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					EX ANTE EVALUATION OF LATVIAN SAPARD RDP
                2000 – 2006




           Experts: Carlo Andrea Pelagallo
                    Jimmy Armstrong




                 March 24th, 2000
                         TABLE OF CONTENTS



1.   EXECUTIVE SUMMARY

2.   INTRODUCTION

3.   METHODOLOGICAL APPROACH

4.   EVALUATION ACTIVITIES
     4.1  Analysis the current situation
     4.2  Assessment of the relevance and consistency of the proposed strategy
     4.3  Assessment and quantification of the expected impacts of the
          selected priorities
     4.4  Verification of the proposed implementation arrangements

5.   CONCLUSION AND RECCOMMENDATIONS

6.   THE  EXTENT  TO    WHICH    THE   CONCLUSION                        AND
     RECOMMENDATIONS HAVE LED TO CHANGES TO THE RDP


ANNEX A
ANNEX 1
ANNEX 2
ANNEX 3
ANNEX 4
ANNEX 5
ANNEX 6
ANNEX 7
ANNEX 8




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1.   EXECUTIVE SUMMARY

The following sections focus on an Ex-Ante Evaluation of the Sapard Rural
Development Plan 2000-2006 of Latvia.
Council Regulation (EU) 1268/99 requires the Authority preparing the Rural
Development Plan (RDP) to have a prior appraisal carried out by independent
evaluators.
The RDP of Latvia to be submitted with an Ex-Ante Evaluation by late March-early
April 2000 will be substantially different from the RDP submitted in January 2000 to
evaluators. The new RDP in fact contains numerous integrations and changes suggested
by evaluators on performing their Ex-Ante Evaluation, as evidenced by the number of
pages, which increased from 97 to 150.
The Ex-Ante Evaluation Phases were as follows:
Phase 1.   Examination of documentation on the Evaluation of Structural Funds
Phase 2.   Examination of the Latvian RDP
Phase 3.   Meetings in Riga (Latvia) with officers responsible for the RDP to shed light
           on unclear or lacking points and outline assumptions on integrations to the
           RDP
Phase 4.   Search for further fact-finding documentation on Latvia and other talks held
           externally to the MoA
Phase 5.   Organisation of a short seminar at the MoA on envisaged Indicators for
           Structural Funds, their usefulness and methods of calculation
Phase 6.   Preparation and delivery to the MoA of the List of suggested integrations of
           the Latvian RDP, with detailed illustration Annexes
Phase 7.   Implementation of integrations and changes required of the MoA following
           the evaluators’ recommendations
Phase 8.   Examination of integrations and changes made by the MoA and compilation
           of an Intermediate Evaluation Document
Phase 9.   Forwarding of the Intermediate Ex-Ante Evaluation Document to the MoA
Phase 10. Further meetings with the MoA to define solutions proposed and respond to
          outstanding questions
Phase 11. Compilation of the definitive Ex-Ante Evaluation report
In accordance with the methodological documents of the EU Commission, the main
sections of the evaluation are the following:
1    Analysis of the current situation in the agricultural sectors and rural areas of
     Latvia
2    Assessment of the relevance and consistency of the proposed strategy
3    Assessment and quantification of the expected impacts of the selected priorities
4    Verification of the proposed implementing arrangements



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In the first section (4.1) an overview is made of the situation of the region(s)/sectors
concerned, the main strengths and disparities/shortcomings, the opportunities for and
threats to rural development (SWOT analysis), and the analysis of previous operations.
In the Ex-Ante Evaluation phase, the RDP was carefully examined, other sources of
information were sought, MoA officers and other key informants were interviewed. A
further essential contribution of the Ex-Ante Evaluation was preparing a detailed list of
integration and changes required, with reasons therefor, specifically:
-    more information on the geographical, economic, social, environmental and
     administrative situation of the country;
-    more quantification of the macro-economic situation; regional variations in
     demography, economic activity, etc., and trends in all of these areas;
-    more analysis of the external factors that are driving the evolution of national and
     EU agricultural and rural development policy;
-    more explicit elaboration of the development issues arising out of the description
     of the situation;
-    more justification for some of the investments proposed in the strategy.
Based on requests made, the MoA made significant changes and improvements in all of
these areas.
In relation to the analysis of previous operations, the RDP described very clearly the
main programmes, but no information was provided on whether the experience of these
programmes would reinforce the need for the type of support being offered under
Sapard or whether lessons had been learnt which could be applied to the implementation
of Sapard.
To try and fill this gap, the evaluators interviewed personnel from the World Bank, The
Latvian Institute of Agrarian Economics, the EU delegation and the Ministry of
Agriculture.
In the second section (4.2), our analysis was focussed on the following issues:
1)   Justification and relevance of the strategy and its priorities for action;
2)   Consistency between operational and global objectives (internal coherence);
3)   Balance between the different support measures of the plan;
4)   Adequacy between the proposed plan and other relevant policies and programmes
     (external coherence).
The evaluation activities and main findings are:
-    An analysis of the expected impact of the proposed measures on the 54
     agricultural and rural development issues defined in the baseline description
     shows that the RDP will address 39. Eight of the remaining 14 will be addressed
     by other National policies and programmes.
-    A logical framework was constructed for the RDP and this shows that there is a
     consistency between the proposed actions and the global objectives of the
     Programme.



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-     The allocation of financial resources to each measure is examined and in the main
      the evaluators agree with the proposed distribution . They draw attention to the
      lack of resources for applied research and suggest that a small allocation for this
      purpose under measure “Technical Assistance”, could add considerable value to
      the efficiency and effectiveness of the Programme.
-     A policy option analysis for each of the development issues demonstrates the
      complementarity and additional contribution of the proposed SAPARD role. An
      examination of the expected impact of the Programme measures on the EU
      objectives for SAPARD shows strong coherence with the CAP. The development
      policy paradigm in Latvia is more basic than the EU model but in general terms
      there seems to be correspondence with EU level objectives for equal
      opportunities, competition, employment, the environment and social inclusion.
The third section (4.3) focuses on the issue of Indicators and their quantification.
The RDP of Latvia, in its first version submitted to evaluators was fully lacking the part
focussing on Indicators identification and quantification.
Based on talks at MoA, it was understood that there was insufficient knowledge on the
use of Indicators.
Consequently, a lot of work was carried out during the ex-ante evaluation to remedy the
insufficient knowledge and correct the numerous shortcomings.
Activities performed by the evaluators in association with the MoA, are summed up
below (each phase is described in detail in chapter 4.3):
-     organise a short seminar for MoA officers in charge of the RDP on monitoring,
      evaluation, Indicators characteristics and methods of Indicators use and
      calculation;
-     provide the MoA with the documentation on Indicators compiled for the Seminar;
-     request MoA to insert Indicators in the RDP for each Measure to be used for
      monitoring and evaluations, with an attached list of suggested Indicators,
      classified into physical, result and impact;
-     request MoA to quantify at least a part of Indicators so as to check consistency of
      amounts envisaged by Measure and estimate expected results and impacts;
-     check with Moa quantifications and perform changes and integrations;
-     assess results and impacts expected of the Programme, by answering the
      “Common evaluation questions” as reported in the Guidelines For Evaluation of
      RDP 2000-2006, compiled by the DG for Agriculture in 1999;
-     evaluate the RDP impact on the environment, by considering the following
      environmental components: soil, water, air, biodiversity and landscape.




Page 5 of 140
Regarding results and impacts expected of the Programme:
When the tables on the quantification of expected impacts and results, and answers to
Common Evaluation Questions, as outlined in section 4.3 are considered, the following
remarks can be made:
-    Major results and impacts are expected in the agro-industrial sector, in which the
     Programme envisages the improvement of 100% of plants needing intervention in
     the milk and slaughterhouses sector, by making them compliant to EU
     requirements; in addition, for the meat, fruit & vegetable and fish sectors, 70%,
     70% and 34% respectively of plants are expected to be made compliant. Such
     sizeable intervention will probably bear a considerable impact on such staple
     suppliers as farmers and fishermen. As a matter of fact, nearly 32.000 suppliers
     are expected to benefit from investments in favour of the agro-industry.
-    Considerable impacts and results are also expected of direct intervention in the
     agricultural sector as well, for the production of produce, and in related sectors,
     based on the improvements identified in the item above. For instance, expected
     advancements will include: the enhanced efficiency of nearly 6.400-7.400 farms is
     expected, improved working conditions for nearly 20.000 workers, improved
     welfare for nearly 69.000 animal units and improved quality of sizeable quantities
     of agricultural products, e.g. 80-100.000 tons of milk, 45.000 tons of meat,
     320.000 tons of fruit & vegetables, etc.
-    Interesting results and impacts are further expected of diversification activities and
     infrastructures in rural areas: e.g. 14.000 new or maintained jobs by diversifying
     activities, 25.000-37.000 new tourists in rural tourism enterprises, with increases
     vis-à-vis current tourist flows of 400-600%;
-    Agro-environmental measures are further worth noting, as extremely high
     increases are expected in this respect (+ 200%) as against current levels;
-    Great importance is attached to training, an area in which 3.000 courses and
     58.000 participants are expected.
Regarding the operational part:
-    The MoA is required to insert into RDP most of the Indicators suggested, a part of
     which has already been quantified;
-    The MoA is required to organise the system of quantitative data gathering relating
     to indicators as part of the monitoring system, by requesting beneficiaries to
     provide the following information for relevant Indicators: the ex-ante state, the
     expected state after the Programme implementation, and a periodical account of
     the state during Programme advancement;
-    The monitoring system is to be supplemented by Mid-Term ed Ex-Post
     evaluations, which can be instrumental in the optimum assessment of a number of
     results and impacts expected of the Programme by means of suitable case studies;
-    Finally, for Measures that are found to bear a number of negative impacts on the
     environment, based on the impact analysis described in section 4.3.5, the MoA is
     required to request beneficiaries, ever since the submission of their projects, to
     introduce more suitable measures to soothe the effects on the environment.




Page 6 of 140
In section (4.4) focuses on competent authorities and bodies consulted on the
preparation and implementation of the Latvian RDP, as well as on procedures and
selection criteria defined, in order to reinforce the project selection in terms of
effectiveness and efficiency.
Arrangements for monitoring, evaluations and controls are further examined, which
were found to be lacking in the RDP and for which suggestions are made.
The Ex-Ante Evaluation has two further sections, i.e. “Conclusions and
recommendations” and “The extent to which the conclusions and recommendations
have led to changes to the RDP”.
In the latter respects, recommendations were made especially at the end of the first
mission in Riga, Latvia, and the RDP contains most of the changes suggested at that
time. Consequently, very few final recommendations and integrations are made.
Finally, the Ex-Ante Evaluation is completed by Annexes reporting integrations
requested and the numerous documents containing explanations and suggestions as well
as documents submitted in the Riga Seminar on Indicators.




Page 7 of 140
2.   INTRODUCTION


Council Regulation (EC) 1268/99 requires the authority preparing the rural development
plan to have a prior appraisal carried out by independent evaluators.
The legal requirements are set out in articles 3(1), 4(2) and 5(1) of the regulation.
Guidance notes issued by the Directorate Generale for Agriculture on 9/11/99 states;
“prior appraisal helps to prepare the rural development plan and facilitates its
implementation through informed planning and decisions concerning needs, delivery
mechanisms and resource allocation. A prior appraisal also facilitates the Commissions
task of appraising the rural development plan.”
ATA, Agriconsulting Temporary Association were commissioned by the Latvian
Ministry of Agriculture to carry out this prior appraisal of the Latvian Rural
Development Plan
The Agriconsulting team was led by Carlo Andrea Pelagallo and he was assissted by
Jimmy Armstrong. Both of these EU experts had previous experience of assisting other
applicant countries to prepare rural development plans for the implementation of
SAPARD. The third member of the team was the local expert, Daina Saktina, who
facilitated the work of the experts and the Ministry of Agriculture through the collation
of information and liasing with the key informants. Each member of the team spent at
least 22 working days on this assignment.
As required by the terms of reference the experts carried out this prior appraisal in
accordance with the detailed rules on support for rural development as laid down in
European Commission Regulation No. 1750/1999 (Article43). They also followed the
European Commission guidelines on Evaluation of Rural Development Programmes
2000-2006 supported from the European Agriculture Guidance and Guarantee Fund and
took account of the Working Paper 2 on The Ex Ante Evaluation of the 2000-2006
interventions Objectives 1, 2 and 3 published by the Directorate Generale , Regional
Policy and Cohesion.
This prior appraisal covers the following key elements:


Methodological approach
A description of appraisal activities and methodology


Analysis the current situation
An assessment of whether the overall Plan or Programme is an appropriate means for
addressing the issues confronting the region or sector.




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Assessment of the relevance and consistency of the proposed strategy
An assessment of whether the Plan or programme has well defined strategic axes,
priorities and objectives and if it reflects an informed opinion as to whether these are
relevant and can actually be achieved.


Assessment and quantification of the expected impacts of the selected priorities
A contribution to the quantification of objectives and the establishment of a basis for
both monitoring and future evaluation work.


Verification of the proposed implementing arrangements
Analysis the adequacy of the implementation and monitoring arrangements and help
with the design of project selection procedures and criteria.


