G. Stanišauskas: additional EUR 100 million approved for Lithuanian agriculture, but no "free lunch"

The European Commission has approved a €100 million state aid scheme for Lithuanian agriculture to promote investment in the production, processing and marketing of agricultural products. So far, only „The Brussels Times“ has reported on it, but let's start at the beginning.

At first glance, this decision by the European Commission may seem like a significant financial boost for Lithuanian farmers, but a closer look shows that the measure has clear conditions and a specific focus - the funds are not subsidies but loan projects linked to EU climate and sustainability policies. In other words, the EC specifies that the funding will not be in the form of direct subsidies or non-repayable support.

It is envisaged that the aid will take the form of loans, which will require farmers and agribusinesses to make financial commitments in addition to investing in the planned projects. In other words, these are not additional payments to compensate for rising costs or to directly increase farm incomes.

This scheme is more focused on investment solutions that are expected to increase the competitiveness of the sector in the future and to contribute to the achievement of environmental objectives.

Investments will have to be in line with the objectives of the EU's agricultural strategic plans as set out in Regulation (EU) 2021/2115. This Regulation has become the key document of the Common Agricultural Policy for 2023-2027, under which all Member States prepare their strategic plans. It includes not only economic, but also environmental and social objectives.

The economic priorities identified in the Regulation are: securing fair incomes for farmers, improving the competitiveness of the sector and strengthening the position of farmers in the food supply chain. However, it is clear that the €100 million does not directly address the economic objectives.

This is why the new funding scheme focuses primarily on projects related to reducing emissions and sustainability. Information from the EC shows that investments will be able to support improvements in soil quality, resource efficiency, reducing ammonia emissions, strengthening animal welfare standards and introducing more advanced technologies.

According to the European Environment Agency, agriculture accounts for around 10–11% of the EU's greenhouse gas emissions. The largest contributors are methane and nitrogen compounds associated with livestock farming and intensive fertiliser use. For this reason, the EU is not only seeking to reduce the amount of fertiliser used, but also to optimise the use of fertilisers.

Scientific studies show that precision farming technologies can reduce fertiliser use by 20–30%, while helping to maintain or even increase yields.

However, some farmers may have questions about additional borrowing. Loans, even if they are on more favourable terms, imply additional financial commitments. This is likely to make the scheme more attractive to larger farms or enterprises with greater investment potential and financial stability. Smaller farms, on the other hand, may face greater challenges in assessing the return on investment.

It is also important to consider the overall scale. Lithuania has around €4.3 billion in EU support under the 2023-2027 Common Agricultural Policy Strategic Plan. The €100 million package therefore represents around 2–2.5% of Lithuania's total agricultural support. This is a significant amount, but it is not the essential basis for financing the sector as a whole.

The scheme approved by the European Commission will be valid until the end of 2028. It should be published in the EC's State Aid Register under file number SA.122686 in the near future, once confidentiality issues have been finalised.

Taking the overall picture into account, the €100 million initiative is not just extra money for agriculture. It is an investment instrument that reflects the broader EU drive to modernise agriculture and link its development to the Green Deal. The key question today is therefore not whether the funds are plentiful, but how effectively they will be used and whether the changes will be of long-term benefit to Lithuanian farms.