Land grab has already begun outside Riga

  • 2004-01-29
  • By Philip Birzulis
DOBELE - "What is land if you don't have freedom. What is freedom if you don't have your own land."So run the words to an old song that encapsulates Latvian feelings about liberty and property, two of the cornerstones of Western civilization.

Recently these sentiments were echoed by Prime Minister Einars Repse in his New Year's address to the nation - in which he called on people to move to the countryside and raise children - and then brought to the headlines when the public learned the prime minister last year made over a half-million euros in real estate purchases.
But politics aside, a major upheaval is under way in the countryside. After years of post-Soviet adjustment, the first few years in the EU will bring more uncertainty.
Long renowned as "Latvia's breadbasket," the Zemgale region south of Riga has seen its land prices double in the last few years, as rich farmers get bigger and small holders have struggled to keep up.
"There are big contrasts to life in the country, ranging from absolute poverty to big, successful businesses," said Valters Bruss, director of the SIA Cers agricultural enterprise in Dobele district. "But if you have knowledge and a bit of luck and are enterprising, you can achieve a lot."
Bruss is undoubtedly in the winner's circle. His farm has expanded to 1,000 hectares, and for the past two years all of its wheat, sugar beet and rapeseed has been exported to EU countries.
Despite anger a few years ago when it was announced that farmers in the EU accession states would only get a quarter of the subsidies paid to the current members, Bruss said Latvian producers would end up with much more money than at present - up to 70 lats (130 euros) per hectare. Little wonder, he explains, that demand for land far outstrips supply in Dobele, as owners anticipate big price rises following the May 1 joining date.
Rich locals aren't the only ones getting in on the act. Despite some restrictions, it is not difficult for foreigners to buy plots through Latvian-registered companies, and Bruss said a number of them had acquired large acreages in the district.
Dobele Agra, a 4,000-hectare-property under cultivation by the Vienna-based multinational Agra AG, has been running since 1991. According to Dobele Agra director Eriks Stasinskis, "favorable conditions" - including cheap land, labor and materials - attract the foreigners. He said that for the first two or three years in the EU, prices for fuel, fertilizer and other materials could rise more than is received back in support payments, but then things should stabilize.
He admitted that conditions favor big players. Indeed, many of the 50-odd workers employed at Dobele Agra during the peak season are small farmers doing side jobs. And apart from a few critical articles in the local press, Stasinskis said there was not much xenophobia.
"We respect each other now. Our type of farming gives a stimulus to the others. We have technology, we don't begrudge advice and we've seen them develop and even overtake us," he said.
But there are other pressing problems. Gatis Miezitis, executive director of the Dobele District Council, said that unemployment stubbornly stays above 10 percent, and many of its victims have been out of a job since the collapse of Soviet collective farming. The farmer quoted above said alcoholism and early deaths were widespread.
In a cruel irony, modernization may increase the social gap even further: There is actually a shortage of skilled labor to work the latest farm machinery, and unless education gets a boost, many will find themselves completely shut out.
Still, Dobele has successfully attracted investment in textiles, wood and metal processing and other nonagricultural industries, and these foreign owned enterprises employ over 1,000 locals. Miezitis said that Danes had invested heavily. The first entrepreneurs from the Scandinavian country spread the word that Dobele was a good environment and offered cheap labor, and soon others followed.
In his New Year's speech Repse asserted that with modern communications, people could do city jobs while living in the country. Indeed, all of those interviewed said that many Dobele residents already commute the 70 kilometers to Riga every day, a trend that should only increase if EU funding improves the roads.
But apart from becoming satellite towns of the capital, Bruss said that a coordinated national plan was needed to find a future for Dobele and other rural communities. Small farmers can get along if they diversify into niches like orchard growing or specialized poultry, and a few have started moving in this direction.
"If you plan well you can make money," he said. "If you have skills like finance and management, you don't even have to be a specialist in growing things, because you can hire someone to do that for you."
Clearly, Latvian farmers are set to face even bigger challenges in the future, and the price of not meeting them will get even steeper.