EU funding for Latvia’s agriculture, food production, forestry, fisheries and aquaculture will become more targeted. As the focus of support changes, so too should the question that entrepreneurs ask themselves when planning to start or develop a business.
Instead of asking, “Where and how can I access funding?”, the starting point should be: “What is my business idea, who needs it, and how will it help me become more competitive?” Funding is a tool for achieving this objective.
The 2023–2027 programming period will soon come to an end, and the new EU programming period will also bring changes to the agricultural sector. At present, Latvia’s agricultural sectors are actively working on their development strategies, defining where they want to be in the future and what needs to be done to achieve growth. Funding in itself is not a development strategy – it is a tool that helps implement development plans and achieve specific, measurable results.
Liene Jansone, Acting State Secretary of the Ministry of Agriculture, believes that this represents a fundamental change in mindset. “It is not about having funding and then finding somewhere to use it. Instead, you should come with an idea that you are passionate about and want to put into practice,” she says. “We understand that agriculture is a business.”
Why has this approach become necessary? European policies and markets are changing, while available resources are limited. Therefore, funding is increasingly being directed towards investments that deliver economic benefits – helping to increase business productivity and income, create greater added value and strengthen financial viability, making businesses more self-sufficient.
This also means greater responsibility for support beneficiaries. According to Jansone, one of the most common problems is excessive reliance on support payments, while insufficient attention is paid to analysing the financial situation of an agricultural holding. Therefore, when planning development and new investments, it is increasingly important to have a clear understanding of the holding’s financial situation – its revenues, detailed costs, cash flow and ability to take on new financial commitments. This is particularly important after several difficult years, when low yields have significantly affected farm incomes.
“Before planning an investment, it is worth going back to basics – analysing your expenses in detail, understanding what can be optimised, assessing the return on investment and only then deciding on the next steps,” Liene Jansone emphasises.
Funding instruments are also changing. As grant opportunities are limited and the overall volume of projects is declining, financial instruments will become increasingly important. Jansone mentions loans with a capital rebate, under which part of the loan may be written off following the successful implementation of a project. Unlike a grant, a loan also creates financial obligations, meaning that entrepreneurs need to assess the economic rationale of their business plans even more carefully.
Co-financing is equally important. Support beneficiaries must be prepared to invest their own funds as well, which further underlines the need to carefully assess the economic rationale of a project before it is implemented – what economic results will the investment deliver, and will the agricultural holding be able to take on the resulting financial commitments?
“The approach of planning a business around the support available should be left in the past,” Liene Jansone emphasises. “There must first be an idea, a market need and a clear development plan. Funding is a tool that helps make this plan a reality more quickly and efficiently.”
This approach also means that the return on support will become increasingly important in the future – in other words, what results the funding invested helps to achieve. The aim is not to absorb the funding available, but to use it to create stronger, more competitive Latvian businesses and agricultural holdings that are better aligned with market needs.
Therefore, the key question in the next programming period will not be how much funding we have absorbed, but what we have achieved with it. Has the agricultural holding become more productive and financially stronger? Has greater added value been created? Have new markets been reached? And has Latvia’s agriculture and food sector as a whole become more competitive?
AGRICULTURAL DEVELOPMENT PLAN 2026–2036
Objective: To increase agricultural output and productivity, contributing an additional 2 percentage points to GDP growth and, over a 10-year period, bringing agricultural output per hectare in line with Finland – from EUR 971 per hectare in 2026 to EUR 2,256 per hectare in 2036.
This will be achieved by:
increasing productivity;
improving competitiveness;
strengthening cooperation throughout the value chain;
improving risk management.
An information campaign on the Jauns.lv news portal aimed at promoting the CAP Strategic Plan and the CFP Maritime, Fisheries and Aquaculture Programme.
