According to him, fertilizer prices started to rise at the beginning of the year, after the new regulation of the European Union (EU) came into effect – the Carbon Border Adjustment Mechanism (CBAM) fee, and later the situation was further complicated by the crisis in the Strait of Hormuz and the supply problems that arose from it.
“Prices have risen sharply. Some fertilizers were already in short supply in the spring, so some farmers fertilized less than they planned. This means that the forecasted harvest may be lower,” G. Špakauskas told Elta.
According to him, some farmers are already considering reducing fertilization in autumn or giving it up altogether, because they lack working capital. According to an agricultural representative, the situation is made even more difficult by the fact that the purchase prices of grain and milk remain basically similar to a decade ago, although production costs have increased significantly during that time.
According to the head of LŪS, the shortage of fertilizer supply is already felt in the market. According to him, traders calculate that if farmers wanted to purchase the entire amount of fertilizer needed for autumn sowing, there would not be enough of it on the market at the moment.
“What will happen next, we live in the unknown. We are waiting for autumn and the European Commission’s decisions on aid measures. We are also worried about investments – many farmers are stopping or postponing them,” said G. Špakauskas.
According to him, if the yield decreases this year due to less fertilization and unfavorable weather conditions, it could affect the prices of food products in the long run.
“If it becomes clear that the yield is lower, processors can start preparing for a possible shortage of raw materials and adjust prices accordingly. It is too early to say whether this will really happen, but such a risk exists,” said the chairman of LŪS.
Evaluating the support measures offered by the state for farms experiencing difficulties, G. Špakauskas said that an additional 100 million was provided. the euro loan facility through the national development bank ILTE is a positive signal, but it is still not enough.
“This is a good start, but for now it’s a drop in the bucket. It’s welcome that the state is looking for solutions and has started working in this direction. However, the most important thing for farmers is that help reaches them quickly. (…) ILTE is still learning how to work with farmers, it’s still trying to apply tools, filters, how to do everything faster, how to evaluate applications, etc. (…) It’s true, there’s still a lack of speed at the moment,” he said.
The head of LŪS assured that farmers’ organizations are cooperating and looking for further dialogue with institutions, additional solutions that will help farms to survive a difficult period.
Dedicated support
ELTA reminds that from May 4 of this year farmers can apply for 40 million EUR support, of which 25 million EUR is provided for farmers facing difficulties, and 15 mln. euros – for those who lack working capital. The budget of this measure is planned to be increased to 100 million. euros, taking into account the activity of the applicants and the actual use of funds.
By increasing the facility to 100 million euros, 60 percent loans are planned to be allocated to farmers facing difficulties, the rest – for working capital.
According to the national development bank ILTE, direct financing for farmers has attracted interest, with a total of more than 450 applications received. Already approved – 76 for 7.2 million. euros, of which 72 contracts were signed for 7 million. euros.
