plan shall correspond to the net profitability26 required from a farmer applying for support under the SPD measure “Investments in agricultural holdings”.

25 State Gazette, 2004, No. 54-1866, Decree of minister of agriculture on the Recommendations for the preparation of business plan for the measure “Support for semi-subsistence farms undergoing restructuring” under the RDP 2004-2006; 26 State Gazette, 2004, No.34-1112, Decree of minister of agriculture on the regulations for the establishment of economic viability for the natural persons applying for support under the Rural development and fisheries priority under the SPD


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Measure 6. Meeting standards This measure implements Regulation (EC) No 1257/1999, Title II, Chapter Va, Articles 21a, 21b, 21c 6.1. Description of situation At the beginning of 2003 there were 13000 dairy farms, which owned no less than 5 cows (140 000 cows in total). Though the number of dairy farms meeting requirements of Council Directive 92/46/EEC for milking, collection of raw milk and its transport at the beginning of 2003 was small (only 4,8 % of dairy farms meet above mentioned requirements), it is expected that about additional 12000 dairy farms holding more than 5 cows will comply with EU requirements until 2007 (about 4000 farms will use their own funds). To assure that all raw meets minimal hygiene requirements for raw milk, the process of restructuring must be reinforced and investments needed for meeting EU standards supported. Aiming at implementation of Council Directive 92/46/EEC laying rules for the production and placing on the market of raw milk, heat-treated milk and milk-based products Lithuania committed fully implement the requirements of Directive until the end of 2006. The Directive is transposed into Lithuanian legislation by the issue of director of State Food and Veterinary Service on 17th of March 2004 No. B1-21727. The requirements of Directive become binding for farmers from 1st of January 2007. The problems in agri-environment concerns pollution by nitrogen compounds. Washing out of nitrogen compounds from agricultural area increased concentration of nitrogen by 20 per cent in Nemunas river. In the Curonian lagoon over the last 15 years amount of phytoplankton, that reflects level of eutrophycation, increased by 20%. In more than one third wells of Lithuania the concentration of pollutants of nitrates is above the allowed limit (50 mg). For these reasons, with aim to increase environmental protection, the Programme of reduction of pollution by nitrates from agricultural sources is developing. In this programme review of agri-environmental standards and terms of implementation of them has been anticipated according to Council Directive 91/676/EEC. Aiming at implementation of the EU Nitrate Directive Lithuania committed to fully implement the requirements of the Nitrate Directive through implementation of two action programmes. The first Action programme for the period 2004-2007 will be implemented in the entire territory of Lithuania. This means that the whole country is designated as the Nitrate Vulnerable Zone. The first Action Programme was approved by the GoL on 26th August 2003 No. 107628 and will come into force at the date of Lithuania’s accession to the EU. Nitrate Directive is transposed to national legislation through Requirements for the protection of waters from pollution with nitrogen compounds from agricultural sources (approved by order of the Minister of Agriculture of the Republic of Lithuania and the Minister of Environment of the Republic of Lithuania, 2001 12 19 resolution No. 452/60729) and Order of the Minister of Environment on the approval of the environmental requirements for manure and 27 State Gazette, 2004, No. 65-2338. 28 State Gazette, 2003, No. 83-3792. 29 State Gazette, 2002, No. 1-14.


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wastewater management on farms, LAND 33-99. - V., 199930. The installation of proper manure/slurry storages will be mandatory to be installed in the livestock farms, which have more than 300 livestock units (LU) and in all new farms being established. Requirements of Directive become binding for farms, which have more than 300 LU from 1st of January 2008. Further in the second action programme also smaller farms will have to obligatory install the manure storages (becomes binding for farms which have 10 – 299 LU from 1st of January 2012). 6.2. Description of measure As stated in Regulation (EC) No 1257/1999, Title II, Chapter Va, Article 21a support may be granted to help farmers to adapt to demanding standards based on Community legislation in the fields of the environment, public, animal and plant health, animal welfare and occupational safety. Temporary support intended to contribute partly to costs incurred and income foregone may be granted to farmers who have to apply demanding standards based on Community legislation and newly introduced in national legislation. To be eligible for support, the standard should impose new obligations or restrictions on farming practice which have a significant impact on typical farm operating costs and which concern a significant number of farmers. Under this measure support will be granted to farmers to help to adapt to Council Directive 92/46/EEC (hereinafter as Milk Directive) and Council Directive 91/676/EEC (hereinafter as Nitrate Directive). Support will be granted during a 5 years period from the date the standard becomes mandatory in accordance with Community legislation. Support will be granted annually in the form of flat rate aid and on degressive basis, in equal installments. By the way of derogation from Articles 21a, 21b and 21c, costs linked to investments needed to comply with standard set by the Community before the date of accession, may be taken into consideration for determining the level of annual support. This possibility is limited to the first three years of the period of support, up to the annual ceiling per farm – 25 000 Euro. During this investment period, the degressivity shall not apply. Loss of income and additional costs resulting from compliance with the standard will not be taken into consideration until the end of the investment period. Payment shall be fixed at level, which avoids over-compensation. 6.3. Objectives of the measure The overall objectives for the measure Meeting standards are the following: • 2.650 farms in compliance with EU requirements of Nitrate Directive;

30 State Gazzete, 2000, No. 8-217


229

• 8000 farms in compliance with EU requirements regarding milking, milk storage and transportation;

• Improvement of the environment due to reduced nitrogen outlet; • Improved competitiveness due to improved quality of milk and adoption of EU standards; The specific objectives for the Meeting standards measure are: • 2.650 manure storage facilities in accordance with EU requirements with a total capacity of

150.000 tons established • 8000 milking equipment installed • 8000 milk storage facilities established The operational objectives of the measure: 2650 farms with a total of 100 thousand livestock units (hereinafter as LU) enter the Meeting standards – Nitrate Directive scheme; 8000 farmers with a total of 75 thousand cows receive support for milking, milk storage and milk transportation under the Meeting standards – Milk Directive scheme. Expected impacts and results for Meeting standards measure Measure Output



Meeting standards

2650 farms with a total of 100 thousand LU enter the Meeting standards – Nitrate Directive scheme 8000 farmers with a total of 75000 cows receive support for milking, milk storage and milk transportation under the Meeting standards scheme

2650 manure storage facilities in accordance with EU requirements with a total capacity of 150 thousand tons established 8000 milking equipment installed 8000 milk storage facilities established

2650 farmers in compliance with EU requirements of Nitrate Directive 8000 farmers in compliance with EU requirements regarding milking, milk storage and transport (Milk Directive) Improvement of the environment due to reduced nitrogen outlet Improved compe-titiveness due to improved quality of milk and adoption of EU standards

6.4. Eligibility criteria The applicant:


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- must be farmer, agricultural company, cooperative company (cooperative) or any other agricultural entity who declared, according to the determined order, tillage and/or cattle for not less than 1 year preceding the application; - must be owning or leasing no less than 3 ha of agricultural land; - would have to supply a plan of the upgrading and/or alterations in husbandry practices required to meet the relevant standards (including list of investments which will result in all relevant standards being met); - must have no taxing arrears to the state budget of the Republic of Lithuania, budgets of municipalities or other funds, into which taxes are collected and administrated by State Tax Inspectorate, also is not indebted to State Social Insurance Fund Board; - Agricultural holding must be on Agricultural And Rural Development Register; - Farmer shall have bookkeeping in accordance with requirements of national legislation from the day of submission of application; - Applicants applying for support under Milk Directive must have a herd of at least 5 but no more than 200 cows; - Applicants applying for support under Nitrate Directive must have at least 10 LU; - Capacity of liquid manure tank forseen in Action plan can be no more than 2500 m³ (in case of application for support under Nitrate Directive). - Applicants are eligible for support under Nitrate Directive only when appropriate national legislation setting demanding requirements is in force. 6.5 Requirements of Directives 6.5.1. To comply with Nitrate Directive requirements farmer must ensure: - Animal density in farm should not exceed 1,7 livestock units per hectare of utilized agricultural land∗. - The capacity of storage vessels for cattle, horse and sheep manure for the storage period no less than 6 months and for pig and poultry manure no less than 8 months**; - The amount of livestock manure applied to the agricultural land each year, including animals themselves, shall not exceed the amount of manure containing 170 kg/ha of nitrogen**; - Organic fertilizer (manure, sewage sludge, composts, etc.) will be spread from drying up of soil in spring to freezing of soil in autumn. Organic fertilizer should not be spread from 1 December to 1 April (on exceptional base it can be done in different time if soils are not frozen and covered with snow)**.

∗ Requirements for the protection of waters from pollution with nitrogen compounds from agricultural sources. Approved by order of the Minister of Agriculture of the Republic of Lithuania and the Minister of Environment of the Republic of Lithuania, 2001 12 19 resolution No. 452/607. ** Order of the Minister of Environment on the approval of the environmental requirements for manure and wastewater management on farms, LAND 33-99. - V., 1999.


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6.5.2. To comply with Milk Directive requirements farmer must ensure: - Premises where milking is performed or milk is stored, handled or cooled must be so sited and constructed as to avoid all risk of contamination of the milk. They must be easy to clean and disinfect and have at least:

• Walls and flooring which are easy to clean in those areas liable to soiling or infection; • Flooring laid in such a way as to facilitate the draining of liquids and satisfactory means of

disposing of waste; • Adequate ventilation and lighting; • An appropriate and sufficient supply of potable water for use in milking and in cleaning the

equipment and instruments; • Adequate separation from all sources of contamination such as lavatories and dung heaps; • Fittings and equipment, which are easy to wash, clean and disinfect.

- Premises for the storage of milk must have suitable milk refrigeration equipment, must be protected against vermin and must have adequate separation from any premises where animals are housed. - The isolation of animals, which are infected, or suspected of being infected, from the rest of the herd must be possible and effective. - Animals of all species must be kept away from premises and sites where milk is stored, handled or cooled. - Premises for milking or storage of milk must be used only for storage of milk and milking equipment; - Absolute cleanliness shall be required of milker. 6.6. Application and checks

National Paying Agency will verify if the investment is necessary to meet the standard in question. Where the application to join the scheme relates to an annual aid amount in excess of EUR 10 000, checks on this application will include an on-the-spot visit.

In case of applications for payment National Paying Agency will ckeck if the investment has been carried out. Where the application for payment relates to an annual aid amount in excess of EUR 10 000, checks on this application will include an on-the-spot visit.

At the end of investment period every beneficiary will be checked if the farm meets requirements of Directive in question. If the beneficiary is not in line with all requirements he must reimburse all amount of support. In case of Nitrate Directive: If the beneficiary is not in line with one or several requirements set in point 6.5.1, following sanctions are applied: • Aid amount is reduced by 10 per cent if an animal density in farm exceeds 1,7 livestock units per hectare of UAA; • In case manure storage vessel is not built or its capacity is not sufficient to store the manure of cattle, horse and sheep for at least 6 months or the manure of pig and poultry for at least 8 months:


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• aid amount is reduced by 40 per cent if possessed storage vessel stores from 25 to 49,99 per cent of manure;



• aid amount is reduced by 60 per cent if storage vessel is not built or which capacity is less than 25 percent of required amount for manure storage. • Aid amount is reduced by 10 per cent if the amount of livestock manure inserted into the soil each year, including manure of animals making to the soil during the grazing period, exceeds 170 kg of nitrogen per 1 ha of UAA; • Aid amount is reduced by 10 per cent if organic fertilizers (manure, sewage sludge etc.) are spread from 1 December to 1 April (If in exceptional cases it is allowed to use organic fertilizers while soil is not frozen and covered by snow, the sanction is not applied). Sanctions are summed up in case the beneficiary is not in line with several requirements. Other sanctions (not related to requirements set in point 6.5.1) are applied first (if applied). After such application the amount of support foreseen for the beneficiary and proved with the documents validating investments is reduced applying the sanctions for breaching requirements set in point 6.5.1. These sanctions are applied to all eligible applications received in 2004-2006. 6.7. Compatibility with other measures Under this measure only investments related to instalation of liquid manure tanks with a capacity of no more than 2500 m³ are supported. Investments related to instalation of liquid manure tanks with a capacity of more than 2500 m³ fall under SPD measure “Investment in agricultural holdings”. So the applicant can receive support for meeting requirements of Council Directive 91/676/EEC only under one measure, either “Investment in agricultural holdings” or “Meeting standards” depending on manure tank capacity needed. Only applicants which have a herd of no more than 200 cows can apply for support in meeting requirements of Council Directive 92/46/EEC under this measure. Applicants which have a herd of more than 200 cows can apply for support in meeting requirements of Council Directive 92/46/EEC only under SPD measure “Investment in agricultural holdings”. For the purpose to avoid double funding these additional measures will be taken: - Project evaluation division of NPA responsible for evaluation of projects under SPD measure “Investment in agricultural holdings” once per year after the end of collection of applications forms the list of participants and their investments planed in business plans. - This list is forwared to every evaluator of applications under measure “Meeting standards”. - If applicant wants to receive support under both measures starting the same year, evaluator of applications under measure “Meeting standards” checks if there is no overlapping between investments foreseen in business plan under SPD measure “Investment in agricultural holdings” and investments foreseen in action plan under “Meeting standards” measure.


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- If there is an overlapping found the applicant is not eligible to get support under “Meeting standards” measure. - If the application is submitted under SPD measure “Investment in agricultural holdings” next year after starting to receive support under measure “Meeting standards” and there is an overlapping found the applicant is not eligible to get support under SPD measure “Investment in agricultural holdings”.

6.8. Amount of payments and total financial allocations 6.8.1 Nitrate Directive scheme The payment is calculated basing on the herd size in LU indicated by the beneficiary for the end of the investment period (either unchanged herd size in LU from the year entering this scheme, or the herd size in LU with planned increase). In case of investment period of 3 years: Farms with 10-29 LU gets 278,33 euro per LU per year; Farms with 30-99 LU – 274,67 euro per LU per year but no more than 25 thousand euro per holding per year; Farms with 100 LU and more – 233 euro per LU per year but no more than 25 thousand euro per holding per year; Indicative need for investments (Nitrate Directive)

LU per holding Indicators

20 50 100 200 300 1. Capacity of storage, thousand m 3 0,28 0,699 1,398 2,796 4,194 2. Investments for liquid manure storage, thousand EUR

10,795 26,685 52,766 104,7 155,640

2.1. Investments per LU 0,540 0,534 0,528 0,524 0,519 3. Investment for specialized machines, thousand EUR 6,000 14,500 28,000 54,000 54,000 3.1. Investments per LU 0,30 0,29 0,28 0,27 0,27 4. Total investments (2+3), thousand EUR 12,743 41,185 80,766 158,7 209,64 5. Investments per LU, thousand EUR 0,840 0,824 0,808 0,794 0,699 There will be paid no payments for additional costs and income forgone because additional operating costs are not significant. 6.8.2 Milk Directive scheme


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The payment is calculated basing on the herd size in cows indicated by the beneficiary for the end of the investment period (either unchanged herd size in cows from the year entering this scheme, or the herd size in cows with planned increase), which in total should not be over 200 cows. Investment period of 3 years: Farms with 60 – 89 cows – 269 euro per cow per year; Farms with 90 cows and more – 239 euro per cow per year but no more than 25 thousand euro per holding per year. Investment period of 2 years: Farms with 5-19 cows – 282,50 euro per cow per year; Farms with 20-39 cows – 351,50 euro per cow per year. Farms with 40 – 59 cows – 380,00 euro per cow per year. Indicative need for investments (Milk Directive)

Grouping of farms according number of cows Purpose of investment

10 28 40 100 200

1. Premises for the storage of milk and equipment, thousand Euro

1,448 7,24 7,24 17,377 28,962

2. Milking equipment, thousand Euro 1,738 8,109 17,377 49,235 86,886 3. Cooling equipment, thousand Euro 2,462 4,344 5,792 17,377 27,514

4. Need for investment:

4.1 Total per farm, thousand Euro 5,648 19,693 30,409 83,989 143,362 4.2. per cow, thousand Euro 0,565 0,703 0,760 0,840 0,717 Type of investment is given in Annex 12. There will be paid no payments for additional costs and income forgone because additional operating costs are not significant.


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6.8.3 Indicative financial allocations, EUR



2004 36,924,315 100.00 29,539,452 80.00 7,384,863 20.00 2005 50,362,445 100.00 40,289,956 80.00 10,072,489 20.00 2006 20,022,670 100.00 16,018,136 80.00 4,004,534 20.00

2004-2006 107,309,430 100.00 85,847,544 80.00 21,461,886 20.00


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Measure 7. Technical assistance This measure is in accordance with Article 33e, Chapter IXa of Regulation (EC) No 1257/1999. 7.1. Introduction This measure is designed to provide support for activities, which are necessary to improve RDP performance, management, effectiveness and delivery. Support may be granted for costs associated with the RDP preparation, monitoring and evaluation, which are necessary for the implementation of RDP as set out in paragraph 7.3 below. 7.2. Objectives of the measure

The overall objective of the measure is to ensure the efficient implementation of the Rural Development Plan. The specific objectives are aiming:

• to ensure an adequate flow of information and publicity;

• to support studies, visits and seminars;

• to provide support for the monitoring of the RDP;

• to provide support for the evaluation of the RDP;

7.3. Description of the measure The support shall be provided for the expenditure associated with the following activities related to the improvement of RDP performance, management and effectiveness: 1. Activities, which are under responsibility of the Ministry of Agriculture:

• Organisation of the Monitoring Committee meetings, including costs of experts and other participants necessary to the effective work of the committee;

• Organisation and performance of RDP evaluation including assistance of experts in the consideration and review of basic data and indicators;

• Organisation of translations to be provided on request to the Commission, and for interpreting; • Organisation of visits, conferences, studies and seminars.