Conclusions and recommendations


The extent to wich the conclusions and recommendations have led to changes to the
RDP.


As recommended in the Aide Memoire which provides guidance on the preparation of
the plan , this prior appraisal is an integral part of the plan which presents the strategic
argument for the development priorities which have been selected and extends that
strategic logic to define the indicators that should to monitor physical progress and
evaluate the results and final impact.




Page 9 of 140
3.   METHODOLOGICAL APPROACH


For the purpose of an Ex-Ante Evaluation of the Latvian Rural Development Plan
(RDP) for 2000-2006, in view of the Sapard Programme implementation, the following
11-phase methodology was adopted:
Phase 1.   Examination of documentation on the Evaluation of Structural Funds.
Phase 2.   Examination of the Latvian RDP.
Phase 3.   Meetings in Riga (Latvia) with officers responsible for the RDP to shed light
           on unclear or lacking points and outline assumptions on integrations to the
           RDP.
Phase 4.   Search of further fact-finding documentation on Latvia and other talks held
           externally to the MoA.
Phase 5.   Organisation of a short seminar at the MoA on envisaged Indicators for
           Structural Funds, their usefulness and methods of calculation.
Phase 6.   Preparation and delivery to the MoA of the List of suggested integrations of
           the Latvian RDP, with detailed illustration Annexes.
Phase 7.   Implementation of integration and changes required of the MoA following
           the evaluators’ recommendations.
Phase 8.   Examination of integrations requested and compilation of an Intermediate
           Evaluation Document.
Phase 9.   Forwarding of the Intermediate Ex-Ante Evaluation Document to the MoA.
Phase 10. Further meetings with the MoA to define solutions proposed and respond to
          outstanding questions.
Phase 11. Compilation of the definitive Ex-Ante Evaluation report.


Phase 1.   Examination of documentation on the Evaluation of Structural Funds.
Prior to the current phase, experts in charge of the Ex-Ante Evaluation of the Latvian
RDP had already come across the issue of evaluating a RDP, based on their ten-year
experience in Structural Funds. However, with a view to using recent documents on the
methodologies of evaluation, an ad-hoc study was conducted with an additional request
for guidelines from officers responsible for evaluation at the European Commission.
Documents examined, which constitute the main methodological reference, are the
following:
-    SAPARD, Prior appraisal of programme proposals, (9/11/99), courtesy of Mr. S.
     Jacobsen from DG for Agriculture.
-    Evaluation of rural development programmes 2000-2006, supported from the
     European Agricultural Guidance and Guarantee Fund, Guidelines, DG
     Agriculture, 1999.




Page 10 of 140
-    The New Programming period 2000-2006: methodological working papers,
     Working paper 2: The Ex-Ante Evaluation of the 2000-2006 interventions
     Objectives 1, 2, and 3, DG XVI.
-    The New Programming period 2000-2006: methodological working papers,
     Working paper 3: Indicators for Monitoring and Evaluation: An indicative
     methodology, DG XVI.
-    Orientations communes pour le Suivi et les évaluations intermédiaires, European
     Commission, 1995.
-    A manual for the environmental evaluation of Regional Development Plans and
     EU Structural Funds Programmes (Italian version), European Commission,
     DG XI, 1998.


Phase 2.    Examination of the Latvian RDP.
Before going to Latvia, the two experts in charge of the Ex-Ante Evaluation examined
the Latvian RDP. Each expert emphasised points deemed unclear, points to be
developed and lacking points.
A comparison was made between the early results of the analysis gathered by the two
European experts on the one hand and by the local expert on the other. Based on such
comparison, subsequent investigation phases were analysed.


Phase 3.    Meetings in Riga (Latvia) with officers responsible for the RDP to shed light
            on unclear or lacking points and outline assumptions on integrations to the
            RDP.
European experts and the local expert held numerous meetings with officers responsible
for RDP, and for individual measures defined therein, from the Ministry of Agriculture
(MoA) of the Republic of Latvia.
External experts were further interviewed who had cooperated in the compilation of the
RDP as well as officers responsible of the statistical office and the Paying Agency.
Meetings provided the opportunity for a further detailed focus on the RDP and the point
view of individual experts who worked thereon and/or who will be following its
implementation. In addition, assumptions were made as to any supplements, changes
and improvements, by assessing with MoA officers the suitability and feasibility of
changes and integrations proposed, as well as any alternative assumptions.


Phase 4.    Search of further fact-finding documentation on Latvia and other talks held
            externally to the MoA.
In view of a more in-depth knowledge of issues and potentials of Latvia and based on
the assistance from the local expert and MoA officers, further studies were identified on
relevant issues (i.e. rural development and less favoured areas, the current state of SMEs
in rural areas, the economic situation, the accounting system in the agricultural sector,




Page 11 of 140
agricultural best practices, etc.), which contributed to a more accurate overview of the
RDP context.
Equally with a view to improving knowledge of the situation, specific talks were held
externally to the MoA, with officers of the EU Delegation, university researchers, and
officers from financing bodies such as the World Bank.


Phase 5.    Organisation of a short seminar at the MoA on envisaged Indicators for
            Structural Funds, their usefulness and methods of calculation.
Based on the RDP examination, the document compiled was found to be short of
Indicator types and totally lacking quantification of such Indicators.
The need was consequently identified to integrate and supplement the RDP by
identifying suitable Indicators for each measure, divided into Physical Indicators, Result
Indicators and Impact Indicators and by quantifying major Indicators.
Based on talks with MoA officers, the issue of choosing the most suitable indicators and
their quantification was found to be unclear and in need of guidelines, which prompted
the MoA officer in charge of the RDP to request one of the experts in charge of the Ex-
Ante Evaluation to hold a short Seminar for all officers involved.
Consequently, documentation was prepared on the use of Indicators as part of Structural
Funds monitoring and evaluation, on individual Indicators selected in relation to
objective types (i.e., Operational Objectives, Specific Objectives and Global
Objectives), on calculation methods, with various examples compiled by using the
Excel program, on the usefulness of Indicators quantification in the programming phase
to check RDP financial assumptions.
The documentation prepared was used for the Seminar held at the MoA and was
subsequently produced. (see Annexes 1 and 2 to the List of suggested integrations).
It shall be noted that the issue of Indicators and calculation thereof was further discussed
with individual MoA experts responsible for measures, during talks held in Phase 3, as
well as in Fig 4.3.1 of Section 4.3, which reports a list of possible physical, result and
impact Indicators relating to various RDP measures.


Phase 6.    Preparation and delivery to the MoA of the List of suggested integrations of
            the Latvian RDP, with detailed Annexes.
At the end of the first Riga mission, a “List of suggested integrations of the Latvian
RDP” was compiled which was submitted to the MoA with eight detailed illustration
Annexes. (See Annexes for further information).
Main integrations requested are the following:
1.    Identification and quantification of Indicators, with: Annex 1 “The Sapard
      Programme advancement follow-up and the use of indicators”, Annex 2
      “Definition of Indicators for SAPARD RDP and example of calculation”.
2.    Projected Expenditure by measure, with Annex 3 “SAPARD RDP of Latvia:
      Financial Plan 2000-2006”.



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3.    Clarification about the reasons to select some Measures or actions, “SAPARD
      Measures not included”, and “Possible actions that can be included in the RDP
      Measures”.
4.    Further elaboration of Technical Sheets
5.    Provision of information from the implementing regulations for each Measure
6.    Suggested revisions to Sections 1 and 2 of RDP, with Annex 4 – A detailed page-
      by-page specification.
7.    Strengths and weaknesses, with Annex 5 Suggested additions and new format
8.    Development issues and policy option analysis, with Annex 6 “A list of the
      development issues that reflect the overall agricultural and rural development
      needs in Latvia”
9.    Questions on consultation, with Annex 7 “ A list of questions on consultation”
10.   Implementing arrangements
11.   Suggested changes to classification of Measures by Priorities, with Annex 8
      “Suggested changes to classification of Measures and Priorities, and Reasons for
      suggested change.”
During this phase, the local expert who had collaborated with the two European experts
in the Ex-Ante Evaluation further assisted the MoA in compiling the integration
documents.
Phase 7. Implementation of integration and changes required of the MoA following the
evaluators’ recommendations
The MoA, based on integration and changes recommended, compiled a new more
comprehensive version of the RDP of Latvia, whose pages increased from 97 to 168.
On compiling the new RDP, European experts frequently liaised with MoA, by
exchanging information and work proposals with the same via e-mail, while the local
expert in charge of the Ex-Ante Evaluation directly collaborated with the MoA in Riga.


Phase8.     Examination of integrations requested and compilation of an Intermediate
            Evaluation Document.
After receiving integrations requested from the MoA, these were assessed and the
chapters of the Ex-Ante Evaluation, as detailed below, were compiled in accordance
with the methodological reference documents:
-     Analysis of the current situation
-     Assessment of the relevance and consistency of the proposed strategy
-     Assessment and quantification of the expected impacts of the selected priorities
-     Verification of the proposed implementing arrangements.




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Phase 9.   Forwarding of the Intermediate Ex-Ante Evaluation Document to the MoA.
The intermediate ex-ante evaluation document was forwarded to the MoA for an
examination of results emerged and an assessment of new suggestions and scenarios
proposed.


Phase 10. Further meetings with the MoA to define solutions proposed and respond to
          outstanding questions.
A round of meetings was held at the MoA to shed light on the final questions and to
better define a number of solutions proposed.


Phase 11. Compilation of the definitive Ex-Ante Evaluation report.
Based on meetings the MoA, final changes in and integrations to the Ex-Ante
Evaluation report were made.




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4.      EVALUATION ACTIVITIES


4.1     Analysis the current situation
Evaluation of the analysis of the current situation in the agricultural sector and rural
areas of Latvia


4.1.1      Introduction
The guidelines issued by DG VI on the ex-ante Evaluation of Rural Development Plans
for the implementation of SAPARD indicate that this section of the evaluation should
deal with:
1.      Analysis of the situation of the region(s)/sectors concerned, the main strengths and
        disparities/shortcomings, the opportunities for and threats to rural development
        (SWOT analysis);
2.      Analysis of previous operations.


4.1.2 Analysis of the situation of the region
The analysis of the current situation is presented in three sections. The contents of each
section, the sources of the information used and the limitations of that information for
development planning are summarised below.


Section 1 - General Overview
This contains an overview of the geography, demography, political system and territorial
organisation of regional government, local government and spatial planning. The macro
economic situation and trends and an appraisal of the country’s environmental assets are
also presented. It describes an established democracy well advanced in the legal and
fiscal aspects of managing privatisation and transition to a market economy. A reform
of the system of local and regional government is now underway. Inflation is under
control and a rate of economic growth which is at least comparable to other countries in
transition, is confidently predicted. There is a clear awareness of the habitats, flora and
fauna and landscapes that have been designated as being of national or international
importance.
The sources of information are the Central Statistical Bureau of Latvia, Ministry of
Economics, Ministry of environmental Protection and Regional Development and
Ministry of Agriculture. The information on the future structure of local and regional
government is incomplete. Decisions still have to be made on the designation of
regions, the delegation of functions and responsibilities to the different levels of
administration and the operational arrangements for spatial planning.




Page 15 of 140
Section 2 - Characterisation of Rural Territory:
This section starts with a definition of rural areas to be targeted under SAPARD and a
comparative analysis of their demographic, social and economic characteristics vis a vis
urban areas and the country as a whole. The quantity and quality of infrastructural
provision in this rural area is described. There is a presentation of the findings of recent
research into regional variations within the rural region as a whole. The characteristics
and distribution of ten regions that are distinctive in relation to their natural resources,
demography, economic and employment structure and trends, are described.
The main features highlighted in this section are:
     rural areas have a lower population density and a persistently negative pattern of
      population change;
     average incomes in rural areas are very far below the national average;
     unemployment levels in rural areas are consistently several percentage points
      above the national average;
     there is a very high level of dependence on agriculture as a source of employment
      in rural areas;
     the quantity and quality of physical and social infrastructure provision in rural
      areas is well below urban standards;
     the variations within the rural areas in relation to the above features can be much
      greater than the contrast between rural areas and the nation as a whole.
In addition to the sources of information used to compile section1, the Ministry of
Transport and Telecommunications provided information on road conditions. The Rural
Development Programme of Latvia on SME and regional development and the Latvian
State Institute of Agrarian Economics on the definition of regional differences in rural
areas. However, in relation to the description of those regional differences, it should be
pointed out that reliable information at an appropriate geographical scale is only
available for a small number of demographic, social and financial variables. Information
on economic structure and performance is only available for the four large
administrative regions and the structure of agriculture at the level of the twenty six
districts. This lack of reliable economic and agricultural information for small areas will
act as a constraint on the preparation of local development plans for rural areas.


Section 3 - Characterisation of the rural economy:
The role of agriculture in the national economy, incomes obtained at the sectoral and
farm level, farm structure, age structure of those employed, structure and performance
of all the main branches of agriculture, the state of fixed assets and equipment, land
related constraints, the characteristics of food processing in the main sectors and the
opportunities for the development of alternative occupations to traditional agriculture,
are all analysed.




