M O N T H L Y I S S U E A B O UT A G RO M AR K E T 2010 August No. 3
This issue Grain and rapes market Milk economy market Fertilizers market Agro technique market Agricultural land market
Russia banned grain export because of drought On 5 August, one of the largest grain exporters Russia declared that it banned grain export after it lost 20% of wheat crop because drought and fires. This ban will be in force from 15 August to 31 December and if it will be necessary, the ban can be extended till the next year. For the higher wheat price, which has increased in 8.3% more on 5 August, Chicago Board of Trade can declare that Americans and Europeans can have to pay a bit more for bread. Analysts say that this load will be for people from Middle East, Africa and some Asian states. Despite Russian Minister of Agriculture requirement to allow exporting grain, when announcing the ban, Prime Minister Vladimir Putin said: “We need to prevent a rise in domestic food prices, we need to keep cattle number and build up the reserve for the next year. As the saying goes: reserves don’t make your pocket heavy“. Premier declared that Russia will take the decision whether to expand the ban to 2011 after the harvest. Despite the ban, Russian farmers have not many prompts to export, because grain prices in Russia have increased faster that in world markets. Before announcing the ban, Russian Grain Association said that it is expected that the export will decrease from 21,4 million tons in 2009 to 15 million tons this year, but SovEcon consultants saw export’s decrease even to 12 million tons, and other analysts – even more. Analysts say that high prices of wheat will be felt most painfully in Middle East, Africa and some states of East Asia or there, where government subsidies food prices.
The UN's Food and Agriculture Organization cut its wheat production forecast Wednesday by 3.7 per cent to 651 million tonnes from its forecast of 676 million tonnes in June, but said fears of another food crisis were "not justified at this point" because of existing large global stockpiles of wheat. Still, it said world commodity supplies remain "more balanced" than during the crisis in 2007-08, when wheat peaked above $13 a bushel. Wheat prices have risen more than 80 percent since early June and notched their biggest monthly gain in July in at least 51 years. Prices for September delivery shot up 60 cents, or 8.3 percent, to $7.8575 a bushel Thursday, the maximum oneday jump allowed. December wheat jumped 55.75 cents, or 7.4 percent, to $8.1125 a bushel.
GRAIN AND RAPES MARKET This year grain harvest is not only stingy, but humble as well. The fields of many farmers look the same – laid corn and land, saturated with rain. That is why many farmers have the same problem – it is hard or even impossible to drive in the fields, but it is necessary to thresh – somewhere in laid fields grain start sprouting in ears. No more than two tons of winter rapes are crumbling from a hectare this year, while it crumbled four tons last year. Lithuanian farmers claim in unison that wheat harvest would not astonish with richness this year as well, because the grain are noticeably smaller than last year. Also, this hard situation is sharpened because of the fact that many farmers
have bargained grain selling prices already in winter and have signed interim selling agreements. Chairman of the Lithuanian Farmers’ Association determines the current situation in the fields as completely tragic, because summer wheat are laid flat, their stems are broken, ears feeding is disturbed, grains are not growing and it is impossible to drive in the fields. According to the data of Director General of the company “Kedainiu Grudai” Darius Karpavicius, the company has bought three times less of new harvest on 1 August of this year, comparing with the same period last year. Besides, the quality of bought harvest is not very high.
Insurance benefits saves those, who insures their crops When the harvest time has just ran up, more than half of the agricultural subjects, who had insured crop, have already addressed insurance company for making amends for crop, damaged by rains and shower of hail. According to the tentative insurers’ counts, about 10 million LTL may be paid out to farmers for the mentioned damages. In May, insurers paid over 5.7 million LTL to agricultural subjects for damages of crop caused by freeze. According to crop production specialists, the winning farms have been those the insured crop of which have been damaged by the freeze and reseeded afterwards. In this case, farmers have received the insurance benefits, which, after properly choosing insurance sums, have fully compensated the suffered loss. According to insurers’ data, about 40 thousand hectares of rapes, 35 thousand hectares of corn, 1 thousand hectare of beetroots, 1.5 thousand hectare of pulse and about 500 hectares of potatoes crop are insured in the country. Estimating the data of crop and agriculture land property declarations of this year it is seen that about fifth part of rapes (of 162 million LTL value) and about 5% of all growing corn area are insured in the country.
