RESTRICTEDWORLD TRADE
ORGANIZATIONWT/ACC/LTU/31
17 March 1999
(99-1070)
Working Party on the
Accession of LithuaniaOriginal:  English
ACCESSION OF LITHUANIA
Communication from Lithuania
The Permanent Mission of the Republic of Lith uania has submitted the following information
on State-trading in Lithuania, with the request that it be circulated to members of the Working Party.
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State Trading
In accordance with Article XVII:4(a) of GATT 1994 and Paragraph 1 of the Understanding
on the Interpretation of Article XVII, the Lithuanian Government wishes to notify hereby the
operation of the Lithuanian Agricultural Products and Foodstuff Market Regulation Agency in the
year 1998.
I. ENUMERATION OF STATE TRADING ENTERPRISES
The Government of the Republic of Lithuania wishes to notify the operation of Lithuanian
Agricultural Products and Foodstuff Market Regula tion Agency (LAPFMRA - Lietuvos zemes ukio ir
maisto produktu rinkos reguliavimo agentura) - a State enterprise that may qualify under the
provisions of GATT Article XVII.
The products, in respect of which LAPFMRA has exclusive rights or privileges are defined in
the Agricultural Products and Foodstuff Market Regulation and Export Promotion Programme which
was approved by Government Resolution No. 788 (30 June 1998).  They are as follows:
- Leguminous vegetables:  HS 07.08;
- Grains:  wheat and meslin HS 10.01, rye HS 1002.00.00.0, buckwheat HS 1008.10.00.0;
- Meat and meat products:  HS 02.01, HS 02.02, HS 02.03, HS 16.02;
- Milk and milk products:  HS 04.01, HS 04.02, HS 04.05, HS 04.06.
II. REASON AND PURPOSE FOR ESTABLISHING AND MAINTAINING LAPFMRA
The main reasons for establishment of LAPFMRA:
- to promote stability in the domestic market by occasional buying and selling operations;WT/ACC/LTU/31
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- to contribute to alleviate shortage of working capital of food processing enterprises and
temporary liquidity problems they may face;
- to support minimum levels of income for producers (farmers) of agricultural products and
foodstuffs.
The purposes of LAPFMRA activities:
- to implement the Agricultural Products and Foodstuff Market Regulation and Export
Promotion Programme (Government Resolution No. 788 of 30 June 1998);
- to intervene as an intermediary between the State and enterprises purchasing agricultural
products to help them finance their activities, inter alia  guaranteeing bank loans.
LAPFMRA was established by Government Resolution No. 617 of 21 May 1998 “On
Lithuanian Agricultural Products and Foodstuff Market Regulation Agency”.  The founder of
LAPFMRA is the Ministry of Agriculture.  In its activities LAPFMRA is guided by:
(i) the Agricultural Products and Foodstuff Market Regulation and Export Promotion
Programme (Government Resolution No. 788 of 30 June 1998);
(ii) LAPFMRA’s own statute approved by the Ministry of Economy on 2 July 1998 (registration
No. VI 98-4);  and
(iii) by Orders of the Ministry of Agriculture.
Articles XI-XX of Government Resolution No. 788 provide that LAPFMRA has the exclusive
right to intervene, through purchases and sales in the markets of the products concerned:  leguminous
vegetables, grains, meat and products thereof, milk and products thereof.
III. DESCRIPTION OF THE FUNCTIONING OF LAPFMRA
LAPFMRA is performing the following functions:
- purchases and sells surplus of agricultural products and foodstuff;
- to intervene as an intermediary between the State and enterprises purchasing
agricultural products to help them finance their activities, inter alia  guaranteeing
bank loans;
- administers the State Reserve of agricultural products and foodstuffs;- provides suggestions on agricultural production and foodstuff market regulation and
export promotion.
The exclusive or special rights or privileges granted to LAPFMRA:- LAPFMRA can conclude agreements with processing industries to purchase, store,
process and sell some of their products by appropriate quantities when they are insurplus. Purchases are made pursuant to the Orders of the Ministry of Agriculture;WT/ACC/LTU/31
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- LAPFMRA uses its own financial means as well as bank loans to purchase surplus of
agricultural products.  The Government or Rural Credit Guaranty Fund guarantees the
repayment of loans;
- LAPFMRA intervenes as an intermediary between the Rural Credit Guaranty Fund
and processing enterprises to help them finance their activities, inter alia
guaranteeing bank loans;
- in conducting its activities LAPFMRA must take into account what financial
resources from the Rural Support Fund are allocated to implement the Agricultural
Products and Foodstuff Market Regulation and Export Promotion Programme.  In
case of shortage of funds, the purchase and storage of production may only take placeon the basis of special Government decision to allocate additional funds;
- if in implementing State programmes LAPFMRA sells the products purchased in
domestic or foreign market at a loss, its deficit is met by the Rural Credit Guaranty
Fund or other financial means defined by the Government.  It is the Governmentwhich must assess and make up for the losses.
According to the statute of LAPFMRA, the Ministry  of Agriculture as a founder, is entitled to
decide on the commodities being subject to regulati on, on the guaranteed (minimum reference) price
on which goods are to be purchased from producers (farmers);  on the guaranteed (minimumreference) price on which services are purchased from the suppliers.
In accordance with Orders of the Ministry of Agriculture, LAPFMRA has currently pledged
to purchase surplus of agricultural products in the milk sector and from meat processing industries.
The activities of LAPFMRA are financed with credits from commercial banks with State
guarantee.
Economic entities are free to engage or not in activities with LAPFMRA.LAPFMRA has no monopolistic or exclusive position on markets since other entities remain
free to purchase, sell, export or import on competitive terms and under normal market conditions.These rights of operators are not affected by the activity of LAPFMRA.
Export operations are conducted according to normal commercial terms, conditions and
practices, including price, profit margins, quality, availability, marketability and other trade
regulations as well as in conformity with conditions provided in bilateral arrangements on productssupply.
LAPFMRA does not conduct any import operations.LAPFMRA has entered into contractual obligations with leguminous vegetables and grain
processors to help them to settle the debt to farmers for purchased production.  These contracts end on
15 June 1999.  Currently, LAPFMRA has signed a contract to purchase one thousand tons of meat.
During the current year, in the framework of the Agriculture Products and Foodstuffs Market
Regulation and Export Promotion Programme, LAPFMRA intends to purchase 5.65-7.43 thousandtons of meat and its products, approximately 350-400 thousand tons of leguminous vegetables and
grains, and 3.64-4.96 thousand tons of milk and its products.WT/ACC/LTU/31
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IV. STATISTICAL INFORMATION
The activity of LAPFMRA in 1998 was conducted in the following areas and commodities
(see the table).
Statistical Information on LAPFMRA Operations
in Domestic Market in 1998
(in thousand tons)
Product description
(HS Code)Domestic purchases
by LAPFMRA
(up to 11 Jan 1999)National production
(1997)Sales by LAPFMRA
(up to 11 Jan 1999)Consumption
(1997)
Leguminous
vegetables;
grains (10.01,
1002.00.00.0,1008.10.00.0)472.09 3021.7 32.12 548.0
Meat and meat
products (02.01,02.02, 16.02)6.31 200.9 4.92 183.0
Milk and milk
products (04.01,04.02, 04.05)7.01 1949.7  5.33 791.7
Data provided by the Ministry of Agriculture and Statistics Department
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