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LV 1. ALTUM Working Capital Loan Program
The program operates in accordance with the Cabinet of Ministers' Regulations No. 582 of December 3, 2019 "Procedures for implementing the state support program for granting loans for the purchase of working capital in the agriculture, forestry, fisheries and aquaculture sectors".
With amendments to Cabinet Regulation No. 582, EUR 5,787,948 will be transferred from the guarantee program to the working capital loan program. The use of this additional funding will allow Altum to review the interest rate applied to loans and reduce it as much as possible. The program sets a rate of 3.5 %, but it can be increased to 6%, taking into account the risk of each client, the current situation in the farm and the used De minimis volume. For this program additional administrative costs are not charged. Considering that loans are repayable resources, the allocation of additional financing will allow the company “Altum” to provide loans in the amount of 15-20 million euros annuallyThe total funding for the program will be 31.39 million euros.
2. Partial repayment of loan interest and coverage of insurance policy costs
Partial cancellation of loan interest is one of the financial instruments that allows farmers to stabilize their cash flow and reduces the financial burden in their economic activities. The support measure has been requested and the funding actually disbursed in 2022 was 11,458,879 euros. This year, the funding actually available is 12,968,520 euros, but the requested amount is 15,274,824 euros, which currently constitutes a shortfall of 2.3 million euros. Since the administration process has not yet ended, it is hoped that the missing amount will decrease and a smaller proportional reduction will have to be applied.
Taking into account the funding requested this year, the Ministry of Agriculture has found an opportunity to increase support for partial repayment of loan interest to EUR 24,000,000 for 2024. As a result, the increase in 2024 compared to 2023 will be EUR 85.1 million.
Taking into account climate change and unstable meteorological conditions, the Ministry of Agriculture continues to support partial coverage of insurance policy costs. Farm risk management is becoming increasingly important every year, allowing farmers to avoid serious losses. Crop and animal insurance is one of the most important tools to protect their production from unpredictable losses. This year, the funding allocated for partial coverage of insurance policies is 8,725,000 euros, but the total requested amount is 10,765,883 euros, which is 2 million euros more than the available funding. This year, the Rural Support Service (RSS) paid the missing amount from the EAFRD funding available for 2024.
The Ministry of Agriculture, taking into account the actual funding required this year, has achieved an increase in total funding to 15,684,117 euros for 2024. The increase for partial redemption of insurance policies in 2024, compared to 2023, will be 45.7 %.
3. Development of a short-term liquidity and stabilization (restructuring) plan for distressed farms and support activities
The Latvian Rural Consulting and Education Centre (LLKC) has experience in providing advisory support to farms with short-term liquidity problems and difficulties. Before starting cooperation with the farm, a meeting is held with the owner and/or manager of the farm, during which the current financial information is reviewed and possible causes of the problems are identified. Next, a cooperation agreement is concluded, which defines the goal of cooperation and a set of necessary measures to stabilize operations. As part of the cooperation, a stabilization or restructuring plan is developed, which includes a cash flow statement, a schedule for repaying loans and other debts (coordinated with creditors), as well as a development plan. As part of the stabilization measures, a team of specialists (crop and livestock specialists, economists, accountants, etc.) is attracted to accompany the farm in this process. This LLKC will offer free for all farmers who suffered from the effects of weather conditions in 2023.
4. RSS planned payment schedule
In October (from 16.10.) and is paid in November first installment or advance payment:
– a basic income support that promotes sustainability (BIS);
– for organic farming.
Planned for December pay the final (second part) payments to the following:
– direct payments – ISIP, payment for small farmers and redistributive payment, coupled income support for dairy cows, sheep, goats, vegetables, fruits and berries, population rye, barley, summer rape and oilseed rape, protein crops;
– agri-environment payments – organic farming, environmentally friendly gardening.
We will pay in January. final payment for young farmers, maintenance of biodiversity in grasslands and compensation payment for Natura 2000 forest areas.
In January The minimum rate payment will start (Article 102(2) of Regulation 2021/2115 requires that a minimum rate be ensured) for ECO1, ECO2, ECO4, ECO5, ECO6 and ECO7. Support for eco-schemes will be paid in 2 instalments.
We will start in February. final payments for coupled income support for cattle and a payment for the management of beekeeping units for pollination purposes.
We will pay in March. agri-environmental final payment: increased welfare requirements and emission-reducing livestock farming, as well as we will pay remaining payments for eco-schemes.
As every year, in June, it is planned to pay out coupled income support for certified cereal seeds, fodder plant seeds and seed potatoes.