Despite the fact that it is anticipated to pay about 15-16 million LTL of insurance benefits this year, insurance tariffs for insuring harvest of the next year, should remain the same. Though, when insuring crop of 2011 harvest, the farmers who have suffered the damage have to pay 5-30% bigger insurance contribution for the crop of plant group, which suffered damage, depending on the percentage of suffered loss.. That is provided with reference to solidarity principle, so as not to increase insurance contributions for the farmers who have not suffered the damage. During 2010, 409 farms have insured crop. The area of insured crop – 78.2 thousand hectares, the value – 175.5 million LTL.
With reference to “El Pais”, “The Wall Street Journal”, “L’Expansion”, l.rytas states that there are no doubts that supply of wheat will noticeably decrease because of the unceasing drought in Russia, which is the biggest during the last 50 years. Russian Government stated that volumes of export will not be restricted, though, more than 200 thousand tons of grain, which was supposed to be shipped to Asian states, have already been stopped in the ports of the Black Sea. The West European farmers also have what to regret for. Here the smaller harvest of vegetables, fruit, grain cultures is expected. 8% of all planet wheat is grown in Russia. During the heat, about 20% of harvest has been lost. Company “Agritel”, which evaluates risk in agriculture, counts that Russia will be able to export 5-10 million tons of wheat this year, whereas export volumes of last year reached 20 million tons. Market analysts state that wheat trade prices may increase by 20% more and exceed 300 USD per ton, because profiteers are currently acting in grain market especially actively.
Russian corn, punished by drought According to lrytas portal, some experts are already picturing apocalyptical scenarios, that purportedly upon the lack of food and rise of its price big inflation should be expected, which will lead to big economical crisis. The increase of prices in some Russian districts should no longer be expected. During July only, price for ton of flour has increased from 5.2 thousand (about 416 LTL) to 11.7 thousand (about 936 LTL) roubles. Russian Government tries to calm the citizens in turn, promising not to allow the increase of prices and assuring that there will be no deficit of items produced in agriculture. It is anticipated that grain harvest in Russia should be 70-75 million tons this year, when there were 97 million tons last year and 108 million tons in 2008. According to the Government representatives, 75 million tons of grain are used per year in Russian inner market. Besides, there are about 20 million tons of
remains. Though, according to lrytas portal, Vice-premier Viktor Zubkov is sure that grain deficit shall reach 4.2 million tons. And what is more, farmers start killing livestock, because they are afraid that livestock will lack food. The biggest network in the country, which buys meat, has bought 8 thousand tons of meat since the beginning of July, which is 20% more than last year. Ben Lloyd-Hughes, climate specialist from “The Walker” Institute, belonging to Reading University, states that separate West European districts also suffer from drought, but Russia, Belarus and Ukraine are heating much more. Farmers’ troubles with weather started already in winter, which was colder and longer than farmers wanted. Lack of rain in June damaged winter crop. Despite the fact that there were rainfalls in June, their level was incomparably lower than an average monthly rate.
Russia asked Kazakhstan and Belarus to suspend their grain export Moscow has moved to request that Kazakhstan and Belarus suspend grain exports due to the worsening drought, the Russian government said on the 5th of August. The Economic Development Ministry has been instructed to submit a proposal to the relevant commission of the Russian-Belarusian-Kazakh customs union, the government press release said. But Kazakhstan and Belarus on the 9th of August rejected Russia’s request that it freeze its grain exports. Russia offered no explanation for the
request at the time. It has since indicated that it fears its grain going duty-free across its borders with its Customs Union partners, would then go on to other countries. Kazakhstan’s harvest is expected to be 13.5 million tons this year. Last year it reaped a record 21 million tons. President Nursultan Nazarbayev weighed in on the issue late last week, predicting that Kazakhstan would export 8 million tons this year. Belarus is expected to produce about the same amount of grain as last year – 8 million tons.
