SUPPORT PAYMENTS FOR AGRICULTURE AND RURAL DEVELOPMENT IN LATVIA

The European Union (EU) Common Agricultural Policy (CAP) affects the development of the agricultural industry and rural areas in all the Member States. A very important role is played by various support payments as one of the policy instruments. The CAP has been developing and is being reformed; therefore, it is important to assess the effect of various CAP support instruments on the development of the agricultural industry. Therefore, the research aim is to assess the support instruments and kinds of support as well as their effects on selected agricultural indicators. The research study proceeds in three stages or phases: first, the identification of the total amount of support payments paid and the key kinds of support; second, a detailed analysis of the key kinds of support; third, the identification of associations between the amounts of support payments and other agricultural and farm performance indicators. The research found that in the period 2005-2014 in Latvia, the total amount of support amounted to EUR 4.3 billion, of which EUR 520 million or 12% were received by approximately 1000 FADN farms. The most significant kinds of financial support in Latvia were direct payments, accounting for 47% of the total amount of support and financial assistance provided for rural development with 39%. The total amount of financial support and the amount of area-based payments affected the key agricultural indicators as well.