Eco-fish farmers groan as markets report hike in eco-nuts

  • 2010-08-04
  • By Linas Jegelevicius

SLOW AWAKENING: Up to 70 percent of eco-commodities are exported, as Lithuanians lack an eco-awareness, says Tomas Demikis.

KLAIPEDA - In Daugai, a settlement of a bit over 1,000 inhabitants in the south, different types of carp swim in two adjacent ponds - peppy - splashing in the first one, and timid, laid back in the other. This may puzzle you. Can you guess the difference between the same fish? Unless you are a fishery expert, you certainly cannot.

“All fish farms are good at growing carp, however, when it comes to the ecology-friendly growing of them, only a few farms assume this resource-intensive, delicate and hard undertaking,” Arvydas Mikuckas, Daugu Zuvis fishery director, asserted bluntly to The Baltic Times. He went on explaining, “Eco-friendly carp growing requires too much tending, as it includes accurately chosen ecological fodder, special pond cleanliness and even less concentration of fish in the same pond, as overabundance would be seen as a breach.” According to the Statistics Department, there are 18 ecological fish farms in Lithuania.

If you guessed correctly the difference in the aforementioned fish comparison, picking the lonely and timid carp as the ecological one, you may wonder who is willing to engage in such a delicate business. “Quite frankly, upon Lithuania’s joining the European Union, it [EU] has been actively encouraging eco-friendly farming, allocating massive payouts for this kind of activity. Therefore, five years ago, seeking new markets and lured by the lumpy payouts, we undertook the ecological bid. However, it has turned out to bring us much headache and little or no payback,” admitted Mikuckas.

Out of 700 hectares of all fishponds of the farm, in 400 hectares of them ecological farming is cultivated, as carp, pike and catfish are being grown. Carp take up 95 percent of the fish. The farm has sold 3.6 tons of the fish this year, which has been a huge slump from the previous year, down from 400 tons in 2009. Christmas sales make up 80-90 percent of yearly sales. “However, that is where I want to make a clarification that may be difficult to get. Though we grow the fish ecologically, however, as its price difference kicks in, we put it on sale as non-ecological fish. Specifically, ecologically grown carp cost 2 - 4 litas (1.16 euros) more per kilo than normally-bred fish. This is something most cannot afford in the crisis-stricken economy. Honestly speaking, ecological fish has never been in big demand in Lithuania, as we rely on foreign markets, mostly. Unfortunately, with the eco fish export orders shrinking, from 16-20 tons per shipment to two-and-something tons, we are put in a situation where eco-labeled export  brings only loss to us,” maintained Mikuckas, adding, “The downturn has severely affected our traditional customers in Germany, Poland, Sweden and Finland. We may want to switch to traditional fish farming, however, our European commitments do not allow us to do that.”

With the low demand in the domestic market, little export this year and foreign orders dwindling violently, the undertaking’s future may be in question, as, Mikuckas claims, many people solve the more down-to-earth dilemma of what to eat. With local supermarket orders for 200-300 kilos of fish weekly, we will not be able to pull through. The demand for carp, a delicacy, averaging 11 litas per kilo, certainly will not rise soon. We see good fish sales only before Christmas. With EU support in question after 2013, when the financial period ends, our prospects remain very gloomy,” Mikuckas acknowledged.

However, 18 eco-fish farms are a sheer minority in comparison with much more abundant eco-crop and cattle farms, which recorded 2,679 units in 2009, a slight slip from the previous year, which had 2,805 eco-friendly farms. Statistically, nearly 5 percent of all Lithuanian farms are involved in ecological farming, which is a very low indication compared to Western countries. “We have been seeing a constant rise in ecological farming since Lithuania joined the European Union. The growth consisted of 40-50 percent a year during 2004-2005, slowing to one digit numbers in the recent years and receding 2 percent this year. This could be attributed to the downturn and slightly decreased EU yearly payouts for ecological farming. We have to acknowledge that many Lithuanian farmers undertake eco-farming for the sole reason of lumpy EU payouts which, on average, consist of 400-600 litas per hectare.

With the EU’s support financial period over in 2013 and new financing prospects gloomy, the Lithuanian eco farmers’ future remains uncertain. While Western EU countries have deep eco traditions, Lithuania, generally speaking, lacks eco-consciousness on all levels. It may take many years to raise eco awareness in the country,” Tomas Demikis, head of Quality Department at Ekoagras, the agency in charge of certifying ecological agriculture production , confessed to The Baltic Times. According to him, 70-75 percent of Lithuanian eco commodities are exported, while the rest, mainly ecological grain, is used in Lithuanian bakeries.

