Lithuanian Ministry of Agriculture seeks review of grain drying service prices

Lithuania's Ministry of Agriculture has formally requested the Competition Council to investigate the pricing practices of companies providing grain purchase and drying services. This action follows numerous complaints from farmers alleging that these companies are employing nearly identical or uniform pricing for grain drying services. The ministry is urging these companies to cease charging additional fees for the sealing of laboratory samples, viewing this procedure as part of transparent business practices that foster a positive business reputation. "We want to draw attention to the fact that elevator prices have remained at a similar level for the fourth season, they are not increasing," stated a ministry representative. Companies reportedly consider all elevator costs and services, including receiving, unloading, cleaning, drying, and storage, when setting prices. Factors such as electricity costs, increased labor expenses due to rising wages (which constitute about 40% of service costs and grow 5-10% annually), higher bank interest rates, and doubled gas prices for drying compared to last year are cited as reasons why elevator prices should have significantly increased. Despite these rising costs, the price has remained stable for four years. The ministry also noted that grain drying services are offered by various market participants, including cooperatives, larger farmers, and state-owned elevators, allowing for price comparisons. Regarding laboratory sample sealing, the ministry has approved changes to the grain sampling and storage procedures, effective January 20, 2025. These changes mandate additional responsibilities for all grain-purchasing companies, despite objections from the Lithuanian Grain Processors and Traders Association (LGPPA) that this would incur extra costs and slow down the grain purchasing process. The LGPPA argues that packaging, sealing, labeling, registering, and storing each arbitration sample requires additional labor and administrative resources, including specialized storage facilities. They proposed sealing and storing samples only upon farmer request, as currently, only a few hundred farmers out of 300-400 thousand samples annually request re-testing, and most of these re-tests reveal reduced grain quality, causing losses for farmers. The number of arbitration tests represents less than 0.002% of the total samples, suggesting that grain quality assessments are generally conducted competently.

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We want to draw attention to the fact that elevator prices have remained at a similar level for the fourth season, they are not increasing.