Page 16 of 140
The following main problems are defined:
       antiquated farm and food processing buildings;
       obsolete and inefficient equipment and machinery on farms and in food processing
        plants;
       small farms, old farmers and low levels of education among farmers;
       fragmentation of farms and food production plants;
       under utilisation and overgrowing of reasonable quality agricultural land;
       moist climate and inefficient drainage systems;
       high production costs;
       low farm incomes.
The Central Statistic Bureau, Ministry of Agriculture, State Land Registry, Ministry of
economics, Latvian State Institute of Agrarian Economics and the Latvian Agricultural
advisory Centre provided most of the information for this section. The process of
preparing this plan was characterised by a broadly based consultation process and
associations of producers, food processors and research institutes made a significant
contribution to the information used in this section. The data available on the structure
of farming, is based on such a small sample of farms and the situation is changing so
rapidly on some aspects that it is difficult to reliably define representative farm types
that could be used to monitor structural changes and define specific strategic
investments for co-financing under SAPARD.


4.1.3      Definition of disparities to be addressed under SAPARD
A SWOT analysis summarises the strengths, weaknesses, opportunities and threats that
arise out of the foregoing analysis of the socio-economic, and environmental situation at
national, rural and agricultural sector levels. The development needs and issues
highlighted in the text under each topic are included in the SWOT analysis with their
page reference. The analysis of the situation of the rural areas ends with a
comprehensive list 54 development issues.
These development issues are then classified on the basis of the broad strategic actions
required to address them.
Six priority areas for co financed investment under SAPARD were thus identified:
1.      Investments in agricultural holdings;
2.      Improvement of the processing and marketing of agricultural and fishery products;
3.      Development and diversification of economic activities in rural areas;
4.      Improvement of rural infrastructure;
5.      Environmentally friendly agricultural methods;
6.      Vocational training and technical        assistance in    support of SAPARD
        implementation.



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4.1.4 Contribution of ex-ante evaluation to the preparation of the analysis of the
      situation in rural areas
A first reading of the plan, followed by a search for further sources of information and
interviews with MoA staff and other key informants, produced the suggested
amendments that are listed in Annex 6 and 7.
These amendments could be summarised as follows:
     More information required on the geographical, economic, social, environmental
      and administrative situation in the country, including a description of the pattern
      and progress of transition from a centrally planned to a market economy. The
      rapid education of the non Latvian reader is one of the main objectives and the use
      of graphics, EU frameworks and widely used indicators would facilitate their
      learning. Some restructuring by way of concentrating all the essential background
      information in the first section and the introduction of a section on the situation in
      rural areas could also help.
     More quantification required of the macro-economic situation; regional variations
      in demography, economic activity, social conditions and infrastructural provision;
      the sectoral pattern, economic, social and demographic structure of farming; and
      trends in all of these areas.
     More analysis was needed of the external social, technological, economic,
      environmental and political factors that are driving the evolution of national and
      EU agricultural and rural development policy.
     More explicit elaboration of the development issues arising out of the description
      of the situation, eg, has the demographic structure of some areas declined to the
      point where sustaining the rural community is no longer a realistic goal.
     More justification was required for some of the investments proposed in the
      strategy, eg, alternative heating systems, modernisation of polder pumps, or pilot
      programmes on controlling run-off, promoting bio-diversity and organic
      production.
     A small number of factual inconsistencies needed to be resolved.
In the second draft of the plan, MoA have made significant changes and improvements
in all of these areas. Some of the gaps which were apparent at first reading, turned out
to be a reflection of the lack of reliable information on that topic.


4.1.5 Factors driving towards sustainable rural development
Some of the evaluators’ initial comments were based on what they would expect to find
in a similar plan in their own country and did not take the recent origins of the State into
account. In particular it has to be recognised that the development policy paradigm will
be more basic than the EU. The factors that are driving policy are primarily the need to
make an effective transition to a market economy and full membership of the EU. The
need for greater competitiveness, and significant growth in GDP and employment are



Page 18 of 140
therefore the critical driving forces. The need to harmonise regulations and legislation
with the EU is a major factor in favour of the integration of quality, health, hygiene and
environmental standards into the objectives and actions of agricultural and rural
development programmes. This tendency for Latvian development policy to be led by
EU policy is also evident in the way in which the Rural Development Programme of
Latvia draws heavily on the values and principles from “The Future of Rural Society”
and other discussion papers such as the Cork Declaration. Some of the key informants
would argue that the objective put forward in the Rural Development Programme to:
“prevent migration from rural areas, to reduce poverty of rural citizens, to pay
maximum attention to the stimulation of employment and ensuring of equal
possibilities.”
does not have a mandate derived from political debate at the national level.
Latvia has inherited a polycentric pattern of development from the soviet era which
pursued the spatial equalisation of productive investment but also triggered a strong
migration from the countryside to the towns. The subsequent downward spiral in the
social and demographic structure in some rural is so great that it raises doubts about the
feasibility and wisdom of using scarce resources to co finance investments in economic
and social revitalisation. The policy advisors in Latvia are therefore very aware of the
dangers of trying to import EU paradigms of regional and rural development without
further research and debate.
Equally, the concepts of social inclusion and equal opportunities do not seem to be on,
or so far up, the political agenda as they are at EU level. For all these reasons therefore
it is important to recognise that development policy in Latvia is primarily driven by
basic macro socio-economic factors and that adoption of some of the more sophisticated
EU type goals has still to happen.


4.1.6     Analysis of previous operations
Section 5 of the plan contains a description of the previous and current programmes that
are directly relevant to the actions proposed for co-funding under SAPARD.
Three main programmes are particularly relevant:
1.      The PHARE programme which funded 26 projects at a total cost of 45MEUR
        since 1994;
2.      Two World Bank loans of $25m each for loans to commercial farms and small
        rural non farm projects respectively;
3.      The national support Programme for Agriculture and Rural Development spending
        31 MEUR in 1999, 4.4 times more than in 1994.
The programmes are very clearly described but there is no information on whether the
experience of these programmes would reinforce the need for the type of support being
offered under SAPARD or whether lessons had been learnt which could be applied to
the implementation of SAPARD. To try and fill this gap, the evaluators interviewed
personnel from the World Bank, The Latvian Institute of Agrarian Economics, the EU
delegation and the Ministry of Agriculture.



Page 19 of 140
The PHARE programme supported a major project on Agri-food processing,
restructuring, marketing, and quality control. The experience of that programme would
verify the choice of investments proposed for co-financing under SAPARD. The
conclusion of the World Bank that there are 10,000 full time commercial farmers and
possibly as many as 50,000 part time farmers who need assistance with investments in
production technology would certainly verify the need for the grant aid proposed under
priority 1-Investments in Agricultural Holdings. The National Support Programme for
Agriculture and rural development paid grants to approximately 1700 farmers, estimated
to be 1% of the latent demand, in just 2years of operation.
In terms of lessons learned, the World Bank would say that the availability of titled land
as collateral for loans is not a problem, but do point out that when grants are restricted
to new equipment under SAPARD, the collateral value of existing capital on farms will
fall. The MoA officials are also very aware that up to a third of all farm equipment is
leased and that this type of investment could not be co-financed under SAPARD.
While everyone interviewed agrees that there will be a considerable increase in the
application rate for SAPARD farm investment grants, there are different opinions about
the approval rate. The World Bank would argue that commercial lenders will continue
to regard the availability of grant as being somewhat uncertain and therefore the
commercial viability of projects (and loans approved) will not improve in proportion to
the higher grant rate compared to previous schemes. The MoA staff believe that this
lesson has already been learnt from the National schemes and that since the bank will
make its final decision after the letter of offer has been issued from SAPARD, the
availability of the grant will be guaranteed.
Finally, the Latvian Agricultural Advisory Centre (LAAC), which was established with
the support of PHARE, is now providing a service throughout the country in all aspects
of farming and at a charge that the farmer can afford. However, all those interviewed
were very aware that more financial information will be required for a farm investment
project under SAPARD and that new types of technical expertise will be required for the
preparation of applications for non farm rural development projects and rural
infrastructure projects. This would point to a need for the expansion of the role of the
LAAC and provision of technical assistance grants for rural development projects.




Page 20 of 140
4.2   Assessment of the relevance and consistency of the proposed strategy

4.2.1 According to the guidelines on ex-ante evaluation issued by DG VI, the
         following topics need to be addressed in this section
         1) Justification and relevance of the strategy and its priorities for action;
         2) Consistency between operational and global objectives (internal
              coherence);
         3) Balance between the different support measures of the plan;
         4) Adequacy between the proposed plan and other relevant policies and
              programmes (external coherence).
After a brief description of methodology, this section will deal with each topic in turn.


4.2.2 The methodology involved:
      A review of the EU’s published guidance notes on evaluation (DG VI and DG
       XVI);
      A perusal of examples of ex-ante evaluation of EU co-funded agricultural and
       rural development programmes;
      Reading of the first draft of the plan and discussions with MoA staff to clarify
       the scope and objectives of priorities and measures;
      The preparation of some draft, but structured, analysis of the proposed strategy;
      Discussions with senior MoA staff to clarify and agree the content of these
       analytical tables;
      The presentation of these tables with comments on the evaluation questions
       proposed by the EU.


4.2.3 Justification and relevance of the strategy and its priorities for action
The DG VI guidelines pose the following 3 questions:
1)    Are key issues retained in the plan well reasoned in relation to the current
      situation and the overall objectives that derive from it?
2)    Are the appropriate sectors, geographical areas, populations/beneficiaries
      addressed?
3)    Have both European level and regional level objectives and priorities been
      adequately addressed?


Are the key issues retained in the plan well reasoned in relation to the current situation
and the overall objectives that derive from it?
The MoA and the evaluators compiled a list of the agricultural and rural development
issues that need to be addressed in Latvia. The list which is presented on page …….




Page 21 of 140
was derived from a detailed review of the description of the current situation in Sections
1 to 3 of the plan, including the SWOT analysis.


Are the appropriate sectors addressed?
Table 4.2.1 illustrates which development issues will be directly addressed by each of
the proposed measures. The table shows that the proposed strategy would have a direct
impact on 39 out of the 54 development issues. Eight of the remaining 14 issues will be
dealt with under other national policies. These figures indicate a comprehensive
strategy.
In relation to the targeted sectors, the important development issues are:
11)   Closer orientation of the pattern of farm production to market situation and trends;
30)   Potential for business and employment growth in rural tourism should be
      exploited;
34)   Opportunities for business and employment growth in rural craft industries need to
      be exploited.
The proposed actions under 1.2, 3.1 and 5.1 to provide the expansion of forestry, herb
production, berry production, mushrooms, crayfish and organically produced food are
specifically targeting sectors in which Latvia has a comparative advantage derived from
its climate and natural resource endowment. The promotion of rural tourism and
production of craft goods under measure 3.1 as a means of diversifying rural
employment also demonstrates specific targeting of non-agricultural sectors for which
rural Latvia has clear advantages. At the moment, innovative export orientated
businesses in the manufacturing/processing sector are not targeted, and, on the basis of
the experience of successful rural enterprise development models, the evaluators
recommend that this sector should also be targeted. Consultations were held with key
informants in the academic and banking sectors on the question of whether co-financed
investments under measures 1.1 (farm modernisation) and 2.1 (modernisation of food
processing) should be more specifically targeted at particular types of agricultural
production. The unanimous response was that both the pace and direction of progress
towards open markets in the EU and Baltic States was still not sufficiently clear to
warrant the promotion of such specialisation.




