Palionis knew about the hidden "bomb" but didn't warn farmers
The meeting of the Seimas Committee on Rural Affairs has finally delivered on a promise made by some parliamentarians earlier – the Committee has taken up an issue of great importance to farmers: the shortfall of EUR 20 million under the measure "Investments in agricultural holdings". This time, in addition to discussing the funding problem, parliamentarians also carried out parliamentary scrutiny procedures to find out why the situation has stalled and what solutions can be expected in the near future.
They understood the risks, but did they manage them?Ramūnas Krugelas, Deputy Minister of Agriculture, was allowed to speak first in the Seimas Committee on Rural Affairs. He explained the situation by revealing that there was a threat that EUR 125 million would have to be repaid to the European Union. "The management of the Ministry of the Environment took the risky decision to do everything possible to use every last cent of this amount," the Vice-Minister said, adding that the objective had been achieved. Unfortunately, €20.5 million remained over-contracted, resulting in a list of 163 „unfortunate farmers“.
„Yes, there will be farms with problems. But from a national point of view – €125 million were injected into the agricultural sector, benefiting some 270 people, i.e. 270 farms that got an extra opportunity“, – continued Krugel. The National Paying Agency (NPA) also sided with the MAA, whose representatives stressed that the decision to take the risk was a logical one, given the practice of the previous two years, when €100 million had to be reimbursed due to cancelled projects.
R. Krugelis does not hide the fact that everybody understood the risk, but the question now is: was it properly managed?Farmers face unbearable challenges
Farmers from the "unlucky list" who attended and spoke at the Committee on Rural Affairs did not hide their emotions and strong disappointment.
„State obligations are being shifted onto farmers' shoulders – we have to finance the share of the MAFF and NMA when most farms have already reached their credit limits“, – said farmer Žygimantas Kidikas.
Daivaras Skiotys echoed him: „I am in a situation where I have taken a very large loan to implement this investment project and have put up, probably, everything possible, I had to pay the bills of the contractors directly, after having received the money from NMA. As of today, I owe the contractors EUR 200 000 – that is what I have to receive from the NMA“. The farmer said that he had not received any letter of guarantee from the NMA, but he had already applied to the bank for a possible loan and had received a negative reply.
Ž. Kidik noted that there are only two things farmers need nowadays – for the state to take responsibility and to share the risk fairly.
„I ask the Committee to initiate a decision to create an intermediate financing facility or guarantee scheme for this group of farmers so that we do not have to incur additional financial liabilities or even go bankrupt by 1 January 2026“, – a clear request on behalf of the farmers, Z. Kidik made. Kidikas.
A contribution to the garden of the farmers' social partners
„To this day, not a single farmers' organisation, association or other body that considers itself a social partner of farmers has taken care of our problems“, – boldly said Ž. Kidik added that it is up to the farmers on the "unlucky list" to defend themselves.
„Farmers' unions have reacted. In September it was reported that there would be a shortage of funds, but the Minister himself (Palionis, who was Deputy Minister at the time) assured them that the funds would be found and that no farmer would have to incur additional costs. And that is perhaps the key issue now," objected Mr. Ž. Martynas Puidokas, Vice-Chairman of the Lithuanian Farmers' Union (LŪS), tried to contradict Kidikas.
But LŪS was already aware of the potential problem on 3 September, when, at the monitoring meeting on the implementation of the Lithuanian Rural Development Programme 2014-2020, representatives of farmers' organisations (including LŪS) unanimously agreed that the RDP projects would be financed from the Strategic Plan, following a proposal by the Vice-Minister of Agriculture, Andrius Palionis.
„I am demotivated and in great despair – it is no longer clear who is for us farmers and who is against. EUR 20.5 million seems a small amount. But for each one of us individually – it is a huge burden“, – noted farmer Akvilė Kovtoniuk. According to the young farmer, this situation has destroyed all confidence and despite the promise that farmers would not suffer losses, they are already suffering – above all, farmers' reputations are suffering.
Quick and clear solutions are expected„The communication of the situation was very late“, – highlighted financial analyst Ignas Jankauskas what in his opinion was the worst in this predicament.
„There was virtually no time to react“, – he added, advising the MAF not to be swayed by statements that it would not fund any more projects in the future, but simply to inform the applicants of the lack of funds sooner in the event of another similar situation.
According to Mr Jankauskas, in this case there was simply no time left for farmers to look for other solutions to the deadlines. The NMA's letter of guarantee must be such that if a farmer puts it on the table, he or she will receive the necessary credit with interest compensation within a week," the financial analyst said.
The simple solution that would reduce the stress on farmers is to make it less stressful.
As the committee meeting drew to a close, Kęstutis Mažeika also called for a clear decision to be presented next week at the latest.
