New EU members and challanges facing European rural and agricultural policy

New EU members and challanges facing European rural and agricultural policy Martins RozeMinister of Agriculture The Republic of Latvia

Facts on Latvia Area km264 589Population, mio., (at beginning of 2004) - 2,319Population density per 1 km236,1Borderline 1 862 km including coastline 494 kmLength of the territory, km from the North to the South 210 from the West to the East 450Average elevation above the sea level 87 mHighest point (Gaizikalns) 311,6 mMean monthly air temperature in Riga January 4.70C July+16,90C

Territorial structure of Latvia at the beginning of 2005

Reform of agricultural sector in the early 90-ties

Decision of the Supreme Council On agrarian reform in the Republic of Latvia (13.06.1990) laid down:land reformreform of economic relationsmanagement reform in agricultural sectorprivatization of State establishmentsradical changes in the system of agricultural and price supportliberalization of external trade

Distribution of the agricultural land area following the types of users Source: Latvian State Institute of Agrarian Economics, basing on materials of the Land and Cadastre and Information headquarters of the State Land Service

Chart2

4.160199035.9

63.91994315.1

99.9200420040.1

Privat farms

Collective farms

Statutory companies

State farms

Chart1

4.160199035.9

63.91994315.1

89200210.70.3

Privat farms

Collective farms

Statutory companies

State farms

Sheet1

Privat farmsCollective farmsStatutory companiesState farms

19904.160.035.9

199463.931.05.1

200499.90.1

Sheet1

0000

0000

0000

Privat farms

Collective farms

Statutory companies

State farms

Sheet2

Sheet3

Share of agriculture in GDP

Share of agriculture* in the total GDP in the EU Candidate Countries in 2002 ** -2001* -agriculture, hunting, forestry and fishing

Share of population employed in agriculture

Share of population employed in agriculture* in the EU Candidate Countries in 2002*incl. forestry, hunting and fisheries** -provisional

Annual average fluctuations of the Consumer Price Index (CPI) in Latvia, 19902003Source: Latvian Central Statistical Bureau

Self-sufficiency in agriculture products %

Latvias negotiation position in the chapter Agriculture basic principles:Development of Latvias sector of agriculture within the common economic domain of the European Union on the basis of equality;Sufficiency of the production level to satisfy domestic market demands;Efficient use of rural land areas in production and conservation of rural landscape;Maintaining rural areas populated by encouraging retraining of workforce, made redundandant in agriculture, to get employment in non-agricultural sectors.

Production quotasLatvia, similar to Estonia and Lithuania has considered that conditions offered by the EU need adjustment, taking into account: restructuring of agriculture from the USSR collective and State farm system to free market system;impact of Russian crisis.

SAPARD challange for EU and accession countriesFirst EU financed decentralised support scheme for non-EU countriesPreparation of Rural Development programmesEstablishement of effective administration systemNew type of aid for the farmers demanding requirements

SAPARD experienceAid applicants were active and able to prepare projects complying with SAPARD Program requirements, acquiring an experience in achieving conformity with the EU requirements;

MoA as the Monitoring Authority within SAPARD Program has facilitated its availability by preparing manifold amendments to the Program conditions;

RSS as the Program administration authority has been able to administrate a relatively large number of projects (the Program anticipated 600-700 projects per year in average, in 2002 RSS received 559 projects but in 2003 1536 projects) in a short period of time two years since the start-up of the Program.

Major changes in policy instrumentsSubsidiesEU Direct paymentsState aidSAPARDSingle Programming documentRural Development planCredit guaranteesCredit guaranteesCredit programsCredit programsReimbursement of the Excise taxReimbursement of the Excise taxBefore accessionAfter accession

Direct payments in new MS compared to EU15 rate, 20041. Malta and Slovenia do not apply the single area payment scheme.Source: OECD

Sources of finance for rural developmentSingle programming document

Indicative financial allocations among the new Member States in 2004 - 2006

Chart1

154

15.33.4

17.50.5

13.72.3

15.70.2

13.731.35

11.50.5

6.64.5

9.90.8

EAGGF%

FIFG%

Sheet2

ValstsEAGGF%FIFG%Total

Latvia15419

Estonia15.33.418.7

Slovakia17.50.518

Poland13.72.316

Hungary15.70.215.9

Lithuania13.731.3515.08

Czech r11.50.512

Malta6.64.511.1

Slovenia9.90.810.7

Sheet2

00

00

00

00

00

00

00

00

00

EAGGF%

FIFG%

Sheet1

ValstsELVGF %ZVFI %Total

Latvija15419

Igaunija15.33.418.7

Slovkija17.50.518

Polija13.72.316

Ungrija15.70.215.9

Lietuva13.731.3515.08

ehija11.50.512

Malta6.64.511.1

Slovnija9.90.810.7

Sheet1

000

000

000

000

000

000

000

000

000

Valsts

ELVGF %

ZVFI %

Distribution of Finances in the Single Programming Document 2004 - 2006Total public (2004 2006) 137 mln EUR

Chart4

0.25

0.05

0.21

0.37

0.075

0.025

0.02

Diversification activities37%

piekirums

200420052006

Orginali EUR98,700,000110,000,000119,400,000

LV ldzfinansjums24,675,00027,500,00029,850,000

Total123,375,000137,500,000149,250,000

No t subsdijm LVL

No tm subsdijm EUR18,288,00012,192,0006,096,000

% no kopj14.82310000%8.86690900%4.08442210%

Iepriekjo periodu saistbas0.07,550,4654,104,087

% no kopj0.000%6.410%2.950%

Atlikums105,087,000117,757,535139,049,913

Kurss LV/ EUR0.61

18,144,91412,096,6096,048,305

annual_allocations

200420052006Average

Priority 124.29%25.11%29.94%26.62%

Early retirement0.00%2.00%3.70%2.02%

Support for producer groups0.70%0.70%0.70%0.70%

Support for semi-subsistance farms4.90%7.30%9.98%7.55%

Meeting Standards18.69%15.11%15.56%16.35%

Priority 260.09%59.01%62.43%60.58%

Agrienvironment5.80%6.00%6.60%6.16%

Less favoured areas and areas with environmental restricions54.2869%53.0131%55.8256%54.42%

Technical Assistance0.80%0.60%0.60%0.66%

Obligations transferred from previous programming period0.00%6.41%2.95%3.22%

Allocation of resources for single area payments (EUR)14.8231%8.8669%4.08442%8.92%

Total100.0000000%100.0000000%100.0000000%100.00%

0.0000000%0.0000000%0.0000000%

8.1.table

YearTotalPublic FundingPrivate Funding

TotalEU fundingNational Funding

EUREUR%EUR%EUR%EUR

12=3+93=5+74=3/256=5/378=7/39

2004123,375,000123,375,00010098,700,0008024,675,000200

2005137,500,000137,500,000100110,000,0008027,500,000200

2006149,250,000149,250,000100119,400,0008029,850,000200

Total410,125,001410,125,001100328,100,0008082,025,000200

8.2.table

200420052006TotalEU element as % of total

Total public costEU contributionTotal public costEU contributionTotal public costEU contributionTotal public costEU contribution

