The State Secretary of the Ministry of Agriculture is interviewed by journalist Māris Ķirsons and Pauls Rēvelis, zemeunvalsts.lv editor

What is currently at the centre of attention for the land-management sectors – agriculture, forestry and also peat extraction – as seen from the ministry's point of view?

Agriculture was, is and will remain a comparatively hard sector, one in which the farmer cannot influence many of the factors involved. That is precisely why the state has been, and will continue to be, as accommodating towards the sector as its means allow. At present the biggest problems in agriculture have been caused by the two preceding years – 2023 and 2024 – which were comparatively unfavourable, indeed bad, for many farmers in Latvia. I would add: not for 100% of them, but for many. The reason is the weather: in some places crop yields were badly affected by hail, in others by drought, which cut farmers' incomes. We should also remember the very high prices of the inputs the sector needs at the beginning of 2023, which had a very negative effect on farmers' profitability.

For those reasons, the most important question is how to make this year – 2025 – easier for farmers and to head off the risk that it might become the third unfavourable year in a row. At the end of 2023 the government approved amendments put forward by the Ministry of Agriculture that give farmers the opportunity to obtain loans from A/S “ALTUM” for the purchase of working capital at a specially reduced interest rate – starting from 3.5% – and an additional 13 million euros of funding was allocated for this. We have made it possible for farmers to apply, from 17 February this year, to the Rural Support Service for an interest-free short-term loan against their area payments, receiving part of the area payment (60%) in advance – before sowing – and the remaining 40% in the autumn. This solution will help with the financial resources needed to buy seed, fuel, mineral fertilisers and plant protection products. However, if farmers withdraw into themselves because of the unfavourable circumstances described above and do not talk to their creditors, hoping that their problems will resolve themselves by some miracle, the outcome may be sad. I urge everyone who has faced or is facing financial difficulties to come to the Rural Support Service and to the Latvian Rural Advisory and Training Centre and to look for solutions together.

Yes, it is possible that some farmers will have to sell a plot of land or lease it out (make use of sale-and-leaseback options). At the same time – and this is a problem – how are we to help a farmer in financial difficulty if he uses a working capital loan (which carries comparatively low interest rates, not available to those working in other sectors, and on top of that the state partly covers the interest) to buy a new tractor, in effect worsening his financial position and making his future even hazier? What does such a situation show? A lack of knowledge and understanding! The question is whether this is an isolated case, a one-off, or reckless behaviour and an almost mythical, unfounded hope that debts might be written off.

As in agriculture, in forestry too the main source of problems has been and will be the weather. If there is no frost in winter, extracting timber resources from a great many forest compartments is difficult. We see such situations in forest areas with wetter soils, and in the regions the minor roads are closed to vehicles hauling roundwood. At the same time, businesses in the forest sector have been given clarity about the future – something that has perhaps been lacking in previous years. In January the Cabinet of Ministers approved the felling estimate for state forests for the next five years – 2026 to 2030 – that is, more than 11 months before it is due to take effect. Previously, as we know, this has happened only very shortly before the start of the period in question. The sector can draw up development plans, because it has been clearly established at government level what the extent of protected areas will be – 30%, including 10% under a strict protection regime. Importantly, the government has clearly stated that we cannot protect 100% of every natural value that exists in Latvia; it is not possible and we shall not do it. What matters is that if there is a wish or a need to protect new valuable natural areas, existing ones will be reduced by the same amount, and, once removed from the protected areas, they will become available for economic activity. The foundation stone has been laid; now specialists from the Ministry of Smart Administration and Regional Development, the Ministry of Agriculture and also the Ministry of Climate and Energy must agree on the mechanism. Such a decision is a clear signal to businesses in the sector and to potential investors in wood processing, and in agriculture too, which they have wanted to hear for so many years.

In the peat sector, the most important thing is that the raw material extracted in Latvia should be processed here and exported as a finished product – in the form of various peat substrates or other products. Of course, the sector may have questions about the availability of peat resources in the long term, for example about the term of the lease agreement for a particular peat bog. At the same time, the leases for peat bogs in state forests, administered by a/s “Latvijas valsts meži”, include a condition on the added value of the extracted resource, on the basis of which new agreements have been concluded.

