For Growth on the Earth

ActusQ November Newsletter

In November – the month of frost – we have expected the first snow. Although the first half of the month was mostly unusually warm, the end of autumn has brought cold northern winds and lots of snow! Nature has gone into winter dormancy and very soon we will celebrate the Winter Solstice.

While the peace of winter reigns around, the new year 2023 is fast approaching, which will mark the beginning of the new period of the Common Agricultural Policy. Latvia’s strategic plan envisages investing 2.5 billion euros in the development of the agricultural sector and rural areas from 2023 to 2027, allocating the largest part of funding, or 1.7 billion euros, to direct payments. Many significant changes in support payments are expected, so farms should actively start planning the next year’s work.

In the following pages of November newsletter, we would like to inform you on the topicalities in Latvian political, financial and agricultural sectors. Have an inspiring start to winter!

Stand with Ukraine!

“In the wake of terrible war terror from Russia to Ukraine, more than 3.8 million people have been forced to flee the country, turning the Ukraine crisis into the fastest growing refugee crisis since World War II. Another 6.5 million have been forced to leave their home and have been displaced within Ukraine. At the same time, about 13 million have been ‘stuck’ in war zones and cannot leave,” is reported United Nations.

People in Ukraine need urgent specific help! The whole world stands for Ukraine and a lot of aid is collected and sent to Ukraine from around the globe. Yet much of this help do not reach the people or deliveries are too slow.  Many of the large humanitarian organizations have been challenged to deliver aid because they are unfamiliar with the country and do lack the capabilities to move aid rapidly across the border.

Government of the Ukraine has mandated UALG (Ukraine Aid Logistics Group) – a group of professionals from Ukraine’s logistic business – to speak to the governments, businesses and NGO’s of the world to source and coordinate the flow of necessary aid. In the first few weeks, UALG moved thousands of tons of aid into Ukraine from two receiving hubs in Poland and Romania, and managed documentation for additional thousands of tons more. UALG also facilitated an agreement between Polish and Ukrainian customs to enable 5,000 minivans with aid from small private donors to cross the border unimpeded. UALG source and deliver hundreds of cross-country vehicles for Border Guard of Ukraine.

Now UALG need’s help from outside – from any of you – to continue their work, as fewer and fewer transport and warehouse providers can commit their resources on a pro bono basis for a long-standing war situation in Ukraine. All the funds you donate to UALG’s Polish-registered charity fund, the Ukrainian Community Foundation, will make a difference on the ground – fast and targeted, within few days, not weeks and not months.

We understand that war terror seems far away when daily life is not directly related with Ukraine. Ukraine fights for lives of people, for peace of a sovereign country. We believe that most of readers have already donated to support the Ukraine. The war terror from Russia is however lasting and it is crucial not to leave Ukraine alone during this lengthy fight. War is a hungry beast, destroying lives of people, destroying businesses and economic patterns, destroying country itself. 

Please stay close to Ukraine! Help to endure with your regular support to efforts of brave Ukraine nation! UALG can ensure that help arrives when it is most needed, rather than too late! Visit site of UALG at www.ualg.org  for further information on how to donate and where to follow expenditure of your donation! 

In these materials you will find specific information about the necessary products and equipment for the Ukrainian government that can be donated:

Funding available for the measure “Investments in tangible assets”

From 10 January to 10 February 2022, the Rural Support Service (RSS) invites to apply for support in the measure “Investments in tangible assets”, which will take place with the following distribution of public funding: 

4.1. Support for investment in agricultural holdings  

The aim of this sub-measure is to support agricultural holdings in order to improve their economic performance and competitiveness, as well as to promote the development of cooperation in ensuring the sustainable management of natural resources and supporting a climate-resilient economy. Type of aid: Investment aid.  

Distribution of public funding:   

  • for the construction and reconstruction of greenhouses – EUR 9 million; 
  • for the poultry or pig farming sectors – EUR 10 million;  
  • for agricultural service cooperatives – EUR 20 million (joint financing in sub-measures 4.1., 4.2., and 4.3.);  
  • 64 124 166 EUR – distributed financing by the regional agricultural administrations of the Rural Support Service for investments in agricultural holdings.  

4.2.  Support for investment in recycling  

The aim of the sub-measure is to increase the efficiency of processing of agricultural products and the added value of products by promoting the development of competitive cooperation and sustainable agricultural production and the introduction of innovations among economic operators.  

The sub-measure supports activities related to the processing of agricultural products and related packaging and pre-processing. 

Amount of funding available: EUR 11 million 

Type of aid: Investment aid. 

4.3. Support for investment in the development of agricultural and forestry infrastructure  

The aim of the sub-measure is to improve infrastructure related to agricultural development, increasing forest productivity, improving stand health and timber quality, maintaining and enhancing the long-term contribution of forests to the global carbon cycle, maintaining biodiversity and mitigating climate change, and increasing the competitiveness of agriculture and forestry.  

The sub-measure supports the following activities:  

  • reconstruction and renovation of drainage systems of national and local government significance and municipal hydraulic structures, including reconstruction or renovation of roads adjacent to the rebuilt or renovated drainage object (without pavement);  
  • construction and reconstruction of access roads to sites and production facilities, including railway access roads (without pavement).  

Amount of funding available: EUR 20 million  


Project application forms and measure conditions are available on the Rural Support Service website in the section “Support measures”. Project applications must be submitted using the RSS Electronic Application System.  

The Rural Support Service announces the acceptance of project applications within the framework of the European Agricultural Fund for Rural Development (EAFRD) and the Rural Development Program.  

Information source: Rural Support Service 


 

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