The impact of 2014-2020 RDP support on the development of organic farming

This final evaluation report within the 2014-2020 RDP of Latvia primarily covers the years 2013 to 2018, with some references extending to 2007-2017 for trend analysis and comparison.

The evaluation aims to assess the impact of the 2014-2020 RDP support measures on the development of organic farming in Latvia, including effects on economic performance, environmental contributions, farm structure and future development opportunities within the Common Agricultural Policy (CAP) framework. It also provides some comparative insights from Estonia and Lithuania.

The evaluation covers both the quantitative and qualitative aspects of the sector, aiming to determine how effectively the programme has contributed to the growth, competitiveness and sustainability of organic agriculture. The report outlines five main evaluation objectives:

1. To describe organic farms based on their number, specialisation and output, and compare them with those in Estonia and Lithuania.
2. To examine changes in production, sales, efficiency, cooperation, pricing, processing and exports, compared to general agriculture.
3. To assess how organic practices contribute to environmental and climate objectives, using land use data and related research.
4. To evaluate the economic impact of 2014-2020 RDP support on organic farms, including subsidy levels and their role in farm income.
5. To explore future development opportunities for organic farming, considering market demand and CAP objectives.

In terms of methods, the evaluation used a mixed-methods approach, combining quantitative analysis with qualitative research to assess the impact of RDP on organic farming in Latvia.

Data sources included monitoring and administrative data from the rural support service (Paying Agency), statistical data from the central statistical eureau, Eurostat and the Latvian Agricultural Data Centre, as well as economic data from the Latvian Farm Accountancy Data Network (FADN/SUDAT). Additional input came from a survey of 380 organic farmers, interviews and focus groups with sector stakeholders, and scientific studies on soil quality, biodiversity and grasslands.

The evaluation relied on structural indicators such as farm size, land use and specialisation; economic indicators like standard output, income and investment; environmental indicators linked to land management and biodiversity; support-related indicators reflecting the scope and distribution of RDP support; and market indicators including production volumes, prices and exports. Spatial and time series analyses supported the interpretation of trends.

The report highlights several limitations that may affect the accuracy of the findings. Data inconsistencies between sources like the central statistical bureau, Latvian Agricultural Data Centre, and Eurostat made comparisons difficult. Some data were missing, especially for 2012 and smaller subsectors like vegetables and poultry. Farm-level data could not be matched due to access restrictions, limiting detailed analysis. It was also hard to directly link outcomes to RDP support because farms received different types of aid at different times. The survey relied on self-reported data, and some farm groups were underrepresented. Limited access to precise spatial data also reduced the accuracy of land use analysis. These challenges were considered when interpreting the results.

The evaluation demonstrates that RDP support contributed to the growth and development of organic farming in Latvia. The gross effects include a 52% increase in organic farmland since 2013 and a threefold rise in the economic size of organic farms over ten years. Organic farms were found to be productive, with 98% of supported farms generating over EUR 4 000 in standard output. However, the net impact on farm income was modest, three times lower than in conventional farms, though investment support had a comparable return. The evaluation also found a moderate contribution of organic farming to environmental and climate goals, with significant potential for improvement in knowledge transfer, cooperation and processing.

Support rates stimulate the development of grassland areas; however, product diversity and processing remain limited and in many sectors, the share of organic production is negligible. About half of organic farmland has been managed organically for over ten years. The evaluation also provides comparison within Baltic States; the structure of land use in Latvian and Estonian farms is similar, while Lithuanian farms are more production-oriented.