For Growth on the Earth

Support for crop, animal and plant insurance

The Rural Support Service (RSS) invites to submit project applications for the “Crop, Animal and Plant Insurance Premium” sub-measure of the “Risk Management” measure. The acceptance of applications for projects shall take place from 19 April 2021 to 1 July 2021. Total public funding is EUR 6 million.

The purpose of aid is to promote the involvement of farmers in the agricultural sector risk reduction by partially covering the costs of the insurance premium.

Support shall only be granted for the existing insurance policies fully paid until 1 July 2021. The policy may be paid by instalments, but the final payment may not be later than 1 July 2021.

In order to receive the support, the applicant must submit the application, a copy of the insurance policy and copies of documents confirming the payments of insurance premiums. Project applications can be submitted to the RSS Electronic Application System (EAS) or signed with a secure electronic signature.

Acceptance of project applications takes place within the framework of the European Union European Agricultural Fund for Rural Development and the Rural Development Program.

Information source: Rural Support Service

Application for area payments

Application for area payments

From April 7 of this year, farmers will be able to apply for area payments by filling the Unified Application in the Electronic Application System (EAS) of the Rural Support Service. 

Given the prevalence of Covid-19 and the restrictions for face-to-face work, the Service will also provide all necessary support by phone to customers who are unable to complete the information in EAS themselves – Service staff will be able to complete and submit the Unified Application during the phone conversation. The Service did the same in the spring of 2020, when more than 10,000 clients received assistance. 

Already for six months, farmers can fill out the Preliminary area payment applications in EAS. This allows gradually fill the necessary information in the application and calculate whether greening and other requirements will be met. If the farmer fills in the information in the Preliminary application, this application must be submitted to the EAS from 7 April. 

Important dates for the 2021 season: 

  • April 1 – submission of applications for specification of field blocks ends; 
  • April 7 – application for area payments starts; 
  • May 24 – deadline for applying for area payments; 
  • June 15 – final the deadline for applying for area payments with 1% reduction in the amount of support for each delayed working date, counting from May 25. 

Information source: Rural Support Service

Latvia attracted EUR 1.25 billion on international finance markets

Latvia attracted EUR 1.25 billion on international finance markets

On Wednesday, 10 March, the State Treasury issued ten-year bonds on financial markets on Latvia’s behalf, raising financing of EUR 1.25 billion. 

The issued ten-year bonds have profitability of 0.105% and coupon rate 0.000%, which is historically the lowest level of long-term bond profitability and coupon level achieved for Latvian state bond issue on international financial markets, according to the State Treasury. 

Latvia’s Finance Minister Jānis Reirs comments: «The State Treasury’s performed borrowing deal has allowed us to attract long-term resources under very good economic conditions. This deal is the first step towards attracting necessary funding on international markets, because we need to secure resources for both battling Covid-19 and supporting the economy, as well as financing other needs of the budget and state debt.» 

The biggest accomplishment with investor demand both numerically and volume-wise is the interest from more than 100 investors. Their general demand volume reached EUR 2.8 billion. 

The issued bonds were mostly procured by European asset managers and banks from Germany, France, and Britain. 

Information source: Ministry of Finance

The loan limit for the purchase of agricultural land has been increased to 1 million euros

On 11 February the government approved amendments to the procedure for granting state aid for the purchase of agricultural land for agricultural production prepared by the Ministry of Agriculture, in order to promote the processing of agricultural land (AL) and production by increasing the loan limit up to 1 million euros. 

The loan available to farmers for the purchase of agricultural land was set at 430 thousand euros in the current regulation, and has not been changed since 2013. Currently there are already farmers whose loan for the purchase of land has reached the 430 thousand euros specified in the regulations and they can no longer receive a loan for this purpose. However, it is important that productive farmers have the opportunity to purchase additional AL. Therefore, the future available loan amount per borrower or one unified company will be set at EUR 1 million. 

The limit for the total area of non-agricultural objects that can be purchased together with agricultural land has also been increased from 20 to 30 percent.  

Until now, the rules contained a restriction that no aid is granted for the purchase of agricultural land from related natural persons. The amendments provide for an additional restriction – the loan will no longer be granted for the purchase of agricultural land from interrelated legal entities. This provision will apply to loans issued after 26 February 2021.  The rules also make a number of clarifications to improve the administration and implementation of the support program. 

More information on support for the purchase of agricultural land is available on the website of the state-owned development finance institution “Altum” (www.altum.lv/en).

Information source: Ministry of Agriculture 

Cadastral values in Latvia

Cadastral values in Latvia

It is planned to continue to apply the current Latvian cadastral values at least until 31 December 2025. This is stipulated by the amendments to the law conceptually supported in the first reading by the Latvian Parliament on February 4.

