"Food will also become more expensive due to the Iran
war. Economists are repeating that serious problems will begin in six months.
Then it will be autumn, when farmers will harvest. They are already saying:
there will be fewer Lithuanian vegetables, grains, and fruits this year and
they will become more expensive. One of the reasons is that farmers can no
longer afford fertilizers. But there are at least two other big problems that
are driving farmers to despair.
Spring in the fields is beautiful only from above. On the
ground - a completely different reality. Vilnius district farmer Veslav
Spiridovič works 100 hectares. Barley and rapeseed have already been sown, and
soon - oats. However, today the most important thing is not sowing.
"Now we can say - luxury fertilizers. We managed to buy
them a little cheaper, we understand that we will not buy fertilizers
anymore," - said farmer Veslav Spiridovič.
They bought fertilizers in the fall – a hundred euros
cheaper per ton than now, but they will only last half the season.
“We will spread as much, we will get a smaller harvest and
that’s it,” said V. Spiridovič.
The calculation is simple: if the costs are higher than the
price of grain, it is not worth it to fertilize.
“There is no point in spreading and having a minus,”
emphasized V. Spiridovič.
Last year was weak – income fell. This year, fertilization
has become significantly more expensive, and the new carbon dioxide tax has
also contributed.
“Those taxes, CO2 taxes, they are ruining us as producers,”
said Audrius Vanagas, chairman of the Lithuanian Grain Growers Association.
The European Union has introduced a border carbon tax since
January. Its essence is to tax fertilizers imported from third countries. The
idea is simple: so that cheaper, but more polluting production can compete
fairly with local production. However, in practice, the tax directly raises
fertilizer prices, and the final blow falls on farms.
“We see that fertilizer prices have increased by a third –
up to 150 euros per ton,” said A. Vanagas.
A lot of gas is needed to produce fertilizer. Economists
explain that fertilizer prices are rising justifiably, because gas is also
rising, although it has risen by just a cent per kilowatt-hour over the year.
“The price of gas, just like in 2022, is a much bigger
headache this year,” said Nerijus Mačiulis, chief economist at Swedbank.
Buying Lithuanian fertilizers is not an option. According to
farmers, local producers are also taking advantage of the situation.
“Our EU fertilizer producers are not granted emission
allowances for free and will continue to be granted. The money we pay for
fertilizer production produced in the EU will not go to the general budget, but
to the accounts of fertilizer magnates,” said A. Vanagas.
A week ago, farmers visited the Prime Minister. The problem
was not resolved, so now they have come to the Minister of Finance.
The Minister promises that the Government will try to
postpone the carbon dioxide tax.
“The common position of the Prime Minister, the Minister of
Agriculture, and the Minister of Finance is that we all agree, we all support
farmers. The entire geopolitical and geoeconomic situation is certainly not
easy,” said Finance Minister Kristupas Vaitiekūnas.
It is unclear when the problem will be resolved, and the tax
is in the hands of Brussels.
“Lithuania has not decided unanimously yet, consensus is
needed,” explained K. Vaitiekūnas.
There is no time to wait in the fields. It is already clear
that the harvest will decrease.
“We will probably run out of grain, because everyone says
that they will fertilize less, it is better to get a smaller harvest than to
make a bigger loss,” – said V. Spiridovič.
Farmers add that the problem is no longer only in
agriculture – it is at the state level. The increased price of fertilizers and
oil will quietly reach the store shelves.
“In agriculture, all the accumulated problems still
boomerang back and this will definitely increase food prices,” – said Raimundas
Juknevičius, chairman of the Lithuanian Farmers’ Union.
Economists are also talking loudly about the upcoming price
increase.
“We may have very serious challenges in the coming half of
the year, and costs will rise in all chains, and the impact on the economy may
be much greater,” – said N. Mačiulis.
Growing a crop is becoming a luxury, so farmers are asking
for money. There is a shortage of working capital, but borrowing is mission
impossible.
“We just lost the financial cushion we had before,” said R.
Juknevičius.
“We will need plant protection products, spraying against
weeds – such work, without which you will not get anywhere,” said V.
Spiridovič.
The Minister of Finance has more specific knowledge here.
“Loans for ILTE working capital start in May,” said K. Vaitiekūnas.
However, farmers complain that it now takes four months to
receive loans from the state development bank. Here the minister is just
wringing his hands.
“I think these are isolated cases,” said K. Vaitiekūnas.
While waiting for money, the sky remains.
“At least God would give good weather – when we need rain
and sun,” said V. Spiridovič.”
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