Taken together, all the sectors you mentioned in your question share one precondition: as far as possible, we produce ever more products with higher added value; that means jobs, particularly in rural regions, and it means tax revenue for the state budget. Support from the EU structural funds is also earmarked for these aims.

In which support programmes is the money originally allocated too little? And which are the ones with very few applications, or none at all?

Overall, state support funding of 59.3 million euros in 2025 has not fallen compared with 2024, and exactly the same can be said of 2023 – the amount is essentially the same. At the same time the state has allocated additional money – 5 million euros – for crop insurance, because, as the experience of the past two years shows, the risks have grown. It seems every car owner knows: if you want to sleep soundly, buy comprehensive insurance; nobody buys a policy thinking that the car will be damaged in an accident and that they will then be able to claim from the insurer, perhaps even making a profit. Crop insurance has to be approached with the same philosophy. The farmer has to work out how much risk he is prepared to take on. In my view, the insurance payout ought to be at least the value of the inputs – that is, in situations where the crop fails (where the yield is very small because of drought or excessive moisture), there should be a chance of recovering at least what was invested (seed, mineral fertilisers, plant protection products, fuel and similar costs). That way farmers would at least not suffer losses. What is more, if on average around 800 euros is invested in one hectare of utilised agricultural land under intensive cropping, an insurance premium of 10 or 20 euros per hectare is not a very large increase in costs. Of course, for a 100-hectare farm that means an additional payment of about 2,000 euros, and for a 1,000-hectare farm 20,000 euros, which is by no means small; but if 80,000 euros or 800,000 euros respectively have been invested, it is not something enormous, all the more so when the state supports it with 50% co-financing. Last year the state support paid out for crop insurance was 10.7 million euros; in 2025 funding of almost 14 million euros is envisaged. Of course, fewer than half of those managing agricultural land use insurance as an instrument for reducing the risk of loss. It should be added that the more hectares are insured, the lower the price of the premium payable will be.

Additional money of 21 million euros is earmarked in 2025 for covering interest payments for farmers, fishing operators and companies processing their produce; in total this will amount to around 21 million euros. At the same time, from 2025 the de minimis conditions (the maximum amount of support per owner) have been changed and now stand at 50,000 euros instead of the previous 25,000 euros. Of course, the increase in the level of support took place gradually over three years. In the farm modernisation programmes, which many years ago regularly ran short of the funding allocated because interest was enormous, business interest has fallen away over the past two years, because their financial capacity has been badly affected by the comparatively poor situation I mentioned earlier.

The Ministry of Agriculture has emphasised increasing the output of those products that we are currently unable to produce in Latvia in quantities matching domestic consumption – vegetables and fruit. To achieve this, greater support for growers is planned. A programme of 16 million euros will be opened to support the creation of fruit and vegetable stores, so that local producers can keep, for example, carrots, potatoes and so on not only for the autumn and winter season but until the new harvest, and at the same time so that as much local produce as possible is consumed in educational, healthcare and security institutions, where imports currently account for a significant share. There will be greater support for organic producers, because the support rates per hectare managed have been increased. CO₂ criteria, incidentally, can help local growers, since their figures will be lower than those for imports (from 300–500 or 1,000 km away). In terms of legislation everything is in order, but… are caterers ready to work with many suppliers? Unfortunately, it is easier to work with one; and the risks of working with several are greater. One can see that it is more convenient to obtain everything needed from a single wholesaler.

Is the situation similar in Estonia and Lithuania?