2. Activities, which are under responsibility of National Paying Agency:

• Preparation, publication and dissemination of information material (including application forms);

• Organisation of information campaigns; • Training of staff and of socio-economic partners;


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• Organization of consultations, studies, seminars, workshops and information days. 7.4. Final beneficiaries

Ministry of Agriculture

National Paying Agency 7.5. Indicative financial allocations, EUR



2004 1,800,000 100.00 1,440,000 80.00 360,000 20.00 2005 2,000,000 100.00 1,600,000 80.00 400,000 20.00 2006 1,925,775 100.00 1,540,620 80.00 385,155 20.00

2004-2006 5,725,775 100.00 4,580,620 80.00 1,145,155 20.00


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Measure 8. Complementary National Direct Payments (CNDPs)

The Community support for CNDPs shall not exceed 20 % of the annual Rural Development Fund allocation. However, as an alternative, Member State may choose to differentiate this limit in various years: 25 % in 2004, 20 % in 2005, and 15 % in 2006. The latter possibility was chosen by the Republic of Lithuania. National Paying Agency is designated as paying agency.

Indicative financial allocations, million EUR

Year Total public cost

% EU contribution

% National contribution

%

2004 46,031 100,00 36,825 80,0 9,206 20,0 2005 41,025 100,00 32,820 80,0 8,205 20,0 2006 33,394 100,00 26,715 80,0 6,679 20,0

2004-2006 120,450 100,00 96,360 80,0 24,090 20,0


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Annex 2: Good Farming Practice

No. Requirements Legislation PROTECTION OF WATERS, WATERCOURSES AND PREVENTION OF SOIL EROSION

1. Farmers must follow requirements of preservation protective strips at water bodies. Coastal protective strips are established at surface water bodies. For natural and regulated rivers which have the basin area bigger than 25 km2, lakes and ponds bigger than 0,5 ha, and quarries bigger than 2 ha, width of the protective strip is determined depending on local conditions: • When inclination of riverside is up to 5 degrees – not smaller than 5 m; • When inclination of riverside is 5-10 degrees – not smaller than 10 m; • When inclination of riverside is more than 10 degrees – not smaller than 25 m Twice as wide as determined above, protective strips of the water bodies are established along the coast of the water bodies that are: • In the territories of state parks or nature reserves; • Within 3 km from the boundaries of the cities (outside the city) • Within 1 km from the boundaries of the towns (outside the town). Half as wide as determined above, protective strips of the water bodies are established along the coast of natural rivers which have the basin area smaller than 25 km2, regulated rivers which have the basin area 10-25 km2, lakes and ponds smaller than 0,5 ha, and quarries smaller than 2 ha. For regulated rivulets and reclamation ditches, which have basin area smaller than 10 km2, width of the preservation strip is determined depending on local conditions: When inclination of riverside is up to 5 degrees – 1 m; When inclination of riverside is 5-10 degrees – not smaller than 2.5 m; When inclination of riverside is more than 10 degrees – not smaller than 5 m.

On approval of the rules for the establishment of protective zones of surface water bodies and coastal protective strips. Order of the Minister of Environment of the Republic of Lithuania, 2001 11 07 resolution No. 540. (Directive 91/676/EEC concerning the protection of waters against pollution caused by nitrates from agricultural sources)

2. It is prohibited to discharge directly sewage polluted by dangerous substances into the ground water.

Order No 472 of the Minister of Environment of 21 September 2001 on Approval of the rules concerning protection of ground


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waters against pollution from dangerous substances. (Directive 80/68/EEC on the protection of groundwater against pollution caused by certain dangerous substances)

MANURE MANAGEMENT 3. Livestock density on the farm shouldn’t exceed 1.7 LU per hectare of agricultural

land. It means that maximum amount of livestock manure applied to the land cannot exceed 170 kg/N per ha. If livestock density on the farm exceeds 1.7 LU per hectare of agricultural land, the owner should purchase additional land or should pass surplus manure to another farm, which has lower livestock density than the established limits.

Requirements for the protection of waters from pollution with nitrogen compounds from agricultural sources. Approved by order of the Minister of Agriculture of the Republic of Lithuania and the Minister of Environment of the Republic of Lithuania, 2001 12 19 resolution No. 452/607. (Directive 91/676/EEC concerning the protection of waters against pollution caused by nitrates from agricultural sources)

4. Manure storage should be established in the farms having more then 10 livestock units, except farms where animals are kept in deep barns. Farms having more then 300 livestock units are obliged to install manure storage in the period of four years after the date of membership in the EU. Farms having 10-299 livestock units are obliged to install manure storage within the period of 8 years after the date of membership into the EU.

Order of the Minister of Environment on the approval of the environmental requirements for manure and wastewater management on farms, LAND 33-99. - V., 1999. (Directive 91/676/EEC concerning the protection of waters against pollution caused by nitrates from agricultural sources)

5. The capacity of storage vessels for livestock (cattle, horses and sheep) manure for a storage period of at least 6 months; 8 months storage capacity is required for pig and poultry manure.

Order of the Minister of Environment on the approval of the environmental requirements for manure and wastewater management on farms, LAND 33-99. - V., 1999. (Directive 91/676/EEC concerning the protection of waters against pollution caused by nitrates from agricultural sources)

6. Organic fertiliser is allowed to be applied in the period starting from April 1st up to December 1st and it is prohibited to use organic fertilizers near by the water sources and intakes. It is not allowed to apply fertiliser on frozen, flooded and snow-covered ground.

Requirements for the protection of waters from pollution with nitrogen compounds from agricultural sources. Approved by order of the Minister of Agriculture of the Republic of Lithuania and the Minister of Environment of the Republic of Lithuania, 2001 12 19 resolution No. 452/607. (Directive 91/676/EEC concerning the protection of waters against pollution caused by nitrates from agricultural sources)


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USE OF PLANT PROTECTION PRODUCTS 7. Application of plant protection products has to be carried out following the

Rules for import, storage, marketing and use of plant protection products. These Rules determinate requirements and conditions for operator, using plant protection products. Only certified spraying equipment can be used when plant protection products are utilized. Only persons having the certificate of the appropriate training can use the plant protection products.

Law on plant protection 1998, Nr.56, revised 2001. No. 48, article 56, part 2. Order No.3D-564 of the Minister of Agriculture of 30th December, 2003, On rules for import, storage, marketing and use of plant protection products. (Directive 91/414/EEC concerning the placing of plant protection products on the market)

SOIL PROTECTION 8. Prior to the intended use of sewage sludge in agriculture it is necessary to prepare a

project agreed with Regional environment departments and regional public health center.

Concerning the prolongation of the validity of the legal document on utilisation of sewage sludge (LAND 20-96). Approved by order of the Minister of Environment of the Republic of Lithuania, 2000 03 03 resolution No. 81 (Directive 86/278/EEC on the protection of the environment and, in particular of the soil, when sewage sludge is used in agriculture).

9. It is forbidden to tillage soil along inclination on the sharp slopes and to grow cultivated crop.

Law for the Special conditions of forest and land use. Government of Lithuanian Republic 1992 05 12 resolution No.343

PROTECTION OF BIODIVERSITY AND NATURE RESOURCES 10. Owners and private or legal persons of the land situated in protected areas shall

follow the established regulations and requirements (laws and other legal basis,documents for domain planing in Protected areas).

Law amending the law of the Protected areas, 2001 12 04 No. IX-628. (Directive 92/43/EEC on the conservation of natural habitats and of wild flora and fauna; Directive 79/409/EEC on the conservation of wild birds)

11. If sewage on farm contains dangerous substances agricultural entities shall obtain permission for the impact of the Pollution Prevention and Control.

Order No 624 of the Minister of Environment of 21 December 2001 on Approval of the rules on pollution of waters by dangerous substances (Directive 76/464/EEC on pollution caused by certain dangerous substances discharged into aquatic environment of the


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Community; Directive 96/61/EEC concerning integrated pollution prevention control)

MAINTENANCE OF VISUAL APPEARANCE OF FARMYARD

12. The visual appearance of the farmyard shall conform to the principles for farmstead management.

Law on Waste Management of the Republic of Lithuania on 16 June 1998. (Directive 75/442/EEC on waste)

GRASSLAND MANAGEMENT 13. Meadows and pastures, also perennial meadows and pastures should be in good

agrarian conditions. Meadows and pastures should be used for the grazing or/and should be mowed at least once per year.

Order No 3D-40 of the Minister of Agriculture of 6 February 2004 on Approval of the administration and control rules for 2004 year for the direct payments for usable agricultural land and area of crops. (Directive 92/43/EEC on the conservation of natural habitats and of wild flora and fauna.)

ANIMAL WELFARE 14. Animals should be kept according to the requirements of animal welfare. Veterinary law of the Republic of Lithuania. 1991 12 17 LRAT

No. I-12110.V. Law on animal care, housing and use of the Republic of Lithuania. 1997 11 6 LRAT No. VIII-50.V. (Directive 98/58/EC of 20 July 1998 concerning the protection of animals kept for farming purposes)


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Annex 3: Details on Less Favoured Areas Table 1. Yield of cereals in 2003. Municipalities Yield of cereals

ton/ha Municipalities Yield of cereals

ton/ha < 80 per cent of national average > 80 per cent of national average

Trakai r. 1,13 Kupiškis r. 2,24 Molėtai r. 1,17 Tauragė r. 2,32 Švenčionys r. 1,45 Kazlų Rūda 2,36 Zarasai r. 1,48 Akmenė r. 2,37 Ignalina r. 1,50 Alytus r. 2,51 Šalčininkai r. 1,62 Birštonas 2,54 Vilnius r. 1,77 Kaišiadorys r. 2,57 Varėna r. 1,77 Prienai r. 2,58 Klaipėda r. 1,77 Jurbarkas r. 2,81 Utena r. 1,78 Biržai r. 2,91 Ukmergė r. 1,81 Kelmė r. 2,92 Druskininkai 1,86 Kalvarija 2,95 Šilutė r. 1,88 Jonava r. 3,01 Rokiškis r. 1,90 Raseiniai r. 3,01 Elektrėnai 1,90 Vilkaviškis r. 3,09 Skuodas r. 1,95 Kėdainiai r. 3,20 Šilalė r. 1,98 Šiauliai r. 3,21 Plungė r. 1,98 Radviliškis r. 3,35 Anykščiai r. 1,99 Kaunas r. 3,38 Kretinga r. 2,08 Marijampolė 3,47 Rietavas 2,08 Panevėžys r. 3,47 Telšiai r. 2,11 Pakruojis r. 3,57 Širvintos r. 2,12 Joniškis r. 3,58 Mažeikiai r. 2,16 Pasvalys r. 3,62 Lazdijai r. 2,18 Šakiai r. 3,73 Pagėgiai 2,18 Source: Counties of Lithuania. Economic and social development. Department of Statistic. Vilnius, 2003. Table 2. The value of total agricultural production per capita engaged in agriculture Municipalities The value of total agricultural production

per capita engaged in agriculture, Lt Percent from the national

average, per cent National average 21489 100 Anykščiai r. 15243 71 Elektrėnai 6631 31


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Ignalina r. 16991 79 Lazdijai r. 16084 75 Molėtai r. 12314 57 Plungė r. 15218 71 Rietavas 16295 76 Rokiškis r. 16950 79 Šalcininkai r. 10712 50 Pagėgiai 14665 68 Šilutė r. 16190 75 Širvintos r. 15510 72 Švenčionys r. 13018 61 Telšiai r. 15870 74 Trakai .r 10077 47 Ukmergė r. 16490 77 Utena r. 10657 50 Varėna r. 13398 62 Zarasai r. 14483 67 Source: Department of Statistic, Lithuanian Institute of Agrarian Economics, 2003.

Table 3. Population density Municipalities Population density

per 1 km2 Municipalities Population density

per 1 km2

< 50 per cent from national average > 50 per cent from national average Švenčionys r. 8,2 Joniškis r. 15,9 Varėna r. 9,1 Pagėgiai 16,2 Zarasai r. 10,2 Pakruojis r. 16,3 Ignalina r. 10,2 Šilalė r. 16,6 Rietavas 11,3 Radviliškis r. 17,2 Rokiškis r. 11,7 Mažeikiai r. 17,6 Anykščiai r. 12,1 Raseiniai r. 17,7 Druskininkai 12,7 Tauragė r. 18,4 Biržai r. 12,8 Šalčininkai r. 18,4 Molėtai r. 13,1 Jonava r. 18,6 Utena r. 13,2 Panevėžys r. 18,9 Telšiai r. 13,3 Pasvalys r. 19,1 Akmenė r. 13,6 Šakiai r. 19,2 Kazlų Rūda 13,6 Skuodas r. 19,4 Kupiškis r. 13,8 Šilutė r. 19,7 Širvintos r. 14,1 Birštonas 19,8 Ukmergė r. 14,3 Kalvarija 19,9 Trakai r. 14,5 Kėdainiai r. 20,3


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Lazdijai r. 15,3 Alytus r. 20,5 Jurbarkas r. 15,3 Šiauliai r. 20,9 Kelmė r. 15,4 Kaišiadorys r. 22,0 Plungė r. 15,4 Prienai r. 22,1 Elektrėnai 15,4 Klaipėda r. 22,2 Kretinga r. 23,2 Vilkaviškis r. 23,3 Marijampolė 30,1 Vilnius r. 39,3 Source: Counties of Lithuania. Economic and social development 1997, 1998, 1999, 2000, 2001, 2002.- V. Department of Statistic, 1998-2003. Table 4. The rate of population regression Municipalities The rate of

regression, per cent Municipalities The rate of

regression, per cent

>-0,5 per cent <-0,5 per cent Anykščiai r. -1,8 Marijampolė -0,4 Molėtai r. -1,6 Vilkaviškis r. -0,4 Rokiškis r. -1,5 Kėdainiai r. -0,3 Ignalina r. -1,5 Kaišiadorys r. -0,3 Alytus r. -1,4 Tauragė r. -0,2 Švenčionys r. -1,4 Jonava r. -0,2 Birštonas -1,3 Plungė r. -0,2 Varėna r. -1,2 Šiauliai r. -0,2 Lazdijai r. -1,2 Mažeikiai r. -0,1 Ukmergė r. -1,2 Panevėžys r. +0,2 Širvintos r. -1,2 Klaipėda r. +0,3 Šalčininkai r. -1,1 Kretinga r. +0,4 Zarasai r. -1,1 Vilnius r. +0,9 Jurbarkas r. -1,1 Kaunas r. +1,3 Akmenė r. -1,0 Biržai r. -1,0 Kalvarija -1,0 Prienai r. -1,0 Rietavas -1,0 Elektrėnai -0,9 Raseiniai r. -0,9 Pakruojis r. -0,9 Skuodas r. -0,9 Pasvalys r. -0,9 Radviliškis r. -0,9 Šilutė r. -0,9


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Joniškis r. -0,9 Kupiškis r. -0,8 Telšiai r. -0,7 Kazlų Rūda -0,7 Šakiai r. -0,6 Kelmė r. -0,6 Trakai r. -0,6 Druskininkai -0,5 Utena r. -0,5 Šilalė r. -0,5 Pagėgiai -0,5 Source: Counties of Lithuania. Economic and social development 1997, 1998, 1999, 2000, 2001, 2002.- V. Department of Statistic, 1998-2003. Table 5. Percentage of population engaged in agriculture, hunting and forestry

Municipality Population engaged in agriculture, hunting and forestry, %

Druskininkai 12,3 Alytus r. 38,5 Varėna r. 21,7 Lazdijai r. 24,9 Vilnius r. 16,9 Elektrėnai r. 17,6 Trakai r. 16,6 Ukmergė r. 34,3 Šalčininkai r. 25,8 Švenčionys r. 31,3 Širvintos r. 26,8 Jonava r. 33,9 Kaišiadorys r. 23,2 Kaunas r. 16,6 Kėdainiai r. 53,6 Prienai r. 37,7 Raseiniai r. 51,6 Klaipėda r. 20,2 Kretinga r. 40,8 Skuodas r. 58,2 Šilutė r. 42,5 Marijampolė r. 38,7 Vilkaviškis r. 40,7 Kalvarija r. 40,9 Kazlų Rūda r. 42,9


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Šakiai r. 36,6 Biržai r. 52,5 Kupiškis r. 30,9 Panevėžys r. 33,7 Pasvalys r. 56,2 Rokiškis r. 58,2 Akmenė r. 25,7 Joniškis r. 33,5 Kelmė r. 34,3 Pakruojis r. 36,5 Radviliškis r. 45,4 Šiauliai r. 31,5 Pagėgiai 44,8 Tauragė r. 49,1 Šilalė r. 49,7 Jurbarkas r. 41,5 Mažeikiai r. 30,4 Plungė r. 42,0 Rietavas 47,0 Telšiai r. 45,6 Anykščiai r.. 30,0 Zarasai r. 31,2 Ignalina r. 29,5 Molėtai r. 44,9 Utena r. 51,8 Source. Department of Statistic, 2004.

