Management Theory and Studies for Rural Business and Infrastructure Development, Volume 36, Number 3

Economic aspects of lfa and organic farming payments in Latvia

Armands Veveris, Peteris Lakovskis, Elita Benga


Less favoured area (LFA) payments and organic farming (OF) payments represent a third of all public funding available for RDP 2007–2013 in Latvia and are used by about two- thirds of all farms. The aim of the study is to assess the economic impact of LFA and OF payments. The data from Rural Support Service, FADN and statistics of agricultural sector were used to conduct the study. A group of farms receiving support payments was compared with a group without this kind of support, in order to evaluate the impact of support payments. The results show that LFA payments have facilitated a significant income growth, especially for small farms. They have also contributed to more intense use of the land. Since OF support has not contributed enough to the agricultural production, direct payments to production will increase economic impact of support payments.

JEL Codes: O13, Q15, Q18.

Keyword(s): Common Agricultural Policy, Farms, Less Favored Areas, Organic farming, Utilized Agricultural Area

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Management Theory and Studies for Rural Business and Infrastructure Development eISSN 2345-0355

This journal is published under the terms of the Creative Commons Attribution-Noncommercial 3.0 Unported License. Responsible editor: Dr Audrius Gargasas.