Russia's decision to ban the grain exports till the end of the year, called the highest jump in grain prices over the past two years. Wheat prices also stimulated the corn, oats and soybean prices. This is good news for U.S. farmers, their grains will not only fill the shortage of Russian exports, but also damaged crops in Ukraine, Kazakhstan and Canada. Wheat prices have risen more than 80 percent since early June and notched their biggest monthly gain in July in at least 51 years. Prices for September delivery shot up 60 cents, or 8.3 percent, to $7.8575 a bushel Thursday, the maximum one-day jump allowed. December wheat jumped 55.75 cents, or 7.4 percent, to $8.1125 a bushel. The U.N.'s Food and Agriculture Organization on Wednesday cut its wheat production forecast Wednesday by nearly 4 percent to 651 million metric tons, but said fears of another food crisis were "not justified at this point" because of existing large global stockpiles of wheat. Still, it said world commodity supplies remain "more balanced" than during the crisis in 2007-08, when wheat peaked above $13 a bushel. By the latest news, Russia may revise its ban on grain exports after October 1, when the size of the harvest volumes becomes clearer, the government said on Tuesday after informing Egypt, Turkey and Israel. Egypt has proposed that Russian companies restructure contracts signed before Moscow suspended grain exports. It also offered to set up a joint commission to find ways of fulfilling the contracts.
The Ministry of Agriculture informs that quota from dividing reserve shall not be provided for the producer, if he:
• by 30 July, 2010, will have submitted an application to participate in the activity “Early retreat from commodity agricultural production” of Lithuanian Country Development 2007-2013 Programme; • by 14 May, 2010, will have presented no selling to use directly declaration for 2009-2010 quota years for municipality Department of Agriculture , if he sells users the milk directly from the farm; • from 1 December 2009 to 31 July, 2010, will have no milker cows, registered in the Farmers Livestock Register under his own name;
MILK ECONOMY MARKET Average natural milk procurement price LTL/t of Lithuanian biggest milk shoppers Average natural milk procurement price, LTL/t Name of a company
Milk, for which Milk, for which deductions due any deduction to quality were due to quality not applied was applied when paying when paying
Average milk procurement price
AB "Pieno zvaigzdes" companies group
UAB "Marijampoles pieno konservai" AB "Rokiskio suris" companies group
AB "Zemaitijos pienas"
UAB "Vilkyskiu pienine"
AS (Agricultural society) "Salteksnis"
UAB „Vikeda“, Kedainiai Bariunai AS (Agricultural society), Joniskis district Dairying cooperative "Zalmarge"
Average milk procurement price, Lt/t
• having no quota, has sold less than 500 kg of milk during 20092010 quota years. The Ministry of Agriculture reminds that the producer, whose part of quota saved in special reserve is sold in an auction or leased, cannot get quota from the partible reserve. Also producers may reject the received quota at any time – the producer only needs to present a freeform request to the National Payment Agency. This way the quota will again pass to the national reserve and will be distributed to other producers.
Data sourse: www.zum.lt
Procedure for imposing quotas for 2010-2011 was confirmed Minister of Agriculture Kazys Starkevicius has confirmed the procedure of imposing Milk production quotas from partible general national milk quota reserve for 2009-2010 quota years by the order No. 3D-637 of 8 July. Quotas will be imposed for those milk producers, who have exceeded their quota (imposed inasmuch as it was exceeded) in 2009-2010 quota years or have sold more than 500 kg of milk without quotas (imposed inasmuch as there was milk sold). According to preconceived counts, there should be about 15.5 thousand milk producers, to whom the quota may be imposed – for them it is planned to distribute about 77 thousand tons of milk quota.
