Business activity of an enterprise is almost inconceivable without planning. Therefore today there are many discussions about the importance of activity planning of the enterprise and forecasting of the resources, necessary to reach the set tasks. For this reason the scientists and practicians offer to implement the budgeting system in the enterprises. This paper introduces the new budgeting model - Activity-Based Budgeting (ABB) model. It also contains the survey of advantages of this model and its applicability in theoretical aspect. The key objective of this paper is to present Activity-Based Budgeting (ABB) as an important means of planning and coordination of activity of the agricultural enterprise (or any other type of an enterprise). After performance of analysis of the main principles of Activity-Based Budgeting (ABB) model the reasoned conclusions can be drawn that application of this model in the agricultural enterprises could be the alternative means against the variable and changing economical and business conditions. It should be emphasized that contrarily to the traditional budgeting models; ABB can help to establish the connections between the incurred costs and the company processes. The paper contains ABB analysis based upon the scientific studies and the fragments of practical application of the model.

The aim of the paper is the assessment of the changes in productivity expressed as the share of production costs in total output and its breakdown by major cost types of Latvian and Lithuanian farms over the period of the implementation of Rural Development Programme (RDP 2007 – 2013). The country’s agricultural productivity is determined by comparison of the total agricultural output value (in producer prices) and total inputs which include intermediate consumption expenditure, depreciation, labour costs and other external costs. The information for the analysis was sourced from the standardized Farm Accountancy Data Network (FADN) data. The results show that productivity level is higher in Lithuanian farms, although the tendency is that the share of costs in production value is increasing in Lithuania, so the difference between two countries is reducing. The changes of productivity in both countries infer the relative growth in the productivity in crop farming both in Latvia and Lithuania respective to dairy farming, as well as the productivity of large farms respective to small and medium farms. The comparisons of major cost items reveal an especially high level of energy costs in Latvia, as well as a high and soaring level of depreciation in Lithuania, especially in dairy farms. In the future policy making, it is worthwhile to design the measures targeting the confinement of risks and negative trends identified in the study.

The paper focuses on the analysis of agricultural externalities and their valuation methods. Agricultural activity beyond supplying food and fibre, can also be instrumental in forming the landscape, providing natural resources, and preserving biodiversity. Furthermore, agriculture contributes to the achievement of societal goals such as the viability of rural areas and their development, food security, and preservation of cultural heritage. Positive externalities of agriculture assert in the form of public goods, whereas intensive environmentally unbalanced agricultural activity causes damage to the environment. The objectives of this paper are to define agricultural externalities and to analyse methods of their valuation. In order to achieve the research aim, characteristics of agricultural externalities in farming systems have been analysed; evaluation methods of the benefit and cost of externalities in farming systems, revealing their advantages and disadvantages have been examined, and scientific studies on evaluation of externalities have been reviewed. Methods of systemic and logic analysis were applied for analysis of agricultural externalities and their evaluation. The analysis has showed that stated preference methods are commonly used for determination of the positive externalities. The most limited methods are travel cost and hedonic pricing methods, which are suitable only for the evaluation of public goods related to recreation or leisure. For evaluation of negative externalities the external costs of agricultural activity are estimated.

The main objective of this research is to find out if quantitative factors describing agriculture have a statistically significant role on the parliamentary election results in Latvia. If this statistical relationship can be proven, then it is important to interpret the causality behind it. 18 agricultural indicators from the 2001 Census of Agriculture were selected to be analyzed with the 8th Saeima political party election results by using multiple linear regression analysis. These 18 parameters are different in their character, and they describe the size of farms, level of education for farmers, land usage statistics, proportion and productivity of certain crops, livestock and the usage of farm machinery. The main hypothesis of this research was that the rural civil parishes with a high intensity of agriculture have a statistically significant difference in election results when compared to the rest of the election results in Latvia. Initial results showed a strong correlation between election results and agricultural indicators, but when the ethnic factor was taken into account in the linear regression model the role of these agricultural indicators was greatly diminished.

Agriculture is a unique sector, because it is associated with negative outcomes stemming from imperfectly predictable biological and climatic variables. These variables include natural adversities (for example, pests and diseases), climatic factors are not within the control of agricultural producers. So in agriculture it is very important to identify and evaluate risk, only then decisions made in farm will bring profit and other positive results. Scientific literature distinguishes a lot of methods for risk evaluation, but it is not clear what methods could be adapted in agriculture sector. This article presents main risk types in agriculture and their features as well as introduces most popular risk evaluation methods and their possible use in assessing risks in agriculture.

