Agriculture is the largest sector of Development Financial Institutions high portfolio of loans and guarantees issued, it has been allocated around € 220 million over the last five years, high.
Last year it was 44 million euros, the most represented sectors are cereals (46%), dairy farming (20%) and mixed agriculture (13%). One in four financed farmers is a homeowner or self-employed high support is often the only way to start or develop a business.
The main high support instruments for farmers are loans for the purchase of agricultural land, investments, working capital financing, small loans in rural areas and land fund services.
high cooperates with the Latvian Rural Consultation Center (LLKC) on a daily basis, so that everyone interested has the opportunity to receive consultation and assistance in preparing a loan application. LLKC specialists will also help to evaluate the return on investment and economic benefits, so that it would bring benefits and not become an additional financial burden.
Latvian land market with its own peculiarities
In the agricultural land market, demand has exceeded supply in recent years, as a result of which land prices have also risen. There are also regional differences, which are affected by both land quality and agricultural activity. In areas with more valuable land and more intensive agricultural activities, the price is significantly higher – the price per hectare varies from 1,000 euros in Latgale to 8,000 euros in Zemgale.
high The largest business activity in the managed land fund, which has been buying, cleaning and releasing agricultural land for five years, has been consistently observed in the Zemgale region, where the fund has purchased 326 properties in more than 6,000 hectares, of which 142 have been sold and leased.
In Kurzeme, the fund has purchased 176 properties in the area of approximately 4,000 hectares, of which 75 are reverse lease transactions; In Vidzeme 3,500 hectares – 148 properties (56 reverse lease), but in Riga 104 properties (24 reverse lease) in the area of over 2,000 hectares were purchased. In Latgale, where properties are often overgrown and neglected, the volumes of transactions are the lowest, with 70 plots of land in the area of 1,000 hectares owned by the fund, of which 22 – reverse lease.
As with loans, the services of the Land Fund are in demand in all sectors, but during the crisis it was most often dairy farming, as milk purchase prices decreased. The greatest interest in the properties acquired by the fund this year has been shown by medium and large farms, which need additional financial resources for further development or restructuring of economic activities. Most farms represent the cereals or mixed agricultural sectors. Lower demand was observed from small farms, which are still looking for their place in the market, developing various niche products.