Following a last minute meeting with government officials Feb. 24, Latvian farmers abandoned plans to block roads and two border checkpoints with Lithuania to protest against cheap imports and high prices in the cattle, milk and sugar sectors.
Instead, farmers accepted a Cabinet pledge of 4.3 million lats (7.2 million euros) in compensation.
The 11th hour deal averted a protest that would have blocked a busy highway junction and roads at the Grenctale border checkpoint.
Prime Minister Einars Repse said the necessary resources would be allocated from agriculture subsidies. The allocation would later be compensated from the national budget if revenue targets are exceeded, which Repse said the government expected to happen.
Leide Visotska, a project coordinator for the Joint Council of Farmers' Organizations, said the government decision was positive for farmers.
"They get what they wanted," she said. "They get compensation in the sugar sector, in the milk trade and on the meat issue," she said.
According to the plan detailed by Agriculture Minister Martins Roze, the sugar industry will receive 1.3 million lats for sugar price compensation, cattle breeders will receive 500,000 lats in compensation and the milk industry will get 2 million lats to 3 million lats for development of an intervention mechanism and direct payments.
Farmer organizations' representative Valters Bruss told the Baltic News Service that he was satisfied with the decision.
Farmers had complained that the local cattle market was being undermined by cheap beef imports of unknown origin and causing losses to cattle breeders.
In the milk sector, Latvian producers accuse Lithuanians of illegal dumping and have pushed for maintaining a milk price of 0.1 lats per liter during the summer when exports are not profitable.
The sugar industry has been troubled by high local sugar prices aimed at protecting domestic producers but criticized by sweets producers who say they cannot compete with foreign firms that use cheaper sugar imports.
To help local sugar-beet farmers, the government introduced plans to compensate producers who buy at least two tons of sugar per month and produce products with at least 5 percent sugar content.
Last week, the hog breeding industry was granted 2.37 million lats by the government and the hog breeders decided not to join the demonstration planned by other farmers.
The Latvian pork-purchase price has been below its production cost for a while because of a strong increase of imports that have pushed down the market price.