The article presents the findings of research aiming to discover the links between absorption of European funds and the development of rural areas in Latvia and Poland. Based on statistical data and Latvian territorial development index at local level, the value of index for Polish local communities was calculated showing a slightly bigger difference in local development in Poland. Absorption of EU funds was rather concentrated in both countries and its highest level was connected with major infrastructural projects as construction of roads, motorways, etc. The use of EU funds under Cohesion Policy is not correlated with the level of development, neither in Latvia nor in Poland. The only significant negative correlation can be observed between the development and the use of funds under Common Agricultural Policy and Fisheries Policy in Latvia.

The primary goal of public projects is to create social benefits for the community. The prepared public project usually has more than one option. In order to choose the most efficient option, it is necessary to take into consideration all social benefits. For this reason multi-criteria methods may be applied since they provide a possibility to assess quantitatively social benefits which are measured in many different quantitative and qualitative indicators. The problem of the research stems from a variety of social benefits indicators of public projects, the problematic establishment of their value and the need of their complex valuation. The paper presents a methodology for TOPSIS multi-criteria method adapted for the valuation of public projects in order to select investment option and the empirical research makes it possible to look at the problems of public project valuation from the practical approach. The research of the paper is aimed at revealing the advantages and limitations of TOPSIS multi-criteria method used for public projects valuation.

Recently economic development has been an issue of intense research and discussion in an academic society. Many facets of countries’ economic development were examined, including foreign trade. As a foundation of international cooperation, this indicator is relevant in observing one’s internal development and external ties. In case of Latvia, this topic is heavily influenced by economists, and the geographical perspective is quite underdeveloped. In this research, the economic ties of Latvia were explored through the analysis of its main export groups in sectors of agriculture, forestry and fisheries throughout the first decade of the 21st century. With the aim of establishing clear ties between Latvia and its major export markets, the statistics of foreign trade was analysed using frequency analysis. It can be reported that in general Latvian export markets are closely located and consist of the Baltic Sea Region countries such as Denmark, Germany, Russia and others. Despite the differences in commodity group destinations, it can be clearly stated that a division of trade flow still exists, separating it into two directions - Eastern and Western, where the former allocates the majority of Latvian processed commodities and more sophisticated goods, and the latter consumes raw materials and less transformed materials. This arguably shows a difference in demand in Western and Eastern markets, where the first mostly requires materials for its own industry, while the latter procures them for consumption on the local market, again pointing to a complexity of reforms required for the Latvian economic focus turning towards Western markets.

Promotion of non-agricultural activities in Latvian rural areas is highly important for diversification of rural economy due to decrease in agricultural and forestry employment. So far too little attention has been paid to this aspect. Although EAFRD is the only EU fund directly supporting rural development, only 14% of its public financing for projects in 2007-2013 was invested in non-agricultural entrepreneurship, half of this in financially demanding energy production projects. By total eligible accepted project expenses, approximately 60% of rural entrepreneurship projects were financed by EAFRD. ERDF was also important in which a smaller number of higher value investment projects was implemented. Although EU funds have some importance in activating rural entrepreneurship, so far the direct impact on creation of jobs and value added has been small. The impact could be increased by setting forth specific job creation requirements for the beneficiaries. It is also suggested to avoid supporting expensive projects which do not create a substantial number of jobs. In view of rural entrepreneurs improvements in entrepreneurial environment, including taxing policy are more important than direct support. It especially concerns operation of small companies. Development of small companies in rural areas is of high importance because in many territories there is no capacity and rationale to develop large projects.

Since 1990 significant structural changes have taken place in Latvia. First of all, it was the reestablishment of an independent state in 1991 and secondly - the accession to the European Union (EU) in 2004. Joining the EU provided free flow of goods, finances and individuals, a single system of legal acts as well as a trustful image of the state for foreign investors. In Latvia, 60% of the EU funds are allocated for agriculture and rural development, thus achieving the objective of producing food adequate for consumers’ purchasing power and ensuring agricultural commodities are available for their processing. Financial aid for primary industries also results in support for the whole society and other industries from which necessary resources and commodities are purchased. After joining the EU, the growth of the agricultural industry was observed owing to support payments. As a result of the EU policy, the size distribution of farms changed in Latvia, the output and exports of food increased as well as agricultural productivity rose. The research aim is to analyse the changes in and gains for Latvia’s agriculture after the accession to the EU. The following research methods were employed: the monographic and descriptive methods, analysis and synthesis and the logical and constructive methods.

