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ActusQ February newsletter about current topicalities in European and Latvian agricultural sector has been published!
Based on the justification from the Ministry of Agriculture, the European Commission (EC) decided on February 19 to grant emergency support of €4.2 million to Latvian farmers for damages caused by severe spring frosts and intense rainfall at the end of July 2024. The emergency support will be provided to farmers whose orchards, potato fields, and other agricultural crops were devastated or significantly affected by the extremely adverse weather conditions last year.
Minister of Agriculture, Armands Krauze, stated: “The European Commission’s decision to grant emergency financial support is crucial, as the unfavorable climatic conditions of 2024 had a severe impact on fruit and vegetable farming. The Ministry of Agriculture has already begun working with farmers’ non-governmental organizations to determine the swift distribution of this support to the affected fruit and vegetable growers.”
The support is intended for the farmers most affected by the adverse weather conditions to compensate for economic losses that threaten agricultural sustainability, taking into account the actual financial losses incurred by the affected farmers.
Information source: Ministry of Agriculture
The Ministry of Agriculture’s three priorities for 2025:
“Together with other member states, we must immediately work on simplifying the current EU Common Agricultural Policy (CAP) to ensure that EU support funding is invested as efficiently as possible in strengthening and developing rural farms and businesses. At present, CAP is overly complex and imposes a massive administrative burden on farmers and regulatory authorities, which prevents us from allocating funding to rural entrepreneurs more precisely, swiftly, and in accordance with the situation both in Latvia and in international markets.
Another important issue is the significant disparities in direct payment amounts among EU member states, which put Latvian farmers at a competitive disadvantage. Therefore, the principle of equality—so often emphasized at the EU level—must finally be implemented in the distribution of direct payments during the next EU planning period starting in 2028,” says Armands Krauze, Minister for Agriculture.
Currently, global market conditions and local regulations often prevent Latvian food producers from competing with imported products. There is potential for an increase in the share of domestically produced food in both retail and public procurement in Latvia. Therefore, the Ministry of Agriculture will push for immediate measures to promote the inclusion of local food in national and municipal procurement processes, as well as to encourage greater consumption of local products.
Armands Krauze also emphasizes that it is time to review the EU Green Deal requirements to improve Latvia’s economic competitiveness and ensure a balance between economic, social, and environmental interests, so that agricultural and food production in Latvia is not threatened. “The uncritical and excessive implementation of the Green Deal could cause significant harm to the economy. It must be understood that all nature and environmental climate protection measures are financed from revenues, which mostly come from production,” Krauze stresses.
Information source: Ministry of Agriculture
On January 27, at the European Union’s (EU) Agriculture and Fisheries Council (Council) meeting in Brussels, ministers from member states discussed how to strengthen farmers’ influence in the overall food supply chain and what changes to make in the implementation of the Common Agricultural Policy (CAP) to reduce bureaucracy and the excessive administrative burden on farmers and EU member states.
Considering last year’s farmer protests, the European Commission (EC) considered proposals from member states, including Latvia’s, and published recommendations highlighting the need to enhance farmers’ influence in the food supply chains and strengthen cross-border cooperation to prevent unfair trading practices. During the Council’s discussions, Latvia positively assessed the EC’s proposals but emphasized that, instead of introducing new requirements, existing ones should be simplified to provide real benefits to producers.
In the discussion on simplifying the CAP, Latvia stressed that significant changes to EU regulations must be made during the current planning period. The need for changes in CAP implementation was unanimously supported by member states in September 2024, when Latvia initiated the discussion on the Council level. Latvia consistently believes that greater emphasis should be placed on the results achieved by the CAP, simplifying reporting and reducing the impact various technical data collection and reporting methods have on farmers. Additionally, it is crucial to provide more flexibility when applying the current requirements in order to stabilize farmers’ financial situations and avoid hindering agricultural production, which is the sector’s primary task.
In the exchange of views on EU external trade, Latvia again urged the EC to act promptly and raise customs tariffs on products from Russia and Belarus, such as fish, grains, vegetables, fruits, sugar and cocoa products, beer, and others.
