Results of the first three years of work of the Latvian Land Fund

INFOGRAPHICS

Three years ago, on July 1, 2015, the Latvian Land Fund (LNF) began operations. It was established to promote the protection and accessibility of agricultural land resources, rational, efficient and sustainable use of them at the national level, as well as the preservation of agricultural land (AL) areas for the needs of agricultural production today and for future generations.

"The Latvian Land Fund and the land purchase lending program, which has gained great popularity among farmers, are two very effective support measures that additionally stimulate the development of business in rural areas and positively affect the socio-economic situation in rural areas," said Minister of Agriculture Jānis Dūklavs with satisfaction.

To achieve this goal, the ZF strategy envisages accumulating approximately 6,000 ha of LIZ by the end of 2019, leasing it to agricultural operators, including 1,000 ha with lease and repurchase rights to property sellers. Information provided by the ZF manager – the Development and Financial Institution “Altum” – indicates that with the current transaction activity, this goal could be achieved by the end of 2018. After achieving the existing goals, new ones will be set to promote the return of LIZ to agriculture and involvement in agricultural production.

All ZF properties are primarily leased to Latvian farmers. ZF transaction activity is typical for Latvia – more activity is observed in Zemgale and less in Latgale.

“Since October 2017, we have changed the conditions and for nine months now, the Latvian Land Fund has been offering farmers the opportunity to sell agricultural land to the fund with the right to lease and repurchase it from the seller, or the so-called reverse lease service. Reverse lease gives farmers the opportunity to stabilize production and organize cash flow in the short term. This is especially noticeable this year after natural disasters. It is a unique opportunity to organize a company without changing the ownership structure and without assuming additional financial obligations,” emphasizes Minister of Agriculture Jānis Dūklavs. The demand for the reverse lease service is greater than initially planned. As part of reverse lease transactions, ZF has already purchased 58 real estate properties with an area of 1,078 ha for a total amount of 3.6 million euros.

During its three years of operation, ZF has reviewed a total of 1,688 applications and purchased, including properties acquired as a result of reverse lease transactions, 338 real estate properties covering an area of 5,853 ha for a total amount of 16.03 million euros, leased 332 properties covering an area of 5,768 ha, and returned 224 ha to agricultural production.

Source: Ministry of Agriculture