Page 22 of 140
                                                          Technical support
Latvian RDP – Development Issues addressed by Measures




                                                          Vocational training
                                                          Reduction of agricultural run-off
                                                                                                              X




                                                                                                                                  X
                                                          Preservation of bio-diversity and rural landscape
                                                          Organic farming

                                                                                                              X
                                                                                                              X
                                                                                                              X


                                                                                                                          X

                                                                                                                              X
                                                                                                                              X




                                                                                                                                                      X
                                                                                                                                                      X
                                                                                                                                                      X
                                                                                                                                                      X
                                                          Modernisation and reconstruction of hydro-




                                                                                                                  X
                                                          technical equipment in polders
                                                          General rural infrastructure development




                                                                                                              X


                                                                                                                      X



                                                                                                                              X




                                                                                                                                                  X

                                                                                                                                                      X
                                                          Development and diversification of economic




                                                                                                              X
                                                                                                              X



                                                                                                                          X




                                                                                                                                                          X
                                                          activity providing alternative income
                                                          Improvement of food processing and marketing




                                                                                                                  X




                                                                                                                                                  X
                                                                                                                                                  X
                                                                                                                                                  X
                                                                                                                                                  X
                                                                                                                                                  X
                                                                                                                                                  ?
                                                          Land reparcelling




                                                                                                                  X




                                                                                                                                          X
                                                          Afforestation of agricultural land




                                                                                                                  X



                                                                                                                          X




                                                                                                                                      X




                                                                                                                                                          X
                                                          Modernisation of agricultural machinery,




                                                                                                              X
                                                                                                              X
                                                                                                              X
                                                                                                              X



                                                                                                                              X
                                                                                                                              X
                                                                                                                              X


                                                                                                                                              ?
                                                          equipment and buildings
          Figure 4.2.1:

                                                         Development




                                                                                                                                                              Page 23 of 140
                                                                                                              10
                                                                                                              11
                                                                                                              12
                                                                                                              13
                                                                                                              14
                                                                                                              15
                                                                                                              16
                                                                                                              17
                                                                                                              18
                                                                                                              19
                                                                                                              20
                                                                                                              21
                                                                                                              22
                                                                                                              23
                                                                                                              24
                                                                                                              25
                                                                                                              26
                                                                                                               1
                                                                                                               2
                                                                                                               3
                                                                                                               4
                                                                                                               5
                                                                                                               6
                                                                                                               7
                                                                                                               8
                                                                                                               9
                                                         Issues
 Technical support
 Vocational training




                                                                                                      X
                                                                                                      X
                                                                                                      X
 Reduction of agricultural run-off




                                                                                                  X
                                                                                                  X
 Preservation of bio-diversity and rural landscape


                                                                          X




                                                                                              X
                                                                                              X
 Organic farming

                                                                  X

                                                                      X




                                                                                          X
                                                                                          X
 Modernisation and reconstruction of hydro-technical equipment




                                                                                      X
 in polders
 General rural infrastructure development




                                                                          X
                                                                          X




                                                                                  X
                                                                                  X
                                                                                  X




                                                                                                          (Issue numbers as per list on page x of plan)
 Development and diversification of economic activity providing




                                                                  X
                                                                  X

                                                                      X
                                                                      X
                                                                      X
                                                                      X
                                                                      X

                                                                              X


                                                                                  X
 alternative income
 Improvement of food processing and marketing
 Land reparcelling
 Afforestation of agricultural land




                                                                  X
                                                                  X




                                                                              X
                                                                              X
 Modernisation of agricultural machinery, equipment and




                                                                  X
 buildings
Development




                                                                                                                                                          Page 24 of 140
                                                                  27
                                                                  28
                                                                  29
                                                                  30
                                                                  31
                                                                  32
                                                                  33
                                                                  34
                                                                  35
                                                                  36
                                                                  37
                                                                  38
                                                                  39
                                                                  40
                                                                  41
                                                                  42
                                                                  43
                                                                  44
                                                                  45
                                                                  46
                                                                  47
                                                                  48
                                                                  49
                                                                  50
                                                                  51
                                                                  52
                                                                  53
                                                                  54
Issues
Are the appropriate geographical areas addressed?
The areas targeted for co-financed investments under SAPARD are clearly defined. The
decision to co-finance investment in the modernisation of food processing in towns
normally excluded, is consistent with the present location of much of the investment in
this sector. The same argument applies to investments in the development and
provision of training, ie, much of the delivery capacity is already located in towns
normally excluded from the designated rural areas.
The specific areas targeted for the implementation of measure 5.2 (preservation,
biodiversity and rural landscape) is clearly justified by their designation as ecosystems
and habitats of national and international importance.
The decision to exclude town areas of “towns with rural territories” from the targeted
area can be questioned. The 25 towns involved are understood to have small
populations (1 to 3,000) and their primary role is the provision of services to their rural
hinterlands. On the grounds that the quality of life in their rural territories will also
depend on their regeneration and that they may will offer the best location for businesses
providing alternative employment to agriculture, it is recommended that further
consideration be given to the inclusion of these towns.
Section 2 of the plan includes a definition and description of 10 different types of rural
region in Latvia. This evidence would suggest strongly that these regions represent a
sufficiently unique combination of development needs and opportunities to advocate the
preparation and implementation of Integrated Area Development Plans for each one.
However, as indicated in the plan and confirmed by interviews with key informants, the
reform of regional and local government is not complete, the operational arrangements
for spatial planning are still evolving, and the principles which should underpin regional
development of these regions have still to be debated at national level. It is therefore
accepted that further regional targeting of investments under SAPARD should be
deferred until such times as they can be defined as a coherent part of an integrated
package reflecting values and principles which are politically acceptable. Table 4.2.1
shows that at this stage, geographical targeting within the rural areas is confined to
giving priority under measure 3.1 (development and diversification of economic
activity) to projects located in regions where there is a greater need for diversification of
employment (development issue number 35).
Are the appropriate populations/beneficiaries addressed?
The plan is clearly targeting an improvement in economic opportunity and quality of life
for all the rural dwelling populations, farming and non-farming. It is likely that many, if
not most, of the beneficiaries from investments in the modernisation of the food
processing industry will be living in urban areas, but the priority given to this action is
clearly justified by its downstream linkages with farming.
The need to attract younger and more progressive persons into farming (development
issue number 15) is reflected in the availability of a higher rate of grant aid for young
farmers under measure 1.1 (modernisation of farming). However, the need for more
employment opportunities for young people (development issue number 29) in rural
areas is not reflected in the targeting of measure 3.1 (diversification of economic
activity), and some consideration should be given to the possibility. Similarly, it might



Page 25 of 140
be expected that the encouragement given to producer participation in the processing
and marketing of organic produce under measure 5.2 (organic farming) would also be
included as a feature of measure 2.1 (modernisation of food processing).
No specific action is proposed on the need to concentrate farm production on farms
capable of producing at competitive rates (development issue number 18). However,
the eligibility requirements that the farm business is registered as an enterprise, and the
need to present a business plan demonstrating the viability of the investment, will have
the effect of targeting financially viable investments on market orientated farms.
Table 4.2.1 shows that the current proposals for the provision of technical assistance
would not include support for research on the topics indicated under development issue
number 52, visits by beneficiaries to similar successful projects (development issue
number 53), or the development of market information systems (development issue
number 54). Consideration should be given to the targeting of these activities.


4.2.4 Consistency between operational and global objectives
According to the DG VI guidelines on ex-ante evaluation, the purpose of this section is
to assess whether:
“there is an appropriate hierarchy of objectives so that the co-financed measures on
outputs/operational objectives would plausibly be transformed into the anticipated
impacts corresponding to the global objectives.”
The definition of the hierarchy of objectives and the linkages between them is
fundamental to understanding how the programme works, how its performance can be
measured and the information which is critical to its management. The construction of
this logical framework for the programme is frequently a very important contribution of
the ex-ante evaluation.
Figure 4.2.1 describes the structure of the Latvian RDP. There are two global objectives
– the first relating to the alignment of Latvian legislation, regulations and administrative
systems and procedures for the management of intervention in the fields of agriculture
and rural development, to those of the EU. The second relates to the contribution which
the implementation of SAPARD programme is expected to make, ie, to contribute to the
achievement of:
“Competitive and sustainable agriculture, strong sustainable rural communities and a
diverse, sustainable environment.”
This overall aim defines 3 broad areas where improvement is expected:
     Development of competitive and sustainable agriculture;
     Integrated rural development;
     Improvement of the environment;
      and there are specific objectives of the RDP for each of these areas which define
      more precisely how the improvement is expected to be achieved. For example,
      Integrated Rural Development will be achieved by:




Page 26 of 140
     Improvement of infrastructure of rural areas to bring it closer to urban standards;
     Creation of employment and a more diverse employment structure in rural areas.
      It is worth noting at this stage that these specific objectives are not the only
      contributions which SAPARD could make to the respective areas of development,
      but that they are the strategic contributions which the consultation with
      stakeholders and analysis of the current situation defined as being most
      appropriate.
The plan proposed that these specific objective will be achieved by co-financing
investments in 5 priority actions which are more or less discrete in terms of targeted
activities and beneficiaries. For example, the specific objectives of:
     Increasing the competitiveness of farming and food processing;
     Increasing the incomes of agricultural enterprises; will be achieved by co-
      financing:
     Investments in agricultural holdings;
     Improvement of agricultural and fisheries product processing and marketing.
In turn there are 10 measures which are the precise actions that will be taken. For
example, there will be co-financing for 3 types of investment in agricultural holdings:
     Modernisation of agricultural machines, equipment and construction of buildings;
     Afforestation of agricultural land;
     Land reparcelling.
The operational arrangements for the implementation of these measures (technical
sheets included in the Annex to the plan) provide yet more detail in relation to eligible
sectors, activities, beneficiaries, project selection criteria, grant rates, co-financing,
maximum and minimum amounts available and minimum standards that must be met by
assisted projects. The details also reflect decisions about the targeting of investments to
achieve strategic objectives within the priority areas. For example, the availability of
higher grant rates for young farmers reflects a strategic goal of attracting more young
farmers into the sector.
The issue that now needs to be evaluated is whether the expected impact of these
proposed actions will contribute to the achievement of the overall objective of the
respective priorities, and ultimately the programme as a whole. The evaluation test is
whether there is a clear causal linkage (or consistency) between the objectives of the
programme, priorities and measures. Figure 4.2.2 provides a schematic description of
these objectives and relationships between them. It shows that global and specific
objectives can be defined for each level and that at the measure level there are also
operational objectives (descriptions of the development activity).
This model shows that the global objectives of the measures will be the specific
objectives of the priorities and the global objectives of the priorities will be the specific
objectives of the programme. It follows that if a clear causal relationship can be shown
between the specific objectives and overall objectives, the overall objectives at all levels
will be consistent.




Page 27 of 140
Figure 4.2.3 illustrates an example where the modernisation of dairy cow buildings will
lead to the modernisation of the milk production sector, which will logically help to
create more efficient farming (lower production costs, better quality), which in turn
will make farming more competitive, and this will contribute to the creation of a
competitive agricultural sector.




Page 28 of 140
Figure 4.2.2: SAPARD RDP of Latvia – Coherence of Objectives of RDP –
              Intervention Logic
RDP

General Objectives          Priorities

Specific Objectives         General Objectives         Measures

                            Specific Objectives        General Objectives

                                                       Specific Objectives

                                                       Operational Objectives


Figure 4.2.3


Programme Level:
Global Objective:
“A competitive,
sustainable agriculture,
strong, sustainable rural
communities, diverse,
sustainable rural
environment.”


                            Priority Level:
Specific Objective 1:       Global Objective:
“Competitive farming”       “Competitive farming”


                                                       Measure Level:
                            Specific Objective 1:      Global Objective:
                            “More efficient farming”   “More efficient farming”


                                                       Specific Objective 1:
                                                       “Modernisation of milk
                                                       production”


                                                       Operational Objective:
                                                       “Milk    cow   buildings
                                                       modernised”




Page 29 of 140
For a number of reasons, it is convenient to break the logical framework analysis of the
programme into 2 questions:
1)    Are the global objectives of the priorities consistent with the global objectives of
      the programme?
2)    Are the global objectives of the measures consistent with the global objectives of
      the priorities?
Figure 4.2.4 describes the logic of the Latvian RDP in relation to Question 1. It is clear
and logical that improving the competitiveness of farming and food processing,
increasing farm incomes, creating employment in rural areas, improving infrastructure
in rural areas, and developing farming methods designed to protect the countryside, will
all contribute to the achievement of the overall objective of the SAPARD programme.
The first draft of the plan did not include a statement of the overall objective. The one
included above was suggested by the evaluators. In their consideration of this statement
the MoA should try to include a reference to the objective of improving farm incomes.
It could be argued that since priorities 1 and 2 have the same overall objectives, the
amalgamation of the two into one priority would create a more efficient structure.
However, since the 2 priorities relate to different sectors and beneficiaries, the retention
of the 5 priorities will facilitate the promotion of the programme to the potential
beneficiaries.
The logic in relation to Question 2 for each priority is described in figures 4.2.5 to
4.2.10. In general these figures show a high degree of consistency between the global
objectives of the measures and those of the priorities. Most of the overall objectives of
the measures in priority 1 will have a logical connection with the improvement of
competitiveness and farm incomes. The exceptions are the first overall objective of the
forestry measure 1.2 and there was some debate about whether it would be more logical
for this measure to be located in priority 5. However, the primary objectives, even if it
is only in the long-term, was deemed to be income and employment generation,
particularly on farms. Some of the overall objectives of measure 1.1 relate to secondary
objectives, eg, improving the working conditions of farmers and welfare of animals, and
raise the possibility of creating an additional specific objective for this priority. The
description of the specific objectives of measure 1.1 is incomplete in that it should
include some explanation of how the overall objectives will be obtained. For example,
a specific objective to ensure that all improvements to farm buildings comply with
animal welfare standards, would explain the intermediate steps required to improve the
welfare of animals. In relation to priority 3, (figure 4.2.7), it is not clear how the overall
objective of increasing employment opportunities for young people will be achieved,
since there is no appropriate action identified in the operational objectives. In priority 4
there is some debate about whether measure 4.2 should be included there or under
priority 1, and the decision to keep it here reflects the consideration that benefits will be
shared by all people living on polders and not just farmers.
Finally, 4.2.10 shows that the overall objective of the vocational training and technical
assistance measures and specific objectives of all the priorities are clearly related to the
achievement of the overall objectives of all the priorities. For this reason, they are
described as horizontal objectives.




