FUELWOOD SUPPORT: RESULTS OF RURAL DEVELOPMENT PROGRAMME IN LATVIA

The purpose of the paper is to evaluate the impact of support or subsidies under Rural Development Programme (RDP) 2007-2013 on wood biomass or fuelwood production and rural development. The tasks of the study presented in this paper are: (1) to evaluate resources and development of fuelwood in Latvia, comparing with other Baltic States and the EU countries in the Baltic Sea Region; (2) to investigate the measures encouraging fuelwood production under RDP 2007-2013; (3) to analyze the impact of Latvia's support (subsidies) on state and regional level. Taking into account that unpublished data of Rural Support Service were analyzed, the original results of subsidies' impact on rural development on region level were obtained. Latvia is among the EU countries with the largest share of forest area and with growing increment in forests available for wood supply each year. The subsidies for encouraging entrepreneurship and diversification into non-agricultural activities have been granted for existing microenterprises, agricultural farms and for founding and development of new microenterprises. The highest number of the supported fuelwood projects has been implemented in the least developed region of Latvia - Latgale region. Despite the support to the bioenergy projects, particularly fuelwood, having stimulated the creation of new jobs and helping to retain the existing ones in Latvian rural area, the cost of a created job is higher than predicted by rules for projects oriented on job creation in Latvia. When it comes to the public costs per working place created or retained, employment opportunities have been costly. The rapid growth of fuelwood export is a result of faster growing supply compared to the domestic use, which could be developed in Latvia.