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Balancing priorities: Latvia’s agriculture and rural development in a European Union context 0

Year: 2003
Financed by:  The Soros Foundation-Latvia; Open Society Institute Justice Initiative Program; JI; Local Government and Public Service Reform Initiative; LGI
The study has been prepared as part of PROVIDUS Public Policy Fellowship Program
Language:  English, Latvian

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Year: 2003
Financed by:  The Soros Foundation-Latvia; Open Society Institute Justice Initiative Program; JI; Local Government and Public Service Reform Initiative; LGI
The study has been prepared as part of PROVIDUS Public Policy Fellowship Program
Language:  English, Latvian

The objective of this study was to respond to some misconceptions about the negative impact of the EU on agricultural development in Latvia and to draw the attention of policymakers to possible ways of dealing with problems that will arise if Latvia joins the EU.

This study poses questions about how accession to the European Union will affect various social groups in Latvia. It focuses primarily on questions concerning farmers and agricultural policy, identifies four main problems and possible models for solving them.


1. Farming alternatives
The implementation of all EU standards and norms, as well as production aid and quotas, will inevitably lead to a situation where many farms are no longer able to maintain current income levels with their present way of farming. Interviews with farmers conducted during the course of the study showed that what they are most concerned about is the inability to finance implementation of EU requirements pertaining to the environment, hygiene and animal welfare. Because of the added costs to these new requirements, many fear that they will not be able to continue farming.  This study proposes a solution to this problem through the development on non-traditional agriculture and creation of new employment opportunities outside of the traditional agro-industrial production. One option is to promote organic farming.

2. Increase in household expenses
Accession to the EU and the introduction of even a modified CAP will most likely lead to a gradual increase the price of food products.  This will lead to an increase in household expenses for food and utilities. In turn, this will lower the purchasing power of the general population, and will adversely affect those living at the subsistence level. This study proposes a solution to this problem through differentiation of the VAT between food and other products, and reduction of the VAT on food at least down to the average rate in EU Member States. 

3. Financial and legislative support
An analysis of Latvia's preparations for accession to the EU shows that our own policymakers are often the ones who impose high standards on agricultural producers. Latvia’s policymakers tend to ignore the fact that the EU does not demand such high standards, and that the costs of their implementation may cripple one of Latvia’s few production sectors. The study recommends adoption of national legislation to cover those food-production and processing enterprises that sell their products only on the domestic market 

4. Public information
Results of public opinion polls show that the main argument for voting against Latvia’s membership in the EU is that accession is a threat to Latvia’s agriculture. The polls on attitude towards EU membership reveal not only absence of consensus and lack of information but also lack of interest. It is important to create public interest about issues connected with EU accession and, then, to provide accessible and objective information about the consequences of EU membership.

 Balancing priorities: Latvia's agriculture and rural development ina European context (726.22 KB)

 Balancing priorities: Latvia's agriculture and rural development in a European Union context (in Latvian) (621.96 KB)

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