Priority 129,967,78823,974,23034,526,25027,621,00044,685,45035,748,360109,179,48887,343,59080%

Measure: Early retirement002,750,0002,200,0005,522,2504,417,8008,272,2506,617,80080%

Measure:Support for producer groups863,625690,900962,500770,0001,044,750835,8002,870,8752,296,70080%

Measure: Support for semi-subsistance farms6,045,3754,836,30010,037,5008,030,00014,895,15011,916,12030,978,02524,782,42080%

Measure: Meeting Standards23,058,78818,447,03020,776,25016,621,00023,223,30018,578,64067,058,33853,646,67080%

Priority 274,132,21359,305,77081,143,00064,914,40093,170,17574,536,140248,445,388198,756,31080%

Measure: Agrienvironment7,155,7505,724,6008,250,0006,600,0009,850,5007,880,40025,256,25020,205,00080%

Measure: Less favoured areas and areas with environmental restricions66,976,46353,581,17072,893,00058,314,40083,319,67566,655,740223,189,138178,551,31080%

Measure:Technical Assistance987,000789,600825,000660,000895,500716,4002,707,5002,166,00080%

Obligations transferred from previous programming period008,813,7507,051,0004,402,8753,522,30013,216,62510,573,30080%

Allocation of resources for single area payments (EUR)18,288,00014,630,40012,192,0009,753,6006,096,0004,876,80036,576,00029,260,80080%

Total123,375,00098,700,000137,500,000110,000,000149,250,000119,400,000410,125,001328,100,00080%

Retirement8,272,250

Producer groups2,870,875

Semi-subsistance30,978,025

Meeting standards67,058,338

Agrienvironment25,256,250

LFA223,189,138

TA2,707,500

SAPARD13,216,625

SAP36,576,000

8.2.table

0

0

0

0

0

0

0

0

0

Agri-environment6%

table_27

MeasureIndicative Contribution in 2004-2006TotalProportion %

Public fundingPrivate Contribution

Priority 1 - Development of Efficient, Flexible and Sustainable Rural Economy247,135,82293,683,993340,819,81553.1%

Investments in Agricultural Holdings42,622,07029,683,23172,305,30111.3%

Support for Young Farmers6,088,86806,088,8680.9%

Improving Processing and Marketing of Agricultural Products27,399,90027,399,90054,799,8008.5%

Promotion of Adaptation and Development of Rural Areas47,014,75133,271,31480,286,06512.5%

Forestry Development9,350,7633,329,54812,680,3112.0%

Development of Local Action (LEADER +)3,044,43503,044,4350.5%

Training2,435,54802,435,5480.4%

Early Retirement8,272,25008,272,2501.3%

Support for producer groups2,870,87502,870,8750.4%

Support for Semi-subsistence Farms30,978,025030,978,0254.8%

Meeting Standards67,058,338067,058,33810.4%

Priority 2 - Preservation of Biologically Diverse Rural Environment248,445,3880248,445,38838.7%

Agri-environment25,256,250025,256,2503.9%

Less-favoured Areas and Areas with Environmental Restrictions223,189,1380223,189,13834.8%

Technical Assistance2,707,50002,707,5000.4%

Obligations Transferred from the Previous Period13,216,625013,216,6252.1%

Allocation of resources for single area payments (EUR)36,576,000036,576,0005.7%

Total548,081,33593,683,993641,765,328100%

total_SPD

EAGGF Vadbas daas plnojam finansjuma sadaljums (2004-2006, milj. euro)

KOPKopjais finansjums

Kopjais sabiedriskais finansjumsPrivtais

PaskumsKOP 100%ES finansjumsValsts finansjums

EUREUREUREUREAGGFEUREUR

2004 -20062004200520062004 - 2006%200420052006kop200420052006kop200420052006kop200420052006kop

1. Investcijas lauksaimniecbas uzmumos72,305,30118,625,54026,145,58327,534,1784262207025.0010,979,26615,412,13316,230,67142,622,0705,881,7508,256,5008,695,000228332505,097,5167,155,6337,535,671197888207,646,27410,733,45011,303,50729683231

2. Atbalsts jaunajiem zemniekiem6,088,8681,568,4672,201,7342,318,66760888685.001,568,4672,201,7342,318,6676,088,8681,176,3501,651,3001,739,0004566650392,117550,434579,66715222180.00.00.00

3. Lauksaimniecbas produktu prstrdes un mrketinga uzlaboana54,799,80014,116,20019,815,60020,868,0002739990021.007,058,1009,907,80010,434,00027,399,9004,940,6706,935,4607,303,800191799302,117,4302,972,3403,130,20082199707,058,1009,907,80010,434,00027399900

4. Lauku teritoriju piemroans un attstbas veicinana80,286,06520,681,35529,031,42930,573,2814701475137.0012,110,80517,000,52917,903,41747,014,7518,704,99012,219,62012,868,600337932103,405,8154,780,9095,034,817132215418,570,55012,030,90012,669,86433271314

5. Ilgtspjga mesaimniecbas attstba12,680,3113,271,5194,583,2854,825,50793507637.502,408,7183,381,2343,560,8119,350,7631,764,5252,476,9502,608,5006849975644,193904,284952,3112500788862,8011,202,0511,264,6963329548

6. Vietjs kapacittes attstba atbalstot ilgtspjgas lauku kopienas (LEADER+ tipa paskums)3,044,435784,2341,100,8671,159,33430444352.50784,2341,100,8671,159,3343,044,435588,175825,650869,5002283325196,059275,217289,8347611100.00.00.00

7. Apmcbas2,435,548627,387880,694927,46724355482.00627,387880,694927,4672,435,548470,540660,520695,6001826660156,847220,174231,8676088880.00.00.00

KOP231,640,32859,674,70283,759,19288,206,434137,956,335100.0035,536,97749,884,99152,534,367137,956,33523,527,00033,026,00034,780,00091,333,00012,009,97716,858,99117,754,36746,623,33524137725338742013567206793,683,993

14,116,200in SPD12009977168589911775436746,623,335

difference0.00.0-0-0

6269000

3761400

KopESLV

LVL72,993,00058,394,40014,598,600

EUR43,795,80035,036,6408,759,160

14032852

8419711.2

pasakumi_spd

1. Investcijas lauksaimniecbas uzmumos%

GadsProjektu kopj summa (EUR)Kopjais sabiedriskaisAtbalsta summa no EAGGFLatvijas ldzfinansjuma apjoms (EUR)Samja ieguldtais apjoms

Finansjuma sadaljums100%35%30%45%

200418,625,54010,979,2665,881,7505,097,5167,646,27431.5789502%

200526,145,58315,412,1338,256,5007,155,63310,733,45031.5789478%

200627,534,17816,230,6718,695,0007,535,67111,303,50731.5789344%0.4105264010

Kop72,305,30142,622,07022,833,25019,788,82029,683,23131.5789433%

Intervences kods 11172,305,30142,622,07022,833,25019,788,82029,683,231

2. Atbalsts jaunajiem zemniekiem

GadsProjektu kopj summa (EUR)Atbalsta summa no EAGGFLatvijas ldzfinansjuma apjoms (EUR)Samja ieguldtais apjoms


