For Growth on the Earth

The European Commission approves amendments to the Strategic Plan of Latvia’s Common Agricultural Policy for 2023-2027

On Thursday, September 7, the European Commission (EC) approved the amendments to Latvia’s Common Agricultural Policy Strategic Plan (CAP SP) for 2023-2027 developed by the Ministry of Agriculture (MofA).

Latvia’s CAP SP for 2023 – 2027 is a medium-term policy planning document that determines support priorities and support instruments in the field of agriculture, as well as rural development. When starting the implementation of the CAP SP and developing the national legislation for the application of the CAP SP, it was found that it is necessary to improve several conditions and measures (interventions) for receiving support in order to ensure their correct administration and application according to Latvian agro-climatic conditions. Therefore, on May 9, 2023, a draft amendment to the CAP SP was submitted to the EC.

Amendments have been made to improve:

  • definitions of agricultural land maintenance and crops;
  • the conditions of good agricultural and environmental standards, such as the preservation of perennial grasses, sowing on steep slopes and the creation of landscape elements in arable land;
  • the conditions of eco-schemes, assuming that from 2024, farmers will have the opportunity to receive eco-scheme support for a wider range of crops;
  • several rural development interventions. For example, in the agro-environmental and LEADER interventions the conditions for appropriate receipt have been specified, but in the intervention LA6 “Support for young farmers to start a business” the period of obtaining education was extended from 3 to 4 years. Likewise, the monitoring period for rural development interventions has been reduced from five to three years for small projects (with the amount of attributable costs up to 50 000 euros);
  • sectoral intervention measures and in the future, when developing operational programs of producer organizations, it would be possible to also include covering staff and administrative costs related to the management of the operational fund or the preparation, implementation and follow-up of the operational program.

With these amendments, no new support measures (interventions) were introduced in the CAP SP, nor were any measures deleted. The amendments made do not affect the goals and results indicators originally planned and indicated in the CAP SP, and the developed financial plan is not changed.

Currently, the specialists of the Ministry of Agriculture continue active work on the development of national legislation in order to implement the CAP SP amendments and start their implementation.

We draw your attention to the fact that already this year, amendments to the rules of direct payments come into force, which cancel the requirement to harvest the grass mass by September 15, except for biologically valuable grasslands. The defined reference area of perennial grasses has also been reduced. Also, by carrying out winter sowing on steep slopes until September 20, the farmer can choose the most suitable sowing direction.

On the other hand, the changes in the intervention LA6 “Support for young farmers to start a business” are already included in the approved regulations of the Cabinet of Ministers on the implementation of the intervention.

2.5 billion euros have been earmarked for the implementation of the CAP SP for 2023-2027, where the largest part of funding, or 1,714 billion euros, will be allocated in the form of direct payments. 0,791 billion euros are earmarked for rural development measures and 10,1 million euros for support measures of the common market organization.

Support measures for agricultural producers to prevent the consequences of a devastating storm

Taking into account the consequences of the storm of August 7, 2023, which caused significant damage to agricultural production and processing, as well as the need to repair the damage caused to production buildings or structures in the shortest possible time, the Ministry of Agriculture (ZM) has decided to immediately announce the submission of projects for the “Investments in tangible assets” measure in the sub-measures “Support for investments in agricultural farms” and “Support for investments in processing” for the renovation of production buildings and structures of agricultural production or agricultural processing enterprises.

Applicants can submit project submissions until December 1, 2023, and after submitting the projects, the Rural Support Service (RSS) will immediately evaluate the projects and grant support. Within the scope of the projects, expenses for the renovation of buildings or structures of agricultural production or processing of agricultural products or the purchase of necessary building materials are eligible. In order to receive support, the applicant must submit supporting information that proves weather damage on August 7, 2023.

Since this investment support is for the damage caused by the storm, the project will not require investment in economic activity indicators and goals. For this financing can apply agricultural producers who have registered as performers of economic activity and who have had income from agricultural activity or processing of agricultural products. The planned funding for the event is three million euros, but if the reserved funding exceeds 80% of the available funding, a proportional reduction will be applied to the applications.

In addition to supporting farmers, the European Commission’s emergency funding for EU farmers was granted by the regulation of 14 July 2023 on EU emergency support for agricultural sectors due to economic and climatic conditions. The EU emergency aid granted to Latvia is EUR 6.8 million with the possibility of granting additional state aid, which does not exceed 200% of the granted amount.

The Ministry of Agriculture has prepared an informative report in which it will call on the government to grant state co-financing in the amount of 200% – the informative report is planned to be submitted to the Cabinet of Ministers for consideration in the near future. The conditions for granting support should be determined by the member states themselves, based on objective criteria and taking into account the economic losses incurred by farmers. Aid must be granted in such a way as not to create distortions of the market or competition. In order to prevent the risk of overcompensation, Member States should take into account other state or EU aid granted to prevent these economic losses when granting aid. The emergency aid must be paid by January 31, 2024.

In the informative report “On the critical situation in the agricultural sector, which affects the economic viability of agricultural producers and the possible solutions for mitigating the negative impact”, the government will be informed about the critical situation that has developed in the agricultural sector in connection with a set of several unfavorable conditions – the high prices of resources and raw materials important for production at the same time as the decrease in purchase prices of products (milk, beef and cereals), the drought and frost in the spring of 2023, as well as hail, affect the predicted yield reduction, which threatens the economic viability and continued existence of agricultural products manufacturing companies.

Information source: Ministry of Agriculture