The effects of export subsidies on Lithuanian agricultural products export

The sale of European agricultural products using export. refunds has been heavily discussed in recent years: This issue received much attention among Lithuanian politicians and industry representatives too. They claim that the commitment of the European Union to eliminate export subsidies by 2014 will negatively affect or even destroy the exports of the subsidised products. This paper examines the effect of export refunds on the export volumes of Lithuanian agricultural products, their evolution over time. The empirical analysis was performed for exports of butter and cheese as the most subsidised products in Lithuania between September 2004 and June 2007. The results show a significant positive effect of export refunds for butter on the quantities exported and non significant effect of cheese export refunds.