20041,568,4671,568,4671,176,350392,117074.9999841%

20052,201,7342,201,7341,651,300550,434074.9999773%

20062,318,6672,318,6671,739,000579,667074.9999892%

Kop6,088,8686,088,8684,566,6501,522,218074.9999836%

Intervences kods 1126,088,8686,088,8684,566,6501,522,2180

3. Lauksaimniecbas produktu prstrdes un mrketinga uzlaboana



200414,116,2007,058,1004,940,6702,117,4307,058,10035.0000000%

200519,815,6009,907,8006,935,4602,972,3409,907,80035.0000000%

200620,868,00010,434,0007,303,8003,130,20010,434,00035.0000000%

Kop54,799,80027,399,90019,179,9308,219,97027,399,90035.0000000%

Intervneces kods 11454,799,80027,399,90019,179,9308,219,97027,399,900

37%37%

4. Lauku teritoriju piemroans un attstbas veicinana



200420,681,35512,110,8058,704,9903,405,8158,570,55042.0910042%

200529,031,42917,000,52912,219,6204,780,90912,030,90042.0910042%

200630,573,28117,903,41712,868,6005,034,81712,669,86442.0910014%

Kop80,286,06547,014,75133,793,21013,221,54133,271,31442.0910031%

Intervneces kods 130113,134,5518,567,9016,393,3102,174,5914,566,65048.6755124%

13032,435,5482,435,5481,826,660608,888074.9999589%

130520,876,11810,438,0587,306,6403,131,41810,438,06034.9999938%

130715,657,0867,828,5435,479,9802,348,5637,828,54334.9999994%

131012,525,6726,262,8354,383,9841,878,8516,262,83734.9999904%

13118,350,4474,175,2232,922,6561,252,5674,175,22434.9999946%

13122,435,5482,435,5481,826,660608,888074.9999589%

?4,871,0954,871,0953,653,3201,217,775074.9999743%

Kodu summa80,286,06547,014,75133,793,21013,221,54133,271,31442.0910030%

Zemes uzlaboana7%%



20043,383,4072,207,0571,646,890560,1671,176,35048.67549189%57,417617584560,167

20054,749,4543,098,1542,311,820786,3341,651,30048.67548986%80,599866933786,334

20065,001,6903,262,6902,434,600828,0901,739,00048.67554766%84,885912975828,090

Kop13,134,5518,567,9016,393,3102,174,5914,566,65048.67551239%

Setting up farm advisory systems2%%


Finansjuma sadaljums100%75%25%0%02

2004627,387627,387470,540156,847074.99996015%823445675,0010

2005880,694880,694660,520220,174074.99994323%1155910947,5320

2006927,467927,467695,600231,867074.99997304%01217300997,8600

Kop2,435,5482,435,5481,826,660608,888074.99995894%0

0

Basic services for rural economy and population8%%0

GadsProjektu kopj summa (EUR)Atbalsta summa no EAGGFLatvijas ldzfinansjuma apjoms (EUR)Samja ieguldtais apjoms0

