Latviski English По-русски
Sunday 28.05.2017 | Name days: Vilhelms, Vilis

Vegetable producers: the industry has a future, but it is burdened by taxes

(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUCompared with Europe’s southern territories, vegetable and fruit production in Latvia has a future, says manager of Mūsmāju dārzeņi association Edite Strazdina.

She notes that the industry’s development rate and competitiveness of local producers on the Latvian and international market is burdened by unreasonably high taxes on labour force, high VAT rate on fruits and vegetables, as well as high electricity price. The planned excise tax increase for fuel will have a negative impact on local vegetable producers and cause price increases.

The fruits and vegetables industry has experienced serious changes in the past several years – after the coming into force of the Russian embargo, most producers have had to refocus their efforts from the east to the west.

Using European support programmes and cooperating with leading supermarket networks, many fruit and vegetable producers have managed to enhance their positions on the local market and even enter foreign markets, Strazdina says.

«The exporting power of fruit and vegetable producers depends on the size of their country of origin. The larger the country’s and the company’s ability to enhance positions on the local market, the better the opportunity it is for them to become a strong member of the international market. Even the largest Latvian producers cannot compete with producers in Poland and Germany production volume-wise. This is why it has been possible to expand by uniting many local producers under a single banner,» she adds.

As noted by the manager of the cooperative association that unites eleven farmers unions, it is becoming harder and harder for local producers to maintain development. Regardless of the market, traders are always interested in cooperation with producers that can supply goods at low prices – it is both financially advantageous and convenient.

«Although Latvian producers have learned to deal with the volume side of things, it is not as simple with prices. Competition is distorted by grey economy and low area payments, which are much higher in other European member states,» Strazdina comments.

In addition, because Latvia is a northern country and warm summer season is very short, greenhouses have to consume more electricity to grow more products. «Electricity in Latvia is 30% more expensive than it is in Sweden and 50% more expensive than electricity in Germany. Products are also made more expensive by the unreasonable tax burden – VAT rates on fruits and vegetables are reduced in most EU member states. Labour and other taxes are also lower. This helps improve farmers’ competitiveness,» Strazdina explains.

«In addition, the future is not looking promising – increased excise tax for fuel would impact prices of locally grown fruits and vegetables,» the expert explains the situation.

Although Strazdina is critical of the government’s efforts to assist local producers, she does welcome Agriculture Ministry’s and Latvian Investments and Development Agency’s organized activities to assist local producers. Even the largest retailer networks that are represented not only in Latvia but other countries as well help local fruit and vegetable producers deliver goods to consumers.

As for the future and the industry’s longevity, Strazdina is optimistic and enthusiastic in spite of complications on the market caused by state and international players. She is confident that fruit and vegetable production in Latvia will only start growing.

«Latvia is a green country – fruits and vegetables grown here are highly valued for their nutritional value and natural contents. Thanks to fertile soil in several of Latvia’s regions, we have no reason to use a lot of artificial fertilizers. Nevertheless, the harsh climate does have an impact on decease rates, which requires the use of chemical additives to combat,» Strazdina says.

Continuing, she adds: «Growing demand for clean and natural products will make fruits and vegetables grown in Latvia more popular on the local and foreign markets,» she predicts.


Leave a reply

Week in Lithuania. PM: Coalition isn't the best

Lithuanian Prime Minister Saulius Skvernelis, whose government has been in office for half a year, says that the Lithuanian Farmers and Greens Union and the Lithuanian Social Democratic Party differ in their philosophies and approaches to many issues.

BNN summary of the week: Estonian minister disapproves of NATO; Latvia’s tax system lags behind

BNN offers a summary of this week’s topical news in a variety of categories: Business; Change; Future; Decline; Truth and Growth.

Municipal elections 2017: what do people say?

With municipal elections gradually coming close, BNN offers a compilation of opinions provided by experts from different industries. Short answers consist of thoughts about specific municipalities that affect respondents directly, and municipal administrations in general – what people expect from officials and what changes they expect from elections.

Trade of natural gas to legal clients in Latvia commences

Trade of natural gas to legal clients in Latvia has commenced. Latvenergo’s Elektrum product offers fixed-price contracts for 12-month supply period. The first gas supply contracts have been signed with clients in Latvia, the company reports.

Murniece: the biggest strength of Latvia’s parliament is public involvement

The biggest strength of Latvia’s parliament is the involvement of the public in resolution efforts of matters associated with child and women’s rights, the rights of disabled people, as well as security, tax policy and the European Union, says Saeima speaker Inara Murniece.

