Diversification of farmers farm activities in Lithuania: promotive and restrictive factors

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1 Diversification of farmers farm activities in Lithuania: promotive and restrictive factors Jurgita Zaleckiene Lithuanian University of Agriculture Jurgita Zaleckiene, LUA 1

2 Objective determine factors promoting or restricting the diversification of activities of farmers farm and propose measures focused on softening of restrictive factors. Jurgita Zaleckiene, LUA 2

3 Methodology (1) The diversification of farmers farm activities use of farm resources related or unrelated to traditional agriculture activities to develop new activities in farm and/or off farm (Turner, Winter et al., 2003). Jurgita Zaleckiene, LUA 3

4 Methodology (2) extents and tendencies of the diversity of farmers farm activities in Lithuania have been evaluated with reference to the Statistics Department information; promotive and restrictive features of farmers activities diversification were estimated in accordance with the empirical research carried out. Jurgita Zaleckiene, LUA 4

5 Methodology (3) Methods of information collection: Quantitative - questionnaire Qualitative - analysis of documents and interviews Jurgita Zaleckiene, LUA 5

6 Methodology (4) according to Schwarze (1993) method the number of investigatives was determined to be 381; the investigation was carried out in , during which 321 respondents were questioned. the reciprocity of questionnaires was 44,7 %. Jurgita Zaleckiene, LUA 6

7 Results: According to results of the census of agriculture 2003 in Lithuania, 48 thousand farmers farm diversified farm activity. Agricultural structure surveys (2005 and 2007) show the number of farmers farm changed according to different form of diversification. Jurgita Zaleckiene, LUA 7

8 Evaluation of internal factors, % Commercial experience of farmers 71,2 17,5 11,3 Knowledge, skills of farmers 83 12,6 4,4 Knowledge, skills of other farmers members 83,3 13,2 3 Financial resources of farm 27,6 62,9 9,5 0% 20% 40% 60% 80% 100% Favorable Unfavorable No opinion Jurgita Zaleckiene, LUA 8

9 Evaluation of external factors Market Conditions Promotive: consumer culture; increasing demand for new services, products. Restrictive: limited opportunities for business development; more competitive businessmen of the city and foreign businessmen; lack of national, regional marketing measures. Jurgita Zaleckiene, LUA 9

10 Financial instruments Promotive: significant support for business development; provision of farmers credits guarantees for credit institutions. Restrictive: high requirements for assistance; undetermined measures to the promotion of regional specialization; unfavorable system for assistance differentiation; lack of confidence of banks in farmers. Jurgita Zaleckiene, LUA 10

11 Infrastructure Promotive: developed training and consulting infrastructure; Farmers professional training financed by the EU and national funds; developed rural social infrastructure network. Restrictive: limited adaptation of consulting, training services to farmers demands and expectations; inadequate spread of information; lack of advices from scientists; poor rural social infrastructure. Jurgita Zaleckiene, LUA 11

12 Cooperation, networks Promotive: farmers' cooperation is recognized as an important tool. Restrictive: missing traditions of cooperation; no measures to promote the dissemination of good practice; weak regional specialization. Jurgita Zaleckiene, LUA 12

13 Legal, administrative environment Promotive: legislative basis; legal compliance with the international norms. Restrictive: lack of coordinating bodies; inadequate communication between the institutions; bureaucratic limitations; changing legislation norms. Jurgita Zaleckiene, LUA 13

14 Measures focused on the softening of restrictive factors: creation of information field; improvement of financial support instruments; building of farmers' skills and competences. Jurgita Zaleckiene, LUA 14

15 Conclusions (1) the results of research show that the support didn t become the instrument of implementation for systematic and effective diversification of farmers farms activity; developed mechanisms to exploit the farmers farm strengths exploitation of farmers farms and encourage regional specialization do not exist; Jurgita Zaleckiene, LUA 15

16 Conclusions (2) developed network of training and consulting institutions in Lithuania only partly create incentives for activity diversification. On the one part, due to the absence of efficient knowledge and information spread mechanism. On the other part, due to the lack of entrepreneurship abilities, farmers are disable to evaluate need of knowledge; Jurgita Zaleckiene, LUA 16

17 Conclusions (3) cooperation is limited by the scattering of diversified farms in country territory, but the inappreciation of this cooperation trend and poor farmers managerial competence have crucial impact on it. Jurgita Zaleckiene, LUA 17

18 Thank you for your attention! Jurgita Zaleckiene, LUA 18