The productivity and its performance is one of the core topics of economics studies. The growth of productivity is an indicator of competitiveness, as well as a possible way to achieve economic growth and wellbeing. After joining the EU, the agriculture of the Baltic countries faced increasing competition of the EU Single Market, while having relatively lower productivity indicators. Since 2004, significant structural changes have taken place in the agriculture of the Baltic countries, and it is a topical question whether these changes and overall trends in the agricultural sectors of the Baltic countries have facilitated to increase productivity. Therefore, the objective of the study is to evaluate the productivity growth of the main production factors and the total factor productivity growth in the agriculture of the Baltic countries between 2004 and 2015, in relation to the changes in the use of the production factors. The paper focuses on the value added as output, and land, labour and capital as individual inputs to obtain partial productivity measures. The evaluation of TFP is based on the Index number approach, where TFP growth is a ratio of the Output index to the Input index. The calculations and analyses show that since 2004 both the agricultural output and value added have increased in the agriculture of the Baltic countries, and also productivity performance has improved.

The European Union (EU) Common Agricultural Policy (CAP) affects the development of the agricultural industry and rural areas in all the Member States. A very important role is played by various support payments as one of the policy instruments. The CAP has been developing and is being reformed; therefore, it is important to assess the effect of various CAP support instruments on the development of the agricultural industry. Therefore, the research aim is to assess the support instruments and kinds of support as well as their effects on selected agricultural indicators. The research study proceeds in three stages or phases: first, the identification of the total amount of support payments paid and the key kinds of support; second, a detailed analysis of the key kinds of support; third, the identification of associations between the amounts of support payments and other agricultural and farm performance indicators. The research found that in the period 2005 – 2014 in Latvia, the total amount of support amounted to EUR 4.3 billion, of which EUR 520 million or 12% were received by approximately 1000 FADN farms. The most significant kinds of financial support in Latvia were direct payments, accounting for 47% of the total amount of support and financial assistance provided for rural development with 39%. The total amount of financial support and the amount of area-based payments affected the key agricultural indicators as well.

Foreign trade as part of the main economic relationship between a country and the global market, its regions and super-players is a significant research object. This paper deals with a particular case, exploring Latvian import in first one and a half decade of the 21st century. Since in Latvian academic society economic issues are largely dominated by economic scientist, this is an attempt by geographer to look at special aspects of mentioned ties and relationships. Research is focused around main producing sectors of economy such as agriculture, fisheries and forestry. With the aim of establishing clear ties between Latvia and its major import markets, the statistics of foreign trade was analysed using frequency analysis. The research shows that Latvian major import markets, although, similarly with its export markets, are located in the Baltic Sea region and have some differences. Major import markets are usually countries with bigger internal market, than Latvia’s. Import does follow the pattern of export markets in its separation into East and West groups with similar characteristics. Major difference, however, is differentiation of markets, where majority of high quality goods are being imported from a wider variety of markets, in contrast to export, where consolidation was a major pattern. This shows a rather close competition on world markets for potential clients, and a way for further economic change in Latvian industrial structure and operations.

The increasing frequency and magnitude of adverse meteorological events together with the growing uncertainty in the upcoming future pose more and more challenges to agriculture. Therefore, the future sustainability of agriculture will increasingly depend on its resilience, i.e. the capacity to withstand various perturbations and to recover from them. The direct payment (DP) system of the EU Common agricultural policy (CAP) is the most financed EU support scheme for agriculture; however, research on its impact on the important phenomena of resilience is scarce and fragmented. In order to fill this gap, this paper offers an extensive overview of literature and a summarized list of factors that are mentioned most often as potentially influencing the agricultural resilience. Based on this, the possible impact of DP on agricultural resilience was analysed. In this paper, it is argued that this impact is transferred mostly through changing farms’ financial capabilities as well as farmers’ attitudes and behaviour, and is both positive and negative. Such phenomena as low crop insurance uptake and decrease in productivity may be due to the overcrowding effects of direct payments. These hypotheses are being tested in a survey, conducted in the meantime.

Farming outputs in agriculture depend on the nature of production, i.e. different farming systems generate different outputs. All these outputs are important for the society, and, therefore, require an integrated approach in view of the specific farming characteristics, where market and non-market outputs are taken into account. Therefore, the paper focuses on analysis of farming system outputs and methods of their evaluation. The objectives of this paper are to define the features of different farming systems and their outputs, then, to analyse the methods of evaluation of farming system outputs used in the studies. In order to achieve the research aim, analysis of economic scientific literature has been conducted; characteristics of farming systems and their outputs have been analysed; evaluation methods of the market and non-market farming system outputs, revealing their advantages and disadvantages, have been examined. Methods of systemic and logic analysis have been applied to analysis of the farming system outputs and their evaluation. The analysis has shown that intensive farming systems generate more market goods, while extensive farming systems – more public goods. Price-based methods are mostly used for the evaluation of market outputs of farming systems. Stated preferences methods are the most universal techniques used for the determination of the values from non-market farming system outputs. Hedonic pricing approaches are used for evaluation of specific agricultural public goods related to recreation or leisure and related to the particular groups of users.