Farmland prices tripled over decade in Latvia

Within a couple of years, the price per hectare of agricultural land has increased by EUR 500 but has at least tripled in ten years.

Over the last decade, agricultural arable land prices in Latvia, Lithuania and Estonia have increased more than three times. It is the most expensive in Latvia, the cheapest in Estonia, as estimated by Luminor Bank. The price increase was also acknowledged by the real estate market company “Latio” – on average, land is becoming a tenth or 500 euros more expensive each year, currently reaching from €2,000 for the less fertile and harder-to-access lands in Latgale and Vidzeme to €6,000 and more for fertile soils in Kurzeme and Zemgale.

“We used to buy land for 50 lats per hectare in Zemgale, the price is now EUR 10,000 and more, it is clear that the change has taken place in a grand way,” Mārtiņš Cimermanis, the head of the Rural Consultation Center, said. 

“The land will not go away anywhere, the land will always be there to buy. This has been the case at all times, but a challenge in Latvia is credit institutions and banks. In the past, they did not credit the purchase of land at all and, if credited, at very disadvantageous periods, very short. When, together with the Ministry of Agriculture, we introduced a land purchase programme through Altum, taking the German model, commercial banks also emerged. The aim was also to kick-start this land lending program,” Cimermanis said.

He thinks land prices in Latvia will even out in the foreseeable future.

According to Mareks Gurauskas, head of operations for small and medium-sized enterprises of the Luminor bank, price increases are likely to continue as demand exceeds supply, and agricultural land in all three Baltic States is liquid property, so the banks consider it to be a good pledge. The rise is driven by the war in Ukraine as it is a major exporter of cereals but there will be no harvests in many fields, which will lead to higher prices for products, with a growing interest in land.

The interest of foreign investors is also present, and skyrocketing energy prices encourage many to seek land for wind parks.

The experts refrained from predicting price ceilings in the coming years. Latvia has two million hectares of agricultural land, and the area is growing as soils are purified and cleared from shrubs.

Source: LSM

News on forest protection.

Spread of diseases caused by multiplication of pests has been discovered in the forest after this summer, yet significant damage has not been detected.

Spruce stands should be inspected and health of these stands should be assessed to evaluate whether the property has not been endangered by eight-toothed spruce bark beetles. When noticing newly damaged spruce trees, especially ones with green needles and bark that is separating in a fragmented way in the middle and the top part of the trunk, you should ensure whether the damage has not been caused by eight-toothed spruce bark beetles. It should be mentioned that this year the number of pests, including eight-toothed spruce bark beetles is rather low.

Spruce stands on the edges of clearings and sunny locations should be carefully inspected. Spruce trees can be endangered also in locations with significant changes to the humidity mode. When discovering the presence of bark beetles, the damaged spruce trees should be cut by means of sanitary selective felling or felling according to the sanitary opinion of the State Forest Service (sanitary clear felling). The type of felling is selected according to the scope of damage. Logging in such locations should be finished not later than by April of the following year to prevent new places of pest multiplication.

The other type of pests which is harmful to pines is the six-toothed pine tip bark beetle. This bark beetle damages the pine stands, endangering even living trees. Its presence can be more difficult to detect than that of the eight-toothed spruce bark beetle because it lives in the thick top branches or trunk parts of pines without scab bark.

In places, small pest damages to young forest stands have been found. As the most significant of these should be mentioned pine weevil which damages the planted coniferous trees by gnawing the bark of plants if it has not been protected. Damaged caused by pine shoot moth has also been observed in separate stands. It should be noted that observations are of a local nature.

Damage caused by various species of gallwasps can also be widely observed. Much damage has been seen on oaks in the second half of summer.

Forest owners should regularly inspect their forest property and consult specialists in the case of discovering any damage caused by pests.

Information source: State Forest Service

Research of Latvia’s agricultural land has been started.

This year, researchers of the Latvian University (LU), faculty of Geography and Earth Sciences started research of Latvia’s soil to obtain information on Latvia’s agricultural land, including peat soil, at the same time updating and improving data on soil in Latvia.

Already in summer of this year, based on historical data on Latvia’s agricultural land, deep soil drilling has been performed and thus the soil profile database has been supplemented in Riga region, Zemgale and Vidzeme highland.

The Ministry of Agriculture, as a responsible partner of the project “Enhancement of sustainable land soil resource management in agriculture” 2014-2021 (E2SOILAGRI), expresses gratitude to land owners and land managers for their responsiveness and support to researchers, carrying out soil probing, deep-drilling and sampling!

