RIGA - Latvian Agriculture Minister Martins Roze has announced plans to step down following mass protests by farmers in Riga.
Hundreds of farmers driving trucks and tractors surrounded Riga on Feb. 3, blocking traffic and calling for Roze's resignation. Protesters also called on the government to support the struggling agricultural sector.
The protests came alongside parliament approval of a 27 million lats (38.4 million euro) rescue package for the troubled sector.
The funds will be used to provide loan guarantees to the dairy industry, allowing farmers who are struggling to repay their loans to postpone payments for one year.
Roze announced his resignation on Latvian news program "100. Pants," but denied having failed farmers.
When The Baltic Times went to press Roze had yet to tender his official letter of resignation to Prime Minister Ivars Godmanis.
Earlier some 50 farmers gathered outside the Ministry of Agriculture, where they parked about 20 tractors in the surrounding street.
Some participants drove their vehicles into the city overnight to avoid violating traffic laws.
Zemnieku Saeima (Farmer's Parliament) Board Member Uldis Krievars said protesters had come prepared to remain in Riga until their demands were met, with many bringing food and firewood supplies.
Farmers forged ahead with protest plans after talks with the government on Feb. 2 broke down.
Hundreds more farmers who had traveled from across Latvia were blocked by police while attempting to enter the city center.
State Police spokeswoman Ieva Reksna told the Baltic News Service that about 200 tractors and other farming machinery could be seen lining roadways on the eastern outskirts of Riga. Another group of farmers attempting to enter Riga from the north were also stopped by the police.
Special police units were deployed to monitor the protests, which remained peaceful.
The protest was part of an ongoing campaign by farmers, who demanded exemptions for loan payments, income protection measures and financial support to stabilize the ailing sector.
Although satisfied with the government's actions, farming groups have underscored that there remain many problems facing the industry that will need to be solved.
Zemnieku Saeima Director Rita Sile said while the government relief package was a welcome reprieve for struggling farmers, for some it would come too late.
"There are some farms it will be too late for. If there is any decision it can only affect and impact those farms that can survive in the next two to four months. For those that don't know how to live in the next two to three weeks it will be too late," she said.
The industry has been hit by a slew of bankruptcies in recent months. Up to 2,000 farms are struggling to meet their monthly loan repayments. The average debt per farm has reached 100,000 lats.
The dairy industry has been the hardest hit, with farmers struggling to stay afloat amid spiralling debt and falling milk prices 's which plummeted 78 percent in the 2007-2008 financial year.
Dairy is Latvia's largest agricultural industry, with farming groups warning its demise would bring the country's entire sector to its knees.
The outlook for Latvia's crop sector is also increasingly bleak, said Sile. The failure of both the dairy and grain sectors, which amounts to 80 percent of Latvia's agricultural industry, would effectively cripple the country's entire agricultural sector.
"What we would see is the death of market oriented farming in Latvia as it is now. Only smaller, subsistence farms, sustained by outside incomes such as pensions would survive," Sile told TBT ahead of the Feb. 3 protest.
Despite such dire predictions, Sile said the government had failed to recognize the seriousness of the situation in the agricultural sector and had continued to ignore the issue despite repeated warnings from farming bodies of the brewing crisis.
Farmers lead a series of protests in recent weeks as part of a grassroots campaign to highlight the crisis in the sector and force the government to take action.
"There is a lot of depression and a lot of desperation in rural areas. Farmers have been left with no choice, and that's very sad," said Sile.
"They are losing their houses and their businesses. They really don't have anything more to lose. They are at the end. It's like they are standing on the bank and they can go no further, the next step will be water," she said.
An estimated 4,000 farmers took part in a similar mass demonstration on Jan. 28.
Rallies were staged in 29 regions across Latvia, with participants blocking traffic for several hours with tractors and other agricultural machinery.
At an earlier meeting with government ministers to discuss ongoing problems in the sector, farmers' representatives promised more protests if key demands were not met within one week.
The crisis has further destabilized Latvia's already shaky coalition government, with the Greens and Farmers Union (ZZS) party threatening to quit the coalition if the government failed to meet farmers' demands.
The threats were widely criticised by coalition partners as a political stunt. Latvian Prime Minister Ivars Godmanis earlier defended claims that government policy had failed farmers.
"In essence, the government's decision means taking money away from other sectors to support the dairy industry. That's why I am shocked by irresponsible and clearly untrue claims that the government's decision has been unfavorable to farmers," Godmanis told BNS following the Feb. 2 failed meeting.
Farmers have called for the government's economic relief package to be rolled out within a month.