The paper focuses on the exposition of the research results on agricultural resources in Kurzeme peninsula-climatic resources, qualitative evaluation of the land, condition of land amelioration, topographic resources, and structural breakdown of farm land by types of use. It is concluded that extremely various climatic and soil conditions govern in the region. The Southeast part of Kurzeme peninsula is displayed very favourably by the aggregate value of agricultural resources. Labour productivity in Kurzeme has been analysed as well.

One of the cornerstones of sustainable use of land resources is the use of land resources for the identified needs. In every country it is needed to list the land according to the type of land use. Such function of land classification in Latvia is maintained by the classification of purpose of real property use. In a certain period of time needs of the specific purposes for which the land resources are used are changing, so the aim of this study is to research changes of areas of purpose of real property use in municipalities of Latvia. The analysis of purpose of use of real property in Latvia municipalities demonstrates the trend of decrease of agricultural land resource areas in proportion to the increase of forest land resource areas, excluding the region around Riga, where areas of agricultural land and forest land resources are decreasing, but residential land resource area for needs of development of capital is increasing.

More than 17,5% of Latvian agricultural land is abondoned, therefore effective use of this land is a significant issue in national economics. One of the alternatives of how to use abandoned agricultural land is its afforestation by birch. The present research is based on the Scandinavian experience. Calculations have been made on the necessary investments and management costs. The recovery and possible impact on price changes in raw birch materials are analysed as well.

Today more than 17.5% of agricultural land is abandoned in Latvia. Effective use of this land is essential for rural development planning, as well as growth of national economics. Afforestation is one of alternative uses of abondoned and marginal agricultural land. Requisite investments and management costs are calculated for forest plantations of pine, spruce, birch and aspen. The analysis of investment appraisal is based on several criteria - net present value, internal rate of return, benefit/cost ratio and equivalent annual annuity.