Several food producers and agricultural organizations are calling on Prime Minister Krisjanis Karins to urgently help industries that are currently in deep crisis.
Organizations claim that pig breeding, milk processing, poultry farming and other industries are in a deep crisis, as the supply chains of feed raw materials from Ukraine were interrupted, the prices of wheat and other raw materials rose significantly, and deferred payments were replaced by prepayments. In an open letter, representatives of organizations also state that “a catastrophic shortage of working capital has formed”, manufactured products are sold below their cost, and energy prices have risen astronomically.
There are also rising prices and shortages in logistics and packaging materials, manufacturers said. Therefore, many companies are planning to reduce production or even stop it.
The Latvian Association of Poultry Breeders, the Latvian Association of Pig Breeders, the Union of Dairy Farmers of Latvia, the Federation of Food Companies of Latvia and the Cooperation Council of Farmers’ Organizations also call for declaring a state of emergency in the aforementioned industries and “immediately take support measures that will reduce the negative impact of the crisis and increase competitiveness both in the local market against imported products, and will give support to exports. In the letter to Karins, manufacturers also urge to assess the impact of the decision of the European Commission on the abolition of import duties on products from Ukraine on the situation in Latvia and to involve industry representatives in the development of solutions.
The letter also contains a demand to “immediately take a decision to reduce the rate of value added tax (VAT)”. The organizations believe that immediate and coordinated action is needed from the Cabinet of Ministers, the Ministry of Agriculture, the Ministry of Economy and the Ministry of Finance.
Industries are ready to help in finding optimal solutions.
As previously reported, on Monday after the meeting of the parties of the ruling coalition, the parliamentary secretary of the Ministry of Economy Ilze Indriksone told reporters that the issue of lowering VAT on food will soon be on the agenda of the government coalition. She said that this issue was not discussed on Monday, but it is planned to be done in the near future.
Meanwhile, the finance minister Janis Reirs (SP) was skeptical about the possibility of reducing VAT. He pointed out that providing support to certain groups of society – an issue that has long been discussed in the coalition – will not be possible in the event of a reduction in budget revenues.
“It is impossible to combine these two things – the provision of assistance and the reduction of budget revenues, these are incompatible things,” Reirs said.
Source: GOROD.LV – новости Даугавпилса by gorod.lv.
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