When discussing EU free trade agreements, Latvia positively acknowledged the opportunities created by existing and potential agreements for EU producers in third-country markets. At the same time, it reminded the Council of the importance of ensuring equal competition conditions, including welfare and production standards and environmental requirements, for third-country products entering the EU.
The Latvian delegation at the Council meeting was led by the State Secretary of the Ministry of Agriculture, Ģirts Krūmiņš.
Information source: Ministry of Agriculture
ActusQ January newsletter about current topicalities in European and Latvian agricultural sector has been published! At the end of the newsletter you will find selected agricultural real estate offers.
In 2024, the Investment and Development Agency of Latvia (LIAA) facilitated 45 investment projects with a total value of €655.4 million, creating an estimated 2,023 new jobs. The most significant projects this year focused on high-value-added manufacturing, information and communication technology (ICT), energy, and aviation industries.
“This has been a challenging year due to the geopolitical situation and the slow growth of our key external economic partners. However, despite these challenges, the volume of investments attracted is 6% higher than last year. This year, we reorganized LIAA and tripled the number of staff dedicated to investment attraction. Looking ahead, we aim to increase annual investment volumes to €1 billion within five years,” stated Laura Štrovalde, Deputy Director of LIAA. She added that LIAA’s current investment portfolio includes 166 projects with a total value of €10.8 billion.
Climate change has shifted investor priorities toward green projects, including renewable energy, circular economy initiatives, and sustainable production. This aligns with LIAA’s focus on knowledge-intensive sectors with broad economic impact. “We are open to working with any significant investment projects but will proactively prioritize sectors that contribute the most to economic growth, such as energy. Affordable green energy is essential for developing manufacturing and other industries, especially in light of EU and global emission reduction targets,” explained Ms. Štrovalde.
Key Investment Projects in 2024:
LIAA’s Global Reach and Future Goals
Of the 45 projects implemented in 2024:Some projects were secured through LIAA’s economic representations abroad. LIAA currently maintains offices in 20 countries and plans to enhance its focus on investment results. Key target markets for investment attraction include Norway, Germany, Sweden, and the USA, each with two representatives. Additionally, new offices are planned for Spain and Indonesia in 2025. These decisions are informed by consultations with business organizations and analysis of Latvia’s foreign trade trends.
The coming year looks promising for investment attraction. As tariff wars between significant powers continue, Latvia is positioned to attract manufacturers who are hesitant to expand into Asia due to increasing risks. In the US, companies looking to grow in Europe also present opportunities. Furthermore, municipalities are developing industrial parks to foster inward investment. Overall, 2025 is expected to bring moderate economic growth to Latvia, sending positive signals to investors.
Focus on Large-Scale Projects
“This year, we worked on several large-scale projects, including the biorefinery Fibenol in Valmiera and the Elwind offshore wind farm. Other notable ventures include the Fokker Next Gen hydrogen-powered aircraft project. To manage these efforts, we plan to divide our team’s focus: some specialists will proactively seek new clients, while others will concentrate on supporting ongoing projects and companies already operating in Latvia. Currently, 60-70% of investments come from businesses already established in Latvia,” noted Ms. Štrovalde.
Geographic and Sectoral Distribution of Projects
Of the 45 projects implemented in 2024:
Key sectors represented include:
LIAA aims to attract €1 billion in investments between 2023 and 2025, creating 7,500 new jobs. For 2025, the agency has set a foreign investment target of €790 million, underscoring its commitment to driving sustainable economic growth in Latvia.
Information source: Investment and Development Agency of Latvia
Starting from January 1, 2025, all the services previously provided by the Agricultural Data Centre (ADC) will be delivered by the Rural Support Service (RSS).
No changes will be introduced to the range of paid services, and clients will continue to have access to all existing systems and registers. The procedure for animal registration, as well as the European Union’s requirements for the registration and identification of animals, will remain unchanged.
This decision was made to establish a unified system, ensuring simplified and flexible oversight of the agricultural sector while reducing the fragmentation and overlap of state administrative functions.
The consolidation of functions under the institutions subordinate to the Ministry of Agriculture will facilitate faster exchange of information between institutions and private individuals, thereby improving and simplifying services provided to the public and enhancing their quality. Since RSS has nine territorial units – regional agricultural administrations – farmers will continue to receive the necessary services in their regions.