Finansjuma sadaljums100%35%15%50%8234451176350

20045,377,6002,688,8001,882,160806,6402,688,80035.0000000%11559107058101651300

20057,548,8003,774,4002,642,0801,132,3203,774,40035.0000000%12173009907801739000

20067,949,7183,974,8582,782,4001,192,4583,974,86034.9999836%

Kop20,876,11810,438,0587,306,6403,131,41810,438,06034.9999938%

Diversification of activities close to agriculture6%%



20044,033,2002,016,6001,411,620604,9802,016,60035.0000000%

20055,661,6002,830,8001,981,560849,2402,830,80035.0000000%

20065,962,2862,981,1432,086,800894,3432,981,14335.0000000%

Kop15,657,0867,828,5435,479,9802,348,5637,828,54335.0000000%

15,657,0867,828,5435,479,9802,348,5637,828,54335.0000000%

Rural tourism and craft8%%



20045,377,6002,688,8001,882,160806,6402,688,80035.0000000%

20057,548,8003,774,4002,642,0801,132,3203,774,40035.0000000%

20067,949,7193,974,8582,782,4001,192,4583,974,86134.9999792%

Kop20,876,11910,438,0587,306,6403,131,41810,438,06134.9999921%

kods 131012,525,6726,262,8354,383,9841,878,8516,262,83734.9999904%

kods 13118,350,4474,175,2232,922,6561,252,5674,175,22434.9999946%

Protection of environment2%%



2004627,387627,387470,540156,847074.9999602%

2005880,694880,694660,520220,174074.9999432%

2006927,467927,467695,600231,867074.9999730%

Kop2,435,5482,435,5481,826,660608,888074.9999589%

Farm advisory and extension services4%%



20041,254,7741,254,774941,080313,694074.9999602%

20051,761,3871,761,3871,321,040440,347074.9999858%

20061,854,9341,854,9341,391,200463,734074.9999730%

Kop4,871,0954,871,0953,653,3201,217,775074.9999743%

5. Ilgtspjga mesaimniecbas attstba



20043,271,5192,408,7181,764,525644,193862,80153.9359545%

20054,583,2853,381,2342,476,950904,2841,202,05154.0431154%

20064,825,5073,560,8112,608,500952,3111,264,69654.0564960%

Kop12,680,3119,350,7636,849,9752,500,7883,329,54854.0205599%

Intervention code 1213,261,8951,630,9481,141,663489,2851,630,94734.9999923%

1223,261,8921,630,9451,141,662489,2831,630,94734.9999939%

124676,541608,887456,665152,22267,65467.4999741%

1252,435,5482,435,5481,826,660608,888074.9999589%

1263,044,4353,044,4352,283,325761,110074.9999589%

Intervention codes kop12,680,3119,350,7636,849,9752,500,7883,329,54854.0205599%

7a

7.Sabiedrisk labuma projektiem2.50%



2004806,785784,234588,175196,05922,55172.9035617%

20051,123,4181,100,867825,650275,21722,55173.4944607%

20061,181,8861,159,334869,500289,83422,55273.5688552%

Kop3,112,0893,044,4352,283,325761,11067,65473.3695277%

kods 1252,435,5482,435,5481,826,660608,888074.9999589%

kods124676,541608,887456,665152,22267,65467.4999741%

7b

7. Investcijas uzmumos2.50%



20041,680,500840,250588,175252,075840,25035.0000000%

20052,359,0001,179,500825,650353,8501,179,50035.0000000%

20062,484,2871,242,143869,500372,6431,242,14434.9999819%0.5000002013

Kop6,523,7873,261,8932,283,325978,5683,261,89434.9999931%

32618951,630,9481141663489285163094734.9999923%

32618921,630,9451141662489283163094734.9999939%

7c

7. Apmeoana2.50%



2004784,234784,234588,175196,059074.9999362%

20051,100,8671,100,867825,650275,217074.9999773%

20061,159,3341,159,334869,500289,834074.9999569%

Kop3,044,4353,044,4352,283,325761,110074.9999589%

3,044,4353,044,4352,283,325761,1100

6. LEADER+



2004784,234784,234588,175196,059074.9999362%

20051,100,8671,100,867825,650275,217074.9999773%

20061,159,3341,159,334869,500289,834074.9999569%

Kop3,044,4353,044,4352,283,325761,110074.9999589%

procentuli

kods 1305.1456,665456,665342,499114,167015%

kods 1305.2152,222152,222114,16638,05605%

kods 1305.330,44430,44422,8337,61101%

kods 1305.430,44430,44422,8337,61101%

kods 1305.530,44430,44422,8337,61101%

kods 1305.6913,332913,332684,998228,334030%

kods 1305.71,430,8841,430,8841,073,163357,722047%

100%

7. Apmcbas



2004627,387627,387470,540156,847074.9999602%

2005880,694880,694660,520220,174074.9999432%

2006927,467927,467695,600231,867074.9999730%

Kop2,435,5482,435,5481,826,660608,888074.9999589%

1,826,6611,826,6611,369,995456,66674.9999589%

608,887608,887456,665152,22274.9999589%

Intervention codes kop2,435,5482,435,5481,826,660608,88874.9999589%

user:Bze ir 15% +10% LFA +5% Jaunie zemnieki

output_indikatori

Kurss LVL/EUR0.6

Semi-subsistance200420052006

Number of farms4,0008,00012,000

Payment per unit1,0001,0001,000

Total4,000,0008,000,00012,000,000

Support for producer groups200420052006

Number of cooperatives304050

Increase in turnover10.0%2.5%

Total Turnover (LVL) in previous year16,117,67817,729,44618,172,682

Payment per unit5%5%4.25%

Total805,884886,472772,339

Korekcija uz Latraps392,673431,940442,739

EUR654,455719,901737,898

LFA

1 kategorija

platba258,000309,600310000

maksjums303030

2 kategorija

platba628,500754,200780000

maksjums464646

3 kategorija

platba529,000634,800689000

maksjums747474

Kop757970009095640096166000

Distribution of Finances in Rural Development plan 2004 - 2006Total public (2004 2006) 410 mln EUR

National support after accession to European UnionIn August 2004, according to Annex IV of the Accession Agreement, the Commission was notified of the existing national support schemes within which the support is allocated also after May 1, 2004;

By 2007 all the existing support schemes must comply with the Community Guidelines for State Aid in Agricultural Sector.

National support measures in agricultureLivestock farming development;Crop farming development;Dissemination of education, science and information;Cofinancing of Latvias and foreign joint projects;Investment enhancement in agriculture;Development of agricultultural NGOs and agricultural service cooperative societies;Development of organic farming;Market promotion.

Total Amount of Subsidies* Compensation for drought*

Chart1

7.41994

13.51995

171996

16.71997

28.51998

31.31999

35.52000

37.12001

51.61.4

60.98.3

39.512.6

42.59.2

Subsidies

State public financing for SAPARD

Year

EUR ths.

Sheet1

Ienkums uz vienu lauksaimniecb nodarbinto, EUR gadIenkums no lauksaimniecbas, milj.EUR

19961089190

1997899166

1998780139

1999638111

2000832123

piensckasliellopigraudi, pkaugi

199868.736.615.153.1

199951298.441.2

20005828.61452.9

Sheet1

780

638

832

Ienkums uz vienu lauksaimniecb nodarbinto, EUR gad

Sheet2

0000

0000

0000

piens

ckas

liellopi

graudi, pkaugi

milj. Ls

Sheet3

1089190

899166

780139

638111

832123

&A

Page &P

Ienkums uz vienu lauksaimniecb nodarbinto, EUR gad

Ienkums no lauksaimniecbas, milj.EUR

EUR/gad

milj. EUR

Sheet4

Individuls saimniecbasValsts saimniecbasPrjie lauksaimniecbas uzmumi

19904.191.24.7

199463.9333.1

2001890.310.7

Sheet4

4.191.24.7

63.9333.1

890.310.7

Individuls saimniecbas

Valsts saimniecbas

Prjie lauksaimniecbas uzmumi

procentuli

Zemnieku saimniecbasPiemjas saimniecbasPersongs palgsaimniecbasKolhoziValsts saimniecbasStattsabiedrbasZemnieku saimniecbasPiemjas saimniecbasPersongs palgsaimniecbasKolhoziValsts saimniecbasStattsabiedrbas

19913.90%60.30%19913.960.3

199652%26%9%1%12%199652269112

200058.80%28.70%1.50%11.00%200058.828.71.511

199419951996199719981999200020012002

7.413.51716.728.731.333.234.840.4

SubsidiesState public financing for SAPARD

199617

199716.7

199828.5

199931.3

200035.5

200137.1

200251.61.4

200360.98.3

200439.512.6

200542.59.2

0.039199119910.60319911991

0.520.260.0919960.010.12

0.5880.2870.01520000.112000

Zemnieku saimniecbas

Piemjas saimniecbas

Persongs palgsaimniecbas

Kolhozi

Valsts saimniecbas

Stattsabiedrbas

Latvijas lauksaimniecbas zemju iedaljums

000000

000000

000000

Zemnieku saimniecbas

Piemjas saimniecbas

Persongs palgsaimniecbas

Kolhozi

Valsts saimniecbas

Stattsabiedrbas

Subsidies

State public financing for SAPARD

Year

EUR ths.

Nacionally financed programsLong-term investment credit program in agricultureCredit program focused on purchase of agricultural landNon-agricultural entrepreneurship development program

