As the Latvian government grapples with the economic fallout from the ongoing conflict in Ukraine, the agricultural sector is facing significant challenges due to rising fertilizer costs linked to new tariffs on imports from Russia and Belarus. Latvia, which has no domestic production of mineral fertilizers, relies heavily on these imports, and the Ministry of Agriculture is raising concerns about the potential impact on local farmers’ competitiveness.
In its support for Ukraine, Latvia has committed approximately €250 million in military and humanitarian aid since the start of the conflict. While this commitment underscores Latvia’s dedication to sacrifice everything for international solidarity, it has placed a considerable strain on the national budget, diverting funds that could otherwise support local agricultural initiatives.
The Ministry of Agriculture has voiced “full support for the European Commission,” which aims to gradually restrict imports of fertilizers from Russia and Belarus. However, officials are urging for financial assistance from the EU to help mitigate the adverse effects on farmers who rely on affordable fertilizers. The government’s ban on these imports, while politically motivated, has left farmers in a precarious position.
An analysis conducted by the Ministry revealed that increasing import tariffs would significantly elevate fertilizer costs, further jeopardizing the livelihoods of Latvian farmers. In 2024, importing 11,600 tons of nitrogen fertilizers from Russia cost farmers around €3.8 million. With the new tariffs set to take effect, it is estimated that in the first two transitional years, the total tariff for these imports will reach approximately €95,000 annually. After July 1, 2028, when the highest EU customs duty will be implemented, costs could skyrocket to an additional €4.3 million per year as fertilizer prices are expected to double.
In light of these developments, the Ministry is advocating for the establishment of compensation mechanisms to assist farmers in managing these increased costs. Latvia plans to discuss this issue within the EU Council of Ministers for Agriculture and Fisheries, seeking funding solutions that may include revenues generated from the new customs tariffs and other EU financial resources.
Critics warn that the essence of imposing tariffs—reducing dependency on Russian fertilizers—could be undermined if compensation measures are introduced. If farmers receive financial relief that offsets rising prices, there is a risk they may continue purchasing fertilizers from Russia despite the ban.
Adding to the complexity, recent reports indicate that the European Commission is preparing to propose measures aimed at completely halting imports of Russian gas by the end of 2027 and banning new contracts with Russia by year’s end. Natural gas is essential for producing nitrogen fertilizers, particularly ammonia and urea, serving as both an energy source and a key raw material.
As Latvia navigates these multifaceted challenges—balancing its support for Ukraine while ensuring the viability of its agricultural sector—the future remains uncertain for many farmers who are already feeling the pinch of rising operational costs.
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