Table 6. The calculations of highly disadvantaged and less disadvantaged areas

Municipalities Agricultural area, ha Index Švenčionysr. 45537 0,4021 Molėtai r. 62675 0,4300 Zarasai r. 49041 0,4402 Ignalina r. 60065 0,4439 Trakai r. 37146 0,4405 Varėna r. 46841 0,4760 Highly disadvantaged areas

301305

Rokiškis r. 98591 0,5424 Utena r. 60882 0,5446 Anykščiai r. 96097 0,5656 Ukmergė r. 74489 0,5681


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Rietavas r. 21253 0,5692 Šalčininkai r. 64690 0,5997 Širvintos r. 49571 0,6222 Lazdijai r. 57392 0,6529 Telšiai r. 72063 0,6074 Plungė r. 55068 0,6175 Pagėgiai 37613 0,6675 Šilutė r. 80900 0,6689 Elektrėnai r. 29458 0,6711 Less disadvantaged areas 793567 Total 1094872 Remark: Example of calculation of index. Svenčionys r. index = 1,45 (ton/ha – Yield of cereals in Svencionys) / 2,7 (ton/ha – National average) + 8,2 (population/km2 in Svencionys) / 30,7 (population/km2 - national average)/2 = 0,4021

Table 7. Details of calculation of compensatory allowance in LFA

Areas Total output Lt/ha

Output crops

Output livestock

Other output

Costs Lt/ha

Variablecosts

Fixed costs

Gross profit Lt/ha

1 = 2 + 3 + 4

2 3 4 5 = 6 + 7 6 7 8 = 1 - 5

HDA 1344 757 560 27 1094 643 451 250 LDA 1502 841 647 14 1187 716 471 315 Non-LFA areas

1719 1627 78 14 1208 703 505 510

Data about agricultural enterprises. Remarks: variable costs of crops = seeds and seedlings, mineral other fertilizers, crop protection products, and other variable costs of crops; variable costs of livestock = feedingstuffs, veterinary services and other variable costs of livestock; fixed costs = fuel, electricity, mainten. of buildings and of machinery, land tax and rent, wages paid and other fixed costs. Compensatory allowance is calculated in this way: Gross profit in non-LFA area minus Gross profit in HDA or LDA.


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Table 8. Yield of crops in Birzai and Pasvalys municipalities and in the Extreme karst zone.

Yield, ton/ha

Extreme Karst zone

Agricultural production Birzai

municipality Pasvalys municipality Without manure Under restrictions of

using manure Cereals 2,91 3,62 1.75-2,17 2,12-2,64

Potatoes 12,7 16,8 7,6-10,1 9,3-12,3

Vegetables 9,6 12,5 5,8-7,5 7,0-9,1

Sugar beat 36,4 40,9 21,8-24,5 26,6-29,9 Source: Cultivated agricultural crops, yield, 2002 – Department of Statistic.


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Table 9. Support for the Less-favoured Areas (1997 – 2002) No. Support 1997 1998 1999 2000 2001 2002

1. Rural Support Fund Reorganisation of agriculturalactivity in the less-favouredareas Total (thous. LTL)

2 106

1 710

1 457

513

2. Special Rural Support Programme 2001

2.1. Direct payments for winter rye of 2001 (thous. LTL)

696

2.2. Direct payments for buckwheat of 2001 (thous. LTL)

1 225

2.3. Total in 2001 (thous. LTL) 1 921 3. Special Rural Support

Programme 2002

3.1. Compensatory allowances (thous. LTL)

11 642 ( 9 745 )*

3.2. Direct payments for winter rye (thous. LTL)

2 654

3.3. Direct payments for buckwheat (thous. LTL)

3 598

3.4. Direct payments for leguminous crop (thous. LTL)

672

3.5. Total in 2002 (thous. LTL) 18 568 ( 15 000 )*

*estimated for 2002


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Table 10. Details of calculation of compensatory allowance in Natura 2000 areas

Usual practise Natura 2000 areas for bird protection

Costs Lt/ha Income Lt/ha Costs Lt/ha Income Lt/ ha First mowing of meadow done in June 176,6 Hay (2,2 t* 138Lt/t) 303,6 Second mowing done in July/August 176,6

Hay (1,75t* 138 Lt/t) 241,5

Grass mowing 63,5 Hay for litter (2 t*30Lt/t)

60,00

Tedding and racking 31,7 Pick-up, transport 81,4 TOTAL (T1) 353,2 TOTAL (T2) 545,1 TOTAL (T3) 176,6 TOTAL (T4) 60,00 Profit from usual practice, Lt/ha P1=(T2-T1)

191,9 Profit from practice applying this restrictions, Lt/ha P2=(T4-T3) -116,6

Income forgone, Lt/haI=(P1-P2)

308,5

Income forgone (EUR)/ha

89

Agronomic and economic assumptions Hay (June) 176,6 From first mowing

we can get 2,2 t/ha ofhay

Grass mowing (39,2+6,8+17,5+8,7=72,2Lt/ha) 63,5


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(Deorection of machinery-39,2 Lt/ha ;diesel – 6,8 Lt/ha; salary – 17,5 Lt/ha; Cost of activity – 8,7 Lt/ha).Tedding and raking (12,4+4,0+15,3+3,8=35.5Lt/ha); (Depreciation of machinery-12,4 Lt/ha; diesel – 4,0 Lt/ha; salary – 15,3 Lt/ha; Cost of activity –3,8 Lt/ha). 31,7 Pick-up, transport (37,7+12,4+31,3+11,6= 93.0 Lt/ha; (Depreciation of machinery-37,7 Lt/ha; diesel – 12,4 Lt/ha; salary – 31,3 Lt/ha; Cost of activity –11,6 Lt/ha).

81,4 From 2nd mowing we can get 1,7 t/ha of hay, 138 Lt/ t is priceof normal feed value hay

Haymaking 176,6 Not fertilising and prevailing dry weather average yielding of natural meadows decrease up to 2 t/ha.

Price of hay decrease by 10 % due to worsequality, compared with that of culturalmeadows. Grass mowing 63,5

Hay (July/August) 176,6 Hay quality Tedding and raking 31,7 Grass mowing 63,5 Pick-up, transport 81,4 Tedding and raking 31,7 Pick-up, transport 81,4


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Annex 4: Details of the Code of Good Agricultural Practice and the Action programme for implementation of EU Nitrate Directive Under the guidance of the Water Management Institute of Lithuania and the Danish Agricultural Consultancy Centre, the Code for Good Agricultural Practice (CGAP), which is a compendium of compulsory and recommended measures for the management of agricultural production, was prepared and adapted to Lithuania’s economic and environmental conditions in 2000. It is an optimal farming system, ensuring sustainable economic development of a farm. The CGAP is a first document of this type in Lithuania, providing the framework for sustainable and environmentally friendly agricultural management system. It is a compendium of regulations and advice set up by legal acts of the European Commission, the Helsinki Commission and national legislation on sustainable and profitable farming without infringing the environmental regulations and damaging the environment. The CGAP includes rules relating to: 1. Periods when the land application of certain types of fertiliser is prohibited. Organic fertiliser is not

allowed to be applied in the period starting from November 15th up to March 15th. It is also not allowed to apply fertiliser on frozen, flooded and show-covered ground. The organic fertiliser should be incorporated into the soil within 6 hours.

2. Livestock densities corresponding to manure application - maximally 170 kg of nitrogen per year per hectare of utilised agricultural area;

3. The capacity of storage vessels for livestock (cattle, horses and sheep) manure for a storage period of at least 6 months; 8 months storage capacity is required for pig and poultry manure. In the intensive Karst region and in the Seashore within 10 km, the manure storage capacity should be 8 months for cattle and 10 months for pigs and poultry.

4. Limitations on the application of fertilisers to the land, consistent with good agricultural practice and taking into account:

• soil conditions, soil type and slope; • climatic conditions and rainfall; • land use and agricultural practices, including crop rotation systems and a balance between: the foreseeable nitrogen requirements of the crops, and the nitrogen supply to the crops from the soil and from fertilisation corresponding to:

- the amount of nitrogen present in the soil at the moment when the crop starts to use it to a significant degree (outstanding amounts at the end of winter),

- the supply of nitrogen through the net mineralization of the reserves of organic nitrogen in the soil,

- additions of nitrogen compounds from livestock manure, additions of nitrogen compounds from mineral fertilisers. All farms at present having more then 150 ha are obliged to perform soil analysis and develop fertiliser plans prior fertilisation each year. It is foreseen to require to develop fertiliser plans in all farms during the implementation of the second Action programme, in the period 1008-2011.

5. Ratio between perennial and annual crops, increase of vegetation cover during periods when the soil is most vulnerable to nitrate leaching. All farms having more then 15 ha of land should have in


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their crop rotation at least 50 % over-wintering crops. 6. Measures that do not allow agricultural effluents to pollute surface and ground water; 7. Land reclamation, biological diversity and landscape. A summary of the Action programme is provided below.


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Annex to the State programme

for reduction of water's pollution from agricultural sources

MEASURES FOR IMPLEMENTATION OF THE STATE PROGRAMME FOR REDUCTION OF WATER'S POLLUTION FROM AGRICULTURAL SOURCES

Title of the measure

Objectives Implementation period

Responsible institutions Expected result

I. Competence building 1. To create training system and to organise training.

To develop training programmes on the CGAP and to organise training with a particular attention given to the problem with nitrates in the private dug wells.

2004 MoA, MoE, Ministry of Education and Science, Ministry of Health Protection

Specialists administrating EU support for environment protection in agriculture will be introduced to the requirements for reduction of water pollution from agriculture; farmers will be trained how to store and use manure, slurry and mineral fertilisers without harm to the environment, how to balance nutrients used by plants, to choose the best crop structure, how to increase economic and nature protection effect , how to implement all measures foreseen in this Programme; methodical material regarding protection of dug wells from pollution will be developed.


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To organise establishment of demonstration farms in which pollution preventive measures would be implemented and the effect of those measures investigated

2005 MoA, MoE, Ministry of Science and Education, physical and legal entities

In demonstration farms the mandatory measures from the Nitrate directive will be implemented, also impact of those measures to the environment will be observed. Based on this research the recommendations on how to minimise pollution from agricultural sources will be prepared, the most effective measures will be demonstrated during the field days and seminars; information will be provided about planning of manure storages, slurry and effluent tanks, about the requirements for those installations, instalment and possible suppliers of material for construction.

2. To prepare legal acts and technical regulations.

To prepare new and to improve the existing legal acts and technical regulations according to the EU requirements related to the instalment of manure storages and slurry tanks.

2004 MoA, MoE The legal acts will be prepared, the technical regulations will be improved, the conditions for the development of the technical projects for manure storages and slurry tanks meeting EU requirements will be created.

II. Measure related to the elimination of pollution from livestock farms. 3. Elimination of pollution caused by big livestock farms

First of all to install manure storages, slurry and effluent tanks in big farms with more then 300 LU

2007 MoA, MoE, physical and legal entities

Manure and slurry storages will be installed according to the defined environmental requirements.

To foresee that in the farms having more then 300 LU the manure would be applied on the fields by special equipment

2007 MoA, MoE, Manure and slurry will be transported to the fields and applied with special equipment, which ensures that environmental requirements are followed.


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4. To reduce pollution from small livestock farms

To create conditions to install manure storages, tanks for slurry or other waste water, to use special equipment for application of mineral and organic fertiliser which are in line with defined requirements

2007 MoA, MoE There will be conditions created for smaller livestock farms to install manure storages, to procure slurry application equipment meeting the defined requirements; in all farms undergoing reconstruction it will be mandatory to install manure storages and slurry tanks meeting the defined technical requirements.

III. Implementation of sustainable agricultural system 5. To reduce run-off of nitrogen, especially of nitrates from agricultural fields.

To define that organic fertiliser is only used in the right periods.

2005 MoA Fertilisation with manure and slurry will be performed during the defined period, organic fertiliser will be incorporated into the soil within defined time.

To limit fertilisation on steep slopes

2007 MoA, MoE, Fertilisation on steep slopes, walleyes will be performed according to the defined requirements based on the vegetation cover, slopes, and soils condition.

To limit fertilisation of waterlogged , flooded soils.

2007 MoA, MoE Lowlands (sinks), where surface water may accumulate will not be fertilised; waterlogged soils will be fertilised according to defined requirements.

To limit animal grazing close to water courses.

2007 MoA, MoE, Animals in the protection zones of water bodies will be grazed according to the defined requirements; protective zones of water bodies will not be damaged.


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To organise rational fertilisation by manure and mineral fertilisers.

2007 MoA There will be requirements set so that fertilisation with manure and other fertilisers will be done in the periods when plants can absorb most of nutrients based on the balance between the plants' need of nitrogen and nitrogen which plants get from soil and fertilisers, in accordance with the amount of nitrogen in soil in the moment when the plants start absorbing most of nitrogen; the fertilisation plans will be developed for each farm, the ongoing registration of the use of fertilisers will be carried out.

To organise land use management according the balance between perennial and annual crops.

2007 MoA, There will be defined requirements and achieved that farms would develop land use plans and would define land area for perennial and annual crops.

In all farms which have more then 300 LU to limit amount of manure applied on the soils.

2007 MoA, Having defined requirements it will be achieved that having incorporated all manure accumulated in the farms, including manure applied on the land while grazing animals, the limit of the allowed application norm of 170 kg of nitrogen per ha of agricultural land will not be exceeded.

IV. Pollution from agricultural sources monitoring 6. To implement monitoring for pollution by nitrates from agricultural sources

To monitor land use, animal density, manure storage and fertilisation in characteristic agroecosystmes; to analyse and prognose the changes.

2007 MoE, MoA Monitoring of agro ecosystems will be carried out in all main natural-geographical regions; there will be established GIS with the database for diffused pollution to be defined and prognosed.


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7. To implement water pollution monitoring

Continuously to monitor ground and surface water status

2007 MoE Improved (expanded) according to coordinated programmes water pollution monitoring will be implemented in the entire territory of Lithuania, nitrate concentration showing the extent of water pollution from agricultural sources will be monitored in surface and ground water.

V.Collection of information, scientific research 8.Information collection

To create a system for collection of information about pollution by nitrates sources and applied measures

2005 MoE, MoA There will be an information system created,which will include data about pollution bynitrates and the implementation of the measuresof this programme and evaluation.

9. To implement Scientific and applied research

To define the environmental and economic effectiveness of the implemented measures, to provide proposals regarding application of science and technical novelties.

2007 MoE, MoA, Ministry of Science and Education

The impact on the environment of the implemented measures will be researched, most suitable measures will be identified, further recommendations regarding implementation of the measures in applying the novelties of science and technique will be developed


262

Annex 5: Physical and financial indicators of the measures (cumulative data per year)

Measure 2004 2005 2006 Number of beneficiaries: 9,500 19,500 30,000 Number of hectares released ('000 ha) 30,000 65,000 105,000 Number of milk quota released, tons 120,000 200,000 240,000

Total 30,125 32,327 27,779 Early retirement (Ch. IV, art. 10-12) d.1

Amount of public expenditure committed ('000 EUR) of which EAGGF 24,100 25,862 22,224

Number of beneficiaries: 60,000 65,000 70,000 Number of hectares released ('000 ha) 606,900 714,000 835,100

Total 47,000 48,000 82,137

Less-favoured areas and areas with environmental restrictions (Ch. V, art.

13-21) e.1 Amount of public expenditure

committed ('000 EUR) of which EAGGF 37,600 38,400 65,710

Number of beneficiaries: 750 1,500 3,000 Number of hectares released ('000 ha) 30,000 45,000 60,000

Total 15,000 22,981 56,671 Agri-environment (Ch. VI, art. 22-24) f Amount of public expenditure committed ('000 EUR) of which EAGGF 12,000 18,385 45,337

Number of beneficiaries: 700 1,500 2,500 Number of hectares released ('000 ha) 3,000 7,000 12,000

Total 2,000 4,425 540 Afforestation of agricultural land; other

afforestation (Ch. VIII, art. 30-31) h & I.1 Amount of public expenditure committed ('000 EUR) of which EAGGF 1,600 3,540 432

Number of beneficiaries: 6,500 10,000 14,000 Semi- subsistence farms undergoing

restructuring Total 2,494 4,004 1,194

n/a Amount of public expenditure committed ('000 EUR) of which EAGGF 1,995 3,203 955

Number of beneficiaries:

Total 1,800 2,000 1,926 Technical assistance (1.5 %) n/a Amount of public expenditure committed ('000 EUR) of which EAGGF 1,440 1,600 1,540


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Number of beneficiaries: 6,000 8,000 2,070

Total 36,924 50,362 20,023 Meeting standards Amount of public expenditure committed ('000 EUR) of which EAGGF 29,539 40,290 16,018

Total 46,031 41,025 32,355 Top-ups

Amount of public expenditure committed ('000 EUR) of which EAGGF 36,825 32,820 25,884

Total 2,750 0 0 Projects approved under Regulation (EC)

No. 1268/1999 Amount of public expenditure committed ('000 EUR) of which EAGGF 2,200 0 0

Total 184,125 205,125 222,625 Total of all measures Amount of public expenditure

committed ('000 EUR) of which EAGGF 147,300 164,100 178,100


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Annex 6: Result and Impact indicators Early Retirement Scheme n/a – not applicable, TBD – to be defined

Questions and indicators EU document chapter

Baseline year Baseline Forecast 2006

To what extent has aid for early retirement contributed to the earlier transfer of farms? Average difference in age between transferor and transferee (years) Average age of transferors in ERS Average age of transferees in ERS Less than 40 years (%) 40 years and over (%) Surface area released early (ha) Number of holdings released under the scheme Cumulative no. of ha released for agricultural purposes Cumulative no. of ha released for non-agricultural purposes

IV.1.

n/a

n/a

2004

n/a

n/a

n/a

n/a

n/a

30000

n/a

n/a

n/a

58,5

n/a

105.000

2500

99750

5250

To what extent has aid for termination of the milk production in small dairy farms under the ERS contributed to the restructuring of dairy sector?

n/a

Quantity of milk production quota released to State Milk Quota


265



Reserve.(tones)

n/a n/a 240.000

To what extent has aid for early retirement contributed to the earlier transfer of farms. In particular, to what extent has there been synergy between ‘early retirement’ and ‘setting-up of young farmers’ in terms of an earlier change of holders? Ratio of {number of beneficiaries of setting-up aid replacing beneficiaries of early retirement aid} to {all cases of assisted retirement} Ratio of {average age of the beneficiaries of early retirement aid replaced by beneficiaries of setting-up aid} to {average retirement age of all farmers receiving early retirement aid}

IV.1.A

n/a

n/a

n/a

n/a

TBD

TBD

IV.2

n/a

2004

n/a

n/a

n/a

1,55

n/a

n/a

TBD

2,2

11,5

25,0

TBD

Was the income offered to the transferors (small dairy farm holders) IV.3.