Farm income and income of population employed in agriculture

Balance of foreign trade in agricultural goods, mln LVL

Diagramma1

64.5-222.9-158.4

65.8-245.5-179.7

111-282.7-171.7

144-334.9-190.9

148.5-361.1-212.6

199-433.9-234.9

Export

Import

Balance

Lapa1

199920002001200220032004

Eksports64.565.8111.0144.0148.5199.0

Imports222.9245.5282.7334.9361.1433.9

Bilance-158.4-179.7-171.7-190.9-212.6-234.9

199920002001200220032004

Export64.565.8111.0144.0148.5199.0

Import-222.9-245.5-282.7-334.9-361.1-433.9

Balance-158.4-179.7-171.7-190.9-212.6-234.9

Eksport

200220032004

Third countries696169

European Union7588130

European UnionThird countries

20026975

20036188

200469130

Import

200220032004



European UnionThird countries

200264271

200361300

200463371

Lapa1

000

000

000

000

000

000

Export

Import

Balance

Lapa2

69.17933960.58272769.173741

74.77419587.934112129.810791

2002

2003

2004

Lapa3

63.55520761.40453262.816312

271.314235299.664914371.035636

2002

2003

2004

MBD001BEFD4.xls

Diagramma4

64.5222.9-158.4

65.8245.5-179.7

111282.7-171.7

144334.9-190.9

148.5361.1-212.6

199433.9-234.9

Eksports

Imports

Bilance

Diagramma2

64.5222.9-158.4

65.8245.5-179.7

111282.7-171.7

144334.9-190.9

148.5361.1-212.6

199433.9-234.9

Eksports

Imports

Bilance

E_02_04

200220032004

Drzei un sakaugi 070.61.31.7

Prjie produkti1.01.22.2

Augi 082.13.02.4

Tauki un eas 150.71.12.8

Kafija, tja, garvielas 091.52.32.9

Miltrpniecbas produkcija 111.92.93.2

Kakao un kakao konditoreja 183.33.95.5

Tabaka, cigaretes 2420.06.16.2

Prtikas rpniecbas atliekas 234.73.96.4

Cukurs un cukura konditoreja 171.74.57.1

Miltu izstrdjumi, konditoreja 192.64.47.1

Graudaugi 107.712.77.2

Sklas, augi, lopbarba 124.63.17.5

Jaukti prtikas produkti 215.25.27.8

Augu/drzeu konservi, sulas 205.77.58.7

Zivis, vveidgie 0310.511.413.0

Piens, piena produkti, olas, medus 0412.415.427.6

Gaas un zivju konservi 1636.133.138.4

Bezalkoholiskie, akoholiskie dzrieni 2221.425.841.5

E_02_04

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

2002

2003

2004

IM_02_04

200220032004






Zivis un vveidgie 0314.314.315.1


Kafija,tja, garvielas 0916.116.616.9






Tauki un eas 1522.723.927.5


Augi 0831.134.639.6

Gaa un suprodukti 0226.831.839.7


Bezalkoholiskie, alkoholiskie dzrieni 2242.742.551.3

IM_02_04

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

2002

2003

2004

bil_99_04

199920002001200220032004

Eksports64.565.8111.0144.0148.5199.0

Imports222.9245.5282.7334.9361.1433.9

Bilance-158.4-179.7-171.7-190.9-212.6-234.9

bil_99_04

000

000

000

000

000

000

Eksports

Imports

Bilance

Evgr_02_04

200220032004

EXP_LSEXP_LSEXP_LS

ES 257477419587934112129810791

TR691793396058272769173741

200220032004

Tres valstis696169

Eiropas Savienba (25)7588130

Evgr_02_04

000

000

2002

2003

2004

Ivgr_02_04

200220032004

IMP_LSIMP_LSIMP_LS


Tres valstis635552076140453262816312

200220032004

Tres valstis646163


Ivgr_02_04

63.55520761.40453262.816312

271.314235299.664914371.035636

2002

2003

2004

Lapa2

Lapa1

Structure of Latvias export goods by EU-25 and Third countries, mln LVL

Diagramma3

69.17933960.58272769.173741

74.77419587.934112129.810791

2002

2003

2004

E_02_04

200220032004



Augi 082.13.02.4

















E_02_04

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

2002

2003

2004

IM_02_04

200220032004














Tauki un eas 1522.723.927.5


Augi 0831.134.639.6




IM_02_04

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

2002

2003

2004

bil_99_04

199920002001200220032004

Eksports64.565.8111.0144.0148.5199.0

Imports222.9245.5282.7334.9361.1433.9

Bilance-158.4-179.7-171.7-190.9-212.6-234.9

bil_99_04

000

000

000

000

000

000

Eksports

Imports

Bilance

Evgr_02_04

200220032004

EXP_LSEXP_LSEXP_LS

ES 257477419587934112129810791

TR691793396058272769173741

200220032004



Evgr_02_04

000

000

2002

2003

2004

Ivgr_02_04

200220032004

IMP_LSIMP_LSIMP_LS


Tres valstis635552076140453262816312

200220032004

Tres valstis646163


Ivgr_02_04

000

000

2002

2003

2004

Lapa2

Lapa1

Structure of imported agricultural goods by EU-25 and Third countries, mln LVL

Diagramma4

63.55520761.40453262.816312

271.314235299.664914371.035636

2002

2003

2004

E_02_04

200220032004



Augi 082.13.02.4

















E_02_04

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

2002

2003

2004

IM_02_04

200220032004














Tauki un eas 1522.723.927.5


Augi 0831.134.639.6




IM_02_04

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

2002

2003

2004

bil_99_04

199920002001200220032004

Eksports64.565.8111.0144.0148.5199.0

Imports222.9245.5282.7334.9361.1433.9

Bilance-158.4-179.7-171.7-190.9-212.6-234.9

bil_99_04

000

000

000

000

000

000

Eksports

Imports

Bilance

Evgr_02_04

200220032004

EXP_LSEXP_LSEXP_LS

ES 257477419587934112129810791

TR691793396058272769173741

200220032004

Tres valstis696169


Evgr_02_04

000

000

2002

2003

2004

Ivgr_02_04

200220032004

IMP_LSIMP_LSIMP_LS


Tres valstis635552076140453262816312

200220032004



Ivgr_02_04

000

000

2002

2003

2004

Lapa2

Lapa1

Latvia`s participation in World Trade organization before joining EUSince 1999 Latvia is WTO member and applies equal provisions to all WTO members in it`s agricultural policy and trade:(1) in domestic support pillar Latvia`s commitments of Amber box payments were: * until 2003 - 24 million SDR ( ~ 12,45 million Euro) * after 2003 - 5% from total agricultural production, which was never exceeded;(2) Latvia bound its import duties on agricultural products at a ceiling rate of 50%;(3) Latvia bound import duties within quotas of certain sensitive products;(4) Latvia committed to eliminate its provided export subsidies.

Latvia`s participation in WTO as EU member state (I) Domestic supportAfter enlargement EU-25 commitments in WTO were consolidated:(1) domestic support:* Allowable ceiling of EU Amber box payments is 67,2 mio Euro, but in 2005 planned Amber box payments for Latvia is ~ 6 mio Euro* Latvia is entitled to receive direct payments under production limiting programs (Blue box), which was not possible before: -) in 2005 the planned sum of SAPs is ~ 39 mio EUR, -) in 2005 the planned CNDP is ~ 61 mio Euro.* In 2005 the planned Green box payments in Latvia are ~ 208 mio Euro

Latvia`s participation in WTO as EU member state (II) Export competition-) Latvia is entitled to receive also export subsidies for exports of certain agricultural and processed agricultural products to third countries:* EU ceiling of export subsidies is ~ 3,8 billion Euro. * In 2004, Latvia`s exporters received export refunds in tune of 71 127,6 Euro for the following products

Chart2

52770.571

65535.48

234653.27

6221.19

119840

The paid export refunds in Latvia in 2004

Beef and veal1%

Processed agricultural products25%

Cereals11%

Sugar14%

Milk products49%

Licences

Izsniegto licenu skaita dinamika 2004.-2005.gadam

MnesisLicenu skaitsKop

ImportsEksports

maijs521264

jnijs22628

jlijs411253

augusts441054

septembris36743

oktobris331952

novembris382058

decembris372360

janvris273057

februris212243

marts482371

aprlis263258

maijs282048

jnijs223254

jlijs285280

augusts352964

Kop538349887

Izsniegto licenu skaits pa produktu sektoriem 2004.gad

SektoriLicenu skaitsKop

MaijsJnijsJlijsAugustsSept.Okt.Nov.Dec.