When visiting our neighbours, one hears that “things are much better in Latvia than here”, which is the exact opposite of what we often hear in Latvia. Analysing the level of support and the conditions of the programmes for farmers, one has to conclude that there is no substantial difference between the Baltic states, although each country has different priorities and emphases. Yes, in Latvia you can see, so to speak, more solidly established farms than in Estonia; among our northern neighbours a single farm could receive support of 0.5 million euros over seven years (an EU programming period), whereas in Latvia the eligible costs were 2 million euros, where depending on the year the level of support could not exceed 50–60% – the amount of public support in Latvia was twice as large. The situation is similar in Lithuania, where the level of support has also not been as high as in Latvia (though it was higher than in Estonia). If we look at what our neighbours have achieved, Estonia has built a modern dairy processing plant of a kind we can only dream about. The question is who gains in the long term – the stability of milk purchase prices for farmers. It has to be admitted that our neighbours have been better at cooperating and have perhaps been more successful, more enterprising traders; overall, the situation in Latvia is no worse and is on a par with our neighbours. Understandably, it is not only Baltic farmers who feel what is happening in Europe. For example, cattle herds in Germany are currently being culled on a large scale because of what is known as bluetongue disease, which affects milk prices and is duly reflected in the prices of dairy products in the shops. Pork prices on the exchange, meanwhile, are sliding downwards, because exports of pork from Europe to Japan and other Asian countries are banned.

Is slow cooperation a Latvian national peculiarity? In Estonia, for instance, local authorities cooperate quite successfully in forest management.

In my view, the majority of Latvians are, or want to be, self-sufficient – they want to do things themselves and decide for themselves – and so they are not really keen to cooperate unless life forces them to. Where cooperation is successful, it works excellently; there are also cooperatives that do not want to take new members into their ranks, because they lack the necessary capacity or because it is a question of expanding the market for their produce. I think we need to talk about ambition and the willingness to take on additional risk, all the more so when the existing arrangements, worked out by the members themselves, are working well. It should be remembered that in Latvia food products are made for the domestic market that do not exist in other European countries, or are unknown there, so export opportunities are very limited – they exist, at best, with our nearest neighbours. For example, our dark rye bread has virtually no market potential outside Latvia and Estonia. To “teach” people in other European countries to eat such bread would probably require many years and considerable spending on marketing.

The land-use sectors are substantially affected by EU regulation. How is Latvia's position on these matters formed, given that EU countries have sharply differing climatic conditions and different soils? Is it even possible to set sensible and fair conditions that are the same for EVERYONE?

It is clear that the 27 EU member states have different climatic conditions, different soils and so on, and consequently differing positions on more than one issue. That means common ground and solutions have to be sought, which is by no means quick or simple. State institutions, research institutes and interest groups of every kind are involved in drawing up Latvia's position – including, of course, farmers, foresters, food processors, timber industry representatives and representatives of the peat sector – and it is approved not only by the Cabinet of Ministers but also by the Saeima's European Affairs Committee, so that the minister concerned has a mandate to go to the EU institutions. The hardest question has been and will be the allocation of money, particularly in the context of implementing the EU Green Deal, from which, it seems, there will be some retreat. At the “Green Week” agricultural forum in Berlin, the EU Agriculture Commissioner stressed something everybody knows: the farmer has to work in the field and receive a fair price for what he produces, one that allows a small profit and makes for a contented person; only then can we look at any substantial restrictions and prohibitions in order to achieve other goals. The situation is changing – one can predict that 2025 will be notable for laying the cornerstones of the next EU multiannual budget, from 2028 to 2034. There will certainly be debate about it, because the countries' wishes differ greatly. Latvia has put forward a proposal to raise customs tariffs on cereals from third countries (Russia, Belarus); at the same time an import ban requires the agreement of all EU member states, and, as we know, Hungary and Slovakia tend to abstain on such matters, which makes the practical introduction of such a ban all but impossible. Of course, every country has its own specific interests, which means a very complicated, lengthy process and possibly even changes to initial positions.

Farmers (and not only farmers) are strongly critical of excessive bureaucracy. Can we do anything in Latvia, and if so what?

The complaints about things being taken too far are justified, but they should be addressed neither to Latvia nor to the Rural Support Service, but to the EU institutions. It is not only Latvian farmers who voice criticism of over-bureaucratisation, but farmers across Europe. The situation is now friendlier to farmers, however, since many requirements have been dropped; for example, there is no need to submit images of every single parcel, they can be kept at home on a computer or a storage device, but it must be possible to show them to an inspector, or there is the option of storing them in the “Mans lauks” system.