The attention should be paid to the fact that producers do not have to present any additional requests. The necessary data will be taken from the data bases administered by the National Payment Agency (NPA) and PI Agricultural Information and Country Business Centre. The Ministry of Agriculture is expecting that division of milk quotas will prompt the producers to bravely start milk production, without fare of over-quota taxes, estimated by the EU. The quota of selling to process of 2009-2010 quota years has been implemented by 76.2%, and tentative quota implementation of selling to use directly reaches 60%. Data sourse: www.zum.lt
The difference between the prices paid by dairies and dairy procurement stations for natural fat milk, bought from Lithuanian dairy producers, is decreasing. During this January-May, there were 434.42 thousand tons of crude natural fat milk bought in Lithuania from Lithuanian dairy producers – 6.05% less than during the same period last year. Average natural fat milk procurement price during the first five months of 2010 made 827.49 LTL/t – 37.69%. During the analysed period, the amount of milk, bought by dairies directly from the Lithuanian dairy producers, has decreased. Whereas in January-May of 2009, natural fat milk, bought by dairies, made 82.45% of all milk bought from Lithuanian dairy producers during an correspondent period, this percent decreased to 71.69% this JanuaryMay. During this January-May, in average, dairies have paid 836.24 LTL/t for natural fat milk to Lithuanian dairy producers – 3.84% more than dairy procurement stations. Though, during last January-May, average procurement price, paid by dairies, made 626.22 LTL/t and this was 29.79% more than the price paid by dairy procurement station at the same time.
An offer to support stock-raising farm During the Chamber of Agriculture Presidium meeting, which took place in July, heads of the Ministry of Agriculture together with representatives of non-governmental organizations of agriculturalists have discussed how to refresh a shrinking state stock-raising sector. Members, who participated in the Presidium meeting, have agreed with redistribution of direct payouts (DP) 2011-2012, offered by the Ministry, which would allow supporting stock-raising farms, which are now going through the very hard times. Since 2004, finances for DP are being paid from the EU and national budget. Support for stock-raising farms, depending on the amount of livestock, is mainly paid from the finances of national budget. Following the EU legal base, since 2013, DP will be paid only from the finances imposed by the EU and only for declared crop and agricultural landed property. Stock-raising farms will not get direct support, related to the number of livestock. When presenting the DP redistribution plan, offered by the Ministry, Rimantas
Krasuckis, Head of Department of Land and Food Economy commented that in the EU (EB No. 73/2009) Regulation it is indicated that redistribution of the DP sum for milk and meat farms, going through the hard times, may be used only as much as it creates an incentive to keep the current production level of the supported sector. Counting that this year at least 1,268 billion LTL should be imposed for DP, the mentioned 3.5% would make about 45 million LTL. It is considered that it would be advisable to impose this support for suckling cows, beef bulls, sheep and, beef goats, if there are any. According to the number of the mentioned livestock, present in the country at the moment, support of about 43 LTL may be paid for little herbivores and support of about 484 LTL for livestock (kept for at least 9 months). It was counted that such support of stock-raising sector would in theory decrease the support for a hectare in about 14 LTL for holders of agricultural landed property and grasslands.
LTO milk price league table avarage for may is 28.61c The EU LTO milk price league table shows the average milk price paid in May by the 16 major European milk buyers included in the series was 28.61c/kg, up marginally on April but up 19% compared with May 2009, which was close to last year's low point of 23,74c (in April). But there were major divergencies in the May figures. Compared with 12mths before, prices in Belgium were up 40% and prices were up more than 30% in Germany, Ireland an the Netherlands. However, on average, prices were up less than 10% in France—where processors have complained for months that milk prices were too high—and milk prices in euros have hardly moved in the UK, where sterling has revalued against the euro by about 8% in the past 12mths; in local currency, UK milk prices fell marginally in the second half of last year, were reasonably stable until May this year but have started to rise quite quickly since June. The Aria price was up only 15% but they usually pay a substantial end-year top-up. Individually, Milcobel have leapt up the rankings for May, placing second with 31.13c—in last year's slump they were close to the bottom. Glanbia and Kerry have also jumped in the rankings.
