Latvia has 188,597 hectares of agricultural land that is not being used, and each year this means output worth at least 23-50 million euros is never produced; if you add to those hectares the areas "affected" by various restrictions and prohibitions, the figure could be even more striking.
"The Rural Support Service (LAD) compiles data every year on the areas of agricultural land that are not used in economic activity," explains Normunds Šmits, Parliamentary Secretary of the Ministry of Agriculture, stressing that agricultural land in Latvia is a valuable resource which, managed responsibly, benefits both the farm and the environment.
Differing figures
LAD data show that in 2024 the largest area lying idle was in Rēzekne municipality – 17,429 ha, Augšdaugava municipality – 13,787 ha, and Ludza municipality – 11,872 ha, with Madona not far behind at 10,965 ha and Balvu municipality at 10,182 ha. That is no small amount. In Rēzekne municipality, unused agricultural land accounted for 15% of the total agricultural area last year, while the share of unmanaged agricultural land in Salaspils municipality was 41%, in Mārupe municipality – 27%, in Ķekava municipality – 25% and in Ropaži municipality – 24%. In the municipalities of Dobele, Saldus and Varakļāni, by contrast, the share of unused agricultural land was only 2%, in Jelgava municipality – 3%, and in Kuldīga municipality – 5%.
Not managed because they cannot be
N. Šmits points out that in Latgale, and especially in the Vidzeme Uplands, land is not managed for objective reasons – limited access to fields, poor soil quality, worn-out or never-built drainage systems and other factors. As with everything, there is a positive side here too. "In effect, these more than 188,000 hectares should currently be regarded as owners' voluntary contribution to natural diversity – they are areas where natural processes take place without human interference," N. Šmits adds.
In Zemgale, as much as possible is used
In Zemgale, on the other hand, the share of unused land is considerably lower, because the structure of agriculture there is different, based on fertile soil, well-developed drainage systems and easy access to fields. "In this region almost all agricultural land is actively used in farming and makes a substantial contribution to strengthening our country's economy," says N. Šmits. He does concede that these regions too have a certain amount of agricultural land that is not used for production, because there are various environmental restrictions and mandatory protection zones designed to protect nature and reduce the impact of agriculture on the environment. These areas lie along fields and ditches, where crops may be grown but mineral fertilisers and plant protection products may not be used.
"According to LAD data, the total length of these 1- and 2-metre protection zones is 38,570 kilometres, which converts to roughly 7,300 hectares. That is no small amount," N. Šmits notes. Translated into money for output never produced, it already amounts to a very significant sum. "Farmers are proving ever more often that production and nature conservation are not opposites but complement one another; even so, almost 200,000 hectares of land still remain uncultivated – that is potential which, subject to environmental conditions, could still be turned into a sustainable gain."
Empty land – a great luxury
"The higher the standard of living, the higher the price of resources, and the greater the losses from not using existing assets," says Rolands Feldmanis, Chairman of the Board of the Latvian Agricultural Cooperatives Association, assessing the overall situation in land use. He acknowledges that there are also various objective reasons why we do not use land – a lack of infrastructure or drainage, a shortage of labour, insufficient soil fertility. "Then we have to ask the producing farmer – what is needed to bring the land into the production cycle and make long-term investments pay off. For instance, a farmer's untouched land on the edge of a city is also waiting to be sold for development. When it will be sold is anyone's guess, but the opportunity for horticulture next to the city is lost for a year, two or five, and perhaps more. Local cabbages and carrots could already be grown – the farmer knows how – but the owner's tax is so low that the farmer, the one who does the work, is not needed," says R. Feldmanis. In his view this is wastefulness, because every hectare of land can create a product – a raw material which, when processed, gives us added value. "The only constant Latvia has is its land resource, because the population (the labour force) is shrinking, which affects the overall rate of economic growth, and capital is mobile, since it moves freely; that is why failing to use an asset as valuable as land – our national capital, right here beneath our feet – is short-sighted." Alongside this, according to R. Feldmanis, one has to reckon with the fact that there are further prohibitions and other restrictions (this applies to forest land in particular) which we impose on ourselves.
Untapped potential
"Every hectare of forest contributes on average 3-6% to Latvia, and even more if it is used efficiently, by growing and tending the forest rather than letting it rot or grow naturally. That is at least 10 cubic metres, on which the forest owner can earn around 500 euros. Producing it means labour is hired and machinery is used – so the multiplier effect is greater still," R. Feldmanis stresses. In his view it would be interesting to see the true picture by asking every resident whether they want to live in an even greener environment or to increase their income. "There is no doubt that balance is needed; the question is whether in Latvia we are ready to live poorly but greenly," R. Feldmanis continues. He would not be surprised if the green agenda were not in the interests of society as a whole once society has to pay for it. "Most of the public does not know the price it pays for green ecosystem services, while for an environmental expert the green environment is work – a place to earn money: the more of it there is, the better – more to earn, plenty of work," R. Feldmanis concludes. In his view the clichéd approach has to change – the notion that by doing nothing the environment will gain more than by doing something.