At the same time there is still much to be done, because a great many different payments have been created over the years – in the 2014–2020 EU programming period there were 34 direct payment rates; in the new period there are more than 60. Whereas previously the farmer had a single greening payment, there are now six eco-schemes and we are “building” one more, because the EU regulation has changed. Can we make the system simpler, trusting the farmer more, while keeping the option of requiring that things be shown? How do we find the balance? At one time the Rural Support Service went out to check 5–7% of farms; now checks cover 100%, using satellite imagery, and to “nitpick” about a farmer not having submitted an image of some field is not proportionate. We are forced to argue about this with the EU inspectors. The aim is to reach a situation where, once data has been submitted, it is used without being requested again, and institutions exchange information among themselves. In any case, there is a great deal of room for improvement on this question. The basic work, together with farmers, has to be done in the ministry, which is the initiator of a number of changes, in order to amend the requirements of existing Cabinet regulations and also the conditions written into laws passed by the Saeima. The hardest thing to change is habits – if a document has always been required, “how could we possibly manage without it, in case someone asks for it?” One of the Ministry of Agriculture's priorities for 2025 is to reduce the bureaucratic burden (data entry, its volume, the submission of reports), making life easier for the people actually doing the work.

Last year the introduction of the Deforestation Regulation, which requires the submission of large volumes of data, was postponed by a year.

I would allow that the introduction of this regulation might be postponed again, but cattle farmers in Latvia should not worry about submitting data, because the data already submitted to the Rural Support Service will be used. After all, pastures in Latvia are not created by felling forests, nor is there deforestation in the EU, and I hope the appropriate changes will be made. It should be remembered that the requirements of the regulation were prompted by the felling of forests taking place in other parts of the world. The outlook of the current European Parliament and of the Agriculture Commissioner gives grounds for hoping for a sensible approach and solutions of a different kind. It should be remembered that transporting beef thousands of kilometres, for instance from South America to Europe, is neither economically nor ecologically sound, since it increases the volume of CO₂ emissions, even though we want the opposite. Latvia is not so large that we need to think about restricting ourselves substantially. More than 50% of Latvia's territory is covered by forest, we have no polluters, and we are one of the greenest, cleanest countries in Europe and even in the world, yet even so we still want to take 30% of the territory out of economic use. In my view, we should think first of all about production and economic security. With apologies to the “friends of nature”, but protecting nature ought to be an additional commitment taken on after production. Food was, is and will be needed; its supply is important for security. No food – no peace.

How should we view the fact that foreign-capital companies are buying shares in Latvian-registered companies working in the land sectors and in processing their produce?

An analysis is needed of why such transactions take place and what lies behind them – financial difficulties, the owners' personal problems or plans, the absence of heirs, or other reasons. Of course, the owner of any company who has spent many years or even decades building it up and developing it wants to obtain the highest possible price at the moment of sale, which is essentially payment for what has been achieved. In such a situation there have been and will be cases where local-capital companies become foreign-capital companies. I would be happier if the land and the shares of food processing, wood processing, agricultural and forestry companies were, or came to be, owned by our own entrepreneurs. At the same time we know that Latvian entrepreneurs buy assets – company shares and also real estate abroad, in Germany, Denmark and so on. For example, “Karavela” bought the “Larsen” canned fish plant and moved it to Latvia, where it makes products whose taste matches the preferences of German and Danish consumers, selling the output in those countries. Overall this trend can be described in one word: globalisation.

Since a significant proportion of the owners of local-capital companies are of a venerable age, perhaps Latvia should think at state level about measures to “bring up” successors, and also write protective provisions into legislation for an heir who has taken over a parent's business?

Choosing, raising and educating business successors is a matter for the owners themselves. Latvia is an EU member state and has to observe the rules of the game. Legally, land can be bought in any EU member state, but it is logical that different EU member states have different conditions (requirements) for the new owner. Fundamentally it comes down to the cost of meeting those requirements. At one time, for example, in one of the EU member states a buyer of agricultural land had to have the appropriate education, while in the case of inheritance the heir had to prove that he would farm the property.

I am glad for every person in Latvia who owns land in Latvia, who uses it in economic activity, produces goods and pays taxes, thereby sustaining the country.