266



appropriate in terms of encouraging them to abandon farming and subsequently offering them a fair standard of living? Average ERS pension (€) Average ERS pension (farm worker) (€) Number of farm workers supported Average compensation per small dairy holding (€) Number of small dairy farm holders supported through ERS. Number of transferors penalized under ERS

2004

2004

2004

2004

2004

n/a

2243

1024

n/a

1353

8600

n/a

2250

1024

600

1353

27200

n/a

Context indicators Average farm size Average number of milk cows per holding, or average milk quota per holding. % of farmers under 40 years of age % of farmers over 55 years of age Ratio of average disposable income in rural area to average disposable income in urban area

2002

2002

2002

2002

2001

13,7

2,26

14,4

60

68,3

15,9

3,0

16,7

45,0

70,0


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Less Favoured Areas



To what extent have compensatory allowances helped in ensuring continued agricultural land use? Change in UAA in LFAs (ha 000) Change in UAA in LFAs ( %) Change in UAA in LFA with natural handicaps (ha 000) Change in UAA in LFA with natural handicaps ( %) Change in UAA in LFA with environmental restrictions (ha 000) Change in UAA in LFA with environmental restrictions ( %)

V.2. 2004 2004 2004 2004 2004 2004

606 41 20 75 15 50

835 72 25 94 23 77

To what extent have compensatory allowances contributed to the maintenance of a viable rural community? Compensatory allowance (EUR, mln) In Highly disadvantaged areas In Least disadvantaged areas Change in number of beneficiaries

V.3. 2002 2002 2004

45000

10 000 42 000 70000

To what extent has the scheme contributed to the protection of the environment by maintaining or promoting sustainable farming that takes account of environmental protection requirements in LFAs? Number of beneficiaries in areas with natural handicaps Number of beneficiaries in areas with environmental restrictions Number of beneficiaries, compliant with environmental requirements (concerns LFA)

V.4.A 1500 4250 100%


268

Agri-environment

Type of indicators EU document chapter

Indicator Forecast 2006

Uptake - Number of beneficiaries (abs.; % of all farmers) - Number of hectares (abs.; % of all agricultural land); - Number of hectares (abs.; % total area)

12,5 % 5 % 1 %

Agricultural indicators

Livestock density - Livestock density, livestock units/ha of forage 1

Organic farming - Number of hectares (abs.; % of all agricultural land)

Farmland under organic farming occupy 2% of all agricultural land

Environmental indicators

Water quality - Ntot, Ptot concentration in the surface water (small lakes and rivers)

Decrease of nitrate nitrogen fromagrarian territories

Soil quality - Erosion (% of area covered by measures)

Decrease of erosion

Landscape - Percentage of land or contracts with provision on the maintenance of countryside and landscape;

Increase by 10 % number of meadows

Biodiversity - Area of meadows Increase of area taken by natural and semi-natural meadow

Local breeds - Number of animals per breed Keeping a constant number of animal

Socio-economic indicators

Farm size - Farm size (comparing participating farms and Lithuanian average)

30 % of farms will be less than 20 ha.


269

Afforestation of agricultural land Questions and indicators EU document

chapter Baseline year Baseline Forecast 2006

To what extent are forest resources being maintained and enhanced through the programme particularly by influencing land use and the structure and quality of growing stock? Area of assisted plantings (ha/year) Forests planted in less favoured areas (%), of which in: -HDA

LDA Percentage of broadleaf’s in the planted forests with assistance (%)

2001

3000 n/a n/a

5000 80 40 40 50

To what extent have the assisted actions enabled forestry to contribute to the economic and social aspects of rural development by maintenance and encouragement of the productive functions on forests holdings? Ratio of lost income premiums to net income from previous land use (%) Share of beneficiaries being connected to associations of forest holders thanks to assistance (%) Share of beneficiaries which are supported under “farmers and associations thereof” category thanks to assistance (%) Share of beneficiaries which are supported as a group of applicants who afforest neighbouring lands thanks to assistance (%) Percentage of short rotation forests established

VIII.2.A. n/a n/a n/a n/a

100 20 90 10

To what extent have the assisted actions enabled forestry to contribute to the economic and social aspects of rural

VIII.2.B.


270



development by maintenance and development of employment and other socio-economic functions and conditions? Additional attractive/valuable area or sites due to assistance (forests for recreation) (ha)

n/a

1500

To what extent have the assisted actions enabled forestry to contribute to the economic and social aspects of rural development by maintenance and appropriate enhancement of protective functions of forest management? Area planted with a view to protective functions (ha) Area planted with a view to economic functions (ha)

VIII.2.C. n/a n/a

1500 2500

To what extent have the assisted actions contributed to the ecological functions of forests by maintenance, conservation and appropriate enhancement of biological diversity? Established forest in Protective areas (ha)

VIII.3.A. n/a

500

Support for semi-subsistence farms undergoing restructuring Questions and indicators EU document


To what extent has aid for semi- subsistence farms contributed to thetransferring farms into commercial farms? Number of supported projects Average age of farmers in semi- subsistence farming Farmers aged: Less than 40 years (%) 40 years and over (%)

2003

0 n/a n/a

17 000 n/a n/a


271



To what extent has aid for semi- subsistence farmers contributed to thetransferring farms into commercial farms? In particular, to what extenthas there been synergy between “support to semi- subsistence farming” and“early retirement” in terms of farm restructuring? Ratio of {number of beneficiaries of semi- subsistence farms taking over thereleased land from “early retirement”} to {all cases of assisted semi- subsistencefarms} To what extent has aid for semi- subsistence farmers contributed to thetransferring farms into commercial farms? In particular, to what extenthas there been synergy between “Support to semi- subsistence farming”and “Investments in agricultural holdings” (from SPD) in terms of farmrestructuring? Ratio of {number of beneficiaries of semi- subsistence farms, supported after“Investments in agricultural holdings” from SPD} to {all cases of assisted semi-subsistence farms}

n/a n/a

n/a n/a

n/a n/a

To what extent has the economic viability of the remaining agriculturalholdings improved? Increase in average semi- subsistence farm size after support (ha) Average size of holding (ha) being overtaken by transferee (from ERS) Average size of holding (ha) taking part in „Investments in agriculturalholdings“ in SPD and getting semi- subsistence support Average values of indicators to show economical viability of farms: - Net profit Margin (%) -

2004 2004 2004 2002 n/a

n/a 11.5 n/a n/a n/a

n/a 11.5 n/a 3 n/a


272



Specialisation in milk production in number of supported farms (%) Specialisation in live stock production in number of supported farms (%) Specialisation in crops production in number of supported farms (%)

n/a n/a

n/a n/a

n/a n/a

Context indicators Average farm size (ha AAU)

2004

n/a

n/a

Meeting standards Questions and indicators EU document


Established manure storage facilities (using funding of Meeting standards measure)? Installed milking equipment (using funding of Meeting standards measure)? Established milk storage facilities (using funding of Meeting standardsmeasure)?

2003 2003 2003

0 0 0

2650 units 8000 units 8000 units


273

Annex 7: Executive Summary of Ex-ante evaluation

Background The following summarizes the results of the ex ante evaluation of the Rural Development Plan 2004-2006 for the Republic of Lithuania (draft December 2002). The evaluation has been carried out by Kvistgaard Consult ApS (Copenhagen, Denmark) on behalf of the Ministry of Agriculture (MoA) and the Agri-information and Rural Business Centre in the Republic of Lithuania. The evaluation was carried out from 15 of January 2003 to 25 of March 2003. According to Article 63 in Commission Regulation 817/2004 an ex ante evaluation of the Rural Development Plan must be carried out prior to final approval of the Plan. The purpose and content of the ex ante evaluation are described in Guidelines for Evaluation of Rural Development Programmes 2000-2006 (VI/8865/99-Rev) in annex III regarding ex ante evaluations. In practical terms the objective of the ex ante evaluation is to contribute to the development of the RDP and through this assist the MoA in the programming of the Lithuanian rural development programme. Results of the Prior Appraisal The following aspects of the RDP have been analysed:

• The disparities, gaps and potentials of the current situation in rural Lithuania, including an assessment of previous results

• The consistency of the proposed strategy • The consistency with the Common Agricultural Policy and other Community policies • The expected impact of the selected priorities • The quantification of targets • The proposed implementing arrangements.

These aspects are summarized below. Before turning to the evaluation results it is urgent for the evaluator to point out that focus in the ex ante evaluation has been to contribute to the improvement of the draft RDP. Therefore attention also has been on what could be done better; where could arguments be improved; where could the presentation be clearer. This means that the evaluation report has a bias towards pointing out missing links and flaws. In order to justify the positive and good elements of the draft RDP in a proper way, it should be emphasised at the outset that the present draft RDP represents a substantial improvement compared to the draft SAPARD RDP from October 1999 and also ex ante evaluated of Kvistgaard Consult. The description of the current situation, the SWOT-analysis and the quantification have been elaborated considerably.


274

Disparities, gaps and potentials of the current situation in rural Lithuania, including an assessment of previous results The description of the current situation in the RDP is generally adequate. The description focuses on agriculture, forestry and the processing industries, but do also include sufficient information on the demographic, social, economic and environmental situation in the rural areas as well as the status regarding employment and infrastructure. All sections contain quantified data. The main flaw of description is the structure and organisation of the content. A few sections are misplaced and the numbering and naming of the headlines are in some cases inconsistent. The SWOT analysis represents one of the important improvements of the RDP. The SWOT is consistent with the description of the current situation and sums the main points in a coherent way. In addition, it has an analytical dimension, which makes it a suitable point of departure for outlining a strategy for rural development. The main weakness in this regard is the missing ranking of disparities. The disparities are listed but there is no explicit ranking. This ranking is an important part of the foundation for developing a focused strategy. The analysis of previous results is another part of the RDP that could be improved. In the current draft only the section on forestry is adequate in terms of analysing the results and drawing out lessons. The remaining sections could be improved by using the section on forestry as inspiration Assessment of the consistency of the proposed strategy Overall the RDP reflects the fact that there is a clear connection between the disparities to be addressed on the one hand and the strategy and the priorities on the other hand. The disparities presented in the description and addressed in the SWOT analysis are targeted by the measures selected in the RDP. The clarity and the justification of the strategy could be improved by a coherent ranking of the disparities, which make clear what problems are the most severe. Accordingly, it could strengthen the RDP if reflections on the concentration of the strategy were presented. The strategy could be either focused further or widened, each having different consequences. In this regard considerations on absorptive capacity of relevant groups of beneficiaries, administrative capacity of the MoA and marginal utility of selected measures could be presented in order to verify the adequacy of the chosen strategy.

The objectives hierarchy presented in the RDP is coherent and there is a clear link from operational to specific to overall objectives, securing internal consistency in the RDP. Furthermore the relation to the Single Programming Document (SPD) and the national measures (SASP) are clear, which suggest that the RDP is coordinated with overall strategy for development in Lithuania. The financial allocation between the different measures (the balance between measures) is not clearly linked to the description and the SWOT. This could partly be due to the missing ranking of problems, which could form a suitable base for carrying out the financial allocation. In addition, the calculations


275

and extrapolations that presumable lies behind the financial allocation are not made explicit, causing some blurring of the underlying reasons for the allocation. Another aspect with regard to the balance of the strategy has to do with the relation between the measures (and specific objectives) and the overall objectives. It can be argued that only one of the selected measures (afforestation) directly contributes to the second overall objective on diversification in rural areas. Therefore it is recommended that the MoA tones down diversification in the overall objective in order to enhance the correspondence between overall and specific objectives. This change can be justified by the fact that diversification is targeted in the SPD. Consistency with the Common Agricultural Policy and other Policies It is the impression of the evaluator that the RDP is consistent with regulation regarding the CAP. Regulation 1257/1999 and 445/2002 set out different environmental and financial requirements for the RDP. All requirements made in the regulation are met. Furthermore, controls and sanctions implemented in order to enforce the legislation are set out in the RDP. Moreover, there are no signs of inconsistencies towards other regulation. There are no sign of unequal treatment of men and women, and the obligations towards greenhouse gasses, water quality and biodiversity seems to be respected. However, making clear how Code of Good Agricultural Practice (CGAP) and Good Farming Practice (GFP) relate to each other and to different international obligations could enhance the transparency of the sections on these issues. Assessment of the expected impact of the selected priorities for action described in the RDP The expected outputs, results and impacts presented in the RDP could be presented in a more systematic and coherent way. The objectives hierarchy as recommended by the Commission is not reflected in the presentation of expected outputs, results and impacts. A restructuring according to the objectives hierarchy will improve the clarity of the intervention logic as well as prepare the subsequent development of adequate development indicators. In addition, it could improve the coherence of the overall objectives hierarchy if the overlaps between the expected outputs, results and impacts of the SPD and the RDP were taken into consideration and presented in the RDP. It is clear from the evaluation that all measures have regard to one or more of the issues raised by the common evaluation questions and correspondingly all issued raised by the common evaluation questions are addressed by one or more of the measures in the RDP. The evaluation questions have been raised by the Commission in order to evaluate the extent to which measures contribute to the overall objectives of rural development set by the Commission. The fact that all measures have regard to the evaluation questions therefore indicates that all measures contribute to the Commissions overall objectives of rural development. Correspondingly, the fact that all evaluation


276

questions are addressed by at least two measures indicates that the RDP measures will have broad impacts and contribute to all overall objectives of rural development. Quantification of targets wherever they lend themselves thereto Quantification has been taken a long way in the current draft. Useful indicators have been developed and many indicators have been turned into quantified targets. These are furthermore grounded in baseline data describing the current situation. However, the quantification is not structured in accordance with objectives hierarchy as recommended by the Commission. The quantification should be carried out thoroughly on the specific and operational level, and to the extent this is regarded possible and meaningful also on the RDP level (overall objectives). Furthermore, effort should be given to providing the missing baseline data, paving the way for the completion of quantification of objectives. Verification of the proposed implementing arrangements It is clear from the description in the RDP that the overall division of responsibility between the MoA, the NPA and the Monitoring Committee (MC) is appropriate. The independence between the NPA and the Monitoring Committee is sketched in the RDP and the different areas of responsibility are outlined. However, the chain of command and communication between the three authorities could be described, in order to make the definition of responsibilities even clearer. For example it could be made clear that all communication between the MC and the NPA goes through the MoA. The division of responsibilities is implemented as prescribed by the Commission, which verifies the impression that the overall set up is appropriate. The arrangements for monitoring and evaluation (M&E) could be addressed more thoroughly in the RDP. It not entirely demonstrated that the necessary preparations for sufficient monitoring and evaluation are in place. Many valuable experiences and arrangements have been provided during implementation of the SAPARD program, and these could be presented and reflected upon in the RDP. It is stressed that special attention are paid to designing a well-equipped data collection and monitoring system, and that the relevant application forms, business plans and indicators are developed accordingly. The eligibility and selection criteria applied in the different measures are generally clear and adequate. Within all measures the necessary criteria have been applied and definitions of key concepts have been set out, in order to secure a project selection and implementation that are contributing to the achievement of the outlined objectives. The relations with national and EC regulation are clear and the definitions in use are closely related and in compliance with the corresponding EU definitions. The applied measures are to a great extent using the same basic eligibility criteria. This gives a consistent use of criteria, which are relatively easy to enforce, as well as justifiable and comprehensible for applicants.