Page 30 of 140
4.2.5    Balance between the different support measures of the plan
The capitalisation of newly formed, but technologically antiquated, farms is critical to
the commercial consolidation of the privatisation and transition process. The produce
from these farms will not find ready markets in Western Europe until the collection,
processing, grading, packaging, storage and distribution meet EU regulations on health,
hygiene and environmental standards. The modernisation of farm production and food
processing targeted by measures 1.1 and 2.1 will therefore significantly help agriculture
to make its potential contribution to national economic growth. At the same time, farm
businesses and farming families are the cornerstones of the rural economy and rural
society. The commercial consolidation of family farming, accompanied by the
improvement and stabilisation of farm incomes, will make a significant contribution to
sustaining a rural economy and preserving the social and cultural fabric of rural areas.
Measures 1.1 and 2.1 are therefore targeting improvements that are a fundamental
prerequisite for both agricultural and rural development in Latvia.
Unemployment levels are already significantly higher in the rural areas targeted by
SAPARD, and further decline in agriculturally related employment in rural areas will be
one of the inevitable outcomes of progressive technical modernisation in the sector. The
inclusion of measure 3.1 to promote the creation of more employment outside
agriculture, is therefore an essential antidote to measures 1.1 and 2.1 if Latvia wants to
give its rural population the opportunity to continue to live and work in rural areas. An
equally important reason for the inclusion of measure 3.1 is that the further development
of rural based business activities such as rural tourism and herb production that can
make a significant contribution to national economic growth. It will also be important
for the MoA to realise that it cannot hope to equalise employment opportunity for the
rural population with the resources that are available under SAPARD. Substantially
greater investments are required under Regional Development Programmes.
Substantial investments are also required for the improvement of rural infrastructure,
partly to facilitate business development, but also to give rural people reasonable access
to essential services. On balance, investments under 4.1 are primarily targeting barriers
to rural enterprise development and improvement which is a reasonable strategic choice.
For example, in the investment of the limited resources available on the general
improvement of rural roads, as distinct from those providing access to farms or rural
businesses, would have a relatively insignificant impact.
The inclusion of 3 measures (5.1, 5.2 and 5.3) specifically targeting the development
and demonstration of environmentally sensitive farming techniques builds on the results
of earlier surveys and research, is ecologically and geographically well targeted and
strategically prepares the ground for the implementation of agri-environmental support
programmes under full EU membership.
The vocational training and technical assistance measures are of course vital supporting
measures for SAPARD. At this stage in the transition to a market economy, it is not
surprising to find that the LEADER II partnership approach to local development is not
well developed, and that the agricultural advisory service is straining to meet the
demand for advice on project preparation and implementation. To be successful,
SAPARD will need to harness the knowledge and experience of the private and
voluntary sectors at local level and will need to provide more and a much wider range of



Page 31 of 140
technical advice through the retraining and advisory service. At the moment, these
needs are not reflected in the proposed scope of measures 6 and 7 and consideration
should be given to the inclusion of appropriate actions. Finally, but by no means least
important, the research community in Latvia has made a very significant contribution to
the preparation of a well targeted SAPARD plan. The list of development issues on
page x identifies a number of areas where research can add very significant value to the
arrangements for the implementation of the programme. Again consideration should be
given to the inclusion of funding for such research under measures 6 and 7.
Figure 4.2.11 shows that there is a significant positive synergy between these measures.
Twenty-two out of the 45 interactions are positive and eight of these are strongly
positive. Of the 23 interactions that are described as neutral, only 4 include a negative
element - that is to say the neutrality is derived from a balance between negative and
positive elements. For example, while the reparcelling of land (measure 1.2) may have
some negative effects on landscape (measure 5.2), the creation of larger plots will
facilitate the integration of farming and environmental management.


4.3.6    Justification of the financial resource allocation
Tabel 4.2.2 and Figures 4.2.12 and 4.2.13 illustrate the allocation of financial resources
between objective areas and measures respectively. The allocation of more than half to
agriculture can be justified on the basis of the arguments presented in 4.2.23 above, that
is to say, the technical modernisation of farming and food processing is fundamental to
the satisfactory completion of privatisation, the realisation of agriculture’s potential
economic contribution at national level, and confirmation of its role as the cornerstone
of the rural economy and society. It can be reasonably argued that because there is such
a degree of positive interaction between the agricultural and rural development objective
areas, a significant proportion of the investment in agriculture can be considered to be
favourable to the objectives of rural development.
There is evidence derived from an assessment of financial needs of farming to justify
the allocation of 25.9% of resources to investments in agricultural holdings. There is
broad agreement that there will be 10-15,000 full-time commercial farms that will need
grant aid to justify investments in production capital at the rates of return and interest
rates projected for the programme period. In addition, it is estimated that there are some
50,000 farms where part-time farming, combined with some other source of income,
could be commercially and socially viable. If these figures prove to be accurate and
there is a rate of uptake similar to previous programmes, then all of the resources
allocated to measure 1.1 will be required.
The allocation of an even higher proportion to the improvement of food processing
under measure 2.1 can be justified on the basis of its ability to increase demand and
improve prices, and therefore lead the revitalisation of farm production out of its current
depression. The maximum amount of grant per project is 1MEUR, but one beneficiary
can receive up to this amount of grant for up to three projects. The ceiling on grant aid
per beneficiary is therefore 3MEUR which is somewhat higher than the norm for this
type of investment.




Page 32 of 140
On the basis of the existing statistical evidence, it can be verified that there is a need for
significantly more financial assistance for the improvement of rural infrastructure than
can be afforded in this programme. If resources do become available as a result of
slippage elsewhere, then consideration should be given to this need. Significant
amounts of added value could be derived from even marginal increases in the funds
allocated to technical assistance and vocational training, particularly if the extra funds
were used for financing more research, expanding the technical capacity of the advisory
service into non-agricultural enterprise development and building the capacity of local
people to become involved in the preparation and implementation of local development
plans. Finally, the financial allocation to forestry seems very small in light of Latvia’s
comparative advantage for the production of high quality timber, the strong export
orientation of the industry, the contribution to employment and farm incomes in rural
areas, and the significant environmental benefits.


4.2.7    Adequacy between the proposed plan and other relevant policies and
         programmes
The coherence between SAPARD and national development policies and programmes is
illustrated by the policy option analysis on RDP of the plan. The analysis defines a large
number of agricultural and rural development issues, not previously addressed under
national programmes, that will now be addressed by SAPARD. The complementary
forms of national agricultural, forestry and fisheries development programmes is clearly
defined in Section 4 of the plan. Adjustments have been made to National Agricultural
Policy to avoid duplication of roles and against a background of increasing national
expenditure on agriculture, there are no indications that the additionality of SAPARD is
being compromised. There is an obvious complementarity with the bias under ISPA
towards the large scale infrastructural projects and the focus of the Regional
Development Programmes on Special Support Areas. As the new arrangements for
local and regional government are put in place, and a system of spatial planning evolves,
it is hoped that any regional targeting of SAPARD investments would be guided by
regional development plans.
Figures 4.2.14 to 4.2.18 analyse the expected impact of the Latvian SAPARD on the 4
objectives for SAPARD and therefore its coherence with the Common Agricultural
Policy. The first 4 pages contain a detailed analysis of how the SAPARD measures will
impact on the CAP objectives. For example, investments in the modernisation of farm
buildings, machinery and equipment under measure 1.1 will contribute to greater market
efficiency by improving quality, reducing costs and improving efficiency (Figure
4.2.14); to improvement of quality and health standards by improving working
conditions, food hygiene and animal welfare (Figure 4.2.15); to maintaining the rural
population by increasing farm wages and encouraging more young people to enter
farming (Figure 4.2.16); and protection and development of the environment by
reducing pollution (Figure 4.2.17). It can be seen, therefore, that these tables elaborate
further on the synergy of the SAPARD measures in terms of their expected impact on
objectives outside those of their designated priority area. A summary of the impact of
the Latvian SAPARD measures on the 4 CAP objectives for SAPARD is provided in
Figure 4.2.18. It shows that SAPARD is expected to make 113 separate contributions to




Page 33 of 140
the achievement of the CAP objectives, and that there is a good distribution across the 4
objectives. All of the SAPARD measures are expected to have a significant impact on
the CAP objectives.
The evaluation of the integration of environmental requirements (besides CAP) into the
policy of rural development planning is presented in section 4.3.
Figure 4.2.19 summarises the expected contribution of the specific objectives of the
Latvian RDP to the achievement of EU level objectives. It shows that strong
contributions are expected in the areas of promoting competitiveness, protection of the
environment and employment creation. The promotion of equal opportunities and social
inclusion is not presented as an important policy issue in the plan and may not yet have
priority on the political agenda in Latvia. Nevertheless, the impact of SAPARD on both
issues should be monitored.




Figure 4.2.12      Latvian RDP - Allocation of Financial Resources between
                   Objective Areas.



                          60,4
          70


          60


          50


          40                                   28,9


          30                                                 Proportion % of total Programme
                                                             exenditure

          20                                                      7,8


          10


           0
                   Agriculture             Rural          Environment
                (Priorities 1 & 2)     Development
                                     (Priorities 3 & 4)




Page 34 of 140
Figure 4.2.13:         Latvian RDP - Allocation of Financial Resources between
Measures



      30



      25



      20



      15
                                                                   Pr op ortion % of total Pr ogr amme
                                                                   expenditure
      10



      5



      0
           2.1   1.1    3.1   4.1   5.1,   1.2   4.2 SM1 1.3 SM2
                                    5.2
                                     &
                                    5.3



SM1                       Support Measure 1 - Vocational Training
SM2                       Support Measure 2 - Technical Assistance




Page 35 of 140
Figure 4.2.19: Latvian RDP – Compatibility with EU Policy Objectives
                                                             EU Policy Areas
Specific Objective
                              Competition      Equal        Environment   Employment   Partnership     Social
                                            Opportunities                                            Inclusion



To increase competiti-            H             M               M             L            H            L
veness of farming and
food processing


To increase income of             H              L              L             L            L            L
agricultural enterprises


To create employment              M             M               L            H             H          M/L
and a more diverse
employment structure in
rural areas


Improvement              of       M             M               L            M             H           M
infrastructure of rural
areas to bring it closer to
urban standards


Environmentally friendly          L              L              H            M            M             L
agricultural methods




H         Contribution High
M         Contribution Medium
L         Contribution Low




Page 36 of 140
Figure 4.2.1: SAPARD RDP of Latvia – Structure of objectives, priorities and measures
Global objective 1       Implementation of the acquis communautaire concerning the common agricultural policy and related policies
Global objective 2       Competitive and sustainable agriculture; strong, sustainable rural communities and diverse and sustainable rural environment
Specific objectives of   Increase of competitiveness of farming and food Improvement of infrastructure of rural areas to bring it Development and promotion of the
RDP:                     processing industry,                                closer to urban standards                                  methods     designed    to    protect
                                                                                                                                        environment and maintain countryside
(Global objectives of    Increase in incomes of agricultural enterprises     Creation of employment and more diverse employment
the Priorities)                                                              structure in rural areas

Objective areas:         Objective area 1: Development of competitive         Objective area 2: Integrated Rural development           Objective area 3: Improvement of
                         and sustainable agriculture                                                                                   environment
Priorities:              Priority 1:             Priority 2: Improvement      Priority 3: Development     Priority 4: Improvement of   Priority 5: Environmentally Friendly
                         Investments in          of agricultural and          and diversification of      Rural Infrastructure         Agricultural Methods
                         agricultural holdings   fisheries product            economic activities
                                                 processing and               providing alternative
                                                 marketing                    income
Measures:                Measure 1.1             Measure 2.1 :                Measure 3.1:                Measure 4.1 General Rural    Measure 5.1 Organic Farming
                         Modernisation of        Improvement of               Development and             Infrastructure
                                                                                                                                       Measure 5.2 Preservation of
                         agricultural            agricultural and fisheries   diversification of          Development
                                                                                                                                       Biodiversity and rural landscape
                         machinery,              product processing and       economic activities
                                                                                                          Measure 4.2
                         equipment and           marketing                    providing alternative                                    Measure 5.3 Reduction of agricultural
                                                                                                          Modernisation and
                         construction of                                      income                                                   run-off
                                                                                                          reconstruction of hydro-
                         buildings
                                                                                                          technical equipment in
                         Measure 1.2                                                                      polders
                         Afforestation of
                         agricultural Land
                         Measure 1.3 Land
                         reparcelling
Supporting Measure 1     Supporting Measure 1: Training
Supporting Measure 2     Supporting Measure 2: Technical assistance




Page 37 of 140
4.3     Assessment and quantification of the expected impacts of the selected
        priorities


4.3.1      Methodological notes
As part of Development Programmes, EU procedures for Structural Funds envisage
the determination of impacts expected as a consequence of Programme
implementation.
To that end, the European Union has compiled a specific methodology which, by and
large, includes the following phases:
-       use of the Logical framework described in Section 4.2, based on the sequence
        shown in Fig. 4.3.1 – by way of example for Priority 1, it includes:


Top down:
        NeedsGlobal ObjectivesSpecific ObjectivesOperational Objectives
                                                                    
                 Impact Indicators      Result Indicators     Physical Indicators


Bottom up:
        Inputs      Outputs        Results      Impacts
                                                     
                Physical Ind. Result Ind.      Impact Ind.


