Opportunities for local farmers to purchase land will be reduced

Farmers are outraged because the Ministry of Agriculture, led by the National Union, has not provided support for the repayment of loan interest on the purchase of agricultural land in the coming years. This support program was historically created so that Latvian farmers could purchase land at similar interest rates as in old Europe. Such a decision will significantly reduce the competitiveness of local farms for land compared to foreign investors, who will in the future be able to purchase agricultural land and even entire farms on much more favorable terms.

The repayment of loan interest was provided not only for the purchase of land, but also for investments such as construction, the purchase of perennial fruit crops, the purchase of agricultural machinery, equipment, machinery, breeding livestock, and partial repayment of loan interest on short-term loans.

This support was received by natural and legal persons engaged in agricultural production and eligible cooperative societies. In 2019, 2,668 applicants, mainly small and medium-sized family farms and 16 cooperative societies, applied for this support.

Such a support program was important for both farmers and cooperatives taking out loans, as well as for banks issuing loans, therefore the leading agricultural organizations: the association "Farmers' Council", "Cooperation Council of Agricultural Organizations" and the "Association of Latvian Agricultural Cooperatives" call for finding funds for partial repayment of loan interest in 2021 and in the following years, so as not to undermine the competitiveness of Latvian farmers.

For 2021, the Ministry of Agriculture's budget draft sub-program 21.01.00 "State support for agriculture and rural development" provides for state support in the form of subsidies of EUR 23,720,490, of which, unfortunately, no funding is provided for investment promotion - partial repayment of loan interest for producers of primary agricultural products and eligible cooperative societies.

ZSA Board Chairman Juris Lazdins: "One of the Government's priorities for mitigating the effects of Covid-19 was to focus on warming up the economy, including the agricultural sector. The loan interest repayment program is essential to promote agricultural production and modernization. Unfortunately, the Ministry of Agriculture has chosen other priorities and does not listen to the opinion of producers. This will negatively affect the competitiveness of our agriculture in the European Union.”