277

Annex 8: List of social partners consulted during the preparation of this Rural Development Plan Nr. Institutions/organization 1 Presidency of the RL 2 Ministry of Environment 3 Department of Forests and protected areas 4 State food and veterinary service 5 Lithuanian academy of veterinary 6 Lithuanian institute of agriculture 7 "Tatula"programme 8 State seed and grain service under the MoA 9 State plant protection service 10 Lithuanian agrarian economic institute 11 Lithuanian institute of horticulture 12 Association of grain processors 13 Lithuanian association of municipalities 14 Lithuanian forest owners association 15 Association of meat processors 16 Lithuanian rural tourism association 17 Lithuanian association of Agricultural partnerships 18 Lithuanian milk producers association 19 Lithuanian farmers union 20 Lithuanian agricultural advisory service 21 Lithuanian Chamber of agriculture 22 State enterprise "Agency of Lithuanian agricultural produce market regulation" 23 Society of Lithuanian farmers 24 Union of Lithuanian family farms 25 Lithuanian water management institute 26 State enterprise Agricultural information and rural development centre" 27 Union of the young farmers 28 Union of Lithuanian land management and hydrochnical engineers 29 Lithuanian university of agriculture 30 Alytus country administration 31 Kaunas county administration 32 Klaipeda county administration 33 Marijampole county administration 34 Panevezys county administration 35 Siauliai county administration 36 Tauragė county administration 37 Telšiai county administration 38 Utena county administration 39 Vilnius county administration 40 Lithuanian Fund for Natura


278

41 Ministry of Social Security and Labour 42 Ministry of the Interior 43 European Committee under the Government of the Republic of Lithuania 44 Ministry of Economy 45 Ministry of Finance


279

Annex 9 : Statistical data on municipalities Total land area and share of agricultural land, as of January 1, 2002, in hectares

Municipality Total land area Agricultural land % of agricultural land Varena 221814 52165 23.52 Svencionys 169179 48481 28.66 Kazlu ruda 55469 17480 31.51 Trakai 120789 39540 32.73 Zarasai 133436 50442 37.80 Rietavas 58570 22677 38.72 Ignalina 149621 61525 41.12 Salcininkai 149137 66716 44.73 Lazdijai 130939 59163 45.18 Vilnius 212916 98297 46.17 Jonava 94404 44010 46.62 Moletai 136779 64315 47.02 Kaisiadorys 105781 52266 49.41 Silute 170625 84638 49.60 Utena 122906 62339 50.72 Plunge 110555 57119 51.67 Taurage 117896 61029 51.77 Elekternai 53802 27874 51.81 Kaunas 149595 78605 52.55 Telsiai 143891 76188 52.95 Kretinga 98901 53010 53.60 Jurbarkas 150745 81593 54.13 Ukmerge 139528 76042 54.50 Klaipeda 133590 74707 55.92 Sirvintos 90580 50740 56.02 Rokiskis 180651 101249 56.05 Anyksciai 176488 99186 56.20 Siauliai 180732 101892 56.38 Silale 118799 67646 56.94 Akmene 84373 48299 57.24 Panevezys 217834 124853 57.32 Kupiskis 108013 62277 57.66 Kelme 170530 99216 58.18 Alytus 140394 81726 58.21 Prienai 103073 62240 60.38 Mazeikiai 122025 73747 60.44 Raseiniai 157337 99033 62.94 Radviliskis 163480 105250 64.38 Birzai 147625 95272 64.54 Kedainiai 167700 109275 65.16


280

Sakiai 145337 98794 67.98 Pagegiai 53700 38015 70.79 Skuodas 91094 64832 71.17 Pakruojis 131557 94288 71.67 Marijampole 75507 54357 71.99 Joniskis 115225 83935 72.84 Kalvarija 44044 32972 74.86 Pasvalys 128911 96806 75.10 Vilkaviskis 125898 97303 77.29


281

Annex 10: SPA's for meadow birds protection in Lithuania

Distribution of meadows and pastures in areas designated for bird protection in the view of favorable farming

Name of the territory for birdprotection

Total area of the territory, ha

Area of meadows and pastures in the territory, ha

1. Apšė river valley 328,73 51,99 2. Erlas – Salantas rivers valleys 1297,10 1054,56 3. Žemaitija National Park 26870,65 2451,22 4. Ventos river valley 3355,80 304,28 5. Kamanos strict nature reserve 3681,70 708,12 6. Minija river valley 2239,40 624,52 7. Kliošiai nature reserve 480,20 84,44 8. Svencelė meadows 178,0 77,54 9. Nemunas delta Regional park 29005,54 9136,49 10. Sausgalviai meadows 247,80 230,92 11. Lakes of Old and New Rusnė 1585,70 1019,33


282

12. Jūra-Šešuvis rivers valleys 1352,53 982,49 13. Nemunas river valley 584,50 467,31 14. Dubysa river 1117,00 186,98 15. Meadows between Raudonė

and Gelgaudiškis 5781,80 471,94

16. Širvinta river valley 495,82 215,30 17. Nevėžis river valley 1153,60 252,08 18. Žuvintas biosphere reserve 18492,97 2859,02 19. Kalvarija surroundings agro-

landscape 27191,50 5468,9

20. Svila river valley 364,10 160,38 21. Birvėta fishing ponds 861,72 420,99 22. Dysnai and Dysnyksčiai lakes 4016,56 127,40 23. Šaltoji and Vyžuona rivers

valleys 1569,32 651,60

24. Nemunėlis river valley 2706,12 493,88 Total: 134958.16 28501.68


283

Annex 11. Calculations of payments for the measure Agri-environment

Table 1: Protection of shore belts of surface water bodies in meadows and in arable land and prevention of soil erosion Calculation of premium per ha regarding management of protection shore belts of surface water bodies installed in meadows

Usual practise Agri-environment Costs Lt/ha Income Lt/ha Costs Lt/ha Income Lt/ ha

Fertilizing 298,10 1. mowing (done in June) 238,7 Grass mowing 66,5 Hay (4t*153 Lt/t) 612,00 Tedding and raking 34,6 Pick-up, transport 137,6 2. mowing (July/August) 176,9

Grass mowing 63,5 Hay (2t*153 Lt/t) 306,00 Grass mowing 63,5 Hay for litter (2t* 30Lt/t)

60,00

Tedding and raking 31,7 Tedding and racking 31,7 Pick-up, transport 81,7 Pick-up, transport 81,7 TOTAL (T1) 713,7 TOTAL(T2) 918,00 TOTAL(T3) 176,9 TOTAL(T4) 60,00

Profit from usual practice, Lt/ha (P1=T2-T1)

204,3

Profit from practice applyingthe scheme, Lt/ha(P2=T4-T3) -116,9

Income forgone, Lt/ha(I=P1-P2) 321,2

Income forgone, EUR/ha 93


284

Agronomic and economic assumptions Hay (June) 238,7 From first mowing we can get 4 t/ha of

hay 153 Lt/t is price of normal feed value hay

Grass mowing 40,4+7,5+18,6=66.5Lt/ha) Depreciation -40,4 Lt/ha; salary- 7,5 Lt/ha; Diesel-18,6 Lt/ha. 66,5 Tedding and raking 12,9+4,6+17,1=34,6 Lt /ha) Depreciation -12,9 Lt/ha; salary- 4,6 Lt/ha; diesel -17,1 Lt/ha. 34,6 Pick-up, transport 74,0+19,1+44,5=137,6 Lt/ha) Depreciation-74,0 Lt/ha; salary- 19,1 Lt/ha; diesel -44,5 Lt/ha.

137,6 If it is not in use fertilities and dry weather in 2nd part of summer medium fertility of naturals meadows decrease till 2 t/ha. For this reason grass can be used as a litter or for compost without additional incomes.

Hay (July/August) 176,9 From 2nd mowing we can get 2 t/ha

of hay 153 Lt/t is price of normal feedvalue hay

Haymaking 176,9

Grass mowing 39,2+6,8+17,5=Lt/ha; depreciation-39,2 Lt/ha; salary-6,79 Lt/ha; diesel -17,5 Lt/ha.

63,5

Grass mowing 63,5

Tedding and raking 12,4+4,0+15,3= Lt/ha) Depreciation-12,4 Lt/ha; salary- 4,0 Lt/ha; diesel –15,3 Lt/ha.

31,7

Tedding and racking 31,7

Pick-up, transport 38,0+12,4+31,3= Lt/ha) Depreciation-38,0 Lt/ha; salary- 12,4 Lt/ha; diesel -31,3 Lt/ha.

81,7

Pick-up, transport 81,7


285

Fertilizing (76+108+72,1+42=298,1Lt/ha); Amonium nitrate 200 kg*0,38 Lt=76Lt/ha; Superphosphate 200 kg*0,54 Lt=108 Lt/ha; Kalium chloride 140 kg*0,51 Lt=72 Lt/ha; Mechanised work 42 Lt/ha.

298,10

Table 2: Calculation of premium per ha regarding management of protection shore belts of surface water bodies installed in arable land and conversion of arable land into grassland


Grass sowing (785,12 Lt/ha 5 years)

157

Winter wheat Wheat (4 t*400 Lt/t) 1600,00 Mechanised work 762,4 Straw (6 t*30 L/t ) 180,00 Seed 152,0

Fertilisers (NPK) 311,3

Grass mowing 63,5 Hay for litter (2 t*30

Lt/t) 60,0

Allowed plant protection products 345,5 Tedding and racking 31,7 Pick-up, transport 81,7 TOTAL (T1) 1571,2 TOTAL (T2) 1780 TOTAL (T3) 333,9 TOTAL (T4) 60,0 Profit from usual practice, Lt/ha (P1=T2-T1)

208,8 Profit from practice applying the scheme, Lt/haP2=(T4-T3)

-273,9

Income forgone, Lt/haI= (P1-P2)

482,7



286

Agronomic and economic assumptions Mechanised work 453,2+87,3+221,9=762,4 Lt/ha; Depreciation of machinery, maintenance – 453.2 Lt/ha;salary–87,3 Lt/ha; diesel – 221,9 Lt/ha.

762.4

Grass sowing Preparation of land for sowing Seed Chalk Lime

785,12 360,6 179,8 47,7 197,02

Cultivation, ploughing, discing 192,7 Tillage (spring) 132,6 Costs of equipment of perennial

grass distributed for 5 years. Harrow 35,3

Grass can be used as a litter or for compost without additional incomes.

Rolling 16,7 Haymaking 176,9

Sowing 54,4

Grass mowing 39,2+6,8+17,5=63,5 Lt/ha; depreciation-39,2 Lt/ha; salary-6,79 Lt/ha; diesel -17,5 Lt/ha. 63,5

Harvesting, crushing of straw 364,9

Tedding and raking 12,4+4,0+15,3=31,7 Lt/ha) Depreciation-12,4 Lt/ha; salary- 4,0 Lt/ha; diesel -15,3 Lt/ha. 31,7

Spreading of mineral fertilisers 41.8 Crops spraying 26,0

Pick-up, transport 38,0+12,4+31,3=81,7 Lt/ha) Depreciation-38,0 Lt/ha; salary- 12,4 Lt/ha; diesel -31,3 Lt/ha.

81,7

Seed 152 Fertilisers 1 ha (83,6+151,2+76,5=311,3 Lt) Ammonium nitrate 220 kg (220kg x 0,38 Lt=83,6 Lt); Superphosphate 280 kg (280 kg x 0,54 Lt = 151.2 Lt); Kalium chloride 150 kg (150 kgx 0,51 Lt=76,5 Lt);

311,3 Market price of straw 30Lt/t t


287

Allowed plant protection products 1 ha (21+98+69+157,5=345.5 Lt/ha) Beices 0,3 kg; (0.3 kgx70 Lt=21 Lt); Herbicides-dialen 21 (2x49 Lt=98 Lt); Fungicides-sportac 1l (1x 69 Lt= 69 Lt); Tango super 1,5 l (1.5 x 105 Lt=157,5 Lt);

345,5 Market price of wheat 400Lt/

Table 3: Calculation of premium per ha regarding management of protection shore belts of surface water bodies


Cut shrubs 27,8 Burning of shrubs 5,2

Mowing by hand on slope 474,3

Racking by hand on slope 75,9

Removal of hay 65,3 Transport 61,4

TOTAL (T1) 0,00 TOTAL (T2) 0,00 TOTAL (T3) 709,9 TOTAL (T4) 0,00

Profit from usual practice Lt/ha P1= (T2-T1)

0,00

Profit from practice applying this scheme, Lt/ha P2= (T4-T3) - 710

Income forgone Lt/ha

I=(P1-P2) 710

Income forgone EUR/ha

206


288

Agronomic and economic assumptions

Mowing of grass by hand, racking, remowing of grass from slope, transport

676,9

Mowing by hand on slope (85 hour/ha; 5,58 Lt/ hour) 474,3 Racking by hand on slope (13,6 hour/ha; 5,58 Lt/hour) 75,9 Removal of grass (11,7 hour/ha; 5,58 Lt/hour) 65,3

Usually farmers do not mowing slopes of surface water bodies. In case of agri-environmental action, remowed grass from slopes can be used as a litter or for compost, without additional incomes. Cutting 100 m2 of small shrubs requires 0,83 hour. Cut shrubs for 1 ha requires 83 hour. Burning of shrubs 1 ha requires 15,57 hour. Slope of ditch overgrew by shrubs 30 % Transport

(35,2+18,6+7,6)=61,4 Lt/ha (Depreciation of machinery-35,2 Lt/ha; diesel – 18,6 Lt/ha; salary –7,6 Lt/ha). 61,4

Cut shrubs (83 hour*5,58 LT*0,3)/5 27,8 Burning of shrubs (15,57 hour*5,58LT*0,3)/5 5,2

Landscape Stewardship Scheme

Table 4: Calculation of premium per ha regarding management of meadows Usual practise Agri-environment

Costs Lt/ha Income Lt/ha Costs Lt/ha Income Lt/ ha First mowing of meadow done in June 176,6 Hay (2,2 t* 138Lt/t) 303,6 Second mowing done in July/August 176,6 Hay (1,75t* 138 Lt/t) 241,5 Grass mowing 63,5 Hay for litter (2

t*30Lt/t) 60,00

Tedding and racking 31,7 Pick-up, transport 81,4 TOTAL (T1) 353,2 TOTAL (T2) 545,1 TOTAL (T3) 176,6 TOTAL (T4) 60,00 Profit from usual practice, Lt/ha P1=(T2-T1)

191,9 Profit from practice applyingthis scheme, Lt/ha P2=(T4-T3) -116,6

Income forgone, Lt/ha I=(P1-P2)

308,5

Income forgone (EUR)/ha 89


289


Hay (June) 176,6 From first mowing we can get2,2 t/ha of hay

Grass mowing (39,2+6,8+17,5=63,5Lt/ha) (Deorection of machinery-39,2 Lt/ha ;diesel – 6,8 Lt/ha; salary – 17,5 Lt/ha). 63,5 Tedding and raking (12,4+4,0+15,3=35.5Lt/ha); (Depreciation of machinery-12,4 Lt/ha; diesel – 4,0 Lt/ha; salary – 15,3 Lt/ha). 31,7 Pick-up, transport (37,7+12,4+31,3= 93.0 Lt/ha;(Depreciation of machinery-37,7 Lt/ha; diesel – 12,4 Lt/ha; salary – 31,3 Lt/ha).

81,4 From 2nd mowing we can get 1,7 t/ha of hay, 138 Lt/ t is priceof normal feed value hay

Haymaking 176,6 Not fertilising and prevailing dry weather average yielding of natural meadows decrease up to 2 t/ha.

Price of hay decrease by 10 % due to worsequality, compared with that of cultural meadows. Grass mowing 63,5

Hay (July/August) 176,6 Tedding and raking 31,7 Grass mowing 63,5 Pick-up, transport 81,4 Tedding and raking 31,7 Pick-up, transport 81,4


290

Table 5: Calculation of premium per ha regarding management of wetlands Usual practise Agri-environment

Costs Lt/ha Income Lt/ha Costs Lt/ha Income Lt/ ha Grass mowing by hand 569,1 Pick-up 91,5 Removing 130 TOTAL (T1) 0,00 TOTAL (T2) 0,00 TOTAL (T3) 790,6 TOTAL (T4) 0,00 Profit from usual practice, Lt/ha (P1=T2-T1)

0,00

Profit from practice applyingthis scheme, Lt/ha (P2=T4-T3) - 791 Income forgone, Lt/ha (I=P1-P2)

791



Usually farmers do not mowe wetlands. Mowing of wetland In case of agri-environmental action, removed grass from wetland can be used as a litter or for compost, without additional incomes.

Grass mowing (85 hour/ha x 5,58 Lt/ hour x 1,2 =569,1Lt/ha); 569,1 Haymaking – 85 hour/ha

Pick-up (13,65 hour/ha x 5,58 Lt/ hour x 1,2 =91,5 Lt/ha);

91,5

Picking - up of hay – 13,66 hour/ha

Removing (19,4 hour/ha x 5,58 Lt/ hour x 1,2 =130 Lt/ha)

130 Transport of hay 19,4 hour/ ha.

Total

790,6


291

Rare Breeds Scheme Table 6: Calculation of costs for keeping one specimen of rare endangered breeds of Lithuanian Ash-Grey cattle per annum

Usual practise Agri-environment Costs Lt/cattle Income Lt/cattle Costs Lt/cattle Income Lt/ cattle

Meat (0,450t*2200Lt/t) 990 Meat (0,25t*1480Lt/t) 370 Salary 196 Calf (1calf* 40kg*2,2 Lt/kg) 88 Salary 196 Calf (1calf* 40kg*2,2 Lt/kg) 88 Electrical energy 7 Electrical energy 7 Forage 892 Forage 892 Pharmaceutical 156 Pharmaceutical 156 Depreciation 119 Depreciation 119 Other costs 187 Other costs 187 TOTAL T1 1557 TOTAL T2 1078 TOTAL T3 1557 TOTAL T4 458

-479 Income, Lt/cattle (P1=T4-T3) -1099 Costs, Lt/cattle (P2=T2-T1)

-479

Income forgone, Lt/cattle (P1-P2)

620

Income forgone, EUR/cattle 180

Income forgone, EUR/livestock unit 1 cattle=1 livestock unit

180


292

Agronomic and economic assumptions Animal net Animal net Salary Salary is calculated on the basis of

average wage per hour 3,36 Lt./ hour; 58,3 hour/cattle; 195,67 Lt/cattle; 12,58 %.

Salary Salary is calculated on the basis of average wage per hour 3,36 Lt./ hour; 58,3 hour/cattle; 195,67 Lt/cattle; 12,58 %.

Electrical energy 7,06 Lt/cattle; 0,29 Lt/kwh; 24,33 kwh/cattle; 0,45 %.