-       the identification of appropriate Indicators, (Physical Indicators, Result
        Indicators, Impact Indicators), with the characteristics featured in Table 4.3.1.;
        (see EC Regulation 1268/99 art.4 “Provision ensuring correct implementation of
        the programme, including monitoring and evaluation and the definition of
        quantified indicators for evaluation Art.5 “Monitoring shall be carried out by
        reference to specific physical, environmental and financial indicators agreed and
        established beforehand.”)
-       the quantification of Indicators, so as to establish a clear connection between
        results, outputs and impacts and the causal relationship between them;
-       checking how and to what extent the Programme, along with its expected
        impacts and results, will contribute to the achievement of global and specific
        objectives. (Monitoring and evaluation).




                                                                          Page 38 of 140
           Fig. 4.3.1 The Sapard intervention logic, example for Priority 1, Investment in
                      agricultural holdings
           1) Top - down

           AnalysisNeedsGlobal ObjectivesSpecific Objectives Operational Objectives

   Analysis               Needs                        Global Objectives                       Specific Objective                Operational Obj.
Agriculture      1 Modernisation of          To increase the competitiveness of        Improvement of agriculture           1 Improvement of
decline, high    mobile and fixed assets,    farming and food processing industry.     competitiveness and living           machinery and buildings.
employment       improvement of market       To increase in income of agricultural     standards of farmers: >efficiency,   2 Afforestation of land with
in agriculture   efficiency,                 enterprises                               >income, better working              low capability for
Preaccession,    environmental                                                         conditions, compliance with EU       agriculture
necessity of     conditions, income and                                                standards for quality , hygiene,     3 Reparcelling of
compliance       working conditions,                                                   environment, animal welfare;         fragmented land.
with EU          age srtucture, quality of                                             improvement of age structure of
standards        life.                                                                 farmers, increasing added value
                                                                                       per worker, decreasing agriculture
                 2 Better use of natural                                               pollution.
                 resources.
                 .



           2) Bottom - up

           ActionsMeasuresPrioritiesProgramme
             Actions                          Measures                            Priority 1                                  Programme
a)   New machinery                   1.1 Renovation of                 1 Investment in agricultural         Priority 1, as part of 5 Priorities and 2
b)   New buildings                       machinery and buildings       holdings                             Supporting Measures: Vocational Training
c)   Afforestation                   1.2 Afforestation of                                                   And Technical Assistance
d)   Water point                         agricultural land
e)   Forest roads                    1.3 Reparcelling
f)   Land reparcelling



           3) Indicators

        Operational Objectives                                Specific Objectives                                     Global Objectives
         Physical Indicators                                   Result Indicators                                      Impact Indicators
Me 1.1                                       % of new machinery compared to the total that need        No. of more efficient agricultural holdings
No. of machinery                             improvement                                               Increased income compared to the baseline data
No. of buildings                             % of new buildings compared to total buildings needing    No. of people that will work in better conditions
No. of projects                              improvement                                               Quantity of products compliant with the EU
                                             % of farms improved compared to total farms needing       requirements
                                             improvement                                               Increased number of young in agricultural
                                                                                                       activities
                                                                                                       N of animals in better conditions

Me 1.2                                       % of afforested land/ abandoned land                      No. of agricultural holdings with an alternative
No. of ha of new forest land                 % of farms with new forest land/ total farms with         income
No. of projects                              abandoned land                                            Increased income compared to the baseline data
                                             Wood increment                                            Added working places
Me 1.3                                       % of ha with reparcelling/total that need reparcelling    No. of agricultural holdings with improved
No. of ha with reparcelling                  % of farms / total that need reparcelling                 situation
No. of farms                                                                                           Increased income




                                                                                                                       Page 39 of 140
      Table 4.3.1SAPARD RDP of                 Latvia:     Indicators      Classification     and
                   Characteristics.


      Indicators Classification
Output Indicators are related to activity and identify the degree of Operational Objectives
achievement. They are measured in either physical or monetary units (e.g. number of hectares of
forest planted, number of farms having received financial support, number of processing plants
restructured, etc.
Result Indicators represent the direct and immediate effects generated by a programme and provide
information on changes that affect the performance of direct beneficiaries.
These Indicators identify the degree of Specific Objectives achievement.
They are measured in either physical (e.g. % of restructured processing plants as opposed to total
plants that need restructuring), or monetary units (e.g. decrease in processing costs).
Impact Indicators represent the Programme consequences, beyond the immediate effects on its
direct beneficiaries.
These Indicators identify the degree of Global Objectives achievement.
Two notions of impact may be defined, depending on whether these have effects occurring
after a given lapse of time (Intermediate Impacts), (e.g. crops affected by irrigation), or long-
term effects on a larger population (Global Impacts), (improvement in farmers’ income).




      Required characteristics of Indicators
No.         Characteristics                                     Description
 1       Pragmatism               The system of Indicators is required to be simple and conducive to
                                  immediate decisions.
  2      Relevance                Indicators must be accurately selected and relevant to the measures
                                  and objectives they relate.
  3      Quantifiability          Ability to set targets and, where appropriate, establish baselines.
  4      Reliability              Clarity of definition and ease of aggregation.
  5      Availability             Indicators must be easy to process and update.
  6      Sensitivity              Indicators must be sensitive to variations occurring on implementing
                                  the Programme.
  7      Comparability            Indicators must ease comparisons both within a given Programme
                                  and between Programmes.
  8      Communicability          Persons and bodies involved in the programme implementation will
                                  need to easily understand information from Indicators.




                                                                                  Page 40 of 140
4.3.2 Purpose
This part of the ex-Ante Evaluation is meant to:
-       assist the Authority responsible for the Programme in understanding the Logical
        Framework methodology and identifying most suitable Indicators, at the three
        envisaged levels, i.e. Physical Indicators, Result Indicators and Impact
        Indicators, in order to quantify objectives and key disparities;
-       assist the Authority responsible for the Programme in suitably quantifying
        Indicators, by methodologies aimed at keeping track of estimates made;
-       check the relevance of the proposed indicators for the three levels;
-       contribute to express an opinion on the reliability of the quantification envisaged
        and the effectiveness of procedures for data collection;
assists planners to define proxy indicators, identify critical factors and establish
procedures for the monitoring and evaluation of the (few) cases where quantification
is likely to be problematic.

4.3.3      Methodology
The following elements were considered when coping with this part of the Ex-Ante
Evaluation of the RDP of Latvia:
-       EU methodology;
-       Ex-Ante Evaluation objectives in relation to this delicate part, which focuses on
        the identification of appropriate indicators for monitoring and evaluation, and
        first quantification of results and impacts;
-       Previous work experiences in providing technical support to the relevant
        Authorities in the programming phase.
The activity included the following phases:
a)      Checking the situation of Indicators included in the RDP of Latvia and the
        advancement of their quantification.
b)      Checking the MoA’s awareness of the need to identify Indicators as well as
        Indicators characteristics, utilisation and calculation methods.
c)      Organisation of a short Seminar at the MoA on follow-up and evaluation
        initiatives, Indicators characteristics and utilisation and calculation methods.
d)      Supplying the MoA with the documentation on Indicators compiled for the
        Seminar and with a list of possible Physical, Result and Impact Indicators for
        each Measure of the Latvian RDP.
e)      Checking Indicators added by the MoA to the RDP.
f)      Checking the MoA’s quantification of Indicators.
g)      Compilation of summary tables, as detailed below, and evaluations/comments
        on the results and impacts expected on implementing the RDP.
h)      Evaluation of the environmental impact of RDP.


                                                                           Page 41 of 140
Items a), b), c), d)
Indicators found in the first RDP version were absolutely incomplete and were not
subdivided in the three envisaged categories, i.e. physical, result and impact.
No quantification had been made.
Talks with officers from the MoA revealed poor knowledge of methods for Indicators
utilisation and quantification. As a matter of fact, the MoA officers requested that a
short Seminar be organised on the issue to inform officers involved in the Sapard
Programme planning and implementation.
One such Seminar was held in February this year at the MoA and focused on the
following subjects, whose details are covered in the Appendix hereto and in Annexes
1 and 2:


1)    The Sapard advancement follow-up and use of Indicators.
This part focuses on the follow-up and evaluation activities of Structural Funds
Programmes as well as on the effectiveness and efficiency evaluations, and provides
background information on the use of Indicators for the implementation of such
activities.


2)    Definition of Indicators for SAPARD and calculation example.
This part illustrates the Logical Framework, with the following top-down sequence:
Needs, Global Objectives, Specific Objectives, Operational Objectives, and bottom-up
sequence: Actions, Measures, Priorities, Programme. It further identifies the
fundamental role of Indicators for monitoring a Programme’s implementation and
judging its performance against the objectives set.
After defining the three types of Indicators and their use, actual physical, result and
impact Indicators calculation examples are given for a number of Measures included
in a SAPARD RDP.
At the end of the Seminar, the MoA was provided with the documentation used for
illustrating subjects covered, attached hereto under Annexes 1 e 2.
To help the MoA easily to identify Indicators, a list was compiled and forwarded to
the MoA reporting possible Indicators, subdivided into the three categories (physical,
result and impact), for the various Measures contained in the RDP of Latvia. (Table
4.3.2).

Items e), f)
Based on guidelines provided, the Moa drew up and quantified a number of
Indicators, which were examined by evaluators and went through changes and
integrations.




                                                                       Page 42 of 140
Item g)
Based on Indicators relating to results and impacts envisaged in the Programme, in
line with objectives envisaged, an evaluation of impacts was made, as detailed in the
following section.
In order to check RDP impact, replies were given to, with quantitative data where
possible, to the “Common evaluation questions”, as reported in the Guidelines For
Evaluation of RDP 2000-2006 defined by DG Agriculture in 1999.

Item h)
Impacts of measures on such environmental components as soil, water, air,
biodiversity and landscape were considered so as to provide the evaluation of RDP
environmental impact.




                                                                      Page 43 of 140
               Table 4.3.2 SAPARD RDP OF LATVIA: SUGGESTED INDICATORS
               Priority 1 Investment in agricultural holdings
               Me.1.1 Modernisation of agricultural machinery, equipment and construction of
               buildings
               Me.1.2 Afforestation of agricultural Land
               Me.1.3 Land reparcelling

 Measures            Physical Indicators                Result Indicators                          Impact Indicators

Me 1.1               N of machinery and          % of new machinery compared to          N of agricultural holdings more
Modernisa-            equipment                    the total that need improvement          efficient
tion                 N of buildings (per         % of new buildings compared to          Increased income compared to the
                      sectors ?)                   the total that need improvement          baseline data
                     N of projects and N of      % of animal houses/total that need      N of people that will work in better
                      agricultural holdings        improvement                              conditions (Men /Women)
                     N of animal houses (N       % of farms improved compared to         N of animals that will produce in better
                      of animals ?)                the total that need improvement          condition
                     N of equipment for          % of young farmers/ total young         Quantity of products of improved
                      manure management            farmers                                  quality (hygiene, etc)
                     N of young farmers                                                   N of young farmers that will work in
                                                                                            better conditions (maintaining r. p.)
Me 1.2               N of ha of new forest       % of afforested land/ abandoned         N of agricultural holdings with an
Afforestation        Km of improved or            land                                     alternative income
                      constructed      forest     % of farms with new forest/ total       Increased income compared to the
                      roads                        farms with abandoned land                baseline data
                     N of water points           Wood cubic meter increment              N of employment in new forest activity
                     N of projects                                                         (temporary        and       permanent)
                                                                                            (Men/Women)
Me 1.3               N     of     ha with        % of ha with reparcelling/total         N of agricultural holdings with
Land                  reparcelling                 that need                                improved situation
reparcelling         N of pieces of land         %      of      pieces    of  land       Increased income compared to the
                      consolidated                 consolidated/total pieces of land        baseline data
                     N of farms                   that need                               N of people that will work in better
                     N of projects               % final dimension of piece of            conditions (Men /Women)
                                                   land/initial dimension
                                                  % of farms/ total that need




                                                                                                    Page 44 of 140
        Priority 2: Improvement of processing and marketing of agricultural and fishery
                    products


        Me. 2.1 Improvement of processing and marketing of agricultural and fishery products
Measures       Physical Indicators                Result Indicators                      Impact Indicators


  2.1         N of projects for each       % of processing plants improved       N of work places in         better
               sector: milk, meat, fish,     in respect to the total that need      conditions (men/women)
               fruit&vegetable, other        improvement, per sector
                                                                                   N of new work places (men/women)
              N of processing plants       % slaughterhouses improved
                                                                                   N of people that consume improved
               improved for each
                                            % output with improved quality,        products
               sector: milk, meat, fish,
                                             per sector
               fruit&vegetable, other                                              N of farmers with increased income
                                            tons of improved quality per year,     (better price from processer)
              N of slaughterhouses
                                             per sector                             compared to the baseline data
               improved
                                            % of purification plants or waste     Value added generated by the
              N of purification plants
                                             water treatment in respect to the      plants, compare to baseline
               or wastewater treatment
                                             total                                  (euro/year)
              N of farmers having
                                            % of farmers having contracts
               contracts      with
                                             with processers in respect to the
               processers
                                             total
                                            % of women owners of processing
                                             plants of total




