Evaluation of the European Green Deal Policy in the Context of Agricultural Support Payments in Latvia

Abstract

The European Green Deal policy will significantly affect the resilience and development of agriculture, which will be determined by the 2021–2027 Common Agricultural Policy (CAP) reforms, entering into force in 2023. Therefore, the European Commission determines that at least 25% of the direct payments should be earmarked for eco-schemes, while 35% of the funding for rural development should be allocated to climate and environmental support measures. Support payments constitute a significant part of farmers’ income and guide their decision-making for production development. Therefore, the goal of the research was set by analysing the existing CAP support payment system in 2019 to determine the possible impact of the reform envisaged for 2023 on farms of various specialisations and sizes in Latvia. The analysis revealed that in Latvia in 2019, 83% of the total number of farms received support, the amount of the support was EUR 5616 per year per farm on average, and within the Single Area Payment Scheme (SAPS), the support was higher by 24%. Among the funding recipient farms, the support accounted for 28% of the farms’ income, calculated per 1 hectare. The detailed calculations carried out indicate that the possible base support payments as a result of the CAP 2023 reform are expected to be higher specifically in cattle breeding and dairy farming, which may contribute to even greater greenhouse gas (GHG) emissions in the future and thus reduce the likelihood of achieving the goals of the European Green Deal policy.