Corruption on decline in Lithuania, yet still remains troublesome

To wrap up the findings of a new corruption research ordered by the Special Investigation Service, an institution dealing with financial crimes in Lithuania, the situation is largely improving, yet not as fast as the service wishes.

Ventspils signs agreement with Chinese-Belarusian industrial park Great Stone

Vetnspils Freeport Authority and Ventspils High Technology Park signed an agreement yesterday with Chinese-Belarusian industrial park Great Stone, which is the largest infrastructure development project in Belarus, as reported by the freeport’s representatives.

Resignation filed by arrested Tallinn Deputy Mayor

The Deputy Mayor of the Estonian capital has stepped down from office after being arrested as part of a criminal case into violations of procedural restrictions of Tallinn procurement tenders.

Residents: situation in Latvia is developing in a wrong manner

54% of residents believe the situation in Latvia is currently developing in a wrong manner. A similar situation is noted in relation to the evaluation of the government’s work. 75% of respondents are critical about the government’s work. Only 17% of respondents are positive about the government’s work, according to results of Baltic International Bank Latvian Barometer.

Finance Minister: we have to be ready for flexibility in the reform plan

Currently we have to progress forward with the intended tax reform and prepare for a degree of flexibility, says Latvian Finance Minister Dana Reizniece-Ozola.

Zarins: unlike healthcare workers, Latvia’s roads are crumbling silently

Saeima deputy Ivars Zarins has submitted a proposal that offers restoring State Roads Fund and providing it with funding of 80% of excise tax for oil products. It is also proposed to divert income from vehicle operation tax and road use fee.

Price of oil slides 5%, though exporters decide to uphold production restrictions

Oil price has dropped by around five percent, even though oil-exporting countries have decided to maintain production limits until spring 2018.

Experts: role of free trade agreements to increase – especially with Asia

Latvian businessmen are already sufficiently active in several Asian markets. Their experience shows – these markets have great potential, according to representatives of the European Parliament’s Information Bureau.

Trump steps up pressure on NATO’s «indebted»

All NATO member states should pay their fair share of military expenses, has stated U.S. President Donald Trump in a meeting of NATO member states in Brussels.

Sunday expected to be summer-like hot in Latvia

This Sunday is expected to be summer-like hot, whereas the week after will be cold and rainy, as reported by Environment, Geology and Meteorology Centre.

Pensioner guide: old people are isolated from society in Latvia

«In my experience with social care, I was surprised by the dominating belief that the only thing old people need is elementary care – some food, a wash and a walk outside. Psychology of old people is something completely alien to people in Latvia,» says initiator of Pensioners Guide in Latvia Nelli Skadina.

SEB: reimbursements paid to nearly 340 loan clients over the past five years

In five years since the signing of the first loan payment insurance contract, reimbursements have been paid to nearly 240 SEB Bank clients who took loans and experienced unexpected difficulties after.

Number of tourists to Riga up 7% in 2017

In the first three months of 2017, a total of 263.5 thousand people were serviced in Riga’s hotels and tourist accommodations. 221.3 thousand of those tourists were foreign guests. Compared with the same period of last year, the number of tourists has grown 7%.

Estonian capital’s Deputy Mayor arrested over waste management dealings

The Deputy Mayor of Tallinn, Arvo Sarapuu, accused of deliberately violating procedural restrictions an especially large scale as part of a criminal case, has been arrested by the Estonian Internal Security Service.

Saeima ratifies convention on restriction for the use of mercury

On Thursday, 25 May, Latvia’s Saeima ratified Minamata Convention on Mercury. The objective of the convention is protecting people and the environment against anthropogenic emissions and leaks of mercury.

Europe experienced foreign investment records last year

Last year, Europe attracted a record large volume of foreign investments with 5,845 new direct investment projects, which is 15% more than the year before, according to results of EY European Attractiveness Survey.

Electric car charging network expands in Latvia to promote «greener thinking»

The once long-away dream of having cars that run on alternative fuel is now a reality – a special infrastructure network keeps expanding in Latvia to make electric cars more popular, says Motors Latvia BMW Group manager Ivars Norvelis.

Estonian Minister steps down after questioning NATO membership

Estonian Minister of Public Affairs Mihhail Korb has stated he resigns from office after saying he is not in favour of NATO membership.

Construction of a fish freezer commences at Ventspils Freeport

Construction work has commenced in Ventspils industrial territory on Talsu Street 200. Latvian National Fisheries Producers' Organisation plans to build a fish freezer facility there, as reported by Ventspils Freeport.

EC: there is a risk tax reform will increase inequality

There is a risk that Latvian government’s proposed tax reform will increase income inequality in the country instead of lowering it, said head of European Commission’s office in Latvia Inna Steinbuka.