The study deals with issues related to the impact of Natura 2000 sites on local development of rural communes in Poland. The purpose of the study is an attempt at comparing the level of social-economic development of rural communes in which Natura 2000 sites are located within their borders against other communes where there are no such sites, based on an analysis of selected indices. The selected indices of social-economic development were analysed in 424 rural communes in six Polish provinces. The study uses statistical data from the Central Statistical Office from the years 2000-2013. The analysis indicates that rural areas with Natura 2000 network sites do not differ from other units of local government as far as the level of social-economic development is concerned and in some cases show even better results. In the ‘Natura’ communes – compared to units where there are no such sites – the level of total income is higher, along with the commune’s own income, and there is a higher level of investment expenditure. The conducted analysis allows for the statement that the presence of Natura 2000 sites does not hinder economic development of communes and only modifies the manner of preparation and implementation of an investment. It does not constitute a barrier to human activity on the condition that any such activity complies with the principles of sustainable development. This testifies to the higher economic activity of inhabitants in comparison to other units.

This article presents analysis of the role of rural community in enhancement and implementation of changes in rural social infrastructure. Rural social infrastructure is a key part of rural social and economic system, the development level of which predetermines satisfaction of needs of rural residents, fulfilment of their range of choices and alternatives. The main objective of this article is to deploy the fact that application of “bottom-up” approach could stimulate rural community to make decision intended for promotion of positive changes when straining after the attractiveness of their locations through the rational development of social infrastructure facilities, supply of target, high-quality and multiple services. The following research question has been addressed – what is the potential contribution of rural community towards promotion of changes in social infrastructure of rural areas. The research aim is to disclose the role of rural community in enhancement of rural social infrastructure changes. An anonymous survey using questionnaire was implemented in five pilot rural areas and the summary of results is presented. It has been determined that activity and citizenship of rural community in assumption of liabilities for the wellbeing of all rural residents predefines the relevancy of their decisions and opinions before the local authorities and other concerned local or regional institutions. Consequently, the challenge for mentioned rural development actors is to identify or recognise the constraints on rural community participation in forming social infrastructure at local level, and to develop and enable specific initiatives in their favour.

In the article, following the theoretical aspect, there is analyzed the business model canvas and there is presented the business model classification involving the discussion related to the particularity of veterinary activities. The research aim is after having summarized theoretical aspects of business models, to disclose business model application peculiarities in veterinary activities. In order to disclose the business model application peculiarities in veterinary activities and to supplement the research by other authors, there was disclosed the peculiarity of veterinary service and there was completed the most relevant business model analysis allocated to the development of veterinary activities. Having systematized the business models introduced in different sources it was noticed that there had not been found any business models which were named as ones being unambiguously relevant to veterinary activities. There have been accurately analyzed application possibilities of the business model canvas for the analysis and development in veterinary service activities.

Quality of information about cost structure of farm is of high importance when making management and production process improvement decisions. Aggregating and analyzing production process cost information by correct and unified methodology provides possibility of evaluating the structure of expenditures. Moreover, it is possible to identify most important cost positions and get perspective on production process. By collecting and processing data using unified methodology it is possible to conduct comparing evaluation between different farms. This is done to identify the most and less efficient farms, their work methods and cost structure. When developing unified methodology, it is essential to take into account that different farms might use different production systems and structure. When creating revenue and expense calculations, it is essential to receive accurate data. Good quality data is fundamental for receiving good quality and usable results. Precise data accounting is another important factor that ensures good quality of cost calculation. Precise accounting decreases number of cost allocation coefficients used for allocation of cost positions and thus decreasing effect of assumptions on unit production cost calculation. Fixed cost allocation by its nature to divide all costs by farm specializations is the most challenging when calculating unit production cost. In order for calculations to be of good quality, precise data on use of assets, specifics and intensity of farming is necessary. By identifying these indicators it is possible to create maximally precise calculation of unit production cost of beef.

The purpose of this paper is to identify the main characteristics of the modern farm in Lithuania and to analyse correlation between features, which should have a modern farm, to understand the age of agricultural system and agricultural concept. The research based on the answers of two groups of experts (180 experts: 98 experts-professionals and 82 experts-farmers). The present paper is examining the characteristics and role of agriculture modernization in the economic and social development of Lithuania. The main characteristics of the modern farm are: new machinery and equipment, technologies, modern production buildings, farms apply a range of innovations, farmers are seeking knowledge are interested in innovation, take part in exhibitions, events, they are energetic, creative and implementing good management practices. Big farms in Lithuania had the opportunity to devote more funds to co-finance structural support, and were able to get more support and modernize faster than small or medium-sized farms. The big farms are more modernised than small ones, but the impact of farm modernization on the rural development sustainability is bigger and more positive from the smaller farms than bigger ones.