How Rural Development Programmes Serve for Viability of Small farms? Case of Latvia and Lithuania

Abstract

The analysis of structure of agricultural sector shows a poor viability of small-scale farms in new EU member states despite support of the Common Agricultural Policy. Considering this problem, the aim of the article is to identify indicators that can be used to show changes in the viability of small farms in order to bring policy makers more attention to this very important group of farms in the context of the agricultural economy in Latvia and Lithuania. For this purpose, 4 economic indicators were selected, analyzed and their impact to the change in the level of viability of small farms during 2007-2016 was assessed. The research based on the data of Farm Accountancy Data Network and Farm Structure Survey, using statistical data comparison, systematic indicator selection and mathematical induction methods. The results shows that despite growing of the rate of subsidies on investment and improving income level in small farms over the observed period , the viability of small farms remains heterogeneous and insufficient to contribute in constructing more resilient and sustainable agricultural sector both in Lithuania and in Latvia. Thus, in the upcoming Rural Development Programming period, the priority should be given to small-scale farms since they play a significant role not only in development of viability of agriculture in general but also are important to agricultural sustainability.