Labba, ts produkti7107712710464

Vns408183118212627189

Banni333413

Vistas gaa112

Liellopu gaa1113

Prstrdti augi1113

Cukurs11111221120

Etilspirts11114

Piens, t produkti145

Kop5222414436333837303

EKSPORTS


MaijsJnijsJlijsAugustsSept.Okt.Nov.Dec.

Labba,ts produkti3573411111155


Cukurs21214414

Liellopu gaa11

Eas un tauki11

Kop12612107192023109

Izsniegto licenu skaits pa produktu sektoriem 2005.gad


Janv.Febr.MartsAprlisMaijsJnijsJlijsAugustsSept.Okt.Nov.Dec.

Labba, ts produkti11101312111111281

Vns111029101651424119

Banni448

Putnu gaa1113

Liellopu gaa0

Prstrdti augi11114

Cukurs21111118

Etilspirts1113


Kop2721482628222835235


Janv.Febr.MartsAprlisMaijsJnijsJlijsAugustsSept.Okt.Nov.Dec.

Labba,ts produkti161515229203619152


Cukurs3225121218

Liellopu gaa0

Eas un tauki1113

Kop3022233220325229240

Licences

000

#REF!

#REF!

#REF!

tonnas, hektolitri

Kopjie produktu apjomi

Komensacijas

000

#REF!

#REF!

#REF!

tonnas, hektolitri

Kopjie produktu apjomi

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

Imports

Eksports

licenu skaits

0

0

0

0

0

0

0

0

0

Imports

0

0

0

0

0

Eksports

0

0

0

0

0

0

0

0

0

Imports

0

0

0

0

0

Eksports

Sektorsnostts izmaksai pavisam

janvrisfebrurismartsaprlis

Atbalstu skaitssumma, LsAtbalstu skaitssumma, LsAtbalstu skaitssumma, LsAtbalstu skaitssumma, Ls

Graudaugi1715,710.67 Ls23,164.63 Ls32,839.89 Ls3210,445.94 Ls

Cukurs00.00 Ls43,161.87 Ls134,846.05 Ls177,885.32 Ls

Piens106,677.30 Ls1927,285.21 Ls1222,278.92 Ls1326,093.77 Ls

Liellopu un tea gaa16,221.19 Ls00.00 Ls00.00 Ls00.00 Ls

Prstrdtie produkti

kop2828,609.16 Ls2533,611.71 Ls2829,964.86 Ls6244,425.03 Ls

Eksporta kompensciju maksjumi pa produktu sektoriem 2004.-2005.gadam

Sektorsizmaksts

Kop 2004. (no 01.05.2004)Kop 2005. (ldz 31.08.2005.)Pavisam kop

summa, Lssumma, Lssumma, Ls

Graudaugi200.24 Ls52,570.33 Ls52,770.57 Ls

Cukurs18,546.71 Ls46,988.77 Ls65,535.48 Ls

Piens59,764.36 Ls174,888.91 Ls234,653.27 Ls

Liellopu un tea gaa0.00 Ls6,221.19 Ls6,221.19 Ls

Prstrdtie produkti20,276.98 Ls99,563.02 Ls119,840.00 Ls

Kop98,788.29 Ls380,232.22 Ls479,020.51 Ls

11111

Graudaugi

Cukurs

Piens

Prtikas piegdes

#REF!

01

0

0

0

0

The paid export refunds in Latvia in 2004

Milk products49%

Sugar14%

Cereals11%

Processed agricultural products25%

Beef and veal1%

00000

00000

00000

Graudaugi

Cukurs

Piens

Liellopu un tea gaa

Prstrdtie produkti

Eksporta kompenscijas

01

0

0

0

0

Export refunds

Latvia`s participation in WTO as EU member state (III) Market access

Decisions and Current activities on CAP reformLatvia has decided that the Single Area Payment scheme will be also applied in year 2006 and 2007

Activities:Analysis of the CAP reform legislation still under process in the MoAEconomical calculation about the CAP reform impact on agricultural sector in Latvia will be finished at the end of this yearInformative campaign as well as discussion with society and farmers was organized by the MoA Consultations with EC experts and regular workshops with Baltic colleagues

Calculator

Opinions on CAP reformOpinion/decision/ by Agricultural Joint Consultative Council: to introduce the reform from 2009, to regard Latvia as a single region and to tie up the support with production levels as much as possible.

Recommendation by the State Institute of Agrarian Economics the scenario, which envisages implementation of the reform, as late as possible in 2009, and providing a maximum interconnection between direct payments and production, gives a stronger development impetus to Latvias agriculture and a general income growth in the sector. The offered support to the reform does not provide support to agricultural production, moreover it does not reach countryside.

Opinions on CAP reformResults of public opinion poll What will Latvias agriculture and rural development look like in the next planning period from 2007 to 2013 (641 inquiry form) the year of the reform implementation 2009, to tie up the payments with production, to regionalize Latvia.

Choice of respondents on implementation of CAP reform, %

Rural Development Programme 2007 - 2013Improving the competitiveness of the agricultural and forestry sector Improving the environment and the countrysideThe quality of life in rural areas and diversification of rural economyLEADER

Main objective of Latvias rural development policy Prosperous people in inhabited rural areas of Latvia

Operational objectives for LatviaEstablishement and development of high quality production chains targeted at consumerEstablishement of new economically active unitsDevelopment of human resources:By training and consultationsBy improvement of age structure

Operational objectives for LatviaPreservation of agricultural land for production of agricultural productsSupport for production of public goodsDevelopment of production of non agricultural products in rural areas

Thank you for your attention!

Lauksaimniecbas un medniecbas IKP bez mesaimniecbasLatvia similar to other Candidate States submitted its position in the chapter Agriculture in 2000. Our negotiation position was based on the following principles:Development of Latvias agricultural sector within the common economic domain of European Union on the basis of equality;Sufficiency of production level to satisfy domestic market demands;Efficient use of Latvias agricultural land in production and conservation of rural landscape;Maintaining rural territories populated by encouraging the retraining of workforce made redundant in agriculture to be employed in non-agricultural sectors.

