Lithuania Economic Conditions

By | December 22, 2021

The characteristics that differentiate Lithuania from other European states are its purely agricultural economy, the high percentage of people working in the fields and living in contact with them, the proverbial sobriety of the residents, the low importance of any activity industrial, the non-existence, apart from Kaunas and Memel, of centers which can be attributed the name of cities. The rhythm of economic life, due to the peripheral position of the country, the long isolation and poor communications, is linked as it is exclusively to the work of the land, later than elsewhere; and therefore also the changes that took place during and after the world war, as well as the more recent adaptations connected with the reconstruction of the state and with the agrarian reform,

Agriculture is carried out in a fairly intensive form having at its disposal vast areas of arable land (49.6 per cent of the territory, against 27.8 in Latvia, 23.4 in Estonia and only 6.1 in Finland), of which about three quarters are put into work annually. Among the cereals, which occupy three-fifths of the arable land, rye is the one that finds the most favorable conditions, hence barley and wheat; the latter in the pre-war period extended over an area that was valued at just one sixth of that of rye, while now the surface is slightly less than half. Connected with the thriving farming is the extension of oats, which ranks second after rye. Potatoes, peas and beans are also of great importance for the peasants’ diet,

Agriculture was conducted in the pre-war period with antiquated methods and the unitary yield per hectare was rather low, due to the fact that the production of southern Russia was so large and cheap, that it was not convenient to intensify it in these more northern regions. The new state has taken steps to facilitate the introduction of agricultural machinery, the improvement of seeds and the use of fertilizers, but conditions still remain at a lower level than in neighboring East Prussia and the Memel Territory. As for agricultural conditions, the best cultivated areas, as well as in the Territory of Memel, are located around Kaunas and in SW Lithuania, while towards the NE. the marshy ground and towards the E. the many lakes do not lend themselves to the intensification of crops. The agricultural land,

Considerable importance, although it has been applied in a less radical way than in Estonia or Romania, both bordering Russia, has had the agrarian reform. Already in the pre-war period there was a tendency to move from a regime of large ownership to a regime of medium ownership, but this came back to the detriment of the Lithuanian population, as the distribution of funds was made in favor of the Russian peasants. The reform, which was approved on April 3, 1922, and which at the same time had the characteristics of a social and national provision, as it favored the Lithuanian peasant at the expense of minorities, established that the properties must not exceed 80 has.; the excess quantities, as well as those confiscated from people who have acted against the state, must be divided into portions between 8 and 20 ha., in favor of individuals or organizations (schools and hospitals). A temperament to the reform was then had in November 1929, authorizing the possession of assets up to 150 hectares; the application deadline, which was supposed to be 1928, was also extended to 1938. Already in 1922 64,671 ha were allocated. and 222 new properties were established, 383 were established the following year, 1448 in the following two (1924-25), so that at the beginning of 1927 the land assigned rose to 4922 sq km, to reach 7095 at the end of 1930. Throughout the country, the agricultural census of 30 December 1930 counted 308,660 agricultural properties, of which 21,290 are less than one hectare. The remainder is 19.1% made up of properties of 20-30 ha., 17.6% between 30-50 ha., 13.2% between 15-20, 9.8% between 50-100, 9.7% between 12-15 and 7.0% between 10-12. L’ the settlement of the new colonists was preferably arranged in isolated residences, in farms and in hamlets; of these about 2,000 were created (with 10,000 homes) for 43,000 peasants. After these measures there was a notable increase in production, also because cooperativism became more and more widespread and the use of capital by the Lithuanians of America was notable. The reform then led to an important transformation regarding the breeding of livestock which, once neglected, now constitutes, alongside the timber, the main wealth of the country. It is greatly facilitated by the vast areas of grass (13.7% of the territory) and pasture (11.8).

