Farmers grateful for the funding they won, but work on equalizing payments continues

Farmers are grateful to Latvian Prime Minister Krišjānis Kariņš for the work done in the multi-annual budget negotiations. A step has been taken towards fair direct payments and a result has been achieved in the long negotiations that is better than the funding initially offered by the European Commission to Latvian farmers, however, equality between European Union countries still remains a goal for the future.

Although we will continue to lag far behind countries such as the Netherlands and Spain in terms of direct payment support, which will still receive more than 150% of the EU average direct payments, it is positive that the gap between the Baltic States and our largest competitors in Eastern Europe, such as Poland, is narrowing. Currently, the agreement provides for approximately 80% of the EU average direct payment support for both the Baltics and our closest eastern neighbours.

It must be admitted that the agreement reached by the Prime Minister will not significantly reduce the pressure on the Latvian national budget, as the planned reduction in the Rural Development Fund will have to be compensated. The minimum that the Latvian government should do is to ensure that the Rural Development Fund is at least at the level of this period with the resources available to it, in order to successfully develop small and medium-sized farms and achieve the set environmental and climate goals.

As the Prime Minister already mentioned, now the homework will begin! It is very important that every Euro obtained from Brussels is invested in development – in the modernization of production, in increasing productivity, so that every EUR invested in the future brings the fruits of labor to farmers, and taxes to the budget. In simple terms – we plant an apple tree that bears golden fruits, instead of buying apples from a neighboring country as soon as we get the money! Unfortunately, the latest statements in the media indicate that certain political forces want to very quickly drain this money from the agricultural sector into the state budget by radically increasing the real estate tax on agricultural land. This is a short-sighted short-term strategy, because farmers will not be able to develop if there are no funds for sustainable investments. The aforementioned decision may lead to a situation where farmers will be forced to switch to more intensive production on their land, while at the same time not achieving environmental and climate goals, which require very large investments.

Juris Lazdiņš, Chairman of the Board of the Association “Farmers' Council”: "Our Prime Minister has achieved good success at the EU level, but now at the national level we need to work carefully to ensure that the money won makes Latvian farms more productive and bears fruit in the long term, rather than satisfying growing budget needs in the short term."