At the end of last month the Latvian Centre for consultation and education in rural areas (LLKC) presented to the public the results of a study on future scenarios of development of Agriculture of the Republic. According to these data, the industry turned out to be the face of neradostnogo the future: while maintaining the current regional policy and the low level of employment for farmers already in enough soon may be reduced by one third. Such a pessimistic forecast called into question the whole agricultural strategy of the State the past two years.

Lack of population and low productivity

During the presentation of the results of the study LLKC, Economist Andris Miglavs recalled that at the present time in the villages and towns of Latvia there are 322 thousands of jobs. However, over the next ten years, their number is likely to drop to 58 thousand and at 62 thousand-in services. In just the past five years, the number of employed workers in rural areas decreased by 30 thousand-though their GDP has not changed. On this basis, the authors of the study concluded that the growth of GDP at market prices nearly froze. In addition, they recalled and the negative demographic trends. According to the statistics of the 119-year rural district only 20 years marked by increases in population. However, if in the Riga area, population density is 140-180 people per square kilometer, for example, in the Rucavskoj district (Liepaej)-a total of 4.5.

Indeed, the problem of social degradation and unemployment are “erosion” of labour needed for development. In addition, the level of socio-economic concerns in Latvia varies depending on the regional origin of a region or locality. The fact is that up to the present time, the Latvian regions lag in development and the living standards of the capital. In Riga the largest salaries and low levels of unemployment. In the opposite: many people cannot find work and leave, businessmen are inactive, tax revenues are minute. Accordingly, although the Riga region has only 16 per cent of the territory of Latvia, he only lived relatively well. Gross domestic product per capita is almost double the figures of other edges, and wages at 25-30 per cent higher than the average for the Republic.

Difficulties in all regions are: low economic activity, high mortality rates and unemployment, a paltry wages, lack of skills and infrastructure, lack of investment mode then. People will die of alcoholism and stress: it has surely holds the European “record” on the deaths from heart attacks and strokes. The most catastrophic situation in Latgale, which is considered the most backward region of the State. Mortality here six times bigger than the birth rate.

In turn, the Minister of agriculture Strauûma in the course of the Conference, Mrs. Laimdota LLKC stressed that the main problem of agriculture consists not only in the loss of human lives but also in low productivity. On this aspect of Latvia is in the penultimate place in the EU. For example, in the production of milk for value-added Latvia beats only two EU countries, whereas subsidies on 1 litre of milk is the fourth largest of all Alliance. Such a striking mismatch highlighted the extremely unsustainable farming.

Latvian experts are trying to construct a possible positive development scenarios of the country’s agriculture-based on the use of existing resources. As Miglavs in Latvia all processed grains, skupaûŝeesâ from farmers (now much of it is exported), this would increase the GDP of 33.4 million. lats and would create at least 700 new jobs. In turn, if the grain and its derivatives also not exported, and used in the fattening of livestock production and marketing in monetary terms increased to 129 million. lats, while the number of jobs to increase by 4. According to the Economist, the resources still available, but one in four hectares of rural land is much more appropriate. As joked a. Miglavs, the land can be owned by any Namibians, but you must use its most productive.

However, present at the presentation of the study LLKC peasants demanded greater specificity. In particular, the farmer Valdis Dzenis called clearer future programme development. And the head of the Latvian Council for cooperation of agricultural organizations Edgar Trejberg asked the authors of the study explained, provenance money for development, taking into account the fact that the purchase prices for agricultural products is extremely low. But Miglavs assured that over the next three years, prices can reach the norm-they are now too the influence of speculators, preventing the normal development of the market. The researcher said that he sees the possibility of creating new jobs in rural areas not only in purely agricultural industries, but also construction, logistics and transport.

Road to twenty years

Here you need to have an understanding of how the passage of Agriculture of Latvia over the past twenty years. All the food and other sel′hozprodukty from December 10, 1991, began to be implemented in the Republic of Latvia on free prices. In the early 90 ‘s of mass destruction turned the de-collectivization of large profitable farms, fixed assets, reducing livestock numbers. At the same time, the decline in production has not made local products more competitive. For example, meat at 50-65% worked at a cheap import raw material.

But then, at the beginning of the 90 ‘s, many began to buy up the land formerly belonging to the collective and State farms, make independent. Most, however, experienced a rude awakening: dream of abundant harvests, the root of those aliens, and tolpah urban labourers who are willing to bend the bowl with broth “, have remained dreams. It was soon found out, that the possession of even relatively large areas of arable land could not ensure the minimum human life. For example, some farmers in countryside of Latgale, were forced to abandon cars, television, even electricity, either to sell off almost all livestock, while most of their plots remained untreated-unprofitable. Historically Latvia had a hutorskaâ system, where individual farms are often quite far apart from each other. Diligently cultivated the principle of non-interference in other people’s business now turns into a complete indifference to the neighbors.