Forage Total feeding for cattle per annum 2855 forage unit/cattle; 0,31 Lt/forage unit; 891,55 Lt/cattle; 57,30 %.

Forage Total feeding for animal per annum 2855 forage unit/cattle; 0,31 Lt/forage unit; 891,55 Lt/cattle; 57,30 %.

Pharmaceutical 155,6 Lt/cattle 10 %


Depreciation 119,39 Lt/cattle 7,67 %


Other costs (Other costs consist veterinary costs: blood test, vaccination, vitamin)

186,72 Lt/cattle 12 %


186,72 Lt/cattlel 12 %

Total 1555,98 Lt/cattle Total 1555,98 Lt/cattle Calculation for salary Calculation for salary Medium salary 430 Lt Medium salary 430 Lt Number of workdays 21,3 Number of workdays 21,3 Number of working hours 170,4 Number of working hours 170,4 Wage per hour 3,4 Wage per hour 3,4 Depreciation Depreciation Barn 14688 Lt Barn 14688 Lt Standard of depreciation 1,67% Standard of depreciation 1,67% Price of equipment 680 Lt Price of equipment 680 Lt Standard of depreciation 16,6% Standard of depreciation 16,6% Amount of depreciation 358,1696 Amount of depreciation 358,1696 Number of cattle 3 cattle Number of cattle 3 cattle


293

Depreciation for 1 tone 119,39 Lt/cattle Depreciation for 1 tone 119,39 Lt/cattle Forage Standard, cnt Price,

Lt/cnt Worth, Lt Standard,

cnt Price, L./cnt Worth, Lt

Hay 8 15,3 122,4 Hay 8 15,3 122,4 Beetroot 20 8,6 172 Beetroot 20 8,6 172 Green crop 69,75 3,4 237,15 Green crop 69,75 3,4 237,15 Concentrate 8 45 360 Concentrate 8 45 360 Total 891,55 Total 891,55 Price of feeding unit 0,31 Lt Table 7: Calculation of costs for keeping one specimen of rare endangered breeds of Lithuanian White-Backed cattle per annum

Usual practise Agri-environment Costs Lt/cattte Income Lt/cattle Costs Lt/cattle Income Lt/ cattle

Meat (0,450t*2200Lt/t) 990 Meat (0,25t*1480Lt/t) 370

Salary 196 Calf (1calf* 40kg*2,2 Lt/kg) 88 Salary 196 Calf (1calf* 40kg*2,2 Lt/kg) 88

Electrical energy 7 Electrical energy 7 Forage 892 Forage 892 Pharmaceutical 156 Pharmaceutical 156 Depreciation 119 Depreciation 119 Other costs 187 Other costs 187 TOTAL T1 1557 TOTAL T2 1078 TOTAL T3 1557 TOTAL T4 458


-479


620



180


294

Agronomic and economic assumptions Animal net Animal net Salary Salary was calculated taking into

account average wages per hour 3,36 Lt./ hour; 58,3 hour/cattle; 195,67 Lt/cattle; 12,58 %.

Salary Salary was calculated taking into account average wages per hour 3,36 Lt./ hour; 58,3 hour/cattle; 195,67 Lt/cattle; 12,58 %.










186,72 Lt/cattle 12 %



Total 1555,98 Lt/cattle Total 1555,98 Lt/cattle Calculation for salary Calculation for salary Medium salary 430 Lt Medium salary 430 Lt Number of workdays 21,3 Number of workdays 21,3 Number of working hours 170,4 Number of working hours 170,4 Wage per hour 3,4 Wage per hour 3,4 Depreciation Depreciation Barn 14688 Lt Barn 14688 Lt Standard of depreciation 1,67% Standard of depreciation 1,67% Price of equipment 680 Lt Price of equipment 680 Lt Standard of depreciation 16,6% Standard of depreciation 16,6% Amount of depreciation 358,1696 Amount of depreciation 358,1696 Number of cattle 3 cattle Number of cattle 3 cattle


295

Depreciation for 1 tone 119,39 Lt/cattle Depreciation for 1 tone 119,39 Lt/cattle Forage Standard, cnt Price,

Lt/cnt Worth, Lt Standard,

cnt Price, Lt/cnt Worth, Lt

Hay 8 15,3 122,4 Hay 8 15,3 122,4 Beetroot 20 8,6 172 Beetroot 20 8,6 172 Green crop 69,75 3,4 237,15 Green crop 69,75 3,4 237,15 Concentrate 8 45 360 Concentrate 8 45 360 Total 891,55 Total 891,55 Price of feeding unit

0,31 Lt

Table 8: Calculation of costs for keeping one specimen of rare endangered breeds of Lithuanian Black and White cattle (local found) per annum




Electrical energy 7 Electrical energy 7 Forage 892 Forage 892 Pharmaceutical 156 Pharmaceutical 156 Depreciation 119 Depreciation 119 Other costs 187 Other costs 187 TOTAL T1 1557 TOTAL T2 1078 TOTAL T3 1557 TOTAL T4 458 Costs, Lt/cattle (P2=T2-T1) -479

Income, Lt/cattle (P1=T4-T3) -1099 Costs, Lt/cattle (P2=T2-T1)

-479


620



296


180













186,72 Lt/cattle 12 %



Total 1555,98 Lt/cattle Total 1555,98 Lt/cattle Calculation for salary Calculation for salary Medium salary 430 Lt Medium salary 430 Lt Number of workdays 21,3 Number of workdays 21,3 Number of working hours 170,4 Number of working hours 170,4 Wage per hour 3,4 Wage per hour 3,4 Depreciation Depreciation Barn 14688 Lt Barn 14688 Lt Standard of depreciation 1,67% Standard of depreciation 1,67% Price of equipment 680 Lt Price of equipment 680 Lt Standard of depreciation 16,6% Standard of depreciation 16,6%


297

Amount of depreciation 358,1696 Amount of depreciation 358,1696 Number of cattle 3 cattle Number of cattle 3 cattle Depreciation for 1 tone 119,39 Lt/cattle Depreciation for 1 tone 119,39 Lt/cattle Forage Standard, cnt Price,

Lt./cnt. Worth, Lt Standard,

cnt. Price, Lt./cnt. Worth, Lt


0,31 Lt

Table 9: Calculation of costs for keeping one specimen of rare endangered breeds of Lithuanian Rufous cattle (local found) per annum




Electrical energy 7 Electrical energy 7 Forage 892 Forage 892 Pharmaceutical 156 Pharmaceutical 156 Depreciation 119 Depreciation 119 Other costs 187 Other costs 187 TOTAL T1 1557 TOTAL T2 1078 TOTAL T3 1557 TOTAL T4 458


-479


620


298



180













186,72 Lt/cattle 12 %


186,72 Lt/cattle 12 %

Total 1555,98 Lt/cattle Total 1555,98 Lt/cattle Calculation for salary Calculation for salary Medium salary 430 Lt Medium salary 430 Lt Number of workdays 21,3 Number of workdays 21,3 Number of working hours 170,4 Number of working hours 170,4 Wage per hour 3,4 Wage per hour 3,4 Depreciation Depreciation Barn 14688 Lt Barn 14688 Lt Standard of depreciation 1,67% Standard of depreciation 1,67% Price of equipment 680 Lt Price of equipment 680 Lt


299

Standard of depreciation 16,6% Standard of depreciation 16,6% Amount of depreciation 358,1696 Amount of depreciation 358,1696 Number of cattle 3 cattle Number of cattle 3 cattle Depreciation for 1 tone 119,39 Lt/cattle Depreciation for 1 tone 119,39 Lt/cattle Forage Standard, cnt. Price,




0,31 Lt

Table 10:Calculation of costs for keeping one specimen of rare endangered breeds of Vištinės geese

Usual practise Agri-environment Costs Lt/geese Income Lt/geese Costs Lt/geese Income Lt/geese

Meat (5kg*8Lt/t) 40 Meat (4kg*7,1Lt/t) 28,4 Salary 39 Eggs (40*0,8Lt/unit) 32 Salary 39 Eggs (40*0,8 Lt/unit) 32 Electrical energy 0,22 Electrical energy 0,22 Forage 55 Forage 55 Pharmaceutical 4 Pharmaceutical 4 Depreciation 1 Depreciation 1 Other costs 12 Other costs 12 TOTAL T1 109,22 TOTAL T2 72,00 TOTAL T3 109,22 TOTAL T4 60,4 Profit from usual practice, Lt/animal unit (P1=T2-T1)

-37,22 Profit from practice applying thisscheme, Lt/geese (P2=T4-T3)

-48,82

Income forgone (I=P1-P2), Lt/geese 11,6

Income forgone, EUR/geese 3,36


300

Income forgone, EUR/livestock unit 56 goose=1 livestock unit (56*3,36=188 EUR/livestock unit)

188

Agronomic and economic assumptions Salary Salary was calculated taking into

account average wages per hour 3,36 Lt./ hour; 11,7 hour/geese; 39,27 Lt/geese; 35,85 %.

Salary Salary was calculated taking into account average wages per hour 3,36 Lt./ hour; 11,7 hour/geese 39,27 Lt/geese; 35,85 %.

Electrical energy 0,22Lt/geese; 0,29 Lt/kwh; 0,76 kwh/geese; 0,20 %.

Electrical energy 0,22Lt/geese; 0,29 Lt/kwh; 0,76 kwh/geese; 0,20 %.

Forage Total feeding for geese per annum 95 forage unit/geese; 0,58 Lt/forage unit; 55,03 Lt/geese 50,24%.

Forage Total feeding for geese per annum 95 forage unit/geese 0,58 Lt/forage unit; 55,03 Lt/geese; 50,24%.

Pharmaceutical 3,29 Lt/geese 3 %

Pharmaceutical 3,29 Lt/geese 3 %

Depreciation 0,77 Lt/geese 0,64 %

Depreciation 0,77 Lt/geese 0,64 %


10,95Lt/geese 10 %


10,95Lt/geese 10 %

Total 109,52 Lt/geese Total 109,52 Lt/geese Calculation for salary Calculation for salary Medium salary 430 Lt Medium salary 430 Lt Number of workdays 21,3 Number of workdays 21,3 Number of working hours 170,4 Number of working hours 170,4 Wage per hour 3,4 Wage per hour 3,4 Depreciation Depreciation Barn 4600 Lt Barn 4600 Lt Standard of depreciation 1,67% Standard of depreciation 1,67%


301

Price of equipment 0 Lt Price of equipment 0 Lt Standard of depreciation 16,6% Standard of depreciation 16,6% Amount of depreciation 76,82 Lt Amount of depreciation 76,82 Lt Number of goose 100 goose Number of goose 100 goose Depreciation for 1 tone 0,77Lt /geese Depreciation for 1 tone 0,77Lt /geese Forage Standard, cnt. Price,



Beetroot 0,8 8,6 6,88 Beetroot 0,8 8,6 6,88 Carrot 0,50 40 20 Carrot 0,50 40 20 Green crop 1,2 3,4 4,08 Green crop 1,2 3,4 4,08 Concentrates 0,54 45 24,3 Concentrate 0,54 45 24,3 Total 55,26 Total 55,26 Price of feeding unit

0,58 Lt

Table 11: Calculation of costs for keeping one specimen of rare endangered breeds of Lithuanian Native pigs per annum

Usual practise Agri-environment Costs Lt/pig Income Lt/pig Costs Lt/pig Income Lt/pig

Meat (0,2t*3200Lt/t)/3 213 Meat (0,16t*2750Lt/t)/3 147

Piglets (2*8 piglets*3,2 Lt/kg*16kg)

819

Piglets (2*8 piglets*2,75Lt/kg*15kg) 660

Salary 39 Salary 39 Electrical energy 3 Electrical energy 3 Forage 480 Forage 480 Pharmaceutical 32 Pharmaceutical 32 Depreciation 21 Depreciation 21 Other costs 64 Other costs 64 TOTAL T1 639 TOTAL T2 1032 TOTAL T3 639 TOTAL T4 807 Profit from usual practice, Lt/pig (P1=T2-T1)

393 Profit from practice applying thisscheme, Lt/pig (P2=T4-T3)

168


302

Income forgone (P1-P2), Lt/pig 225 Income forgone, EUR/pig 65

Income forgone, EUR/livestock unit2,86 pig=1 livestock unit (2,86*65=186 EUR/livestock unit)

186


account average wages per hour 3,36 Lt./ hour; 11,7 hour/pig; 39,27 Lt/pig; 6,14 %.

Salary Salary was calculated taking into account average wages per hour 3,36 Lt./ hour; 11,7 hour/pig; 39,27 Lt/pig; 6,14 %.

Electrical energy 2,96 Lt/pig; 0,29 Lt/kwh; 10,2 kwh/pig; 0,46 %.


Forage Total feeding for pig per annum 1103 forage unit/animal; 0,43 Lt/forage unit; 479,78 Lt/pig; 75,06 %.


Pharmaceutical 31,96 Lt/pig 5 %


Depreciation 21,31 Lt/pig; 3,33 %

Depreciation 21,31 Lt/pig 3,33 %


63,92 Lt/pig 10 %


63,92 Lt/pig 10 %

Total 639,2 Lt/pig Total 639,2 Lt/pig Calculation for salary Calculation for salary Medium salary 430 Lt Medium salary 430 Lt Number of workdays 21,3 Number of workdays 21,3 Number of working hours 170,4 Number of working hours 170,4 Wage per hour 3,4 Wage per hour 3,4 Depreciation Depreciation


303

Barn 6000 Lt Barn 6000 Lt Standard of depreciation 1,67% Standard of depreciation 1,67% Price of equipment 680 Lt Price of equipment 680 Lt Standard of depreciation 16,6% Standard of depreciation 16,6% Amount of depreciation 213,08 Lt Amount of depreciation 213,08 Lt Number of pigs 10 pigs Number of pigs 10 pigs Depreciation for 1 tone 21,31 Lt /pig Depreciation for 1 tone 21,31 Lt /pig Forage Standard, cnt. Price, Lt./cnt. Worth, Lt Standard, cnt. Price,

Lt./cnt. Worth, Lt

Beetroot 6,85 8,5 58,23 Beetroot 6,85 8,5 58,23 Green crop 6,25 3,4 21,085 Green crop 6,25 3,4 21,085 Concentrate 8,9 45 400,5 Concentrate 8,9 45 400,5 Total 479,81 Total 479,81 Price of feeding unit

0,43 Lt

Table 12: Calculation of costs for keeping one specimen of rare endangered breeds of Lithuanian White pigs (local genofound) per annum

Usual practise Agri-environment Costs Lt/pig Income Lt/pig Costs Lt/pig Income Lt/pig

Meat (0,2t*3200Lt/t)/3 213 Meat (0,16t*2750Lt/t)/3 147

Piglets (2*8 piglets*3,2 Lt/kg*16kg)

819

Piglets (2*8 piglets*2,75Lt/kg*15kg) 660

Salary 39 Salary 39 Electrical energy 3 Electrical energy 3 Forage 480 Forage 480 Pharmaceutical 32 Pharmaceutical 32 Depreciation 21 Depreciation 21 Other costs 64 Other costs 64 TOTAL T1 639 TOTAL T2 1032 TOTAL T3 639 TOTAL T4 807 Profit from usual practice,

393 Profit from practice applying thisscheme, Lt/pig

168


304

Lt/pig (P1=T2-T1)

(P2=T4-T3)

Income forgone, Lt/pig 225 Income forgone, (P1-P2) EUR/pig 65

Income forgone, EUR/livestock unit2,86 pig=1 livestock unit (2,86*65=186 EUR/livestock unit)

186


account average wages per hour 3,36 Lt./ hour; 11,7 hour/pig; 39,27 Lt/pig; 6,14 %.

Salary Salary was calculated taking into account average wages per hour 3,36 Lt./ hour; 11,7 hour/pig; 39,27 Lt/pig; 6,14 %.







Depreciation 21,31 Lt/pig; 3,33 %

Depreciation 21,31 Lt/pig 3,33 %


63,92 Lt/pig 10 %


63,92 Lt/pig 10 %

Total 639,2 Lt/pig Total 639,2 Lt/pig Calculation for salary Calculation for salary Medium salary 430 Lt Medium salary 430 Lt Number of workdays 21,3 Number of workdays 21,3 Number of working hours 170,4 Number of working hours 170,4


305

Wage per hour 3,4 Wage per hour 3,4 Depreciation Depreciation Barn 6000 Lt Barn 6000 Lt Standard of depreciation 1,67% Standard of depreciation 1,67% Price of equipment 680 Lt Price of equipment 680 Lt Standard of depreciation 16,6% Standard of depreciation 16,6% Amount of depreciation 213,08 Lt Amount of depreciation 213,08 Lt Number of pigs 10 pigs Number of pigs 10 pigs Depreciation for 1 tone 21,31 Lt /pig Depreciation for 1 tone 21,31 Lt /pig Forage Standard, cnt. Price, Lt./cnt. Worth, Lt Standard, cnt Price, Lt/cnt Worth, Lt Beetroot 6,85 8,5 58,23 Beetroot 6,85 8,5 58,23 Green crop 6,25 3,4 21,085 Green crop 6,25 3,4 21,085 Concentrate 8,9 45 400,5 Concentrate 8,9 45 400,5 Total 479,81 Total 479,81 Price of feeding unit

0,43 Lt

Table 13: Calculation of costs for keeping one specimen of rare endangered breeds of Lithuanian Weighted horses per annum

Usual practise Agri-environment Costs Lt/horse Income Lt/horse Costs Lt/horse Income Lt/horse

Meat (0,65t* 3250 Lt/t) 2112 Meat (0,65t* 2800 Lt/t) 1820

Foal(2 foals*130kg*3.25Lt./kg)/5

169

Foal(2 foals*130kg*2,8Lt./kg)/5 146

Salary 495 Salary 495 Electrical energy 7 Electrical energy 7 Forage 927 Forage 1205,1 Pharmaceutical 201 Pharmaceutical 221,1 Depreciation 175 Depreciation 175 Other costs 201 Other costs 201 TOTAL T1 2006 TOTAL T2 2281 TOTAL T3 2304,2 TOTAL T4 1966 Profit from usual practice, Lt/horse 275

Profit from practice applying this scheme, Lt/horse (P2=T4-T3) -338


306

(P1=T2-T1)

Income forgone, Lt/horse (I=P1-P2) 614

Income forgone, EUR/horse 178

Income forgone, EUR/livestock unit 0,83 horse=1 livestock unit (for horses older than 2 years) (0,83*178=148 EUR/LU) 148


account average wages per hour 7,02 Lt./ hour; 70,50 hour/horse; 495,24 Lt/horse; 24,69 %.