In accession negotiations Latvias representatives paid the most of attention to production quotas.Latvia, similar to Estonia and Lithuania has always considered that the conditions offered by the EU must be properly adjusted, taking into account restructuring factor and impact of Russian crisis:Specific condition of all three Baltic States they are sole countries of all the Candidate States, which had to overcome an absolute restructuring of agricultural sector from the USSR collective and State farms to free market system. Therefore, the years 1990-1995 are characterized as the period of privatization of agricultural sector and an actual restructuring period laying down the foundation for an absolutely new sector.The growth and development of Latvias agricultural sector in 1998 was interrupted by crisis in Russia, which resulted in a sharp reduction of exports of foodstuffs to the biggest Latvias trade partner of that time Russia.Latvia was aiming to achieve during the negotiations such level of production quotas that would create long-term development opportunities for perspective sectors of agriculture as well as to reach such a support to production upgrading and such a model of direct payments that would ensure equal competition opportunities for Latvias agriculturists on the EU market.To prepare for implementation of acquis, European Union set up in Latvia, as well as in other Candidate States, several non-refundable support programs. There were three pre-accession support programs for Central and Eastern European countries PHARE, ISPA and SAPARD.The European Commission for Agriculture and Rural Development launched SAPARD Program thus, for the first time since the foundation of the EU, Candidate States had opportunity to make decision on granting of and payment of funding.The financing under SAPARD Program is based on other principles than those of the national subsidies. Beneficiaries of this support program had to be oriented on a successful entrepreneurial activity, as one of the eligibility prerequisites was economic viability of the establishment. These applicants had to prove not only how successful their businesses were but also to find financial resources to cover 100% implementation of their projects, as the public financing could be recovered only after a full project implementation.Financial resources available under SAPARD Program were determined by annual financial agreements signed between the Republic of Latvia and the European Commission on behalf of the Community. The public financing was composed of 75% EU financing and 25% LV co-financing that constituted 45-100% (depending on conditions of the supporting measure) of the total eligible costs of the project. Under SAPARD Program, Latvia has acquired a valuable experience regarding the measures, which after accession are financed from EAGGF Guidance part. A specific implementation mechanism fit for Latvias conditions has been put in place for these measures. Lots of recommendations referred to in Latvias SAPARD Mid-term Evaluation Report have been taken into account when developing the measures to be implemented according to the Single Programming Document. Some of the most important are as follows:reduction of bureaucratic burden that would simplify the submission procedure as well as provide access to financing for small-size establishments; to pay more attention to rural development and not only to agriculture thus, ensuring a balanced choice of measures.The total number of projects differs from region to region and also within different measures, it is influenced by:intensity of agricultural and economic activity in the region and the dominating sector;the size of regional and agricultural territory and the number of administrative districts constituting this region;ability of beneficiaries to prepare good projects and to invest in the development of their establishment.The amount of four year financing available under SAPARD Program has been utilized in two years of implementation, consequently:applicants were active and able to prepare projects complying with SAPARD Program requirements thus acquiring experience in reaching conformity with the EU requirements;MoA as the Monitoring Authority within SAPARD Program has facilitated its availability by preparing manifold amendments to the Program conditions; RSS as the Program administration authority has been able to administrate a relatively large number of projects (the Program anticipated 600-700 projects per year in average, in 2002 RSS received 559 projects but in 2003 1536 projects) in a short period of time two years since the start-up of the Program.Experience in utilization of the EU structural funds thus acquired will be useful for candidates and governmental institutions. Upon accession to European Union, types and conditions of support changed considerably, the same happened with priorities of sectors to be supported and levels of payments therefore, it was necessary to use SAPARD experience also in future. The purpose of the Single Programming Document (SPD) is to provide access to the EU structural funds in 2004-2006 and it comprises strategy and priorities set up by Latvias government where resources of structural funds are to be channeled. Latvia receives financing from all 4 EU structural funds European Regional Development Fund; European Social Fund; European Agricultural Guidance and Guarantee Fund; Fisheries Management Finance Instrument.Taking account of the fact that the programming period is short, there are integrated and pragmatic priorities defined. This approach will strengthen the need to follow the principle of complementarity of the EU structural funds. Even if the high priority is given, in order to support priorities and to improve basic infrastructures needed to enhance development of the country, the SPD triggers new investments, which can encourage the development of entrepreneurship and human resources. The accent that is put on the dimension of human resources of SPD, reflects a long-term development objective of Latvia to create a competitive and all-embracing economy based on knowledge. On June 23 2004, the European Commission for Agricultural Structures and Rural Development meeting considered and approved the Rural Development Plan of Latvia (RDP). On July 30, 2004 the European Commission made a decision On approval of Latvias Rural Development Programming Document for 2004-2006 programming period Thus, the year 2004 was the first functioning year of Latvias Rural Development Plan.The aim of this plan is to raise income level, to develop and improve production efficiency of agricultural holdings, following environmental requirements, to diversify rural economy and income and maintain rural area populated.The following measures are used to achieve this aim:- Agri-environment:development of organic farming;maintaining of biological diversity of grasses;laying out of buffer zones;conservation of genetic resources of agricultural animals.- Less favored areas and areas with environmental restrictions;- Early retirement; - Support to restructuring of semi-subsistence farms; - Support to producer groups;- Achievement of standards.To facilitate implementation of the Rural Development Program, the Ministry of Agriculture encourages cooperation with non-governmental organizations. The major part of issues, prior to the decision making, is discussed with relevant non-governmental organizations Agricultural Joint Consultative Council, Latvian Nature Fund and other organizations. During implementation of the plan, social partners play the most significant role on the basis of the following tasks:to gent involved and to assist, within the limits of their competence, the RSS and MoA in implementation of objectives of the plan;to assist in information and consulting of rural population (different target groups) on availability of support or changes in requirements;to represent interests of different target groups in the decision making process (particularly in the Monitoring Committee);cooperating among themselves and involving a wider public, to collect proposals on necessary improvements or on elimination of shortcomings occurring in the mechanism of measure implementation, and subsequently inform the public on possible changes in implementation of measures;to ensure education and advisory to rural population, regarding eligibility to support, more effective utilization and reporting of payments utilized.