LTO LEAGUE TABLE MONTHLY MILK PRICES-2010 (c/kg) Jan Feb Mar Apr Granarolo 33.98 33.98 33.98 33.98 Milcobel 29.98 28.50 29.55 30.08 Hameen. 36.68 33.79 30.87 30.86
May 33.98 31.13 30.86
Arla Foods F/C Dairy Crest
27.16 28.15 27.29
27.15 26.74 27.50
27.16 23.98 23.05
27.09 25.19 25.05
28.09 27.37 25.28
*The averages above do not include Granarolo
Latest CWT test round to slaughter another 34,000 cows In their latest herd daughter programme, the US Co-ops; Working together (CWT) organization last week accepted 194 bids to send 34,442 cows to slaughter, cutting the US dairy herd by 0.4%, in another effort to reduce US milk production. After falling significantly last year, US cow numbers increased 21,000 head in the first 5mths of 2010. Auditors will visit selected farms from next week. Once audited,
farmers have 15 days to liquidate their herds. No bid figures have been released yet but when this round was announced in May, it was stipulated that the maximum bid would be 8.5c/litre. In the previous nine CWT slaughter rounds, a total of 477,000 cows were slaughtered at an average bid of 13c/ litre at a total cost of $520m, funded by a levy on participating co-ops and farmers.
New lower melamine content levels agreed New rules tightening the international limits on melamine content in food products were agreed by the Codex Alimentarius Comrnission meeting in Geneva last week. The commission agreed that minute levels of, melamine, the chemical used in making plastics, fertilizers and concrete, could be safe for human consumption, but it set an upper limit of 1mg/kg in pow-
dered infant formula and 2,5mg/kg in other food and feed. The tightened limit follows the experience in China in 2008 when melamine was found to have been added to a range of products including baby formula, leading to the death of six infants with almost 300,000 falling ill, and the latest scandal.
Global certain dairy products price Lt/ kg Product name
Butter, AA Cheese Cheddar tipe, units LMP, Central
Average price USA CME, FOB 2009 2010 26 week 24 week 23 week 25 week 26 week (06 (06 22(06 14(06 07-11) (06 21-25) 28-07 02) 26) 18) 6,6 9,8 9,98 10,52 10,75 CME 6,13 8,45 8,57 8,66 8,79
Change % week2
region FOB NPA, National, FOB Whey powder, Central region, FOB
Western Europe, exports , FOB
Butter, 82% fat WMP SPM
Melted butter Whey powder
2009 24-25 week (06 08-19) 7,21 5,62 6,42 7,79 1,47
22-23 week (05 31-06 11)
24-25 week (06 14-25)
12,3 8,12 9,76
12,61 8,04 10,04
2,48 -0,96 2,93
74,77 42,99 56,47
Oceania export , FOB
Butter, 82% fat WMP SPM Cheese Cheddar tipe
2009 24-25 week (06 08-19) 4,52 4,89 5,01 6,24
New pasteurization method acclaimed at London South African company who have developed a new liquid purifying technology have been hailed in the UK as „most likely to succeed“ at the lndustrial Energy Efficiency Accelerator conference hosted by Dairy UK. SurePure's system uses ultraviolet light to pasteurise at lower cost. Managing director, Stephen Miller, said: "There are no consumer negatives using photopurification because nothing is added to the liquid (like preservatives are) and nothing is taken out (likę filtration does) and the bio-chemistry of the liquid is not affected as it is by heat-treatment. This is one of the safest purtfication processes that can be used." He said the technology took 10yrs to develop, costing more than