A significant turnaround in agriculture after the entry of Latvia into the European Union in May 2004, when the industry began to receive funding from the EU. Thus, in 2003, subsidies to agriculture amounted to 15.7 million euros and revenues from agricultural activity-136.6 million euros, already five years grants have reached-246 million euros and revenues without subsidies-only 74 million euros. In subsequent years the volume of income without subsidies from agricultural activity is still just declined. The former Minister of agriculture Mr. Mārtiņš Roze even said that direct subsidies to European farmers are degradiruûŝim way-because the records of their use requires no one. Latvian farmers are currently 90 euros per hectare (with an average level of subsidies in the EU, at 266 euros per hectare). As a result, a peasant, receiving money for the development of production, not always puts them in reality. According to Rose, Brussels should consider other forms of financial assistance. For example, farmers might be more profitable to not receive direct subsidies and monetary support to the real productive projects.

By the way, it should be noted that the entry into the European Union has brought farmers not only benefits. Upon joining the Alliance Latvia has lost all three of its refineries working in Liepaja, Jelgava and Jekabpils. In due course they provide full coverage of the domestic market and had 330 households. In 2006, the year of the reform of the EU sugar industry-on the pretext of opening the market to third countries and prices for sugar. As a result, if before the reform of the sugar has been produced in twenty-three countries of the European Union of the twenty-seven, after it had been closed all plants in Latvia, Portugal, Ireland, Bulgaria and Slovenia. According to some experts, the sugar industry could be retained, but the authorities have chosen to implement European directives obediently …

The industry suffered and other shocks. Thus, in 2008 and 2009, the grave crisis touched dairy. In those years of purchasing prices for milk due to weak world demand went through a severe recession. In addition, gas prices took off, fuel, and fertilizer-that created the problem, and Latvian peasants. Support the dairy industry at that time, the European Commission had contributed funds to its structuring.

Will Lee farmer grants?

Beginning 2009, entered into the history of a new colourful page-”marches on the capital tractor.” The peasants then personally visited the its technology to the capital to protest: why the Government in the face of the first blow of the global crisis has been the salvation of banks rather than real output? Protesters have demanded and obtained the resignation of then Minister of agriculture Martin′ša Rose. Viktor Kalans, the then Chief of the Bureau of sel′hozkonsul′tacij of Daugavpils district, explained BakuToday the gravity of the situation at the time: “the Government worked to subvert and Kalvitisa, in fact, the collapse of the national economy. Farmers generally find themselves in dire situation: they are, naturally, were thrown. After all, “fatty” power actively urged them: take credit, extend, are being purchased new equipment! Now it turns out that the farmers simply have nothing to give back these loans … Let’s say I took credit for 5 per cent. And then for a month up to 14.6 per cent rate bounces! Or another example: discrepancy between the amount of money you pay a per litre of milk and its price on the counter. Milk is a perishable product you want to sell with the hands quickly. That’s forced peasant to give him 16 centimes per litre. While in the store the same liter is from 68 to 80 centimes! If the situation had been properly established, the 30 per cent would receive 30-plus seller and 30-farmer. When the aspect ratio the same a liter in a shop would cost 45 centimes. However, on the product were only those who had nothing to do with its creation. With meat and grain is approximately the same situation …. “

This situation has resulted in many farm bankruptcies. However, the emergent foreign land buyers took advantage of the vacuum created in Latvia in great numbers.

To cope with the catastrophic situation, the Government has allocated to peasants 27 million lats. 7 million identified as subsidies for every litre of milk made below cost. Even 17-gone as the guarantee of a “bank holiday” for debtors. As a result, the situation gradually subsided. As a result, during the past year has even achieved some success. In 2011, the 17% was exported on the foodstuff and agriculture more than the year before. The food and agriculture industry rank third in the Latvian export (14% of total exports in Latvia). Recovery industry highly contributed to increases in the price of agricultural products on world markets. In turn, banks gradually resume credit èksportosposobnyh agricultural enterprises-although the risk-adjusted owing to unattractive enough bankrotirovaniâ tax policies in the country.

Now power sees major opportunity for peasants to work and development of the agricultural sector to attract more European money. In particular, it was stated by the publication “Business Conduct” President Andris Berzins: “I believe that the issues of job creation, employment and immigration issues to focus on regional development. Simply put-the village. Since the exodus of residents is from the countryside. It seems to me appropriate to rely on agriculture, but before that Latvia should do all the possible and impossible to increase subsidies for agriculture. Now we get about 40% less than other countries on average and less than our Baltic neighbours. We get 90 euros per hectare, Greece-about 400 euros and the EU average that figure stands at 160 euros. It turns out that what we produce in our land, we simply cannot compete on price. And it is essential for us to this situation as soon as possible to deploy his side, getting at least average 160 euro per hectare. Otherwise our losses in the countryside would be disastrous. Now in many parts of the school are closed because there is no one to learn-there are no people. You know, I personally do not see other options for saving the village and create a serious barrier for those who migrate from there just because no work. But rural development can only be associated with local resources. I have no illusions that tomorrow there will be a major investor and invest millions in development of a production … “

It is believed that the hope for increased evrodotacij is quite faint. It is linked with the General increasing Eu problems when even question that maybe the euro area (which is still hard to Latvia) in its present form could not be maintained. But if Latvia would not be able to find additional money for their agriculture, is to face further outflows of local peasants, raz″ezžaûŝihsâ in labour emigration.