The EU Green Deal can be implemented in Latvia in various ways. One of those paths involves decisions that lead to drastic changes in production across the industries tied to land management.

Jobs in those industries have been, are and will remain a critical factor in population renewal and in keeping the country evenly populated, and although it is the high value-added industries that are pushed to the fore, agriculture and forestry are the real export leaders. Modern technologies, including ICT, are assigned a very important role in both economic growth and job creation, while it is often forgotten that people everywhere in the world have needed and will continue to need food and timber products. The land management industries are significant employers and taxpayers, and they also keep areas populated, particularly in rural regions. Moreover, history has shown that birth rates in rural areas are considerably better than in cities. In the present time of change, many operate under the slogan: “Things will never be the way they used to be!” At the same time, wood is the most human-friendly material there is, and no one can get by without food. The question is this: what happens if food suddenly runs short?

There is no denying that carrying out decarbonisation policies will demand “sacrifices” of Latvia, but they should not be sought in the land management industries alone, because the result will be that we literally give up the table and the chair, along with whatever we would put on that table. The moment of truth appears not to be far off, when hide-and-seek will no longer be an option and policymakers will have to state clearly how much each industry must cut its emissions, and which industries those are. Take, for example, the recently presented National Energy and Climate Plan. In all likelihood, unpicking this puzzle will bring us back to the old truth: whichever finger you bite, they all hurt. Cutting emissions may well go hand in hand with cutting jobs, because it is naive to hope that people working in agriculture or forestry will instantly be transformed into IT specialists. The employment map shows that in Latvia's regions the land management industries account for the lion's share of jobs, and if we subtract public sector jobs and retail, these industries' contribution to employment is dominant. In weighing up restrictions on land use, it must be borne in mind that they could substantially change the future development not only of individual municipalities but of entire regions — and not for the better. That other countries have grasped this fact is shown by New Zealand, where agriculture is to be struck off the list of industries required to pay for the emissions they generate. Land use restrictions will not bring losses to production and to the population of an area in direct proportion; the effect will most likely be cumulative, because once working people leave a populated place, state-funded services there lose their purpose as well. First the schools and the police stations are shut down, and later the administrative functions. The market has already provided an example, when the application of technology in the countryside made a share of jobs redundant. The state can now achieve a similar effect through its own decisions; a single signature can sweep away not just villages but some small towns too.

Up to 100,000 workers could be affected

Information compiled by Juris Paiders from Central Statistical Bureau data (Dienas Bizness, 28.05.2024) indicates that the land management industries alone — agriculture, forestry and fisheries — employ one in five people in nine municipalities, and it should be noted that two further municipalities come very close to that figure, whereas in the large cities the number employed in these sectors is, understandably, only 1-4.5%. This may be one of the most important reasons why those who live in an urban environment do not understand what the land management industries mean for the national economy. Naturally, if “certain adjustments are implemented” in the land management industries, it stands to reason that this will be felt by those who process what is harvested or grown. Food processing employs more than 22,000 people and wood processing more than 20,000, to which must be added furniture manufacturing with more than 5,000 employees. The conclusion, in the end, is that the number of jobs affected exceeds 100,000. Is that a lot, or is it in fact not very many? If we assume that the number of people employed by businesses in 2022 was 681,000, the share of those “affected” comes to close to 15%. It should be borne in mind that the forestry and food industries are substantial purchasers of services on the market, so if something changes significantly in these industries, workers in other sectors will feel it too. The question is whether the state, in deciding on the introduction of the Green Deal in the land management industries, has estimated — or will estimate — the potential impact on employment, on population numbers in the regions, on the volume of taxes paid, and on production and export figures.

No alternative for the time being

If we accept that part of these industries' capacity simply has to be shut down in the name of a green Europe, the present situation must be taken into account: in a whole range of municipalities the land management industries are the most important private employer, one for which there simply is no alternative, because the remaining jobs are in public services (funded by the state or the municipality) and the money to pay for them comes out of the budget. In other words, it is the aforementioned businesses that pay the taxes and maintain this infrastructure. Statistics show that over the past 33 years rural Latvia has lost a quarter of a million (252,014) inhabitants, and the “fir tree” of Latvia's population pyramid promises nothing better for the future. Quite the opposite: looking ahead, there will be fewer people — the creators of wealth — not only in the countryside but throughout Latvia. So people are already in short supply. Incidentally, so is tax revenue. In making it harder to operate in a given region, it must be remembered that workers are already lacking and that new investment projects cannot be expected, if only because there are not enough people. This is in fact a story about the country's territorial security, because territory without inhabitants can be regarded as part of the state only formally — on the map. In other words, state policy must not eliminate a single private sector job by compulsion, something we might describe in modern terms as green motivation. Over-regulating the market in a way that leads to bankruptcy amounts to exactly the same thing.

Time to stop behaving like first-formers

Latvia has essentially been engaged in exporting labour to the wealthier countries of the European Union. Our “lost” workers build up the prosperity of other countries and increase their tax revenues, and those countries have paid nothing towards raising, educating and “delivering” these working-age people. That may now be in the past. Migration from Latvia towards Germany, France, Italy, Spain and other countries has all but stopped, yet it would be healthy to avoid the mistakes of the 1990s and the 2008 crisis and not step on the same rake again, back when eliminating jobs was considered the most effective solution — and better still if the former holders of those eliminated jobs packed their bags and left the country, because then there were no benefits to pay.

The land management industries are a significant employer. That is how it should stay, and decisions about change must be based on science and research-based data, not on a percentage-point climate target handed down by the EU. In other words, the calculation must start from people, not from decarbonisation percentages, because a country cannot exist without people. Until now we have often done the sums from the wrong end. If there is a number after the equals sign, we will work out what to put into the equation to make it come out right. That is what first-formers do when they realise they cannot do the maths! We all want to live in Latvia, and the solution has to be a genuine one, not something reverse-engineered from the answers at the back of the book!