Compared to the pre-war period, horses (589,000 head in 1932) increased by 52%, cattle (1,154,000 head in 1932) by 60, pigs (1,233,000 in 1932) by 220, sheep (625,000 head in 1932)) of 101%. In connection with the wet or dry seasons and with the restrictions imposed on exports, quite considerable changes are noted from year to year, but the general trend is to improve the breed and industrialize the products. The value of exported cattle rose from 35 million litas in 1928 to 70.1 million in 1931; the production of butter from 9016 q. in 1927 to 81,414 in 1931. The Maistas cooperative takes care of the export of cattle, the union of dairies, called Pienocentras, takes care of the butter. Farmyard animals, especially geese, are also on the rise.

The value of the fishery products, on the other hand, is modest: in 1929-30 sea fishing yielded 2,160,000 kg. of fish and that of inland lakes and rivers 715 thousand kg., for a total value of 3.5 million litas. For Lithuania business, please check

The forest area is rather modest, being estimated at 8794 sq km, of which 7667 are state owned, 795 are privately owned and 332 in the Territory of Memel. The export of timber, which has to contend with competition from neighboring countries, is hampered by poor internal communications. The purchase of the port of Memel was of great importance, which is well equipped for woodworking, in order to be able to ship boards, pulp and paper. The export increased from 54.2 million litas in 1926 to 72.5 in 1928 and nearly 100 million in 1930 (38.3 of cellulose, 15.8 of wood for fur, 15.3 of boards, 11, 7 of wood from paper and the rest cut wood or raw wood). The annual exploitation is around 2.1 million square meters. and much of it is also used inside.

Given the extensive moraine blanket and the existence, below it, of uniform land of a rather recent age, Lithuania does not possess mineral wealth. The humid climate and the irregular hydrographic regime meant that peat could form in the marshes. The largest deposits are those of Amalva, near Marijampole (3340 ha., With a power of 3-8 m.) And of Sulinkiai (2208 ha.;. Power from 4 to 8 m.). The extraction, which only in a small part is done by mechanical means, is around 100 thousand tons. Along the sea, between Memel and Palanga, amber is collected (1930; 270,317 grams), which is then processed by a hundred workers and gives rise to an annual export of 256,000 litas (average over the last 5 years).

The industry, which must adapt to local economic conditions and seek more to serve the needs of the internal market or to process some agricultural product, is of little importance in Lithuania. Before the war, Russia had limited the economic activity of this border province to some leather factories in Šiauliai (with 1000 workers), to some metallurgical factories (screw factory, with 1600 workers, and window and door factory with 800, both in Kaunas) and breweries, which then exported the products to the interior of the country. The poor purchasing capacity of the residents and the inexistence of city life meant that small distilleries, mills, sawmills, brick factories, furniture and matches were sufficient for local needs. After the war the economic structure changed somewhat; the leather factories and metallurgical workshops, the Russian and Polish market closed, had to adapt to internal needs, while on the other hand the awakening of agriculture provided the industry with some products to be transformed; it follows that if the number of workers remains almost the same, the industry is more varied. The lack of specialized workers (except for wood), the scarcity of capital, the possibility of counting on a rather modest market, does not allow us to foresee a much greater development.

The industry and craftsmanship employ a total of 110,000 people, of which 33,000 are employed in industry alone. Only 83 companies, with more than 50 employees, have any importance (11,150 workers); then there are 227 enterprises with more than 15 and less than 50 workers and 790 enterprises with more than 5 and less than 15. Food factories are in first place (cattle slaughterhouses, bacon factoriesand meat preserves, dairies, mills, breweries, distilleries), then those that deal with woodworking, the polygraphy and paper industry, the textile industry (wool and linen processing, now in progress: produced for 36 million litas in 1931), the mechanical and metallurgical industry and the clothing industry. The penultimate and the third last of these industries, however, are still far from covering internal needs. The largest number of businesses are located in Memel and then in Kaunas. A large sugar factory was opened in 1931 in Marijampolė (production 1932: 9370 tons) and a factory for preserved meat in 1932 in Šiauliai.

Lithuania Economic Conditions 2