Salary Salary was calculated taking into account average wages per hour 7,02 Lt./ hour; 70,50 hour/horse; 495,24 Lt/forse; 24,69 %.

Electrical energy 7,05 Lt/horse; 0,29 Lt/kwh; 24,3 kwh/horse; 0,35 %.


Forage Total feeding for horse per annum 3685 forage unit/horse; 0,25 Lt/forage unit; 927,45 Lt/horse; 46,24%.


Pharmaceutical 200,56 Lt/horse 10 %


Depreciation 174,72 Lt/horse 8,71 %



200,56 Lt/horse 10 %


200,56 Lt/horse 10 %

Total 2005,57 Lt/horse Total 2005,57 Lt/horse Calculation for salary Calculation for salary Medium salary 900 Lt Medium salary 900 Lt Number of workdays 21,3 Number of workdays 21,3


307

Number of working hours 170,4 Number of working hours 170,4 Wage per hour 7 Wage per hour 7 Depreciation Depreciation Barn 14688 Lt Barn 14688 Lt Standard of depreciation 1,67% Standard of depreciation 1,67% Price of equipment 680 Lt Price of equipment 680 Lt Standard of depreciation 16,6% Standard of depreciation 16,6% Amount of depreciation 524,1696 Lt Amount of depreciation 524,1696 Lt Number of horses 3 horses Number of horses 3 horses Depreciation for 1 tone 174,72 Lt /horse Depreciation for 1 tone 174,72 Lt /horse Forage Standard, cnt. Price,

Lt./cnt. Worth, Lt Standard, cnt. Price, Lt./cnt. Worth, Lt

Hay 18,5 15,3 283,05 Hay 18,5 15,3 390,1 Green crop 65 3,4 221 Green crop 65 3,4 360 Oat 14,6 29 423,4 Oat 14,6 29 455 Total 927,45 Total 1205,1 Price of feeding unit

0,25 Lt

Table 14: Calculation of costs for keeping one specimen of rare endangered breeds of Žemaitukai horses per annum


Meat (0,65t* 3250 Lt/t) 2112 Meat (0,4t* 2800 Lt/t) 1120

Foal (2*130kg*3.25Lt./kg)/5

169 Foal (2*120kg*2.8Lt./kg)/5 134

Salary 495 Salary 495 Electrical energy 7 Electrical energy 7 Forage 927 Forage 695,25 Pharmaceutical 201 Pharmaceutical 201 Depreciation 175 Depreciation 175 Other costs 201 Other costs 201 TOTAL T1 2006 TOTAL T2 2281 TOTAL T3 1774,25 TOTAL T4 1254


308

Profit from usual practice, Lt/horse (P1=T2-T1) 275

Profit from practice applying thisscheme, Lt/horse (P2=T4-T3) -520,25 Income forgone, Lt/horse (I=P1-P2)

795


Income forgone, EUR/livestock unit0,83 horse=1 livestock unit (forhorses older than 2 years) (0,83*230=191 EUR/livestock unit)

191













200,56 Lt/horse 10 %


200,56 Lt/horse 10 %



309




0,25 Lt

Table 15: Calculation of costs for keeping one specimen of rare endangered breeds of big Žemaitukai horses per annum


Meat (0,65t* 3250 Lt/t) 2112 Meat (0,5* 2800 Lt/t) 1400

Foal (2foals*130kg*3.25Lt./kg)/5

169

Foal (2foals*130kg*2,8:t/kg)/5 146

Salary 495 Salary 495 Electrical energy 7 Electrical energy 7 Forage 927 Forage 1010,43 Pharmaceutical 201 Pharmaceutical 201 Depreciation 175 Depreciation 175 Other costs 201 Other costs 201 TOTAL T1 2006 TOTAL T2 2281 TOTAL T3 2089,43 TOTAL T4 1546


310

Profit from usual practice, Lt/horse (P1=T2-T1) 275

Profit from practice applying thisscheme, Lt/horse (P2=T4-T3) -543 Income forgone, Lt/horse (I=P1-P2)

818


Income forgone, EUR/livestock unit0,83 horse=1 livestock unit (forhorses older than 2 years) (0,83*237=197 EUR/livestock unit)

197













200,56 Lt/horse 10 %


200,56 Lt/horse 10 %



311




0,25 Lt

Table 16: Calculation of costs for keeping one specimen of rare endangered breeds of Lithuanian Coarse-wooled sheep per annum

Usual practise Agri-environment Costs Lt/sheep Income Lt/sheep Costs Lt/sheep Income Lt/sheep

Meat (0,05 t*7000Lt/t) 350 Meat (0,04 t*7000Lt/t) 280 Lamb (2 lambs*25kg* 7 Lt./kg)350 Lamb (2 lambs * 23kg *7Lt/kg)322 Salary 39 Salary 39 Electrical energy 10 Electrical energy 10 Forage 168 Forage 168 Pharmaceutical 31 Pharmaceutical 31 Depreciation 31 Depreciation 31 Other costs 31 Other costs 31 TOTAL T1 311 TOTAL T2 700 TOTAL T3 311 TOTAL T4 602 Costs, Lt/sheep 389 Income, Lt/sheep 291


312

(P2=T2-T1) (P1=T4-T3) Income forgone, Lt/sheep (I=P1-P2)

98

Income forgone, EUR/sheep 28

Income forgone, EUR/livestock unit 7,14 sheep= 1 livestock unit (7,14*28=200 EUR/livestock unit)

200


account average wages per hour 3,36 Lt./ hour; 11,7 hour/sheep; 39,27 Lt/sheep; 12,58 %.

Salary Salary was calculated taking into account average wages per hour 3,36 Lt./ hour; 11,7 hour/sheep; 39,27 Lt/sheep; 12,58 %.

Electrical energy 10,44 Lt/sheep; 0,29 Lt/kwh; 36 kwh/sheep; 3,34 %.


Forage Total feeding for sheep per annum 575 forage unit/animal; 0,29 Lt/forage unit; 168,52 Lt/sheep; 53,99 %.

Forage Total feeding for sheep per annum 648 forage unit/sheep; 0,29 Lt/forage unit; 188 Lt/sheep; 53,99 %.

Pharmaceutical 31,21 Lt/sheep 10,09 %

Pharmaceutical 40Lt/sheep 10,09 %

Depreciation 31,49 Lt/sheep 10,09%



31,21 Lt/sheep 10 %


31,21 Lt/sheep 10 %

Total 312,15 Lt/sheep Total 312,15 Lt/sheep Calculation for salary Calculation for salary Medium salary 430 Lt Medium salary 430 Lt


313

Number of workdays 21,3 Number of workdays 21,3 Number of working hours 170,4 Number of working hours 170,4 Wage per hour 3,4 Wage per hour 3,4 Depreciation Depreciation Barn 6000 Lt Barn 6000 Lt Standard of depreciation 1,67% Standard of depreciation 1,67% Price of equipment 3450 Lt Price of equipment 3450 Lt Standard of depreciation 16,6% Standard of depreciation 16,6% Amount of depreciation 1574,7 Lt Amount of depreciation 1574,7 Lt Number of sheep 50 units Number of sheep 50 units Depreciation for 1 tone 31,49 Lt /sheep Depreciation for 1 tone 31,49 Lt /sheep

Forage Standard, cnt. Price, Lt./cnt. Worth, Lt Standard,


Hay 3,42 15,3 52,33 Hay 3,42 15,3 52,33 Beetroot 2,4 8,6 20,64 Beetroot 2,4 8,6 20,64 Green crop 12,9 3,4 43,86 Green crop 12,9 3,4 43,86 Concentrate 1,15 45 51,75 Concentrate 1,15 45 51,75 Total 168,58 Total 168,58 Price of feeding unit

0, 29Lt

Table 17: Calculation of costs for keeping one specimen of rare endangered breeds of Lithuanian blackhead sheep (local type) per annum

Usual practise Agri-environment Costs Lt/sheep Income Lt/sheep Costs Lt/sheep Income Lt/sheep

Meat (0,05 t*7000Lt/t) 350 Meat (0,04 t*7000Lt/t) 280 Lamb (2 lambs*25kg* 7 Lt./kg)350 Lamb (2 lambs * 23kg *7Lt/kg)322 Salary 39 Salary 39 Electrical energy 10 Electrical energy 10 Forage 168 Forage 168 Pharmaceutical 31 Pharmaceutical 31 Depreciation 31 Depreciation 31


314

Other costs 31 Other costs 31 TOTAL T1 311 TOTAL T2 700 TOTAL T3 311 TOTAL T4 602 Costs, Lt/sheep (P2=T2-T1) 389

Income, Lt/sheep (P1=T4-T3) 291 Income forgone, Lt/sheep (I=P1-P2)

98

Income forgone, EUR/sheep 28

Income forgone, EUR/livestock unit 7,14 sheep = 1 livestock unit (7,14*28=200 EUR/livestock unit)

200


account average wages per hour 3,36 Lt./ hour; 11,7 hour/sheep; 39,27 Lt/sheep; 12,58 %.

Salary Salary was calculated taking into account average wages per hour 3,36 Lt./ hour; 11,7 hour/sheep; 39,27 Lt/sheep; 12,58 %.



Forage Total feeding for sheep per annum 575 forage unit/animal; 0,29 Lt/forage unit; 168,52 Lt/sheep; 53,99 %.

Forage Total feeding for sheep per annum 648 forage unit/sheep; 0,29 Lt/forage unit; 188 Lt/sheep; 53,99 %.

Pharmaceutical 31,21 Lt/sheep 10,09 %

Pharmaceutical 40Lt/sheep 10,09 %




31,21 Lt/sheep 10 %


31,21 Lt/sheep 10 %

Total 312,15 Lt/sheep Total 312,15 Lt/sheep Calculation for salary Calculation for salary


315

Medium salary 430 Lt Medium salary 430 Lt Number of workdays 21,3 Number of workdays 21,3 Number of working hours 170,4 Number of working hours 170,4 Wage per hour 3,4 Wage per hour 3,4 Depreciation Depreciation Barn 6000 Lt Barn 6000 Lt Standard of depreciation 1,67% Standard of depreciation 1,67% Price of equipment 3450 Lt Price of equipment 3450 Lt Standard of depreciation 16,6% Standard of depreciation 16,6% Amount of depreciation 1574,7 Lt Amount of depreciation 1574,7 Lt Number of sheep 50 units Number of sheep 50 units Depreciation for 1 tone 31,49 Lt /sheep Depreciation for 1 tone 31,49 Lt /sheep

Forage Standard, cnt. Price, Lt./cnt. Worth, Lt Standard,


Hay 3,42 15,3 52,33 Hay 3,42 15,3 52,33 Beetroot 2,4 8,6 20,64 Beetroot 2,4 8,6 20,64 Green crop 12,9 3,4 43,86 Green crop 12,9 3,4 43,86 Concentrate 1,15 45 51,75 Concentrate 1,15 45 51,75 Total 168,58 Total 168,58 Price of feeding unit

0, 29Lt

Organic farming scheme Table 18: Calculation of premium per ha for organic farming – cereal (including legumes and protein crops)


Winter wheat Wheat (4t* 400Lt/t) 1600 Winter wheat Wheat (2,8t*440Lt/t) 1232 Straw (6t*30Lt/t) 180 Straw (4,2 t*30Lt/t) 126 Seed 300 Mechanised work 762,4 Mechanised work 1039,5 Seed 152,0 Organic fertilisers 1000 Fertilises (NPK) 311,3 Allowed plant protection 225


316

products Allowed plant protection products 345,5

Certification fee 19,6

TOTAL (T1) 1571,2 TOTAL(T2) 1780 TOTAL(T3) 2584,1 TOTAL(T4) 1358

P1=T2-T1 208,8

Profit from practice applying the scheme, Lt/ha (P2=T4-T3) - 1226,1

Income forgone, Lt/ha(I=P1-P2) 1435



Mechanised work (453,2+87,3+221,9 = Lt/ha); Depreciation of machinery, maintenance –453.2 Lt/ha; salary – 87,3 Lt/ha; diesel –221,9 Lt/ha)

762,4

Mechanised work

1039,5

Tillage 132,6 Cultivation, ploughing, discing 192,7

Tillage 132,6 Manure handling with penac for 1 tone – 40 g.

Harrow 35,3 Cultivation (3 times), ploughing, discing 227,8 Usable for handling of crop biological preparation-fitoverm 0,3 l/ha

Rolling 16,7 Harrow 35,3

Sowing 54,4 Spreading of organic fertilisers 228,8 Harvesting, crushing of straw 364,9 Sowing 54,4 Spreading of mineral fertilisers 41.8 Rolling 16,7 Crop spraying 26,0 Harvesting, crushing of straw 343,9 Seed 152


317

Fertilisers (NPK) (83,6+151,2+76,5=311,3 Lt) Ammonium nitrate 220 kg (220kg x 0,38 Lt=83,6 Lt); Superphosphate 280 kg (280 kg x 0,54 Lt = 151.2 Lt); Kalium chloride 150 kg (150 kgx 0,51 Lt=76,5 Lt);

311,3 Seed 300

Allowed plant protection products 1 ha (21+98+69+157,5=345.5) Beices 0,3 kg; (0.3 kgx70 Lt=21 Lt); Herbicides-dialen 21 (2x49 Lt=98 Lt); Fungicides-sportac 1l (1x 69 Lt= 69 Lt); Tango super 1,5 l (1.5 x 105 Lt=157,5 Lt);

345,5

Organic fertilisers (40t*25Lt/t) 1000

Allowed plant protection products : Penac (0,3 l x110 Lt/l) 33

Fitoverm (1,6 kg x 120 Lt/ kg) 192 Certification fee 19,6 Table 19: Calculation of premium per ha for organic farming – perennial grass


Milk (4,2t*1,2 cow*0,65*597Lt/t)

1792,8

Milk (4,2t*0,56cow*0,65*597Lt/t) 912,69

Haymaking (198x1,3=257,4) 257,4 Fertilisers (NPK) 332,00 Grass mowing 72,2 Tedding and racking 35,5 Haymaking (2 times) 418,4 Pick-up, transport 90,0 Grass moving 75,5 Tedding and raking 38,9 Pick-up, transport 93,0 Certification fee 19,1

TOTAL (T1) 750,4 TOTAL(T2) 1792,8 TOTAL(T3) 276,5 TOTAL(T4) 912,7


318


1042,4

Profit from practice applying the scheme, Lt/ha (P2=T4-T3) 636.2




319


Fertilisers (NPK): (76+130+84+42=332Lt/ha); Ammonium nitrate 200 kg (200kg x 0,38 Lt=76 Lt/ha); Superphosphate 240 kg (240 kg x 0,54 Lt = 130 Lt/ha); Kalium chloride 166 kg (166 kgx 0,51 Lt=84 Lt/ha); Fertilisers – 42 Lt/ha.

332,00

Allowed plant protection product 1 ha:

Starane 1,5 l/ha

Costs of equipment of perennial grass distributed for 3 years. During 3 years of use meadows are mowing at an average 1,3 times (201 Lt/ha x 1,3 times = 261.3 Lt/ ha)

Haymaking 207,4 For 1 ha of perennial grass keeping 1,2 cow Haymaking 197,7 Fertility 2 t hay for 1 ha of grassland keeping 0,56 cow

Grass moving 75,5 Grass mowing 72.2 Price of organic milk – 0,597Lt/kg Tedding and raking 38,9 Price of organic milk – 0,597Lt/ kg Tedding and raking 35,5 Produce 65% of milk from

perennial grass forage. Pick-up, transport 93,0 Milking 4,2 t of milk Pick-up, transport 90.0

Price of organic milk the same as obtained traditionally, because 2 years production is not certified as organic.

Certification fee 19,1 In addition, due to low purchasing power of consumers demand for organic production is low.