After accession of Latvia, its national payment system is gradually approximated to the EU agricultural support payment system and the Community Guidelines for State aid in Agricultural Sector. Implementing the national support policy instruments for a sustainable rural development, farmers must be provided with an uninterrupted national support and gradual transition to the EU payment system, as well as in accordance with Latvias accession negotiation position. The EU direct payments, measures and national support payments provided in the Single programming Document and Rural Development Plan are complementary to each other but not analogous to them. Introduction of new support measures:According to Article 88 of the EC Treaty, new support schemes are coordinated with the European Commission; According to the Commission Regulation 1/2004 of 23 December 2003 on application of Articles 87 and 88 of the EC Treaty in respect of national support to small and medium establishments engaged in production, processing and marketing of agricultural goods.The aim of support measures is ensuring of a harmonious development of an efficient and sustainable production by means of the development of socio-economic domain. The national support will improve efficiency of agricultural production, building up a competitive and multifunctional agricultural sector within a comprehensive and integrated rural development by enhancing the growth of income from agriculture. New basic eligibility principles are being phased into the national support measures. The national support method co-financing. To achieve the aim of the support measure, 20 to 30% of the costs incurred by the measure is covered by beneficiaries from their own resources or loans The National support is constant every year ( EUR 38 mio). Fluctuations are caused by compensatory payments due to climatic conditions (flood, hail, draught, etc.) as well as SAPARD co-financing). Until now, the MoA with a view to supporting agriculture and rural development, and in cooperation with Latvijas Hopetku un zemes banka (Mortgage and land bank) has implemented three programs.A long-term investment crediting program in agriculture was developed with a view to facilitating attraction of investments to capital consuming sectors of agriculture. Within this program, farmers can receive loans at a lower interest rate (initially 7%, now 4 and 5%) for long-term investments. The total credit line of the program LVL 15 mio. EUR 21,3 mio. This program was launched in 2002 and it is planned that by the end of the current year the credit line will be finalized. The objective of the credit Program assisting purchase of agricultural land was providing possibility to farmers to receive financing on favorable conditions for purchase of the major production means agricultural land and to encourage the development of farms with an optimal production structure. Farmers can receive long-term loans for land purchases (up to 20 years) at 4% interest rate. The total credit line of the program is LVL 9 mio EUR 12,8 mio. The program was launched in summer of 2002 and it is planned that by the end of the current year this credit line will be finalized.Non-agricultural entrepreneurship development program was focused on enhancing of economic development in rural areas by supporting non-agricultural entrepreneurship. Within the program rural business people were eligible to several types of support: credits, credit guarantees and advice. The program was run from 2003 to May 1, 2004 afterwards the EU support measures entered into force.With EU enlargement the former foreign trade regime of 10 new member states considerably changed and became one economic union and common market including common agricultural and trade policy and free movement of goods in internal EU-25 market. At the same time all new EU member states became binding partners of all EU concluded trade agreements with third countries Through enlargement Latvia and other 9 new member states were integrated into EU trade mechanisms system providing protection of EU internal market through tariffs and quotas and increase of exports capability through export refundsBefore accession to EU, Latvia had 10 Free trade agreements with EU -15, Lithuania, Estonia, Poland, Check Republic, Hungary, Slovak Republic and Slovenia and European free trade area (EFTA). After EU enlargement for all 10 new member states are binding EU concluded agreements such us economic partnership agreements (with Russia, Ukraine, Uzbekistan etc.), economic cooperation agreements (African Caribbean and Pacific countries, customs union with Turkey, Andorra etc.) and preferential trade agreements (with EFTA, South Africa, Mediterranean countries, Mexico, Chile etc.) and now are participating in discussions with European Commission on liberalization of already concluded agreements or to start new trade liberalization negotiations with third countries.

This is very challenging possibility to achieve as offensive as defensive trade interests as in bilateral as in multilateral level.Balance of foreign trade in agricultural goods, mln LVLLatvia in the area of food and agricultural products is a net importing country what proofs balance of external trade of Latvia.

Structure of Latvias export goods by EU-25 and Third countries, mln LVL Latvias exports of food and agricultural products has increasing tendency as to European Union, as to third countries markets. Latvias accession to the European Union increased export flows considerably to the countries of enlarged EU, partly that was affected by opening markets and by elimination of tariff barriers in trade between EU Member States.

Structure of imported agricultural goods by EU-25 and Third countries, mln LVLLatvias main importing partners are European countries, as before EU enlargement, as after. EU enlargement promoted import to Latvia from its EU partners especially.

Latvias participation in World trade organization before joining EUSince 1993 one of Latvias great challenges was accession to WTO, which were achieved in 1999 when Latvia became WTO member undertaking to apply equal provisions to all WTO members in its agricultural policy and trade:-) in domestic support pillar Latvias commitments regarding trade distorting support in agriculture (amber box) were 24 million SDR ( ~ 12,45 million Euro) and after 2003 amber box payments could constitute amount of 5% from total agricultural production, which was never exceeded;-) Latvia bound its import duties on agricultural products at a ceiling rate of 50% and implementation period of annual tariff reductions;-) Latvia bound import duties within quotas of certain sensitive products restricting its volumes of imports (for wheat and meslin, barley, oats, raw cane sugar for processing);-) Latvia committed to eliminate its provided export subsidies for certain milk products and rye.

Latvias participation in WTO as EU member state (I) Domestic support-) Allowable ceiling of domestic support in agriculture: trade distorting (amber box) increased to 67,2 million Euro. but in 2005 planned Amber box payments for Latvia is ~ 6 mio Euro

-) Latvia is entitled to receive direct payments under production limiting programs (blue box), which was not possible before, for example in 2005 the planned sum of single area payment for Latvia`s farmers is 38,9 million Euro, and planned complementary national direct payments is 61,3 million EUR (in 2004 farmers received 27,3 million EUR from single area payment and 46,3 million from complementary national direct payments).

-) * In 2005 the planned Green box payments in Latvia are ~ 208 mio Euro

Latvia`s participation in WTO as EU member state (II) Export competition

-) Latvia is entitled to receive also export subsidies for exports of certain agricultural and processed agricultural products to third countries. EU ceiling of export subsidies is 3 861,79 million Euro. For example in 2004, Latvias exporters received export refunds in tune of 71 127,6 Euro, mainly for exports of milk products (49%), processed products (25%), sugar (14 %) and cereals (11 %).

Latvia`s participation in WTO as EU member state (III)

After joining EU, the level of Latvia`s bound tariffs in WTO increased considerably for all agricultural and processed agricultural goods, what you can see in some provided examples below. Latvia's bound rate of duties were expressed just in one form ad valorem duties (% of value of a product concerned), but to have a comparable look, we re-calculated our bound rate of duties in specific form (EUR per ton), according to the average Latvia`s import values of concerned products in 2002, 2003 and 2004.

In conclusion future challenges from participation in WTO as EU member state

The challenge for Latvia is participation in ongoing WTO Doha Development Agenda negotiations, which foresee to promote multilateral and beneficial international trade liberalization. The positive outcome of successful trade liberalization shall lead to growth of all economies and to rise in living standards and particularly to eradication of poverty in developing and least developing world part. For Latvia as newly acceded member of EU and other 9 new member states it is vital to keep the obtained benefits from EU enlargement in agricultural policy and trade. In spite of development dimension, which has to be taken into account in all WTO agricultural negotiations pillars, for enlarged EU it is vital to strengthen domestic competitiveness of agricultural products, which can be threatened in case of granting too much preferential market access to those third countries, which have greater competitive advantages in production of agricultural products. Therefore the challenging task would be to find a way to keep or safeguard our sensitivities, which are related to social and economic policies. On the other hand it is important to find also new markets for EU-25 production.

CAP reform the objectivesTo switch direct income support from production to producer to increase the efficiency of production To promote market oriented, environmentally friendly and sustainable agriculture To increase the competitivenes of EU agriculture and to rise food quality To ensure better balance between direct payments and rural developmentTurpmk Lauku attstbas politika 2007.2013.gadam galveno uzmanbu velts trim jomm atbilstoi "trim paskumu asm", kas noteiktas jaunaj lauku attstbas regul: lauksaimniecbas un mesaimniecbas konkurtspjas uzlaboana; vide un lauku ainava; dzves kvalittes uzlaboana un lauku ekonomikas dadoana. Ceturt ass, kas balstta uz programmas Leader stenoanas gait gto pieredzi, rada iespjas lauku attstb izmantot uz vietj lmea pieeju "no apakas uz augu".Lauku reioni sastda 90 % no paplaints ES teritorijas. Jaunais programmu periods sniedz uniklu iespju prnest atbalstu no jaun lauku attstbas fonda uz izaugsmi, darba vietm un ilgtspjgu attstbu.

Documents

New EU members and challanges facing European rural and agricultural policy