The amendments set a task for the Cabinet of Ministers to prepare and submit to the Parliament for consideration draft laws ensuring re-evaluation of the amount of state fees related to cadastral value. Among other things, the amendments envisage drafting the laws necessary for the exemption of housing from real estate tax, determine the amount of real estate tax for compulsory shared property, as well as commercial areas and agricultural land.

“While the majority of the Parliament and the government has not agreed on a comprehensive review of the real estate tax system, which would ensure a fair and tolerable tax burden for population and entrepreneurs, the increase of cadastral values should not be allowed,” previously argued Juris Jurass (New Conservative Party), the Chairman of the Legal Commission which is responsible for the progress of the draft law in the Parliament.

In Latvia, the amount of real estate tax is related to the cadastral value of the property. Until now, cadastral values have been frozen to prevent an increase in Real Estate Tax (RET).

In order for the amendments to the Real Estate State Cadastre Law to enter into force, the Parliament must support such amendments in two more readings.

The currently valid cadastral values are calculated using real estate transactions for 2012 and 2013. The State Land Service (SLS) has been developing a new cadastral valuation methodology for several years. Therefore, since 2017, the cadastral values of properties have been frozen and are used, for example, in the calculation of RET and compulsory rent.

In 2017, the Parliament supported amendments to the law, which provided for the freezing of cadastral values of real estate until 2020. At the end of October 2019, it was decided to “freeze” cadastral values for another two years until 2022.

Information source: Latvian Public Broadcasting

Reduced VAT for fruits, berries and vegetables

On Tuesday, 24 November, Latvian Parliament approved amendments to the Value Added Tax (VAT) Law that provide for simplifying VAT usage and reducing VAT to 5% for fresh fruits, berries and vegetables in the final reading. 

Finance Ministry previously explained that the goal of amendments is clarifying VAT regulations to:  

  • simplify application of VAT; 
  • reduce administrative burden and costs; 
  • prevent possible interpretations; 
  • coordinate VAT regulations with other legislative tasks; 
  • promote the operation of VAT system by returning overpaid VAT back to taxpayers. 

Amendments to the law preserve reduced 5% VAT for fresh fruits, berries and vegetables until 31 December 2023 to assist with development of agriculture sectors, reduce grey economy, increase the competitiveness of legally working businesses, as well as assist with consumption of fresh fruits, berries and vegetables in the country. 

To reduce the administrative burden for taxpayers and make costs more efficient for the State Revenue Service (SRS), a single method is to be established for VAT taxpayers to be reported the decision on their registration in SRS VAT payers register. Law amendments are part of the legislative drafts accompanying the 2021 budget law. 

Information source: Cabinet of Ministers, Baltic News Network

Rural Development Program funding for rural development

Within the planning period for the years 2014 – 2020 of Latvian Rural Development Program (RDP), Latvia introduced 16 support activities. In general, since the commencement of RDP implementation, 82 project tender application rounds were announced until late 2019, as well as area payments were paid every year.  

The activity of applicants for support were high. In general, during the project tender application rounds, 48,485 project applications with the total public funding of EUR 1,432.4 million were submitted since the beginning of the planning period, including 34,418 confirmed projects with the total public funding of EUR 898.5 million confirmed by the end of 2019, or 94.0% of the public funding available within the framework of the implementation of project activity.  

The total confirmed public funding in all RDP activities (projects and area payments) by the end of 2019 reached EUR 1,414.4 million, or 92.3%, but the funding paid out was EUR 1,064.4 million, or 69.5% of the funding available during the period.  

The highest amount of public funding, as well as the highest number of approved projects fall within the sub-activity “Support for Investment in Rural Farms”, of the support activity “Investment in Material Assets”. The next largest amount of approved public funding falls within the sub-activity “Basic Services and Renewal of Villages in Rural Areas”. Then the sub-activity “Support of Investments in the Development of Agriculture and Forestry Infrastructure” follows. A high activity is observed in the sub-activity “Support for the Implementation of Actions in Accordance with Community-Driven Local Development Strategy”.  

It is important to mention that in 2019 the area of insured cultivated sown and planted areas of the farms that applied for the partial remuneration of the costs of purchases of insurance policies within the activity “Crop, Animal and Plant Insurance Premium” has increased (more than 1.7 times).  

The payments of support in the area payment dependent activities for the maintenance and improvement of environmental, climate and rural landscape, and the areas applied for support in some activities have slightly exceeded the planned target indicators of the Rural Development Program. 

Information source: Ministry of Agriculture