An Analysis of Transition Price Policies in the Lithuanian Food and Agricultural Sector

Abstract

<p>Lithuania has been progressing rapidly in the privatization of agriculture and the development of market economy mechanisms. An important component of the transition reforms has been the deregulation of input, farm, and consumer prices. The context, processes, and results of the price policies are examined for the major food and agricultural products. As of November 1992, real input prices and consumer prices have increased, while real farm prices and real wages have declined compared with prereform levels in 1990. The large gap that previously existed between retail prices in state stores and private market levels food and agricultural product prices are still well below border prices. How these will evolve in the longer term depends on the domestic market and foreign trade policy regime that has yet to be adopted by the government.</p>