Lithuanian Agriculture and the World Market: Policy Options and Implications and Modeling Agricultural Markets for Policy Trade Analysis in Lithuania

The two related papers in this report were prepared for two conferences in Estonia in May 1993. The first paper (Saku) discusses alternative policy directions for Lithuanian agriculture and provides a qualitative assessment of these options. The second paper (Tartu) uses a simulation model for Lithuanian agricultural markets to analyze the impacts of three policy scenarios. The reference or baseline scenario assumes that real prices will increase at a specified rate. This forms the basis for comparison of two other scenarios. One assumes that domestic prices reach world market parity prices by 1995, allowing only for a quality discount of 15 percent for meat products. The other scenario assumes the extreme self-sufficiency case, where all imports and exports are zero and prices are solved for equilibrium levels.