Agriculture, Investments, Legislation, Lithuania, Markets and Companies

Not only Linas Agro Group, Invalda LT and Agrowill Group will face expansion difficulties but also KTG Agrar, which invests in agriculture in Lithuania but is listed on German stock exchange.

"Entering the exchange the companies declared intentions to operate transparently and strive for benefit of every shareholder. However, restrictions on land purchase which took effect early this year and additionally proposed safeguards will render legal expansion impossible, thus this will harm several thousand small shareholders and all Lithuanian capital market," said Member of the Board of Investors' Association Vaidotas Rukas.

According to him, Linas Agro Group, Agrowill Group and Invalda LT, which has invested in agriculture company Litagra, lease most of the agricultural land. The companies will not be able to purchase land if owners decide to sell it at some point. Therefore, plots cultivated by these companies might be taken over by smaller farmers controlling less than 500 hectares or who divide their land between family members.

What is more, Rukas said that small farms are less effective and some of them are even involved in the so called "envelope pay" practices. Hence, revenue from exports would decrease if farms were forced to become even smaller artificially. Meanwhile, fears that foreigners will flock to Lithuania to buy up all the land are unfounded, according to Rukas, because there are almost no concentrated areas of land, while the average farm size is lower than 10 hectares.