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Latvia’s pig farmers to receive state aid

Latvia will issue state support to help the country’s pig industry, which is severely impacted by the Covid-19 pandemic.

This was announced by Latvia’s ministry of agriculture in a statement. According to the ministry, the pig industry’s revenue decreased by 11,2% in the second quarter of 2020, in comparison to the same period of the previous year. The continuing Covid-19 pandemic caused sharp fluctuations of both demand and market prices, which eventually took their toll on the pig farmers’ financial situation.

State support is on its way for Latvia’s pig producers. - Photo: Shutterstock
State support is on its way for Latvia’s pig producers. - Photo: Shutterstock

Prospects remain uncertain

As Covid-19 is far from gone, the prospects of market recovery remain uncertain. “Recent information indicates that in many parts of the EU oversupply crises in the pig industry gain momentum because export is hampered and Covid-19 also impaired productivity of slaughterhouses”, the ministry warned.

State aid to support Lithuania’s pig industry

The European Commission has approved state aid of € 47.5 million to pig farmers in neighbouring Lithuania, south of Latvia. This support will take the form of direct grants, with a budget of € 7.5 million, and subsidised interest rates for loans, with a budget of € 40 million. The purpose of the scheme is to address the liquidity needs of farmers and help them continue their activities during and after the outbreak.

Common pig market

The Baltic countries have a common pig market. According to the ministry it is essential to keep Latvia’s pig industry conditions similar to those in Lithuania. Everything happening in Lithuania would also be affecting Latvia.

Prices for pigs decrease

Since April, the average purchasing price for pigs, paid to farmers in Latvia, decreased by 19,8% to € 152.20 per 100 kg, estimates by the Latvian statistical service showed. In Lithuania, the price shrank by 4.6% to € 149.50 per kg. In Estonia, the northernmost of the 3 Baltic states, however, prices rose by 8.3% to € 169.90 per kg.

Latvia’s pig farmers suffer more

Latvia’s pig farmers have reportedly suffered heavier Covid-19 losses than those in Lithuania or Estonia. That is partly related to a peak in 2019, when the market situation was the complete opposite with very good prices for the Latvian pig industry. By then, prices paid to producers jumped by nearly 30% as demand to pig meat went sky-high in Europe. That was all related to the African Swine Fever (ASF) epidemic in China, and Europe rushed to sell more pigmeat to China.

In February of 2020, the prices reached their peak in Latvia, being € 210.20 per 100 kg. That was by nearly 61% higher compared to the same period of the previous year.

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