Prospects and Challenges in Lithuanian Agricultural Markets After EU Accession

Medium-term prospects for key agricultural markets in Lithuania are analysed under alternative policies. Policy alternatives show the impacts of EU accession and also the impacts of implementing AP reforms in 2007. The model is a partial equilibrium, multi-commodity model where commodity prices are linked to key prices in major EU markets. The accession analysis shows significant impacts on production, prices, and even on relative prices. It indicates impacts on production and trade patterns. The most realistic scenario (SAPS to 2006 and SFP from 2007 to 2010) generates a growth in product value more than 10 percent higher than the non-accession scenario. The largest increase is in the value of milk production. There also is a decline in crops share and increase in milk share of the total market revenue, while cattle and dairy together increase from about 35 percent of output value in 2002 to over 45 percent in 2010.