                                                                                          Page 45 of 140
              Priority 3 Development and diversification of economic activities providing
                         alternative income


              Me 3.1 Development and diversification of economic activities providing alternative
              income
  Measures           Physical Indicators                 Result Indicators                         Impact Indicators

Me 3.1             N of projects                  % of New/increased SMEs in               Employment created or safeguarded
Services           N of SMEs receiving             repect to a baseline                      (N and % of total jobs)
SME’s               finacial         support       % of women owners of SMEs of              (Men/Women )
                    (Men/Women owners)              total
                  N of new SMEs                   New/increase sales in SMEs
                    receiving        finacial       (Meuro)
                    support (Men/Women
                    owners)
Me 3.1            N of projects                   % of New/increased craft                 Employment created or safeguarded
Development       N of craft activities            activities in respect to a baseline       (N and % of total jobs)
of crafts           receiving      financial       % of women owners of craft                (Men/Women )
                    support (Men/Women              activities of total
                    owners)                        New/increase sales in craft
                  N      of   new craft            activities (Meuro)
                    activities    receiving
                    financial        support
                    (Men/Women owners)
Me 3.1            N of projects                   % of beds created or improved in         % of increase N of tourist
Development       N of beds created or             respect to the baseline situation        Employment created or safeguarded
of rural tourism    improved                       % of farms with rural tourism of          (N and % of total jobs)
                  N of farms improved              total                                     (Men/Women )
                 (Men/Women owners)                % of women owners of rural               Value added generated per year
                                                    tourism of total                          (Meuro)
Me 3.1              N of projects                 %      of     RIT      Professional      Employment created or safeguarded
Development         N     of   Professional        associations of total                     (N and % of total jobs)
of         rural     associations receiving                                                   (Men/Women )
information          financial       support                                                 N of companies or farms served
technologies         (Men/Women owners)
                    N of marketing actions
Me 3.1              N of projects                 % of nurseries of total                  Employment created or safeguarded
Growing       of    N of nurseries                % of seedlings of baseline                (N and % of total jobs)
planting            N of seedlings                                                           (Men/Women )
material     for                                                                             Value added generated per year
forest                                                                                        (Meuro)
                                                                                             Plant production per year
Me 3.1              N of projects                 % of new or improved initiatives         Employment created or safeguarded
Other               N       of    improved         per sector of the total                   (N and % of total jobs)
alternative          initiatives                   % of women owners of improved             (Men/Women)
activities          N of new initiatives           or new initiatives of total              Value added generated per year
                                                                                              (Meuro)




                                                                                                   Page 46 of 140
              Priority 4 Improvement of rural infrastructure


              Me 4.1 General rural infrastructure development
              Me 4.2 Modernisation and reconstruction of hydrotechnic equipment in polders
 Measures           Physical Indicators                Result Indicators                      Impact Indicators

Me 4.1             N of projects                % of new or improved roads of        % of new users/ baseline users
Farm access        Km        of      roads       total needs                          Satisfaction rate of users
roads               constructed          or      % of increased density of roads
                    upgraded                      (km x square km)
                   N of farms involved          N of new users
Me 4.1             N of projects                % of new or improved water           % of new users/ baseline users
Water-mains        Km of water mains             mains of total needs                 Satisfaction rate of users
                   N of farms involved          % of increased density of water
                                                  mains (km x inhabitant)
                                                 N of new users
Me 4.1             N of projects                % of new or improved water           % of new users/ baseline users
Alternative        N of farms involved           mains of total needs                 Satisfaction rate of users
heating                                          N of new users
Me 4.1             N of projects                % of improved houses of total        N of people that will live in better
Rural              N of houses improved          needs                                 conditions
housing            N of farms involved                                                % of increased sites of historical or
                                                                                        cultural importance
Me 4.2             N of projects                % of improved pomp/total that        N of agricultural holdings in more
Polders            N of pomp                     need improvement                      safe and efficient condition
                   N of ha of improved          % of ha of improved polders/total    Increased income compared to the
                    polders                       that need improvement                 baseline data
                   N of farms with              % N of farms with improved           N of people that will be in more
                    improved conditions           conditions/total   that     need      safe and efficient condition (Men
                                                  improvement                           /Women)




                                                                                              Page 47 of 140
           Priority 5 Environmentally friendly agricultural methods


           Me 5.1 Organic farming
           Me 5.2 Preservation of Biodiversity and rural landscape
           Me 5.3 Reduction of agricultural run-off


 Measures          Physical Indicators                  Result Indicators                        Impact Indicators

Me      5.1       N of projects                  % of N of organic farming with         % Increase in surface with organic
Organic           N     of     agricultural       Sapard/Total N of farm                  farming
farming            holdings                       % ha of organic farming with           % Increase in agricultural holdings
                  N of ha org. Farm.              Sapard/Total cultivated ha              with organic farming
                  N of processing plants         N of processing plants with
                   with organic products           organic pr/ Total N of processing
                                                   plant
Me 5.2            N of projects                  % of N of low inputs farm with         % Increase in surface with
Biodiversity      N     of     agricultural       Sapard/Total N of farm                  environmentally friendly agriculture
and                holdings                       % ha of low inputs farming with        % Increase in agricultural holdings
landscape         N of ha with low                Sapard/Total cultivated ha              with     environmentally    friendly
                   agricultural inputs                                                     agriculture
                  N of ha of valuable                                                    n of people visiting demonstration
                   habitats improved                                                       projects
                  N of ha with rare fruits
                  N of animals of rare
                   breeds
Me 5.3            N of projects                  % of N of low inputs farm with         % Increase in surface with
Agricultural      N     of     agricultural       Sapard/Total N of farm                  environmentally friendly agriculture
run-off            holdings                       % ha of low inputs farming with         or with water protection zones or
                  N of ha with low inputs         Sapard/Total cultivated ha              with land reclamation
                  N of ha of “water              % ha of water protection               % Increase in agricultural holdings
                   protection zone”                zone/total ha that need                 with     environmentally    friendly
                  N of ha of land                % ha of land reclamation/total that     agriculture or with water protection
                   reclamation                     need                                    zones or with land reclamation
                                                                                          n of people visiting demonstration
                                                                                           projects




                                                                                                 Page 48 of 140
              Supporting measures


              Me 1 Training improvement
              Me. 2 Technical assistance to the SAPARD programme


 Measures           Physical Indicators              Result Indicators                       Impact Indicators

Supp. Me 1         N of projects              % of trainee/ total that need, per    % increased trainee per sector
Training           N of training courses       sector (Men/Women)                     compared          to       baseline
                    with different n of                                                (Men/Women)
                    hours                                                             n of beneficiaries for different
                   N of hours                                                         Measures of RDP trained and
                   N of trainees                                                      involved in the implementation

Supp. Me. 2        N     activities     for
Disseminatio        dissemination         of
n          of       information
information        N      of      publicity
                    campaigns


Me. 6.1            N of Procurement of Pc
Monitoring         N of Procurement of
/evaluation         Sw
                   N of contracts for
                    hiring experts
Me. 6.1            N of Studies and
Studies and         research
research
Me. 6.1            N of contracts        for
Technical           hiring experts
assistance




                                                                                             Page 49 of 140
4.3.4   Assessment and quantification of expected impacts of the selected priorities
An estimate of results and impacts of the RDP of Latvia was made based on the
Logical Framework summarised in Fig 3.4.2, in the light of the constituent Objectives
of Measures (Operational, Specific and Global). In this respect, related Indicators
were quantified (Physical, Result and Intermediate Impact) and subsequently
aggregated at Priority Level (Intermediate Impact).
Table 4.3.3 below shows situation by Measure, while table 4.4.4 situation by Priority.
Data reported relate to results and impacts, and are examined below by considering
the “Common evaluation questions” as reported in the Guidelines For Evaluation of
RDP 2000-2006 defined by DG Agriculture in 1999.
Questions were prepared in view of various evaluations, and obviously exhausting
answers can be given primarily by ex-post and – in part – mid-term evaluations, rather
than with an ex-ante evaluation. However, in the “ex-ante” evaluation, Questions help
to better assess RDP results and impacts by focusing on issues envisaged in EU
Regulations.


Priority 1 Investments in agricultural holdings
Question (Q)1.1: To what extent have the investments improved the income of
beneficiary farmers?
Investments in agricultural holdings are expected to result in a considerable increase
in the income of beneficiary farmers, which increase is put at 172% based on MoA’s
unofficial estimates.
For the monitoring activity, it is hereby recommended to evaluate such income
increase, by requesting beneficiaries to provide related data, both prior to the
Programme start and during its implementation.
It is further recommended that the trend of such economic parameter be monitored, in
order to identify the Programme impact on beneficiary farmers at the time of mid-term
and ex-post evaluations based on case studies.


Q 1.2 To what extent have the investments contributed to improve efficiency at
holdings?
As shown in table 4.3.4, the number of beneficiary holdings that are expected to
improve their efficiency based on the intervention under Priority 1 of the Latvian RDP
is in the range of 6.400 to 7.400. On average, the Sapard Programme is expected to
improve the efficiency of nearly 7.000 holdings for a surface between 185.000 and
210.000 hectares.




                                                                        Page 50 of 140
Q 1.3 To what extent have the investments contributed to the reorientation of farming
by redeployment of production and diversification of activities?
To answer this question, it is hereby recommended to check variations caused by the
Programme in crop patterns on performing the monitoring and evaluations envisaged.
Regarding the afforestation of agricultural, areas a surface of nearly 9.000 he is
envisaged.
With reference to diversification of non-traditional agricultural activities, please note
that in the RDP of Latvia it is included under Priority 3 together with non-agricultural
diversification activities. For such activities too, it is hereby recommended to check
variations intervened by suggested indicators on performing the monitoring and
evaluations envisaged.


Q 1.4 To what extent have the investments improved the quality of farm products?
As shown in tables 4.3.3 and 4.3.4, considerable improvement of quality can be
observed, which complies with EU requirements in various sectors of agricultural
production: milk 80.000-100.000 tons, i.e. up 30% on the current value; meat 45.000
tons; grain and cereals 320.000 tons; fruit, vegetable and other products 300.000 tons.


Q 1.5 To what extent has the diversification of on-farm activities originating from the
investments helped maintain employment?
As shown in table 4.3.4, in Priority 3, limited to the part relating to diversification of
activities in agriculture, nearly 4.400 new jobs are expected in non-traditional
agricultural activities.
As mentioned above, verification of the Programme impact during its implementation
is recommended.


Q 1.6 How significant are the impacts of the investments on the rural environment?
Refer to the following section for details on environmental impact.


Q 1.7 To what extent have the investments improved the quality of the production
process, notably by improving the working conditions and animal welfare and
hygiene?
The modernisation of stables and warehouses for agricultural products, as well as the
renewal of machinery undoubtedly implies a positive impact, as it improves the
working conditions and animal welfare and hygiene.
As shown in table 4.3.4:
-     the estimated quantity of workers whose conditions will improve is equal to
      nearly 20.000;
-     the estimated quantity of farms with animal breeding methods that are expected
      to improve animal welfare and hygienic conditions of production amounts to
      2.300 – .3.200;


                                                                          Page 51 of 140
-    Animal Units whose conditions are expected to improve amount to nearly
     69.000.
The monitoring activity will check the consistency of current estimates.


Priority 2 Improvement of agricultural and fishery product processing and
           marketing
Q 2.1 To what extent have the investments helped increase the competitiveness and
added value of agricultural products?
Q 2.2 To what extent have the producers of the basic agricultural products benefited
from investments?
Eligibility requirements require that processing companies shall submit contracts
signed with producers.
Benefits due to the improvement of processing and marketing conditions of products
should consequently be extended to producers.
As for quantification, table 4.3.4 shows that an estimated number of 70 processing
plants are expected to considerably improve their efficiency, while nearly 32.000
suppliers, including farmers and fishermen, are expected to benefit from investments
in favour of the agro-industry.
As mentioned above, it is recommended to check the Programme impact by suggested
indicators on performing the monitoring activity.


Q 3 To what extent have the investments improved human health conditions thanks to
the quality of the products and the working conditions?
In relation to the improvement of quality of products, table 4.3.3 lists improved
product quantities; from per capita consumption, the population who would use
quality products could be calculated.
With reference to the improvement of working conditions, table 4.3.4 shows a high
impact; in fact, nearly 4.700 employees in various processing sectors are expected to
work according to EU conditions.


Q 2.4 How significant are the impacts of the investments on the environment and
natural resources?
Refer to the following section for details on environmental impact.


Priority 3 Development and diversification of economic activities providing
           alternative income




                                                                           Page 52 of 140
Priority 4 General rural infrastructure development


Q 3.1 Have the assisted actions, specifically those undertaken to improve the living
conditions in rural areas, contributed to maintain the population in rural areas?
Investments to improve living conditions in rural areas and maintain population are
numerous, although quantifying them in the ex-ante evaluation phase is difficult.
The table with indicators by measures reports indicators to quantify in time, so as to
answer this Question with quantitative data.