RSS will also adopt the practices of previous years, ensuring that farmers can order and receive animal identification tools. Additionally, RSS will represent national interests in international organizations overseeing and evaluating agricultural animals, including the International Committee for Animal Recording (ICAR) and the Interbull Centre for the evaluation of breeding bulls.
A commission established by the Ministry of Agriculture will ensure the inventory of ADC’s material and non-material assets, financial resources, and obligations by December 31, 2024, as well as the transfer of archives and record-keeping to RSS. Changes related to the reallocation of funding between institutions will be carried out within a single state budget sub-program. The commission will also assess the number of personnel to be transferred from ADC and prepare the ADC’s closing balance sheet.
Source of information: Rural Support Service
On December 10, Latvian government approved amendments to the regulations governing support from the European Agricultural Fund for Rural Development (EAFRD) for implementing area and animal-based commitments. These amendments increase the 2024 support rates for organic farmers in two agri-environmental measures – LA10.4 and LA11 – as well as for all those managing biologically valuable grasslands under measure LA10.5.
With the rate increase*, farmers who implemented interventions LA10.4, LA10.5, and LA11 in 2024 will have their support recalculated. As a result, the total support amount they receive will be higher than initially planned in the spring.
Since the Rural Support Service has already started distributing EAFRD payments for area- and animal-based support, the support rates for farmers’ 2024 spatial applications will be recalculated by the end of December. This recalculation will include the increased rates and other additional adjustments.
Information source: Ministry of Agriculture
One of the largest grain exporters in the Baltics, LATRAPS has successfully raised €8 million during its public bond offering with a fixed interest rate of 7.5%. The total demand for the bonds exceeded initial expectations, reaching more than €12 million, surpassing the initial bond offering target by 50%.
Interest from both retail and institutional investors has been strong since the publication of the Information Document, emphasizing the strength of the agricultural sector and the potential of the ASNS Ingredient project in the Baltics. Over 300 private and institutional investors took part in the public bond offering. In terms of investment volume, Latvian investors made up to 90% of the total demand.
Roberts Strīpnieks, Chairman of the Board at LATRAPS, commented: “The results of our first public bond offering reflect the community’s interest in participating in the development of the agricultural sector and in strengthening Latvia’s name on the global economic map, for which I am grateful to every investor. From today, not only the 1220 members of LATRAPS are involved in this important process, but also more than 300 investors. I am pleased that the goal of this issuance is ambitious and tangible for all of us together – to build the largest pea protein isolate factory in Northern Europe, ASNS Ingredient, where construction is planned to start this month.”
“LATRAPS example illustrates that an issuer with a good reputation, solid financial performance and well-developed growth plans is not only able to attract significant interest from institutional investors, but also motivates an increasing number of Latvian private investors to start their investment journey in bonds. We are happy to see substantial interest from Latvian investors, as every LATRAPS bond investor will help the issuer implement one of the largest investment projects in Latvia in recent years,” assessed Kristiāna Janvare, Head of Investment Banking at AS Signet Bank.
Estonia’s largest farmers association, KEVILI, also expressed its views on the LATRAPS bond offering: “We are proud of our Latvian colleagues and fully support them in this public bond offering. We see it as setting a bold example for other farming associations in the Baltics, including KEVILI. Agriculture, especially the cultivation of grains and rapeseed, is an area where we have much in common to strengthen our cooperation. Estonian farmers will take the opportunity to supply peas to the new ASNS Ingredient facility, thereby fostering the growth of agricultural exports from our region and enhancing the global recognition of the whole Baltic agricultural sector.”
As demand for the bonds significantly exceeded the issuance volume, the allocation to investors is made according to the principle of proportionality, aiming to establish a stable, diversified, and reliable investor base.
Following the bond issuance, LATRAPS will submit an application to Nasdaq Riga for the listing of the bonds in the Nasdaq Baltic First North alternative market.
The bonds will be settled on December 12, 2024. Bondholders will receive quarterly coupon (interest) payments, with the first coupon payment being made on 31 March, 2025.
The arranger of the bond issue is AS Signet Bank, while legal advice is provided by the law firm TGS Baltic.
Information source: Latraps
