Scrimping on fertilizer and chemicals use last season – whether by design or force of tight credit – was farmers' most profitable option, according to the experience of Central European agriculture.

Growers who invested heavily in nutrients and sprays "were not recovering their costs", US officials said following a tour of countries including the Czech Republic, Romania and Serbia.

"This was a result of high fertilizer and chemical prices while the price for grains dropped much below last season's record highs," the US Department of Agriculture delegation reported.

Farmers who held back, however, "apparently had better net returns", said the report, which was based on field tours and interviews with farmers, researchers and industry and state officials .

Profit alerts

The briefing follows a series of profits warnings from agrochemical and fertilizer groups, citing a collapse in farm demand brought on by lower crop prices and difficulty of getting loans.

America's farm lender reported a 95% cut in lending in the fourth quarter.

However, the USDA findings do not tally with all evidence presented to Agrimoney.com which has, for instance, heard of one farm enterprise in Ukraine which wrote off 100,000 hectares of rapeseed after a failure to apply fertilizer and insecticides left the crop stunted and pest-damaged.

Abandoned land 

The USDA report also highlighted the retreat of agriculture in Romania since the collapse of Communism, with the amount of irrigated land slumping by more than 90% to well below 300,000 hectares.

"Deterioration and a lack of investment in the infrastructure systems occurred after the regime change of the early 1990s," the report said, noting that even where irrigation was available, its cost deterred farmers.

Officials also noted a "large amount" of deserted farms - "not land just lying fallow or waiting for next season's crop but vacant land".

Many Romanians who have inherited farms have sought other professions, abandoning their land.

"Low land taxes contribute significantly to this scenario, allowing owners to let their fields lie fallow without much concern to renting them out to other farmers," the report said.