"By giving up the chance to earn even a million euros more a year, Latvia is in effect giving up the chance to build and accumulate national capital. The consequences? Latvia as a nature park, complete with its serving staff – the natives – will be bought up by foreign investors who want to be CO₂ neutral while producing high-value-added goods that let them live comfortably, be educated, modern and strong, just as is already happening as foreign companies buy up our CO₂ quotas," R. Feldmanis concludes.
In his view, what Latvia needs is not a vision brimming with dreams but a real development plan that clearly defines how many restrictions there are, of what kind, and where. "And it must be stuck to!" There should be no room for constantly throwing prohibitions around or using them for self-interested ends – anyone has the right to propose one. "If we lose our basic resources, the country will become emptier still and, sadly, poorer, because we lose competitiveness for the sole reason that no such restrictions exist in China or India, and Volvo, Jaguar and Land Rover belong not to Europeans but to Chinese and Indian businesspeople," says R. Feldmanis.
Billions in development capital lost
Non-producing land – land with prohibitions and encumbrances – is worth less. "Local owners will be more willing to sell it, and the price will also be lower than for 'producing' hectares. That creates favourable conditions for others to buy the land up, not in order to produce but to acquire a limited resource," R. Feldmanis concludes. He points out that no more land is being made. "By buying up non-producing agricultural or forest land, other capital may be acquired – a base, for example, for ecosystem services for which money will be received in future. "At the moment we do not know and cannot attribute this rising future value to the land, but Scandinavian funds may well be able to," R. Feldmanis stresses. At least 200,000 ha are currently not used in agriculture and, assuming the restrictions go ahead, at least 10% of forest land (by the 2030s economic activity is planned to be restricted on 30% of the territory) – together that will be roughly half a million hectares of land from which we earn nothing.
"From the point of view of the national economy, development capital is being lost – worth about two billion euros, assuming an average price of 4,000-5,000 euros per hectare, which corresponds to land where timber has just been harvested but the forest has not been regenerated, or to agricultural land that is not the most fertile," says R. Feldmanis, noting that investing in stock market indices yields on average 6-8% over fifty years, which could be taken as the upper limit for return on investment, while the lower rate – for the use of state treasury resources – is around 4%.
"So 5-6% a year would be a rational requirement for yield. That makes the lost capital 100-120 million every year," R. Feldmanis says, showing his calculations. He points out that prohibitions are created neither by ministry officials nor by European directives, but precisely by society and its most vocal opinion-formers. "Whether they voice the view of society as a whole or only of a small part of it cannot be established statistically, but by taking unilateral decisions, or by styling themselves defenders of society and nature, they deprive that same society of enormous income potential," R. Feldmanis stresses. He draws attention to the fact that introducing prohibitions is itself a procedure that we pay for ourselves – it can run to hundreds of thousands of euros.
"If we lose around 100-120 million euros a year, then looking ahead the multiplier works too: the lost capital is not invested, not multiplied – so the real losses are greater still, namely several hundred million a year.
"In Latvia GDP per capita is 21,300 euros; in Estonia it is already 27,000 euros. The difference is a quarter. With that attitude to our own land, will we catch up with Estonia? I doubt it!" R. Feldmanis says. He points out that agriculture, forestry and fisheries account for only 5% of GDP. "You can look wider still – for capital investment in industry and services, and for urban land, the price is higher still, more valuable, because it comes with developed infrastructure and population," says R. Feldmanis. In his view, what is needed is purposeful development, not a fight against opinions of our own making.
Maximum efficient use must be encouraged
In R. Feldmanis's view, the aim is to achieve maximum use of the land resource, and this can be done with a tax on unproductively managed land. "If a certain income is not achieved, when land is not worked in line with its fertility, then let the landowner pay an additional tax. Exactly the same applies if the land is not used and a farmer is not allowed to use it, because land has become a form of investment: in that case the owner is rich enough to pay society in the form of taxes for taking away an opportunity for economic growth. And to prevent agricultural land being converted into forest land, since the share of forest in Latvia already exceeds 50%, the bar for converting agricultural land into forest land must be raised," R. Feldmanis proposes.
