«More and more external factors emerge and strike at the food industry. This industry is in a state of crisis. Food is becoming more expensive, and our local farmers and manufacturers are becoming weaker on domestic and international markets. The crisis has grown and the future is looking rather grim,» warns director general of Latvian Agricultural Organization Cooperation Council (LOSP).
«If the Cabinet of Minister and the Saeima no not act now – food prices may reach new heights in autumn. We must act now! Food must be declared the country’s strategic resource. We must do all we can to make sure food is accessible to all residents – by reducing VAT on food, similarly to 23 other EU member states,» stressed Vilnītis.
On Wednesday, 11 May, LOSP plan to discuss topical issues for the sector – the growing energy prices and their effect on the national economy, the food industry, the continued growth of food prices.
LOSP plans to make a joint decision to ask the Saeima and the government to declare a state of emergency in the food industry and set a 5% VAT rate for food.
LOSP also insists the government must develop and pass guidelines to overcome the crisis and to ensure domestic producers, traders and residents have access to clear and unambiguous information. LOSP also insist that the government, ministry of economics and ministry of finances provide information about financing and estimates for gas supplies for households and producers in a situation when gas supplies from Russia are over, as well as provide alternatives for energy sources, including using local fuels: wood, chips, pellets, peat, HES, biogas, wind, solar, etc. LOSP also wants to know about state support mechanisms for local renewable energy suppliers and consumers.
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LOSP board chairman Edgars Treibergs comments: «The energy crisis has created an enormous burden for entrepreneurs and producers, as well as households. We need alternatives and we need them now. The government remaining idle creates risks for countless enterprises – the possibility of closure is becoming more and more realistic. Latvia’s uniqueness is confusing in a time when 23 EU member states have reduced VAT for food, bu Latvia’s Saeima still clings to 21% VAT rate.» He adds that Polish food producers and fuel traders and Poland in general earn enough with reduced VAT on food and fuel because prices there are lower than in the rest of Europe and many people travel to Poland specifically to shop.