Economics and Rural Development, Volume 3, Number 2

EFFECTIVE USE OF FINANCIAL RESOURCES FOR RURAL DEVELOPMENT OF LATVIA

Gunita Mazūre
Latvia University of Agriculture

Abstract

Agriculture is a very sensitive issue in Latvia, since the number of persons employed in farming is declining, and other sectors
of the rural economy cannot guarantee stable income for those abandoning agriculture. Thus state regulated financial support promoting,
encouraging and supporting agricultural and rural business development through the provision of long-term, fixed interest rate
loans and financial counselling services is needed. Many farmers and agricultural undertakings lack their own sources to finance investments
and modernise agricultural production. The shortage of financial means leads to competitive difficulties in foreign markets.
The article focuses on the study of subsidies, credit and investment flows in particular sectors, as the aim of the research is to
identify the potentialities of subsidies, credits, credit guarantees and investment, and to evaluate their flows in the promotion of the
development of agriculture and rural entrepreneurship. The research is mainly based on the monographic descriptive method and the
methods of analysis and synthesis, and covers ca. 13 years. The research concludes that the purchase of new and efficient machinery
and other equipment by means of credits could facilitate the growth of the mentioned sectors; however the amount of credits available
under targeted crediting programmes is still insufficient.

Keyword(s): agriculture, rural development, financial support, credits, guarantees, investment


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Economics and Rural Development ISSN 1822-3346 / eISSN 2345-0347

This journal is published under the terms of the Creative Commons Attribution-Noncommercial 3.0 Unported License. Responsible editors: Prof. Dr Vilija Alekneviciene, Dr Gunita Mazure.