At the same time, the Ministry of Agriculture is grateful to Prime Minister Krišjānis Kariņš (JV) and his team for the result achieved in the historically longest and most complicated negotiations on the EU multi-annual budget. As a result, the financing of Latvia’s Common Agricultural Policy in the period 2021-2027 will increase by 24.6% compared to the current period.
Krieviņa reminded that in total in the 2021-2027 programming period Latvia will receive 3.347 billion euros in the EU Common Agricultural Policy, including 2.41 billion euros in direct payments, which is a total increase of 40% compared to the current period. Latvian farmers will receive 82% of the EU average level of direct payments in 2027, compared to the current 75% of the EU average.
“This is still relatively far from the EU average and our Latvian farmers remain in the last place among the EU countries with the lowest level of direct payments even with this good result of negotiations. Thus, our farmers will be in an unequal competitive environment for the next EU programming period compared to other EU countries, as resource costs, fuel and raw materials are paid the same across the EU and their prices do not fall, “she said.
Krieviņa added that in the 2021-2027 planning period, 851 million euros have been earmarked for Latvia for rural development, which is also a cause for concern. “As a result of these negotiations, funding for rural development remained significantly reduced. This is € 118 million or 12% less than in the current programming period,” she said.
According to the representative of the Ministry of Agriculture, although the decrease in rural development funding seems to be compensated by the allocation of European Economic Recovery Fund (EAFRD) money – Latvia will receive 86 million euros from the EDF, but there is a lot of uncertainty about this money. The Ministry of Agriculture sees this as a temporary support and intended for relatively narrow goals – structural changes in rural areas and achievement of the ambitious goals of the EU Green Course.
As reported, with the adoption of the EU multi-annual budget and the decision to establish the EU Reconstruction Fund, Latvia will have 10.5 billion euros available in the next seven years, which is a 39% increase compared to the current EU multi-annual budget period from 2014 to 2020. In addition, it will be possible, if necessary, to borrow around EUR 2.5 billion on very favorable terms.
An increase in the amount of direct payments has been achieved in agriculture – if now farmers receive 179 euros per hectare, then in 2022 they could receive an average of 200 euros, but in 2027 – 215 euros per hectare.
Latvia will still receive more than it contributes from the total EU budget – an average of 3.6 euros for every euro paid.
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