Potential for increasing trade with China huge: Lithuanian Minister of Agriculture
Lithuania is a small country inside the European Union (EU), but its agricultural industry has taken the leading role in the world in terms of trade and productivity. Efficient by European standards, Lithuania’s agriculture produces a large surplus that cannot be entirely consumed domestically.
As the second largest sector in the Lithuanian economy, agriculture has been one of the country’s main sources of income, employment and foreign exchange earnings. The Global Times (GT) talks with the visiting Lithuanian Minister of Agriculture Giedrius Surplys
(Surplys) who shared some of his latest concerns over food and agriculture.
GT: Brussels is proposing an investment of $11.37 billion in agricultural research post-2020. New technologies promise to bring efficiencies to traditional agriculture, whilst others are skeptical about its yield results. How would you see it?
Surplys: In general, I think this investment of $11.37 billion into technology and innovation in agriculture is a very wise one. Because agriculture as I see it is one of the most attractive sectors that is very much in need of innovation and technology. We can speak about feed types and sensor-based farming. These need a lot of bright minds, enthusiasm and money. I think this allocation of $11.37 billion from horizon 2020 program is a very smart decision.
I know that somebody is afraid that smart farming will steal jobs from people, but in Lithuania we have quite a number of companies which have already implemented smart
farming. What they say about the program is that it is not stealing jobs but making people change jobs. So we will not see a reduction of employees in the farming sector due to innovation and technology, but we will see these people changing their mindset and educating themselves and continuing to work with the machines, processes and systems. We must be frontrunners [in agricultural research and innovation]. We cannot sleep, relax and be overtaken by other countries.
Also, I want to say that before investing in technologies and innovations of agriculture, we must first ensure a level playing ground for the farmers of all the EU member countries, because today our farmers are receiving much less direct payments to their farms per hectare than the rest of Europe. By doing so, we can’t avoid that some countries will be leaders and some will not. GT: In the context of the tariff war between China and the US, a growing number of European agricultural producers see an opportunity to replace American products in the Chinese market. What is your view?
Surplys: Lithuania is a very big fan of free trade. We have witnessed our fast integration into the World Trade Organization (WTO) and the EU, and this helped us to increase our GDP by four times and exports by 10 times over the past 20 years. So we are really in favor of free trade and we are against limiting free trade. Due to the possibilities that free trade offers, we have a bigger ambition and we have a huge potential of increasing our trade with China. Now we have a deficit of trade with exports from China times bigger than our imports to China when talking about food and agriculture. In 2017, our food exports increased by 46 percent, and we think that we are on a good track, especially that our political dialogue has intensified and our president Dalia Grybauskaitė is coming to the China International Import Expo in Shanghai in early November.
GT: The EU’s tariff on agricultural products are relatively high, and the advantageous products that China exports to the EU, such as vegetables, fruits, fish, and tobacco, are all being imposed with high tariffs. What are the reasons behind this?
Surplys: The EU is now basing one-third of its trade on the free trade agreement (FTA). If we would finalize all of the FTA that we are involved in now it would be two-thirds of the EU trade. In general, we are moving towards the FTA with many countries. What we have to keep in mind is that the agricultural sector is a very sensitive one, because it is related to food safety, environment, social and economical factors, therefore, both the EU and China are very cautious. I fully understand that we must be cautious and must have all the scrutinized procedures because it is a very sensitive thing. So these things need time. The last thing when we speak of the EU tariffs is the protection of investment and we still have homework to do in this field. If we want to invest, we must ensure that our investments are protected in the country.
GT: Eastern Europe has witnessed several outbreaks of African swine fever. Within the free movement zone, several countries have reported outbreaks including Lithuania. Recently you have called on the European Commission to cover losses incurred by the country’s farmers from drought and swine fever. How much damage has this virus contributed to the agricultural industry of Lithuania?
Surplys: Around 30,000 pigs have been lost due to the fever. We have not calculated precisely so far. In general, our pig farmers are ensured that they are paid for each pig [by the government] if they have to cull them.
But we have a problem when we speak about the rule of regionalization that the EU has decided to impose on each EU member due to the requirement of the WTO. If a dead pig is found due to the African swine fever, farms within ten kilometers around the affected area are banned from exporting their pigs. Due to this issue, I have asked the EU to think of ways to compensate for these losses.
In general, the EU is very sensitive about the fever and is taking all the measures to combat it. But we are not the only ones in the EU believing that this export ban is an overly strict sanction, because we think that even if your farm is just five kilometers away from the infected areas, it doesn’t mean to say that the fever can also be found in your farms. We are now negotiating with the EU about this and we will see how it goes.
Lithuanian Minister of Agriculture Giedrius Surplys