Common Agricultural Policy of the EU - Latvia's perspective

In the conclusions of the EU Council of June 2008, leaders of the European Union stated: ''It is important to continue to improve the market orientation of agriculture and thus enable EU farmers to better respond to market signals, while ensuring fair competition and fostering sustainable agriculture across the EU'' (European Council 19/20 June 2008 Presidency Conclusions, Article 28, p.8). In the meantime, however, funding for market activities and direct payments under the Common Agricultural Policy (CAP) available to Latvia for the financial perspective of 2007-2013 consist of only EUR 0.84 billion or EUR 1.36 billion, including the state co-financing. It is the lowest amount of direct payments made per ha in the EU. Even in 2013, when the EU direct payments to Latvia will reach 100%, they will mount up to mere 93 EUR/ha (65 LVL/ha). In comparison, the average level of direct payments within the EU-27 is 276 EUR/ha (194 LVL/ha). The research aim is to analyse the main directions, goals and programme implementation of CAP in the present financial perspective and propose solutions for its improvement. Materials, facts, working documents, and analysis from the European and Latvian institutions and financial analysts have been used in the policy assessment. Results are presented and formulated in a descriptive and logically constructive manner of synthesis. It is crucial for Latvia that the upcoming calculations for the financial perspective of 2014-2020 are made in an objective, fair manner that corresponds to the real-life situation in the EU member states. Revision of the EU direct payments system for the next financial perspective will have a decisive impact on agriculture and the rural development in Latvia. The renewed system of EU direct payments, CAP, and the European Rural Development policy shall be based on clear principles of active, straightforward implementation of new strategies, equality in access to resources and policy-making, simplified process of decision-making and calculations of further financial assistance, and above all – on the principle of fair competition. The Ministry of Agriculture of the Republic of Latvia has placed improvement of competitiveness of agricultural and forestry management enterprises among its top priorities, alongside restructuring, development and implementation of innovations, and improved level of knowledge and professional qualification among the population of Latvia. Yet - how many of the programmes aimed at reaching these goals have actually led to uncontested results? And how many of those have been included in the new state budget plan and financial perspective of the upcoming years? The research will look at the economic policy of the European Commission, the European Parliament, and the government of Latvia, factors affecting the economic policy as well as efficacy of the use of available resources. It will conclude by drawing up the desirable trends for future economic and political strategy both on the European and national level.