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Profitable agricultural activity provides a stable self-sufficiency with agricultural and food products. Positive structural production changes have been reached in the Lithuanian agrarian sector while implementing EU common agricultural policy measures. However, due to both external and internal factors influence differences, profitability of separate agricultural branches and products vary a lot and may have a negative impact on the rational agricultural production changes. The aim of the research is to provide the rational decisions of profitability increase in agrarian sector using mathematical model. The tasks of the research are: to perform comparative analysis of Lithuanian and EU member states agrarian sector; to prepare mathematical model for agrarian sector profit forecasting and formulate assumptions for the model application; to evaluate factors influencing agrarian sector profit and provide their forecast up to the year 2013. Results of the research: evaluation of Lithuanian and EU member states agrarian sector economic indicators show that Lithuanian agrarian sector, having unequal level of competitive abilities, stands behind. Therefore it is necessary to use efficiently available external (support, prices) and internal (costs) reserves. Mathematical model has been prepared for agrarian sector profit and its scenarios forecasting, in consideration with different assumptions (actual and normative production costs, different direct payments levels) up to the year 2013. Forecasting results and scenario analysis show that optimization of production costs leads to higher profit, prices and direct payments increase profitability of the agricultural production at different level. Recommendations for the sustainable development of agricultural sector and policy measures improvements are proposed.

Profitable agricultural activity provides a stable self-sufficiency with agricultural and food products. Positive structural production changes have been reached in the Lithuanian agrarian sector while implementing EU common agricultural policy measures. However, due to both external and internal factors influence differences, profitability of separate agricultural branches and products vary a lot and may have a negative impact on the rational agricultural production changes. The aim of the research is to provide the rational decisions of profitability increase in agrarian sector using mathematical model. The tasks of the research are: to perform comparative analysis of Lithuanian and EU member states agrarian sector; to prepare mathematical model for agrarian sector profit forecasting and formulate assumptions for the model application; to evaluate factors influencing agrarian sector profit and provide their forecast up to the year 2013. Results of the research: evaluation of Lithuanian and EU member states agrarian sector economic indicators show that Lithuanian agrarian sector, having unequal level of competitive abilities, stands behind. Therefore it is necessary to use efficiently available external (support, prices) and internal (costs) reserves. Mathematical model has been prepared for agrarian sector profit and its scenarios forecasting, in consideration with different assumptions (actual and normative production costs, different direct payments levels) up to the year 2013. Forecasting results and scenario analysis show that optimization of production costs leads to higher profit, prices and direct payments increase profitability of the agricultural production at different level. Recommendations for the sustainable development of agricultural sector and policy measures improvements are proposed.

Profitable agricultural activity provides a stable self-sufficiency with agricultural and food products. Positive structural production changes have been reached in the Lithuanian agrarian sector while implementing EU common agricultural policy measures. However, due to both external and internal factors influence differences, profitability of separate agricultural branches and products vary a lot and may have a negative impact on the rational agricultural production changes. The aim of the research is to provide the rational decisions of profitability increase in agrarian sector using mathematical model. The tasks of the research are: to perform comparative analysis of Lithuanian and EU member states agrarian sector; to prepare mathematical model for agrarian sector profit forecasting and formulate assumptions for the model application; to evaluate factors influencing agrarian sector profit and provide their forecast up to the year 2013. Results of the research: evaluation of Lithuanian and EU member states agrarian sector economic indicators show that Lithuanian agrarian sector, having unequal level of competitive abilities, stands behind. Therefore it is necessary to use efficiently available external (support, prices) and internal (costs) reserves. Mathematical model has been prepared for agrarian sector profit and its scenarios forecasting, in consideration with different assumptions (actual and normative production costs, different direct payments levels) up to the year 2013. Forecasting results and scenario analysis show that optimization of production costs leads to higher profit, prices and direct payments increase profitability of the agricultural production at different level. Recommendations for the sustainable development of agricultural sector and policy measures improvements are proposed.

Profitable agricultural activity provides a stable self-sufficiency with agricultural and food products. Positive structural production changes have been reached in the Lithuanian agrarian sector while implementing EU common agricultural policy measures. However, due to both external and internal factors influence differences, profitability of separate agricultural branches and products vary a lot and may have a negative impact on the rational agricultural production changes. The aim of the research is to provide the rational decisions of profitability increase in agrarian sector using mathematical model. The tasks of the research are: to perform comparative analysis of Lithuanian and EU member states agrarian sector; to prepare mathematical model for agrarian sector profit forecasting and formulate assumptions for the model application; to evaluate factors influencing agrarian sector profit and provide their forecast up to the year 2013. Results of the research: evaluation of Lithuanian and EU member states agrarian sector economic indicators show that Lithuanian agrarian sector, having unequal level of competitive abilities, stands behind. Therefore it is necessary to use efficiently available external (support, prices) and internal (costs) reserves. Mathematical model has been prepared for agrarian sector profit and its scenarios forecasting, in consideration with different assumptions (actual and normative production costs, different direct payments levels) up to the year 2013. Forecasting results and scenario analysis show that optimization of production costs leads to higher profit, prices and direct payments increase profitability of the agricultural production at different level. Recommendations for the sustainable development of agricultural sector and policy measures improvements are proposed.