320

Table 20: Calculation of premium per ha of organic farming – horticulture (specilisation in fruits)


Mechanised work 66,6 (10tx 600Lt/t) 6000 Mechanised work 43,7 (5 tx700 Lt/t) 3500 Fertilisers (NPK) 269,00 (1tx 200Lt/t) 200 Fertilisers (300 kg kalium salin) 132,00 (0,5tx 200 Lt/t) 100 Allowed plant protection products 27,50

Handling of under trees (0,5 ha) 235,9

Handling of under trees (0,5 ha) 273,6

Cultivation of space in betweenthe rows (0,5 ha) 273,6

Cultivation of space in between the rows (0,5 ha) 149,3

Tree pruning 149,3

Tree pruning 187,9 Apple picking 1020,3 Apple picking 1227,5 Certification fee 342,0 TOTAL (T1) 2201,4 TOTAL(T2) 6200 TOTAL(T3) 2196,8 TOTAL(T4) 3600


3998,6

Profit from practice applying thescheme, Lt/ha (P2=T4-T3) 1403,2




321

Agronomic and economic assumptions Mechanised work (23,9+29,5+13,2=66,6 Lt/ha) (Depreciation of machinery-23,9 Lt/ha ;diesel – 29.5 Lt/ha; salary – 13,2 Lt/ha) 66,6

Mechanised work (15,6+18,8+9,3= 43,7Lt/ha)(Depreciation of machinery-15,6 Lt/ha ;diesel – 18,8 Lt/ha; salary – 9,3 Lt/ha)

43,7

Fertilisers (NPK) (114+54+102=269 Lt/ha); Ammonium nitrate 300 kg (300kg x 0,38 Lt=114 Lt); Superphosphate 100 kg (100kg x 0,54 Lt = 54Lt); Kalium chloride 200 kg (200kgx 0,51 Lt=102 Lt); 269,00

Fertilisers Kalium salin 300 kg/ha; (300kg x 0,44=132 Lt/ha);

132,00 Handling of undergrowth 2 times

Allowed plant protection products (Raundap -2*13,75=27,5 Lt/ha)- 2l/ha, 2 times 27,50

Haymaking mechanised of space in between the rows 6 times

Handling of undertrees (0,5 ha) 273,6 Handling of under trees (0,5 ha) 273,6 Pruning 2 workers 2,5 day Pick -up 39,1 Cultivation of space in between the rows (0,5 ha)

149,3 Haymaking of space in between the rows 6 times

Cultivation of space in between the rows (0,5 ha)

149,3 1 worker picks up 0,35 t/day

Tree pruning 187,9 Pruning 2 workers 2,5 day Tree pruning 187,9

Price of organic apples is the same as produced traditionally because 2 years production does not receive certificate of organic production.

Apple picking 1227,5 1 worker picks up 0,41 t/day Apple picking 1020,3

Certification fee 342

In addition, due to low purchasing power of consumers demand for organic production is low.


322

Table 21: Calculation of premium per ha for organic farming – vegetables, potatoes


Vegetables

Vegetables (12,4 t*0,9*400 Lt/t) 4464 Vegetables

Vegetables (11t*0,75*480 Lt/t) 3960

Mechanised and hand works 1460 Mechanised and hand works 2100 Seed 308,0 Seed 380,0

Mineral fertilisers (NPK)) 453,2 Organic fertilisers(45t*25Lt/t) 1125

Allowed plant protection products 430,4

Allowed plant protectionproducts 240,4

Certification fee 205,3 TOTAL (T1) 2651,6 TOTAL(T2) 4464 TOTAL(T3) 4050,7 TOTAL(T4) 3960,0


1812,4

Profit from practice applying thescheme, Lt/ha(P2=T4-T3) -90,7




323


Mechanised and hand works (349,7+153,5+144,3+155,4+77,7+579,4=1460Lt/ha);

1460 Fertilising kg/ 1 ha

Mechanised and hand works 2100

Tillage, harrowing, rollage, discing 349,7 Manure handling with penac

for 1 tone – 40 g. Cultivation (3 times) (43,5+60+50=153,5 Lt/ha) (Depreciation of machinery-43,5 Lt/ha ;diesel – 60 Lt/ha; salary – 50 Lt/ha)

153,5 Usable for handling of crop biological preparation-fitoverm -0,44 l/ha

Sowing 144,3

Spreading of organic fertilisers 228,8 Medium price of organic vegetables 400 Lt/t

Scarification 155,4 Tillage, harrowing, rollage, discing 306,8

Price of organic vegetables is the same as produced traditionally because 2 years production does not receive certificate of organic production.

Fertilising and spraying 77,7 Cultivation (3times) 105,6 Harvesting 579,4 Sowing 144,3 In addition, due to low

purchasing power of consumers demand for organic production is low.

Crops spraying (2 times) Allowed plant protection product: Fitoverm 0,3 – 0,4 l/ha 26,0

Crop care 709,1 . Propagating material 308 Harvesting 579,4 Seed 380 Fertilisers and allowed plant protections products 883,6

Fertilisers and allowed plant protectionproducts 1365,4

Mineral fertilisers (NPK) N- 270 kg/ha; P-290 kg/ha; K – 210 kg/ha: Borum-30kg/ha (30 x 2,9Lt/kg=87 Lt/ha); 453,2 Organic fertilisers (45t*25Lt/ t) 1125


324

Allowed plant protection products (156+166,5+58,9+41,48+7,5 = 430,4 Lt/ha); Betanal -3,9 kg x 40 Lt/kg=156 Lt/ha; Gezagard-3,2 kgx 52 Lt/kg=166,5 Lt/ha; Agil-0,49l x 120 Lt/l=58,9 Lt/ha; Decis-;0,61 l x 68Lt/l=41,48 Lt/ha; Beices –0,15 kg x50 = 7,5 Lt/ha. 430,4

Allowed plant protection products: Penac (1,6 kg*120 Lt/kg) Fitoverm (0,44l*110Lt/l)

192 48,4


Table 22: Calculation of premium per ha for organic farming – herbs


Herbs Herbs (0,6*12000) 7200 Herbs Herbs (0,48*12800) 6144 Mechanised and hand works 5014,7 Mechanised and hand works 4663,4 Seed 500 Seed 560 Mineral fertilisers (NPK) 238 Organic fertilisers 1000 Allowed plant protection products 156 Certification fee 205,3

TOTAL (T1) 5908,7 TOTAL(T2) 7200 TOTAL(T3) 6428,7 TOTAL(T4) 6144,0


1291,3

Profit from practice applying thescheme, Lt/ha(P2=T4-T3) -284,7

Income forgone, Lt/ha (I=P1-P2) 1576



325


Mechanised and hand works 5014,7 Mechanised and hand works 4663,4 Mechanised work (172,7+56+194=506,7 Lt/ha); (Depreciation of machinery-172,7 Lt/ha; diesel – 56 Lt/ha; salary –194 Lt/ha). 422,7

Mechanised work (256,7+180+66,6= 503,3 Lt/ha); (Depreciation of machinery-256,7Lt/ha; diesel –180 Lt/ha; salary –66,6 Lt/ha).

503,3

Hand work 4592,0 Hand work 4160,1 Seed 500 Seed 560 Mineral fertilisers Fertilisers (NPK) (76+65+97=238 Lt/ha); Ammonium nitrate 200 kg (200kg x 0,38 Lt=76 Lt/ha); Superphosphate 120 kg (120 kg x 0,54 Lt = 65 Lt/ha); Kalium chloride 190 kg (190kgx 0,51 Lt=97 Lt/ha); 238

Organic fertilisers (40t*25 Lt/t) 1000

Allowed plant protection products Gezagard-3l x 52 Lt/l=156 Lt/ha. 156



326

Table 23: Calculation of premium per ha for organic farming – horticulture (specilisation in berries)


Berry Berry (10t*2500Lt) 25000Berry Berry (7t*2900) 20300

Salary 7488 Salary 7488 Diesel 627 Diesel 627 Machinery depreciation, maintenance 355

Machinery depreciation, maintenance 355

Seed 2810 Seed 2810 Mineral fertilisers (NPK), allowed plant protection products 3043

Organic fertilisers, allowed plant protection products

700

Auxiliary material (foil, packing) 1760 Auxiliary material (foil, packing) 1760 Other costs 1608 Other costs 1608 Depreciation 509 Depreciation 509 Expenditure 2123 Expenditure 2123 Certification fee 177

TOTAL (T1) 20323

TOTAL(T2) 25000TOTAL(T3) 18157 TOTAL(T4) 20300

Profit from usual practice, Lt/ha (P1=T2-T1) 4677

Profit from practice applying the scheme, Lt/ha (P2=T4-T3) 2143

Income forgone, Lt/ha (I=P1-P2) 2534



327


Salary 7488 Salary 7488 Diesel 627 Diesel 627 Machinery depreciation, maintenance

355 Machinery depreciation, maintenance 355

Seed 2810 Seed 2810 Mineral fertilisers, allowed plant protection products 3043

Mineral fertilisers, allowed plant protectionproducts 700

Auxiliary material (foil, packing) 1760 Auxiliary material (foil, packing) 1760 Other costs 1608 Other costs 1608 Expenditure 2123 Expenditure 2123 Depreciation 509 Depreciation 509 Certification fee 177


328

Annex 12: Equipment used as basis for calculations of payments for meeting requirements of Council Directive 92/46/EEC Number of cows in farm 10 28 40 100 200

Type of milking equipmentVP 170, 20L Family comfort

2x2 EuroHeringbone, HP 102

2x5 EuroHeringbone, M400, MM25

2x8 Euro Paralel, Alpro, MPC, MM25

Number of units 2 3 (Duovac)

1 (milking platform of 4 places)

1 (milking platform of 10 places)

1 (Parallel type milking platform of 16 places)

Type of cooling equipment DX/OB 400L DX/OB 1200L DX/OB 1800L DX/CE 5000L DX/CE 9700L Number of units 1 1 1 1 1 Milking equipment: For 10 cows farm – Vacuum pump VP 170 with 20 liters can, 2 units; For 28 cows farm – semi-automated milking system “Family comfort” with 3 Duovac milking units; For 40 cows farm – automated milking platform 2x2 EuroHeringbone with hydro pulsator HP 102 For 100 cows farm – automated milking platform 2x5 EuroHeringbone with automatic take-off M400 and milk meter MM25; For 200 cows farm – automated parallel type milking platform 2x8 Euro Paralel with milking point controller MPC and DeLaval milk meter MM25 (provides functions including flow indication, flow control milking and automatic take-off) which forms the basis of the ALPRO® milking system.


329

Annex 13: LFA area RDP_PERIOD

RDP_MS

RDP_MS_REGION_CODE

COMMUNE_CODE

COMMUNE_LABEL MUNICIPALITY

WARD LFA_16_STATUS

LFA_19_STATUS

LFA_20_STATUS

VALIDITY_DATE

AUTHORITY_CODE

AUTHORITY_NAME

REPORTING_DATE

MS_update_status

EC_update_status

0406 LT LT LT0115 DRUSKININKU

LEIPALINGIO

T N 20030511 LT 20030511 U R

0406 LT LT VIECIUNU T N 20030511 LT 20030511 U R 0406 LT LT LT0632 AKMENES KRUOPIU T N 20030511 LT 20030511 U R 0406 LT LT LT0934 ANYKSCIU ALL WARDS T N 20030511 LT 20030511 U R 0406 LT LT LT0133 ALYTAUS DAUGU T N 20030511 LT 20030511 U R 0406 LT LT RAITININKU T N 20030511 LT 20030511 U R 0406 LT LT LT0536 BIRZU PABIRZES N C 20030511 LT 20030511 U R 0406 LT LT SIRVENOS N C 20030511 LT 20030511 U R 0406 LT LT NEMUNELIO

RADVILISKIO

N C 20030511 LT 20030511 U R

0406 LT LT PACERIAUKSTES

N C 20030511 LT 20030511 U R

0406 LT LT PAROVEJOS N C 20030511 LT 20030511 U R 0406 LT LT LT1042 ELEKTRENU ALL WARDS T N 20030511 LT 20030511 U R 0406 LT LT LT0945 IGNALINOS ALL WARDS T N 20030511 LT 20030511 U R 0406 LT LT LT0246 JONAVOS DUMSIU T N 20030511 LT 20030511 U R 0406 LT LT UPNINKU T N 20030511 LT 20030511 U R 0406 LT LT LT0794 JURBARKO VIESVILES T N 20030511 LT 20030511 U R 0406 LT LT LT0249 KAISIADORI

U NEMAITONIU

T N 20030511 LT 20030511 U R

0406 LT LT KRUONIO T N 20030511 LT 20030511 U R 0406 LT LT PALOMENES T N 20030511 LT 20030511 U R 0406 LT LT PAPARCIU T N 20030511 LT 20030511 U R 0406 LT LT LT0252 KAUNO ZAPYSKIO T N 20030511 LT 20030511 U R 0406 LT LT LT0458 KAZLU

RUDOS JANKU T N 20030511 LT 20030511 U R

0406 LT LT LT0654 KELMES VAIGUVOS T N 20030511 LT 20030511 U R 0406 LT LT UZVENCIO T N 20030511 LT 20030511 U R 0406 LT LT KRAZIU T N 20030511 LT 20030511 U R 0406 LT LT SAUKENU T N 20030511 LT 20030511 U R


330

0406 LT LT PAKRAZANCIO

T N 20030511 LT 20030511 U R

0406 LT LT LT0355 KLAIPEDOS DOVILU T N 20030511 LT 20030511 U R 0406 LT LT PRIEKULES T N 20030511 LT 20030511 U R 0406 LT LT LT0557 KUPISKIO KUPISKIO T N 20030511 LT 20030511 U R 0406 LT LT LT0159 LAZDIJU ALL WARDS T N 20030511 LT 20030511 U R 0406 LT LT LT0861 MAZEIKIU SEDOS T N 20030511 LT 20030511 U R 0406 LT LT LT0962 MOLETU ALL WARDS T N 20030511 LT 20030511 U R 0406 LT LT LT0763 PAGEGIU ALL WARDS T N 20030511 LT 20030511 U R 0406 LT LT LT0566 PANEVEZIO KARSAKISKI

O T N 20030511 LT 20030511 U R

0406 LT LT LT0567 PASVALIO PASVALIO N C 20030511 LT 20030511 U R 0406 LT LT SMILGIU N C 20030511 20030511 U R 0406 LT LT KRINCINO N C 20030511 LT 20030511 U R 0406 LT LT LT0868 PLUNGES ALL WARDS T N 20030511 LT 20030511 U R 0406 LT LT LT0269 PRIENU STAKLISKIU T N 20030511 LT 20030511 U R 0406 LT LT LT0671 RADVILISKI

O SIAULENU T N 20030511 LT 20030511 U R

0406 LT LT LT0272 RASEINIU SILUVOS T N 20030511 LT 20030511 U R 0406 LT LT LT0874 RIETAVO ALL WARDS T N 20030511 LT 20030511 U R 0406 LT LT LT0573 ROKISKIO ALL WARDS T N 20030511 LT 20030511 U R 0406 LT LT LT0484 SAKIU LEKECIU T N 20030511 LT 20030511 U R 0406 LT LT LT1085 SALCININK

U ALL WARDS T N 20030511 LT 20030511 U R

0406 LT LT LT0787 SILALES BIJOTU T N 20030511 LT 20030511 U R 0406 LT LT KALTINENU T N 20030511 LT 20030511 U R 0406 LT LT UPYNOS T N 20030511 LT 20030511 U R 0406 LT LT LAUKUVOS T N 20030511 LT 20030511 U R 0406 LT LT BILIONYS T N 20030511 LT 20030511 U R 0406 LT LT TENENIU T N 20030511 LT 20030511 U R 0406 LT LT TRAKSEDZI

O T N 20030511 LT 20030511 U R

0406 LT LT SILALES RURAL

T N 20030511 LT 20030511 U R

0406 LT LT KVEDARNOS

T N 20030511 LT 20030511 U R

0406 LT LT PALENTINIO T N 20030511 LT 20030511 U R 0406 LT LT ZADEIKIU T N 20030511 LT 20030511 U R 0406 LT LT LT0388 SILUTES ALL WARDS T N 20030511 LT 20030511 U R


331

0406 LT LT LT1089 SIRVINTU ALL WARDS T N 20030511 LT 20030511 U R 0406 LT LT LT0375 SKUODO BARSTYCIU T N 20030511 LT 20030511 U R 0406 LT LT NOTENU T N 20030511 LT 20030511 U R 0406 LT LT LT1086 SVENCIONI

U ALL WARDS T N 20030511 LT 20030511 U R

0406 LT LT LT0777 TAURAGES GAURES T N 20030511 LT 20030511 U R 0406 LT LT BATAKIU T N 20030511 LT 20030511 U R 0406 LT LT LAUKSARGI

U T N 20030511 LT 20030511 U R

0406 LT LT ZYGAICIU T N 20030511 LT 20030511 U R 0406 LT LT LT0878 TELSIU ALL WARDS T N 20030511 LT 20030511 U R 0406 LT LT LT1079 TRAKU ALL WARDS T N 20030511 LT 20030511 U R 0406 LT LT LT1081 UKMERGES ALL WARDS T N 20030511 LT 20030511 U R 0406 LT LT LT0982 UTENOS ALL WARDS T N 20030511 LT 20030511 U R 0406 LT LT LT0138 VARENOS ALL WARDS T N 20030511 LT 20030511 U R 0406 LT LT LT0439 VILKAVISKI

O VISTYCIO T N 20030511 LT 20030511 U R

0406 LT LT GRAZISKIU T N 20030511 LT 20030511 U R 0406 LT LT LT1041 VILNIAUS BUIVYDZIU T N 20030511 LT 20030511 U R 0406 LT LT DUKSTU T N 20030511 LT 20030511 U R 0406 LT LT MEDININKU T N 20030511 LT 20030511 U R 0406 LT LT SUZIONIU T N 20030511 LT 20030511 U R 0406 LT LT LT0943 ZARASU ALL WARDS T N 20030511 LT 20030511 U R

rural development plan 2004-2006 lithuania · 2015-08-11 · 5.9. swot analysis ... table 37:...

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