Albertas Gapsys, head of Product Market Research Department at the Institute of Lithuania’s Agrarian Economy, concluded to The Baltic Times that “during the downturn, the demand decrease in ecological goods is seen not only in Lithuania, but in more developed EU countries as well.” He notes that nowadays, many people pay attention only to price, but not to the inscription about the ecological product on the label. “Though, relatively, we grow quite a lot of ecological cattle and grain, only a small part of it reaches the Lithuanian market as, statistically, nearly 75 percent of the eco harvest is exported. There is not much demand for it in Lithuania. If you talk to an eco farmer, you will hear only complaints regarding realization of their crop. As a potential eco-product market, we are still evolving. However, it is obvious that Lithuania has done little in propagating eco-farming and consumption. Though eco-consumption is inching up, most consumers still overlook and underestimate the benefits of eco-farming. It may take years to change that,” Gapsys maintained.

He points out that, in a budget-oriented economy, ecological farming faces a tough challenge coming from genetically modified (GM) food products - plants that have had their genetic characteristics altered. If to speak of the EU policy regarding the matter, it has been quite liberal so far, allowing EU countries themselves to decide on the use of the GM products. It seems that Lithuania has assumed a conservative stance tackling the issue so far. Thus, Lithuania, different from most EU countries, has banned cultivation of genetically modified rape.

“Scientists still have not drawn policy-setting conclusions concerning genetically modified crops. While the approach is cautiously conventional for the time being, it might be a matter of the near future, when the scientific judgment will tilt in favor of genetically modified cultivating, especially when the basic cost of such products is considerably less than for ecological ones. Other factors also give a disadvantage to ecological goods, as their main attraction – healthiness – may be shaken,” Gapsys asserted.

Until 2009, Lithuania encouraged its farmers and producers to undertake eco-friendly farming and manufacturing by setting a 5 percent value added tax (VAT), but with the government’s austerity measures, the pro-ecological measure has been revoked, setting VAT for eco-goods at 21 percent. This is thought to further weaken the ecological approach in the country.
Despite this, quite oddly, the downturn has not affected the eco-market as much as the traditional one, though eco-sales reports from small eco-friendly stores and large supermarkets report mixed results. It is due to this that Vytautas Vyskupaitis, the Ekologiski Produktai storeowner in Vilnius, alleges the 50 percent turnover tumble in eco-product sales since the crisis began. The entrepreneur attributes the fall not as much to a demand decrease due to the crisis as much to the irrational state policy regarding VAT.

Contradictorily to the small entrepreneur’s account, all major food retail chains boast of increasing eco-sales during the crisis. Renata Saulyte, the Maxima spokesperson, contended that “Ecological production has become particularly popular in the economic boom, however, it remains a go-go thing in the downturn as well.”

“Eco sales in 2010 remain at the level of the previous years. This is quite surprising, as sales of other products have fallen. Interestingly, sales of some long-lasting eco-goods, such as tea, rice, sauces, sugar, flour, grits coffee, macaroni and canned vegetables have increased 18 percent in 2010, in comparison with 2009. Ecological vegetable sales have been even higher, by 20 percent, this year. Maxima relates the sales boom due to changed customer habits, placing the quality of a product first. It shows the demand for ecological products will be high in future,” Saulyte noted to The Baltic Times.
The food retail giant lists over 600 ecological commodities in its stores.

According to Jovita Bagdonaite, spokeswoman for Rimi, another major food retail chain, in 2009, ecological product sales have been the same as in the previous year, as some goods have seen a 10 percent rise. Rimi is eyeing a 20 percent eco-sales hike this year.

“The reports may seem quite contradictive, as many households have cut down on food consumption. However, the healthy nutrition consumer segment is constantly rising, as more and more customers prefer an ecological product. In responding to the trend, Rimi is constantly introducing new eco-commodities in its stores,” Rimi Lietuva general director, Tony Holmberg, said in a press release.

Pursuing this objective, Rimi has maintained setting up eco-farmers’ mobile little markets at some major Rimi supermarkets. The concept has received overwhelming support from both farmers and consumers, as the markets offer ecological dairy, meat and crop goods to health nuts. Rimi reports sales of over 300 ecological products in its stores.