Subsidies should be provided to various sectors of the economy only if they are at risk, said Latvian Minister of Agriculture Didzis Šmits in an interview. The politician said – he is not a man for subsidies, and he believes enterprises should not be paid just because they exist.
«Agriculture is a sector that is affected by the climate the most – there is not way to stay indoors and stay safe from the weather. There are moments when help is needed, because not everything can be covered by insurance. But I am completely against sectors coming up and saying they need six million euros because they exist. And then we learn this sector has done nothing on its own to reorganise,» stressed Šmits.
At the same time, he said he wants to discuss this topic with the pig industry. The minister said he does not understand provision of annual support for an industry that does not sign long-term contracts with food processors, which would guarantee this sector some stability.
«I’m getting the impression that the moment
things are good, they do trade, and the moment things get bad, they turn to the state for support.»
If you receive support every years, then you’re not in any way interested in long-term contracts. Why do our food processors procure raw materials from Lithuania? Because they have long-term contracts, explained the minister.
He also said he has yet to study this issue in depth to make any bold claims, but if someone needs support every year, it is clear something else needs to be done. At the same time, he stressed that support for crisis situations is not excluded as unnecessary, rather it is important to keep in mind proportionality and the point of such support. ‘For the cow to be milked, it needs to be fed first,» said the minister.
«Although I hail from the food processing industry, I am very sceptical about these forms of support. The money paid for food processing has not changed anything, no one has died or has been saved,» said Šmits, adding that
he would rather provide support for the recovery of the export market and trips to expositions,
which normally yields results.
«I approve of support towards recovery of the export market, because it leads to results in the future instead of enjoying budget money here and now without any need to compensate the state,» said Šmits.
Also read: Minister of Agriculture: we have to fight for Latvia’s interests in EU Climate Policy