Changes in the independent Lithuania

On March 11, 1991 the elected Supreme Council (renamed later officially Reconstituent Seimas (Parliament)) has adopted the Act of Restoration of the Independent Republic of Lithuania, and several days later, on March 17 appointed first Government of the restored state. The Ministry of Agriculture was reestablished on March 22, 1990 when the Supreme Council adopted the Act of Government of the Republic of Lithuania. In independent Lithuania functions and activities of the Ministry underwent change. In addition to agriculture, its sphere of regulation now included food industry and fisheries. The ministry had to create favorable legal and economical environment for building institutions necessary for development of agriculture and food sectors and rural areas.

Since the very first days of the restored Lithuanian Republic, it has started its independent agrarian policies starting with land reform. Since 1997 the state has started to formulate and shape its agricultural policies on the basis of private agricultural production and market economy. Since 2004 the Ministry has been formulating and implementing it on-going agricultural and rural policies.

The development of Lithuanian agricultural policies has gone through three distinct stages since the restoration of independence:

• 1990-1996 – cardinal reforms, liberating from the consequences of Soviet occupation
• 1997-2003 – adaptation of agriculture, industry and business to the environment of market economy
• from 2004 – development of agro-food and rural sectors after the Lithuanian accession to the EU.

Since its EU accession in 2004, Lithuania not only has joined the common European market, but also joined measures of the EU structural policy which aim at reducing by financial means existing social and economical inequalities among the EU regions and improve competition of less developed regions. Lithuanian rural people together with agricultural and food business have opportunity to become beneficiaries of the EU support measures.

The European financial support is really impressive. During the period of 2004-2008 6.606 billions of Litas of support (direct payments, investments and compensations) were injected into Lithuanian agricultural sector, whereas only 1.814 billions of Litas were allotted to agriculture from the national budget. Such lavish financial help had profound effect on agricultural sector, it allowed open and develop new markets, promote export, raise income of farmers and guarantee its stability, enhance investment potential and competitiveness in domestic and foreign markets, and accelerate modernization and cooperation processes. Agricultural sector has developed potential of competing in international markets, while rural areas turned more attractive for residents and businesspeople, and their infrastructure has been significantly improved. It is calculated that the EU support makes 25% of the total income of agricultural and contributes significantly to its financial vitality.