Historically agriculture has been the backbone of any given economic system. It uses the most land to produce the most food products. It provides food, raw material for other industries and the largest employment opportunities in rural areas. It also preserves the quality of the rural environment and when practiced in family farms, it can, as well, protect a country’s heritage, tradition, and history.
In the Republic of Latvia, the economy was at first dominated by transit trade and agriculture, mainly handled by small family farms in remote locations. After World War I, an agrarian reform benefited the prevalence of small family farms. Nevertheless, under Soviet control, the family farm model in Latvian agriculture was displaced by a far more industrialized model. Between 1932 and 1990, the amount of agricultural land in Latvia decreased by a 32 percent. As the state took control over the family farm, lands were abandoned and converted to forest. Half of the arable land was used for producing supplies for the Soviet republics. Meat, dairy products, and crops were shipped to other countries in exchange for equipment and other goods like fuel and fertilizer.
Even though small private plots, such as family farms, and some animal holdings were authorized by the Soviets, these plots served most to supplement the poor output of the inefficient collective farms. At the end of communist rule and after liquidating Collective farms, most of the country’s livestock had to be held on such plots. When the Soviet system fell apart, however, feed shortages and rising cost of farm equipment created a decline in agricultural production in Latvia.
After joining the European Union eleven years ago, Latvia changed its laws and regulations, adapting to the EU principles. The farming industry was restructured and its fast developing was easily predicted. Since then, the farming industry has been growing significantly every year. However, competitiveness of agriculture in Latvia is still low compared to other EU member states. It has become a vital matter to detect what are the most significant problems in production resources as well as opportunities in the current system. Some may think that the key to agricultural sustainability lays in Family and local farming, which may increase production efficiency and competitiveness by generating employment and focusing on local issues instead and preventing long-term abuse of the land. As a general rule household, which manages more than 100 hectares of land from the family farms become employers.
SO, WHAT IS FAMILY FARM IN LATVIA?
In Latvia, family farm is a business that works not only for food production and profit but also ensures food security and community development in other sectors.
There is no such thing as an exact definition of what a family farm is in Latvia. Nevertheless, every farm where most of the work is done by members of the same family is considered to be a family farm. It does not matter if you are young or old, man or woman, every member of the family is involved in the work and chores of the farm. This symbiotic relationship ensures the exchange of know-how and experience, and inheritance of the farm from generation to generation.
Family farms are considered to be more than a business, they are a lifestyle. Family farms are involved in most agriculture-related industries in Latvia, such as crop farming, cattle breeding, forestry, fishery, and food processing. Statically speaking, 30% of Latvia’s territory is used for agriculture and according to the data, there are approximately 83 thousand of farms, most of which are family farms – around 73 thousand of them. Agricultural activities employ 49% of the people living in rural areas in Latvia, mainly in forestry, fishery and, food processing farms and companies.
It is very important to support family farms since they are in charge of the preservation of the basics of the rural population, traditions, and cultural heritage.
Currently, in order for family farms to be competitive, they have to become cooperatives, which gives them the chance to compete with the bigger and more industrialized farms. Bureaucracy, laws and the lack of support programs make it extremely difficult for small farmers and entrepreneurs to set or maintain a business. Family farm owners in Latvia believe government aids are more accessible to big farms, which economically speaking, have a lower profitability related to own capital compared to small farms. However, production amounts per family farm are not enough for asset replacement, since they have a lower production capacity. This makes them less competitive market participants, with significantly less support from the government to change their situation.
For Latvia, as well as for most countries, it is crucial to invest governmental resources in order to preserve heritage in the rural areas. Small farms are responsible for keeping the rural areas alive, and the rural areas are the ones in charge of fueling the entire territory.