The role of agribusiness in maintenance of future rural employment in Latvia

Krievina, A., Latvia Univ. of Agriculture, Jelgava . Dept. of Economics;Latvian State Inst. of Agrarian Economics, Riga; Leimane, I., Latvia Univ. of Agriculture, Jelgava . Dept. of Economics;Latvian State Inst. of Agrarian Economics, Riga; Miglavs, A., Latvian State Inst. of Agrarian Economics, Riga

The role of agribusiness in maintenance of future rural employment in Latvia

2012

Krievina, A., Latvia Univ. of Agriculture, Jelgava (Latvia). Dept. of Economics;Latvian State Inst. of Agrarian Economics, Riga (Latvia) | Leimane, I., Latvia Univ. of Agriculture, Jelgava (Latvia). Dept. of Economics;Latvian State Inst. of Agrarian Economics, Riga (Latvia) | Miglavs, A., Latvian State Inst. of Agrarian Economics, Riga (Latvia)

Agriculture and manufacture of food products is important source of employment in Latvia. The number of people engaged in agribusiness has considerably decreased over the past years in Latvia. Therefore the paper seeks to analyze the existing situation in utilization of agricultural potential, as well as to evaluate the role of agribusiness potential in maintenance of rural employment in Latvia. The potential is analyzed in the context of the productivity of the persons employed in agribusiness, land use and the self-sufficiency level with the main food products in Latvia. The value added in Latvian agribusiness is very low in comparison with other EU countries, indicating low labour productivity in Latvia. The potential of agricultural land is also not fully utilized in Latvia, which gives basis to consider obtaining of higher agribusiness output in Latvia at the expense of inclusion of additional land resources. The development of the potential of Latvian agribusiness is to be associated with the satisfying of demand for meat in local market and increase in the supply of dairy products on export market. Considering the necessity to reach at least the EU average labour productivity, even the full utilization of agricultural potential is not sufficient for the maintenance of rural employment in Latvia at the level close to current. The decrease in employment in the agribusiness of Latvia cannot be stopped, even more – it is possible that it will continue provoke the decrease also in other sectors of economic activity, namely – sectors of public and private services provided to people in rural space.

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