Current events

Support for the Latvian vegetable sector

On July 24, representatives of the association "Farmers' Council" (ZSA) met with the Minister of Justice Jānis Bordāns to discuss the situation regarding the expected increase in cadastral values for agricultural land, which would also significantly affect the increase in Real Estate Tax (RHT).

 

Representatives of the ZSA insisted that the increase cannot be allowed in such amounts, as it will create a significant additional financial burden on farmers and hinder the development of agriculture in Latvia. In order to organize and inventory the cadastral values of agricultural land, the ZSA proposed to reduce the NIR rate from 1.5% to 0.2%. During the conversation, the issue of canceling the Land Registry fee in the case of consolidation of agricultural land was also discussed. Currently, the Land Registry fee is applied in the amount of 2% when purchasing or changing agricultural land. In addition to the Minister, the ZSA made proposals on how to prevent the increase in NIR for those land units that are smaller than 3 ha. The Minister appreciated these proposals and is ready to work on them.

 

In order to ensure low prices for customers and growth for local producers, on July 20, Maxima, ZSA and the Association “Council of Agricultural Organizations” (LOSP) started collecting signatures on the “Mana balss” portal for the initiative “Let's Reduce VAT on Food Products”. Its goal is to initiate changes in legislation by setting a reduced VAT rate of 51% for food products – fresh meat, fresh fish, eggs, dairy products, while also maintaining it for fruits and vegetables typical of Latvia.

 

The VAT reduction for Latvian-specific fruits and vegetables, which was introduced for a three-year period in 2018, has made a great contribution to both farmers and society as a whole. The shadow economy in this sector has also decreased. Although fluctuations in food demand are usually insignificant, this initiative has increased the consumption of fresh fruits and vegetables by as much as 14%. This shows that society responded to the price reduction and should be given the opportunity to take the next step towards a healthy and high-quality diet by reducing the VAT rate to 5% for fresh meat, fresh fish, eggs, and dairy products.

 

On July 6, the ZSA, the Minister of Agriculture, LOSP, the Latvian Association of Agricultural Cooperatives, the Latvian Traders Association, and the Latvian Food Traders Association signed a memorandum of cooperation to promote the availability of high-quality fruits, berries, and vegetables produced in Latvia to consumers and to support Latvian fruit, berry, and vegetable producers in overcoming the economic consequences of the Covid-19 crisis.

 

The main task of farmers is to provide the population of Latvia with the necessary basic food products. However, local vegetables, fruits and berries are not always available in sufficient quantities in store chains, therefore, the participating organizations hope to promote the availability of products grown in Latvia to the population by concluding this memorandum. In the future, ZSA will also prioritize in its work increasing the proportion of local fruits, berries and vegetables on store shelves to a dominant level and to provide the population of Latvia with fresh, healthy and tasty local products.

 

On June 10, representatives of Latvian farmers' organizations, including the Latvian Agricultural Federation, met with the President of Latvia, Egils Levits, to discuss the development of the agricultural sector, including the European Union's multiannual budget for 2021-2027 and the financing of the Common Agricultural Policy (CAP). On June 11, representatives of Latvian farmers' organizations also discussed these issues remotely with Prime Minister Krišjānis Kariņš.

 

During the meeting, representatives of farmers provided both the President and the Prime Minister with an insight into the situation in agriculture, and we elaborated on issues related to agricultural employment, attracting migrant workers, and increasing the competitiveness of products produced in Latvia both in the local market and globally.

 

As the fruit, berry and vegetable harvest approaches, the ZSA called on the responsible institutions to be more actively involved in resolving border crossing issues so that guest workers from third countries can be brought into agriculture.

 

The association "Farmers' Council", the Cooperation Council of Agricultural Organizations and the Latvian Association of Agricultural Cooperatives sent an official letter to Prime Minister Krišjānis Kariņš, Chairman of the Saeima Committee on National Economy, Agrarian, Environmental and Regional Policy R. Nemiro, Minister of Economics J. Vitenbergs, Minister of the Interior S. Ģirģens and Minister of Agriculture K. Gerhards, expressing concern about the shortage of workers in agriculture, especially in the harvesting of fruits, berries and vegetables.

 

Latvia grows a diverse range of fruits, berries and vegetables, the harvesting of which, like in all EU countries, requires intensive manual labour. The harvest season is approaching, but interest in the job advertisements posted was minimal, despite the stated gross monthly salary of 900 euros. Farmers are disappointed by the pessimistic prospect that the harvest grown in Latvia could remain in the field, while at the same time our consumers would buy berries, fruits and vegetables grown in Poland and other countries.

 

Given that direct payments to Latvian farmers are the lowest in the European Union, it is most difficult for us to compete with farmers from other countries. Over the past 15 years, our workforce has migrated to EU countries, and we are currently seeing that Latvians who returned from other countries are still choosing to leave. Pupils, students and temporary workers cannot fully replace the shortage of workers in seasonal agricultural work. However, there are sectors in agriculture where manual labor is unavoidable, because it is not possible to replace it with equipment everywhere. That is why the shortage of workers in the country must be compensated with guest workers from third countries. None of the developed European countries has managed without guest workers so far and will not.

 

Therefore, when assessing compliance with the restrictions adopted due to the pandemic, the ZSA asked the responsible institutions to:

  • the possibility of bringing guest workers to Latvia and employing them in agricultural sectors;
  • to be more actively involved in resolving border crossing issues;
  • allow migrant workers to start work immediately if no signs of respiratory infection are observed and there is confirmation that they are not infected with Covid-19.

 

Also, in response to the economic consequences of the COVID-19 crisis, on April 27, the ZSA sent a letter to all Latvian municipalities calling on them to postpone and consider the possibility of reducing the property tax on agricultural land, as well as not to apply late fees for late property tax payments in 2020.

 

Latvian farmers had to maintain not only their competitiveness in the market, but also their long-term viability due to the COVID-19 crisis. Therefore, any support for farmers was and still is very important, and for some it may even be decisive in getting through this crisis. Taking into account that agricultural companies are among the largest payers of NIS taxes and providers of jobs in rural areas, the ZSA called on local governments to take a step towards farmers and apply the relief provided for by law.