5. Amendments to the Latvian CAP Strategic Plan 2023-2027 (CAP SP)
The CAP SP was approved on November 11, 2022 and has been applied since January 1, 2023. It combines a wide range of targeted support measures and has been developed taking into account the needs of Latvia, and several Cabinet regulations have been developed for its implementation.
The first amendments to the CAP SP were made in 2023, and the overall harmonisation process took 8 months (the amendments were approved by the European Commission (EC) on 07.09.2023). The amendments were primarily made to:
– take into account the proposals that were made when preparing the draft regulations of the Cabinet of Ministers for the implementation of the CAP SP;
– improve the conditions for ensuring a correct administration and control system;
– make adjustments to the CAP SP financial plan, taking into account the continuation of the measures of the Rural Development Programme 2014-2020.
The draft amendment was agreed upon before submission to the EC. with the CAP Monitoring Committee established in the countryThe Latvian Monitoring Committee is composed of 16 representatives of the advisory council of non-governmental organizations of farmers from the “Cooperation Council of Agricultural Organizations”, “Latvian Gardener”, “Latvian Fruit Growers Association”, “Meat Cattle Breeders Association”, “Latvian Seed Growers Association”, “Farmers' Parliament”, “Latvian Association of Agricultural Cooperatives”, “Association of Agricultural Statutory Societies”, “Latvian Association of Organic Agriculture”, “Latvian Young Farmers Club”, “Latvian Farmers Federation”, “Latvian Beekeeping Society”, “Farmers' Association” and “Latvian Food Enterprises Federation”.
The Supervisory Committee also includes representatives from the European Commission, the CAP National Network, the Latvian Rural Forum, the Latvian Forest Owners Association, the Environmental Advisory Council, the Latvian Agency for Rural Development, the Ministry of Environment and Rural Development, the Ministry of Environment, the Ministry of Education, the Ministry of Finance, the Ministry of Finance, the Ministry of Social Affairs, the Ministry of Health, the Ministry of Social Affairs, the Ministry of Health, the Ministry of Social Affairs, the Ministry of Health, the Ministry of Social Affairs, the Ministry of Social Affairs, the Ministry of Social Affairs, the Ministry of Social Affairs, and the planning regions.
Also in 2024, the Ministry of Agriculture plans to make amendments to the CAP SP, forming a working group of representatives of farmers' organizations to discuss the necessary amendments in order to improve the conditions that will be applicable from 2025. In the near future, we will invite representatives of your organizations to the working group, in which we will then begin work on developing proposals for amendments to the CAP SP.
6. LIZ Management System (LIZ PS)
In order to ensure farmers' adaptation to the new conditions and to facilitate the information submission process (without applying any reduction in support for late submission of information), the Cabinet of Ministers' regulations have been amended to provide for
– extend the deadlines for submitting information to the LIZ management system from November 5 this year to February 5, 2024 on basic liming, herbicide use, fertilization plan and plant protection products, thus enabling farmers to meet all the conditions of ecosystem support interventions;
– extend soil agrochemical research or agrochemical service providers' data or soil samples the deadline for preparing and submitting analysis results to the LIZ management system from May 22 to November 5, 2023;
– lifting sanctions for late submission of information In the LIZ management system for 2023.
The State Plant Protection Service (SPPS) also helps and will help farmers enter information into the SPPS. SPPS will provide assistance in regional departments in Latvia and in the central administration in Riga, please call 67336733 or contact us by email lizps.atbalsts@vaad.gov.lvThe Latvian Rural Consulting and Education Center will also provide consultations by phone. 28337799.
Farmers who keep records of their own fertilizer and plant protection product use will be assisted by VAAD in entering information by consulting or with the farmer's consent. will perform data entry on behalf of the farmer if the farmer submits data to VAAD in paper form or in Excel data format.
If farmers keep records of the use of fertilizers and plant protection products using the electronic systems of the following companies – SIA “AgTech” (Next Farming), eAgronom OÜ, SIA “Linas Agro” (Geoface), k/s VAKS and SIA “Latvijas Lauku konsultāciju un izgļitbildības centrs” (Mans lauks), then Farmers themselves or through the aforementioned service provider can submit data in Excel format from electronic systems to the VAAD electronically to the email address lizps.atbalsts@vaad.gov.lv.
In the case of drawing up a fertilization plan, if the farmer cannot enter information into the LIZ management system, then with the farmer's consent and based on the field history data submitted by him in Excel supported file formats, VAAD consultants will create a fertilization plan individually for each farm in the LIZ management system.
Information prepared by the Press and Public Relations Department of the Ministry of Defense
