ASSESSMENT OF INVESTMENT PROJECTS IMPLEMENTED BY FARMS IN ZEMGALE REGION

The research aim is to analyse the use of EU project funding in the agricultural industry in Latvia in the period 2007-2016 and assess the effect of investment projects implemented by agricultural holdings in Zemgale region on the financial performance of the holdings. The research analysed the legal acts regulating the implementation of support measures under the Rural Development Programme in the programming periods 2007-2013 and 2014-2020 and calculated the financial performance and competitiveness indicators (average profit margins, solvency and financial dependence) of agricultural holdings in Zemgale region, which were compared with the national averages, based on FADN statistical data. Methods of research: monographic, graphic, analysis, synthesis, statistical analysis. The analysed indicators were grouped by planning region in Latvia (the regional division of the Rural Support Service (RSS) - the Regional Agricultural Departments - was taken into account). Based on the research findings, the authors conclude that in the programming period 2014-2020 a solution is sought to retain the existing farm structure, strengthening small farms and reducing the influence of large farms on the agricultural industry. Even though public funding is focused on investment in tangible assets in the programming period 2014-2020, it is intended not only for agricultural holdings but also for forestry and food processing enterprises. The research has found that if other circumstances remain unchanged, there is no causal association between net value added and the amount of investment subsidies the reason of a decrease in both variables was the consequence of the 2008 crisis. The average financial dependence of farms in Zemgale region in the period 2007-2013 exceeded the maximum level, and the farms were considerably dependent on borrowed capital. The research developed recommendations for the Ministry of Agriculture of the Republic of Latvia with regard to criteria for the evaluation of support project submitters, proposing excluding enterprises with high financial dependence from participation and contributing to the competitiveness of agricultural holdings and their financial independence.