Farmers' Saeima: Reduced VAT Is Not Direct Support for Farmers

Agriculture Minister Uldis Augulis has stated that reduced VAT on food is the most important support for farmers and consumers. However, the Farmers' Saeima disagrees. Its board member Mārtiņš Trons emphasizes that lower VAT does not reduce costs for fuel, fertilizers, electricity, or labor, nor does it increase purchase prices.

The reduced VAT applies only to certain food product groups, so many farmers are unaffected. The association has called for this reduction for years, hoping it will boost local food consumption. But if sales volumes do not increase, farmers gain no benefit.

Currently, farms face pressure from rising input costs. Fuel and fertilizers together account for about 40% of production investments, and fertilizer prices have increased by roughly 40% since autumn. While the association welcomes the reduced excise duty on diesel, it offsets only a small part of the cost rise.

Real support, according to Trons, is what reduces production costs or mitigates sudden cost increases. The government must turn the upcoming EU decision on fertilizer price support into practical aid before autumn sowing.