R100m (€10m). He said: "When you pasteurise milk, the heat destroys the immune-fighting properties. Raw milk also contains enzymes, the most important healthbuilding ingredients of all, which are inflammation fighters and immune buiders, but they are also destroyed by heat during pasteurisation." More melamine-tained milk poeder seized Chinese authorities last Friday seized more than 60 tonnes of milk powder tainted with the industrial chemical melamine at a factory in Qinghai, according to the Dongyuan Dairy Factory in Qinghai, which borders Gansu, contained up to 500 times the permitted level of melamine, Xinhua reported. More milk powder was later seized in Gansu and two officials from the Gansu dairy company have been detained. Tables explanation: 1
prices in foreign countries (Lt) made in accordance with the exchange rate on the date of LB 2
compare with latest two weeks comapre 2010 y. and 2009 y. the data for the periods 3
22-23 week (05 31-06 11)
24-25 week (06 14-25)
11,29 8,92 10,73 11,01
11,38 9,13 10,82 11,01
0,77 2,35 0,77 0,77
151,5 86,7 115,8 77,97
compare 2010 24-25 weeks to 22-23 weeks
FERTILIZER RĄŠŲ RINKA MARKET European uropos trąšų fertilizer kainos prices Belgium - €/t bulk CAN 27% del retail KCI (G) fot ex-store DAP fob/fot bulk $ France- €/t bulk AN 33,5% gran del AN 33,5% prill fot bgd Urea prill fot Urea gran fot DAP fot KCI gran fot Germany - €/t bulk CAN cfr imp inland Urea prill cfr 15-15-15 cif inland DAP fot seaport Ireland - €/t bagged Urea gran del CAN 27,5% del 27-6-6 del Italy - €/t bagged Urea gran fot Urea prill fot CAN (27%) fot DAP fot Netherlands - €/t bulk Can cif del inland KCI (G) fot ex-store Spain - €/t bulk CAN 27% fot Urea prill fot DAP fot 15-15-15 fot United Kingdom - £/t bagged
25 July 179-182 310 n.m.
11 July 179-182 300-305 n.m.
215-217 205-215 n.m. 243-248 n.m. 300-305
215-217 205-215 n.m. 243-248 n.m. 300-305
173-175 235-236 285-292 395-400
167-175 235-236 290 405-409
n.m. 230-240 325
n.m. 230-240 330-335
260-265 250-255 n.m. 500
260-265 250-255 n.m. n.m.
172-175 235-340 355-370 280
172 235-340 265 270
AN 34,5% del farm
AN cif import Urea prill cif bulk Urea gran cif bulk DAP cif bulk Baltics - US $/t Urea prilled bulk Ammonium Nitrate prilled UAN 32%N DAP MAP KCI standard grade
185-195 180-185 190-205 338-341 24 July 245-250 200-210 178-181 450-470 452-468 325-340
180-190 180-185 195-200 336-339 10 July 242-245 210-223 155-160 450-470 452-468 325-340
Although prilled urea prices could to be coming under pressure, AN and CAN prices remain firm. For urea there is little interest in most markets but this is not necessarily the case for nitrates. Producers report excellent demand for CAN in most Northwest European markets with product tight. Prices are higher than last year but this seems to have had little negatyve impact on buying. For AN, demand is firm in France and in the UK there has been a positive start to the season with buyers readily accepting new campaign prices. Although UAN prices came under a little pressure in late June, levels have edged up once more. On the phosphate side, DAP demand is limited overall, usual at this time of year, but there is more interest in some Med markets. Fresh business is reported for July from Morocco to Italy and France although import interest is negligible in Spain where domestic product is proving competitive.
