Shocking figures on ILTE’s activities: agricultural guarantees have fallen by 62 per cent, whilst stricter requirements are being imposed on livestock farming

The Ministry of Agriculture (ŽŪM) states that the integration of the former Agricultural Loan Guarantee Fund into the current ILTE scheme has not, in essence, changed the availability of individual guarantees to farmers. However, data provided by the Ministry itself shows a sharp decline – between 2023 and 2025, both the number of guarantees granted and their total value fell by 62 per cent. The Ministry and industry representatives offer differing explanations as to why the volume of guarantees has fallen so sharply.

Volumes fell by almost three times

Ignas Jankauskas, head of MB “Skaičiai žemdirbiams”, states that following the reform of the former guarantee scheme, the volume of guarantees for their agricultural sector fell by approximately three times.

“The provision of guarantees to the agricultural sector, both in terms of number and amount, has fallen [...] by approximately three times compared with what the Agricultural Loan Guarantee Fund had provided in recent years“, – he notes, adding that the decline was not due to reduced demand, but to the more complex process of obtaining guarantees.

Data provided by the Ministry of Agriculture also confirms this decline: “The number of guarantees granted and the total value of guarantees granted between 2023 and 2025 fell by 62 per cent.”

In other words, the volume of guarantees in 2025 amounted to approximately 38 per cent of the 2023 level. However, the Ministry does not directly link this decline to either the ILTE reform or the pricing of guarantees.

““This downward trend in the granting of guarantees may have been influenced by the fact that financial institutions have greater confidence in representatives of the agricultural sector or are applying other measures to secure the repayment of loans and leases,” – states the Ministry of Agriculture. The Ministry also mentions preferential loans and new products that have emerged on the financial market.

However, the response does not provide data showing what proportion of the 62 per cent decline is attributable to each of these reasons. The Ministry of Agriculture also did not provide the breakdown of the annual number and value of guarantees requested by “Agrobitė”.

Data published by ILTE also shows a decline in the portfolio of individual agricultural guarantees – the company’s 2025 financial statements indicate that the balance of the agricultural guarantee portfolio fell by more than 23 million euros over the course of the year.

Pricing structure changed in 2025

Another issue worthy of discussion is the cost of guarantees. I. Jankauskas provides a specific example: an investment project requiring a loan of 1 million euros with an 80 per cent ILTE guarantee for ten years.

“For a similar project in 2024, the guarantee fee was around 24,000 euros, whereas now it has risen to 104,000 euros. [...] A person borrows €1 million and must have a further €100,000 set aside for the guarantee fee“ – I. Jankauskas reveals these shocking figures.

“Agrobitė” has not independently confirmed this specific calculation of 104,000 euros. However, the fact that the pricing of guarantees has changed is official. ILTE states that the new pricing structure for individual agricultural guarantees came into force on 25 September 2025.

“When setting the tariffs, the credit risk associated with the guarantees and the guarantee payouts recorded in different sectors of activity were assessed. The aim is to ensure that guarantee pricing is based on the risk assumed and contributes to the long-term financial sustainability of guarantee operations“, explains ILTE.

The rate for livestock farming is higher

ILTE is currently publishing indicative rates: for arable farming – from 3.1 per cent; for livestock farming – from 3.9 per cent, and for forestry and fisheries – also from 3.1 per cent. The final fee also depends on the guarantee amount, term, client type and other risk parameters.

“Livestock farming would pay the most; the rate applied to the crop farming sector is already lower,” – notes I. Jankauskas, raising the question of whether a higher guarantee cost for livestock farming is consistent with the stated aim of promoting this sector.

ILTE responds that the difference is based on its historical data.

“An analysis of ILTE’s historical guarantee portfolio data shows that the livestock sector recorded a higher risk of guarantee claims and payouts than the arable farming sector. This is taken into account when setting the sector’s risk tariff“,– the National Development Bank states in its response.

When asked whether such pricing is proportionate and whether it should be reviewed, the Ministry of Agriculture (ŽŪM) does not, in essence, provide its own assessment.

“The amounts of the fees for guarantee remuneration and for amending guarantee terms, as well as the procedure for calculating them, are set by the management bodies of the guarantee institution UAB ILTE,” the Ministry states.

State expenditure on compensation is not increasing

In some cases, part of the guarantee fee is compensated from state funds.

I. Jankauskas raises the question of whether a higher guarantee fee automatically implies higher state compensation. ILTE acknowledges that such a link is possible in the case of a specific entity.

“If the guarantee fee increases, the amount of compensation payable to a specific entity may rise accordingly,” notes ILTE. However, the overall data does not indicate an increase in state expenditure.

According to data from the Ministry of Agriculture, the funds used for guarantee fee compensation fell from 1.95 million to 0.71 million euros in 2023–2025 fell from 1.95 million to 0.71 million euros, or by 64 per cent. ILTE states that 1.06 million euros was spent on compensation in 2024, and in 2025 – €0.71 million.

“The total amount spent on compensation has fallen in recent years due to a decline in the number of applications for individual guarantees,” explains ILTE.

Criticism is also levelled at ILTE’s direct loans

I. Jankauskas raises another question – whether ILTE, by lending directly to farmers itself, is competing with credit unions and smaller banks, which it is supposed to be helping to finance agriculture through the guarantee scheme.

“ILTE has entered into direct competition with credit institutions. This is very bad news for credit unions or smaller banks operating in the regions,” – says I. Jankauskas.

According to him, if a financial institution requires a guarantee for a farmer’s loan but the cost of that guarantee becomes too high, the credit union or bank may refuse to provide the funding. In such a case, the farmer may ultimately be forced to seek funding directly from ILTE.

ILTE disagrees with this assessment.

“ILTE provides direct loans to agricultural operators in cases where they are unable to obtain financing on the market,” states the National Development Bank.

According to ILTE, to ensure that its funding complements the market rather than competing with it, a statement from a financial institution confirming its refusal to finance the client is required before a direct loan is granted.