Abstract
Sustainable agriculture is the basis for long-term economic growth ensuring employment for the rural population. The aim of this research is to assess the dynamics in agricultural output, investments, direct payments and energy use in Estonia, Latvia and Lithuania under the Common Agricultural Policy (CAP) during 2008-2017. The method of research is the evaluation of production factors generated by agriculture and related activities carried out by the model of the EAA system. The performance of the agricultural holdings is measured using economic indicators: output of the agricultural 'industry', gross fixed capital formation (GFCF), direct payments, return on capital, total labour force input, average farm income. We discuss the trends in absolute and relative indicators relates to different aspects of the sustainable agricultural development to identify the key priorities of the CAP in the Baltic States which are new European Union Member States.
Highlights
The EU comprises a number of Member States with different levels of development
Over the period from 2008 to 2017 the agricultural output increased by 88% in Estonia, 38% in Latvia, 32% in Lithuania
When analysing the situation in Estonia, Latvia and Lithuania the main changes in value of agricultural output was linked to the performance of the direct payments which increased the farms' income
Summary
The EU comprises a number of Member States with different levels of development. As regards the new EU Member States, they often face less competitive agriculture due to insufficient use of intermediate inputs and experiencing low price recovery ratios. Development of the EU agricultural highly depends on the CAP This is especially the case in the new EU Member States as CAP payments account for relatively high income share there. The CAP aims to maintain sustainable and diversified agriculture across the EU, to provide consumers with affordable food at reasonable prices and to ensure appropriate standard of living for EU farmers'. Both the global agricultural markets and the CAP are constantly evolving. In order to increase farm profits, farmers were encouraged to respond to market developments changes, produce goods according to consumers needs, together with proper management of agricultural land, appropriately in line with environmental, animal welfare and food safety standards. Each measure under the CAP should be monitored and evaluated to ensure its effectiveness in terms of the following indicators: economic viability; income generation; structure of agricultural production and intermediate consumption
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