Data source:Fertecon European Fertilizer Fax, 23 July 2010
GROTECHNIQUE TECHNIKOS MARKET RINKA AGRO During hard times, EU support has also pushed agriculture forward According to the report of the Ministry of Agriculture, economical crisis from all Lithuanian economy branches touched agriculture least. This is also confirmed by the statistics, given in the new electronic issue “Lithuanian agriculture and food economy 2009” (“Lietuvos zemes ir maisto ukis 2009”) of Lithuanian Agrarian Economics Institute (LAEI). European Union and national support helped state agriculture during the hard time conditions. In 2009, 2 billion 869 million LTL was committed for agriculture. 7.89 billion LTL, from which almost 6.1 billion LTL are EU finances, are committed for implementation of Lithuanian Rural Development Programme 2007-2013 (Programme). Since the beginning of Programme’s implementation till the end of the first quarter of this year there were 302 566 support agreements signed under the given requests for 2 billion 563 million LTL, from which 1 billion 982 million LTL are EU finances, that is 32.5% of the committed EU finances in the programme for all period. Since the beginning of the Programme implementation till the end of the first quarter of this year there were 1 billion 961 million LTL paid, from which 1 billion 496 million LTL are EU finances, that is 24.5% of all EU finances, committed for the programme. The Programme consists of four directions: “Increasing competitive ability
of land, food economy and forestry sector”, for which 3 billion 281 million LTL are anticipated, from which 2 billion 471 million LTL are EU finances, or 40% of all EU finances for the Programme; “Development of environment and landscape“ – 2 billion 847 million LTL, from which 2 278 million LTL are EU finances, or 37% of all EU finances for the Programme; “Life quality in rural places and deversification of rural economy“ – 968.9 million LTL, from which 729 million LTL – EU finances, or 12% of all EU finances for the Programme; “Implementation of LEADER method“ (3 direction means are implemented as well) – 473 million LTL, from which 378 million LTL – EU finances or 6% of all EU finances for the Programme. 321 million LTL, from which 240.8 million LTL are EU finances or 4% of all EU finances for the Programme are committed for technical support, anticipated in the Programme. According to Programme regulations, annual finances are divided among every mean, mean activity spheres and sectors. Simplified procedure of the support (no more than 150 thousand LTL) provision has increased the number of declarants and support recipients, fastened usage of finances. After the establishment of Credit fund, the possibilities of economical subjects to get the necessary credit resources have increased. During the hard time conditions, negative influence on the price change and the processors’ activity results was lightened by market regulation means, which helped to keep competitive ability of farms and expand the degree of environment safety means.
ŽEMö MARKET ŪKIO PASKIRTIES OF AGRICULTURAL ŽEMöS RINKA LAND Land-tax will not increase for farming farmers The new land-tax counting method, which is now being prepared and according to which land-tax will be counted from the average market value with reference to land values map, worries farmers. After comparing the average land market values with “nominal”, it is seen that land values near the big cities significally differ. Average market value in Kaunas district is about 13 times higher that the “nominal”, near Panevezys – about 16 times, Vilnius and Klaipeda – even 20 times. In order to avoid the increase of land-tax because of the difference in value, work group, which has prepared the order of changing tax, offers to count land-tax not by fixed 1.5% tariff, but apply the variable value tariff from 0.01 to 4% (depending on the difference in value of the specific place, entrusting tariff regulation for municipalities) and applying coefficient (0.35%), reducing land-tax for land of agricultural purpose. During transitional period it is anticipated to apply compensational coefficient as well, which would additionally protect tax payers from possible jumps of taxes.
Following the conclusions and recommendations of the work group, it is anticipated that the Ministry of Finances will prepare the project amending the Land-tax Law, and the Ministry of Agriculture – procedure of derelict land identification. The work group, formed in the Ministry of Agriculture has discussed which methods of derelict land identification would be the most effective and the least painful for state budget. It was decided to start from apparently derelict areas – the land with ligneous grass and forest flora started to grow – applying maximal tax tariff to the owners of such lands without any coefficients reducing the tax. Distance cartography methods (air-photos, satellite data) are planned to be used for derelict land identification, storing a 3-year archival material. The Ministry of Agriculture informs that currently, only part of land of agricultural purpose is used according to its purpose, the other part (about 400 thousand hectares) is derelict and does not create surplus value.
Editorial: AB “Agrowill Group”, Smolensko g. 10, Vilnius Tel./fax +370 5 2335340; +370 5 2335345; e-mail: email@example.com Subscribe to free updates in the website www.agrowill.lt
Data sourses Fertecon European Fertilizer Fax, 25 June 2010, Dairy Industry Newsletter July 13, 2010, Vol 22, No. 6, Dairy Industry Newsletter August 3, 2010, Vol 22, No. 7; www.msnbc.msn.com /business, www.cbc.ca; www.rianovosti.com; www.24dunia.com Agro rinka, Nr. 13 (140)/2010 m., zum.lt, manoukis.lt, savasukis.lt, Web sites of other companies