This summer, an intense mapping of peat soil distribution in agricultural land in Viduslatvia and Vidzeme highland was carried out as well as profiles of deep-drillings were performed and soil samples were taken for laboratory tests. At the same time, using remote research data, a model is being developed, which by means of an artificial intellect, will make specification of the distribution of peat soil easier in situ.

Currently, an active work is carried out on adjustment of the soil classification system in field conditions in Taurene parish, describing deep-drilling soil profiles and taking samples for further laboratory tests.

Alongside with the above mentioned, a field variant of agricultural soil mapping methodology has been developed on different scales. Just as the field variant of the Latvian national soil classification system has been developed by improving the classification and aligning it with the international World Soil Classification System of the United Nations Organization Food and Agriculture Organization.

In the course of Latvia’s soil research that will go on for three more years up to January 31, 2024, the results will be obtained, providing information on soil not only for farmers but also for research institutions, non-governmental organizations and Governmental institutions. The restored information on agricultural land will be useful for planning and developing of agricultural and climate policy, based on the latest data and conclusions.

Information source: Ministry of Agriculture

State supported insurance policies for farmers may not include a low indemnity limit

The government of Latvia has approved amendments prepared by the Ministry of Agriculture (MoA) to the regulations on granting the State and EU support to insurance of harvest, animals, and plants during the planning transitional period of 2021-2022 so as to ensure that insurance policies do not include a very low indemnity limit that does not protect farmers in the case of great losses.

Therefore, in the future:

• the minimum indemnity limit for the risk factors mentioned in the insurance policy should be in the amount of at least 200% of the insurance premium,

• in the case if the risk factors mentioned in the policy occur, the deductible may not change depending on previously disbursed insurance indemnity for any of the risk factors mentioned in the policy,

• support will not be granted for such insurance policies that provide coverage for losses caused by such diseases that are mentioned in the laws and regulations on compensation for losses occurring during the outbreak of an animal infection disease under supervision of the State or epizootic disease.

The regulations include also the following additional provisions for administration of support:

• at the moment when a farmer applies for insurance support, the policy must be valid, and the insurance policy must be fully paid by the last day of the application submission round,

• in the case of suspicion that insurance policy is not economically based and is not appropriate to the insurance purpose, the Rural Support Service may request an explanation from the insurer or the support applicant,

• regulations for insurance of animals provides proportional reduction of support in the cases when animals have been insured for a period which is less than one year,

• the insurer is obliged to inform the Rural Support Service concerning the cases when insurance contract has been amended or terminated before expiry date, and the insurance premium or its part has been repaid to the farmer.

In order for the support to be received also by applicants who have purchased insurance policies before the effective date of the regulations, all mentioned amendments shall apply only to those insurance contracts that have been signed after 20 August 2021.

Information source: Ministry of Agriculture

New possibilities for land use – how to compensate carbon dioxide emissions with birch.

This spring, the Latvian company “Not Hot Environmental Solutions” planted 32 thousand birches on 16 hectares in Pabērži, Kārķu Parish, Valka Municipality. This young stand will compensate 8.9 tonnes of CO2 over 40 years, while all the trees planted by the company so far – 16 tonnes of CO2. Currently, “Not Hot Environmental Solutions” owns eight birch plantations in different places of Latvia. There are 57.8 thousand trees.

“Not Hot Environmental Solutions” offers companies and individuals to calculate how many tonnes of CO2 each of them produces according to their business, domestic, transport and other habits, and proposes to finance planting of adequate quantities of trees to compensate for these emissions. Trees remain under the management of landowners and will become furniture after 40 years, continuing their life in a new cycle. In this way, everyone has the opportunity to become climate-neutral and even climate-friendly, already compensating for more CO2 than generated.

The company was founded in 2019. The authors of its idea are the businessman Māris Simanovičs and the German businessman with experience in forestry Michael Brockmann. €500 thousand euro has been invested in the development of the company’s mobile app and calculator to combat climate change.

While working on the platform, “Not Hot Environmental Solutions” has collaborated with the Latvian State Forest Research Institute “Silava”, developing an optimal land-planting model and calculating the CO2 capture for birch stands during their life cycle. In order to assess CO2 emissions from operations of a person or company, a calculator has been developed in cooperation with environmental activists and the researcher Jānis Brizgs and adapted separately to companies and individuals.

Information source: Magnetic Latvia – Labs of Latvia