Up to an Additional €500 Million Available to Farmers in the European Union
- Jul 20
- 3 min read
Agriculture is one of the most important sectors of Latvia's economy, with its competitiveness directly influenced by resource prices, access to export markets, and international geopolitical developments. Grain farming represents a significant share of Latvia's agricultural production, and each year Latvian grain producers compete with farmers from other EU Member States in the European single market while also facing the effects of global supply chain disruptions and fluctuations in raw material prices.
The European Union continues to introduce measures to help farmers address the challenges posed by high fertilizer prices and rising production costs. On 13 July 2026, the EU Agriculture Council adopted a regulation providing targeted support for farmers affected by the sharp increase in fertilizer costs.
Why Is Support Needed?
Over the past few years, fertilizer prices across Europe have increased significantly. According to the European Commission, prices have risen by more than 70% since 2024, driven by geopolitical developments in the Middle East, supply chain disruptions, and other factors.
The situation was further exacerbated by the crisis in the Middle East and disruptions in the Strait of Hormuz, which had a significant impact on the fertilizer market and supplies across Europe.
What Support Is Available?
The adopted regulation provides several support instruments for farmers:
a new liquidity support mechanism under rural development programmes;
up to 65% co-financing from the European Agricultural Fund for Rural Development (EAFRD);
the possibility to use previously unspent programme funds;
the possibility for Member States to provide additional funding of up to 200%;
advance payments to farmers to help alleviate cash flow challenges;
greater flexibility in planning direct payments for 2027.
At the same time, the European Commission plans to mobilise an additional €300 million, which, together with the €200 million already available through the agricultural crisis reserve, would create a support package of up to €500 million for European farmers. Member States will also have the opportunity to complement this funding with national co-financing of up to 200%, potentially increasing the total support available to as much as €1.5 billion.
European Fertiliser Action Plan
In addition to the immediate support measures, the European Commission is implementing a broader Fertiliser Action Plan to strengthen the availability and resilience of fertilisers across the European Union. Its objective is to reduce the EU's dependence on imported fertilisers and the raw materials required for their production, while enhancing the competitiveness of European agriculture and strengthening food security.
The Action Plan aims to promote domestic fertiliser production, improve the resilience of supply chains, encourage more efficient nutrient management in agriculture, and accelerate the adoption of bio-based, low-emission, and circular economy alternatives. At the same time, it includes measures to help farmers reduce costs, improve resource efficiency, and lessen their dependence on fluctuations in global markets.
European Commissioner for Agriculture and Food Christophe Hansen has emphasised that the transition to more sustainable fertiliser solutions will only be possible if farmers are provided with appropriate economic incentives while maintaining their competitiveness. The EU's strategy therefore focuses not only on providing short-term support during periods of high prices, but also on strengthening the long-term resilience of the European agricultural sector.
What Does This Mean for Latvia?
For Latvian farmers, these decisions could provide additional opportunities to reduce cost pressures and make use of more flexible financing instruments at a time when the sector continues to face high input prices and significant investment needs.
Going forward, it will be important to monitor how these new EU support instruments are implemented in practice and what specific opportunities they create for Latvia's agricultural businesses.
Comments