Q 3.2 To what extent has diversification of activities originating from the assistance
contributed to the maintenance or creation of employment in rural areas?
As shown in figure 4.3.4, the following new or maintained job quantities can be
estimated: nearly 14.000 in diversification activities, of which 9.800 in non-
agricultural activities and 4.400 in non-traditional agricultural activities.
If temporary jobs created as a consequence of infrastructural investments and jobs
maintained following the increase of facilities and infrastructures in rural areas are
added, impact on employment is expected to be considerable.


Q 3.3 To what extent have the actions contributed to maintain or improve the income
of rural population?
Refer to answer to Question Q 3.1 above.


Q 3.4 How significant have the assisted actions contributed to the rural environment?
Refer to the following section for details on environmental impact.


Vocational Training
Q 4.1 To what extent has vocational training of individuals of either sex assisted in
achieving efficient and competitive structures?
Q 4.2 To what extent has the improved level of training contributed to employment,
more specifically to enhance job quality?
As shown in table 4.3.3, with investments envisaged, the overall number of
participants in various courses planned is very high, i.e. 58.000 people. Consequently,
the programme is expected to significantly contribute to an increase in the qualitative
level, notably for new or innovative activities and issues for the country.
To quantify impact on employment, results will have to be assessed in time, by
suitably using suggested indicators (trainees/no. of recruitments).




                                                                       Page 53 of 140
Q 4.3 To what extent has vocational training promoted environmentally sustainable
management and practice in agriculture and forestry?
The Programme includes a set of specific courses on “environmentally sustainable
management and practice in agriculture and forestry”, in which many participants are
expected to take part.
On top of courses, as part of the same subject, pilot/demo activities and information
dissemination actions are envisaged which should contribute to promote
environmental “culture” in rural areas.


Q 4.4 To what extent has vocational training enabled farmers to conform to standards
in the field of hygiene and animal health?
An essential part of courses is expected to focus on the subject covered herein.


Q 4.5 To what extent has vocational training been conductive to the uptake of rural
development activities?
As mentioned above, on top of environment, animal welfare and hygiene, a substantial
part of training consists in courses on economics (including management and
marketing), while another part comprises courses on alternative rural businesses.
As shown in table 4.3.3, nearly 3.000 training events and 58.000 participants are
expected.
Impact on rural development should consequently be high.
Programme monitoring with suitable indicators will allow a check on the correctness
of forecasts.


Priority 5 Environmentally friendly agricultural methods
Q 5.1 Biodiversity (habitats and damage to them from farm pollution)
The situation relating to the impact of various measures on different environmental
components, including “biodiversity” is illustrated in the following paragraph.
Regarding the specific measure envisaged in the RDP, estimates made – as reported in
table 4.3.4 – show 950 farms with environmentally friendly management in the most
valuable areas of Latvia, 49 farms with special measures for the protection of
migrating birds, about 9.500 ha of meadows with appropriate management.


Q 5.2 Rural landscapes (biophysical features, appearance of habitats and
agricultural ecosystem, cultural & historical features)
The impact of various measures on different environmental components, including
landscape, is illustrated in the following section.
Insofar as “ cultural & historical features” under measure 4.1 “General rural
infrastructure development” are concerned, specific financing is envisaged for the
“improvement of rural housing of historical or cultural importance”.



                                                                        Page 54 of 140
As shown in figure 4.3.3, intervention is envisaged in favour of 200 cultural heritage
buildings.


Q 5.3 Natural resources (soil, water, etc.)
The impact of various measures on the different environmental components, including
soil, water and air is shown in the following section.
Please note that the RDP includes Measure 5.3, “Reduction of agricultural run-off”,
for soil and water conservation.


Rural Development Programme
After separately examining the different Priorities, and attempting to assess results
and impacts based on Questions, the following “Common cross-cutting evaluation
questions” are reported to illustrate the overall RDP impact, with a view to remind
Moa of Latvia to gather and quantify suitable indicators, during the monitoring phase,
so to answer such questions.


Q 6.1 To what extent has the assistance influenced the population level, composition
and distribution in rural areas?


Q 6.2 To what extent has the assistance been conducive to securing employment?


Q 6.3 To what extent has the assistance been conducive to provide an appropriate
level of income to the rural community?


Q 6.4 To what extent has the market situation been improved through the assistance
especially from redeploying production, improving quality and competitiveness?


Q 6.5 To what extent have environmental concerns been integrated into rural
development programming so as to improve the environmental aspects of activities in
rural areas, including agricultural practices?


Q 6.6 To what extent have programming and implementation helped in producing the
anticipated impacts ?




                                                                       Page 55 of 140
     Tab 4.3.3 SAPARD RDP of Latvia: Operational Objectives and Physical
     Indicators; Specific Objectives and Result Indicators quantified for Measures.


     Priority 1     Investment in agricultural holdings


     Measure 1.1 Modernisation of agricultual machinery, equipment and construction of
     buildings


   Operational Objectives                     Physical Indicators                  Quantification
To improve machinery        and Number of projects                                     4.800-6.900
buildings of farms
                                Total number of farms                                  2.400-3400
                                Number of farms with animal breeding                  2.300-3.200
                                Area of farms ( ha)                                 55.000-80.000


      Specific Objectives                         Result Indicators                Quantification
To increse animal wefare and Number of animals in better conditions (Unit             68.900
improve the environment of Animals N)
animal breeding
                                % of animal conditions improved with respect to      + 10-15%
                                the total that need improvement (Milk sector)
                                % of animal conditions improved with respect to      + 30-40%
                                the total that need improvement (Meat sector)
To increase quality standard of Quantity of milk production compliant with EU       80-100.000
products compliant with EU quality standards (tons )
requirements
                                % increased milk production compliant with EU          +30%
                                quality standards ( tons, 1999/2006/diff.)
                                Quantity of meat production compliant with EU         45.000
                                quality standards ( tons )
                                Quantity of grain&cereals production compliant        320.000
                                with EU quality standards ( tons )
                                Quantity of          fruits&vegetable, and other      300.000
                                production compliant with EU quality standards (
                                tons )
To increase in income of % of increased in income of agricultural                    Should be
agricultural enterprises        enterprises                                          monitored




                                                                             Page 56 of 140
Measure 1.2 Afforestation of agricultural land
    Operational Objectives                  Physical Indicators                Quantification
To afforest land with          low Number of projects                                    600-1000
capability for agriculture
                                   Surface of agricultural land afforested                     9.200
                                   (ha)


       Specific Objectives             Result Indicators                       Quantification
Better use of land with low % of agricultural land afforested                               2,3 %
capability for agriculture  under total “to be afforested”
                            % of farms with new forest under                                     1%
                            total “to be afforested”
                            Net wood increment (. m3)                                     370.000
                            Net land value increment (.Eur)                             7.225.000
                            Net CO2 sequestered(metric tons)                              310.000



Measure 1.3 Land reparcelling
    Operational Objectives                  Physical Indicators                Quantification

To reparcell fragmented land       Number of projects                                     100-150
                                   Area with reparcelling (ha)                            120.000
                                   Number of farms involved (N farms)                          4.000
                                   Number      of    pieces      of   land                    12.000
                                   consolidated


     Specific Objectives                  Result Indicators                    Quantification
To improve efficiency in use of % of area with reparcelling/total that                          17%
land                            need
                                % of farms with reparcelling/total that                          8%
                                need
                                % of pieces of land consolidated/total                          14%
                                of land that need




                                                                             Page 57 of 140
Priority 2 Improvement of agricultural and fishery product processing and
           marketing

    Operational Objectives                     Physical Indicators                 Quantification
To ristructure and improve Number of projects                                             145-190
processing plants compliant with
EU requirements
                                 Total number of new or restructured                           68
                                 processing plants (N)
                                 Number of new or restructured processing                      26
                                 plants in the livestock sector (N)
                                 Number of milk processing plants compliant                    11
                                 with EU quality standards (N)
                                 Number of slaughterhouses compliant with                       5
                                 EU quality standards (N)
                                 Number of meat processing plants compliant                    10
                                 with EU quality standards (N)
                                 Number of fish processing plants compliant                    28
                                 with EU quality standards (N)
                                 Number of fruits and vegetable processing                      9
                                 plants compliant with EU quality standards
                                 (N)
                                 Number of other processing plants (oil, flax,                  5
                                 etc) compliant with EU quality standards (N)

       Specific Objectives                        Result Indicators                Quantification
To improve quality of production Quanyity of milk processed compliant with                230.000
from food processing industry, EU quality standards ( tons )
meeting EU requirements
                                   Quantity of meat (from slaughterhouses)                  45.000
                                   production compliant with EU quality
                                   standards (tons)
                                   Quantity of meat processed compliant with                20.000
                                   EU quality standards (tons )
                                   Quantity of fish processed compliant with EU             34.000
                                   quality standards (tons)
                                   Quantity of fruits and vegetable processed               10.000
                                   compliant with EU quality standards (tons )
To increase the number of % of number of milk processing plants                             100 %
processing plants and the quantity improved (compliant with EU quality
of products with:                  standards) in respect to the total that need
- efficiency, hygiene, quality of improvement (% N)
    products, welfare of animals,
    environmental      conditions,
    compliant with he EU
    requirements
                                   % of quantity of milk processed improved                 100 %
                                   (compliant with EU quality standards) in
                                   respect to the total that need improvement (%
                                   tons)



                                                                           Page 58 of 140
      Specific Objectives                       Result Indicators                 Quantification
                                 % of quantity of meat processed in                         80 %
                                 slaughterhouses improved (compliant with
                                 EU quality standards) in respect to the total
                                 that need improvement (% tons)
                                 % of number of meat processing plants                        70 %
                                 improved (compliant with EU quality
                                 standards) in respect to the total that need
                                 improvement (% N)
                                 % of quantity of meat processed improved                     70 %
                                 (compliant with EU quality standards) in
                                 respect to the total that need improvement (%
                                 tons)
                                 % of number of fish processing plants                        33 %
                                 improved (compliant with EU quality
                                 standards) in respect to the total that need
                                 improvement (% N)
                                 % of quantity of meat processed improved                     34 %
                                 (compliant with EU quality standards) in
                                 respect to the total that need improvement (%
                                 tons)
                                 % of number of fruit&vegetables processing                   70 %
                                 plants improved (compliant with EU quality
                                 standards) in respect to the total that need
                                 improvement (% N)
                                 % of quantity of fruit&vegetables processed                  70%
                                 improved (compliant with EU quality
                                 standards) in respect to the total that need
                                 improvement (% tons)


Priority 3 Development and diversification of economic activities providing
           alternative income


 Operational Objectives                     Physical Indicators                  Quantification
To develop diversified Number of projects                                                    3.900
activities in rural areas
                          New rural information technologies                                  21
                            Crafts activities receiving financial support                    130
                            Number of women owners of craft activities                        70
                            Number of new beds created/improved                      3.800-5.800




                                                                            Page 59 of 140
     Specific Objectives                       Results Indicators                  Quantification
To increase the number of % of establisced rural communication centres of                    80 %
diversified activities in rural total
areas
                                % of new beds created or improved to the base line     400-600 %
                                improvement
                                % of increase number of tourists                       400-600 %
                                % of increased crafts activities in respect to a               6%
                                baseline
                                % of women owners of crafts activities of total               55%



Priority 4 Improvement of rural infrastructure

Measure 4.1 General rural Infrastructure Development
  Operational Objectives                     Physical Indicators                 Quantification
To improve: rural access Number of projects                                                 1.560
roads, water mains, heating
facilities, cultural heritage
buildings
                              Length of new rural roads (km )                                 375
                              Number of water mains (number of wells)                       1.000
                              Number of new heating facilities utilising                      150
                              alternative heating sources (number,)
                              Number of renewed rural cultural heritage                       200
                              buildings (N)


     Specific Objectives                         Result Indicators                 Quantification
To increase quantity and % Increased length of rural roads (km,                      Should be
quality of rural infrastructure 1999/2006/diff.)                                     monitored
                                % Increased number of heating facilities utilising   Should be
                                alternative     heating      sources     (number,    monitored
                                1999/2006/diff.)
                                % Increased number of renewed rural cultural         Should be
                                heritage buildings (number, 1999/2006/diff.)         monitored




                                                                          Page 60 of 140
Measure 4.2 Modernisation and reconstruction of hydro-technical equipment in
polders
  Operational Objectives                       Physical Indicators                 Quantification
To restore efficiency      of Number of projects                                                10
polders system
                           Number of improved polders (N)                                       10
                           Number of farms with improved conditions                          1.415
To obtain dehumidification Surface of land improved ( ha )                                  10.600
of land

     Specific Objectives                  Result Indicators             Quantification
To increase % of polders % of improved pomp/total that need improvement           36 %
system working
                         % of ha improved polders/total that need                  21%
                         improvement
                         % of number of farms with improved                        45%
                         conditions/total that need improvement



Priority 5 Environmentally friendly agricultural methods


Measure 5.1 Organic farming
  Operational Objectives                      Physical Indicators                  Quantification
To develop organic farming       Number of new organic farms (N)                  150-300


    Specific Objectives                        Result Indicators                   Quantification
To increase the number and       % of increased number of organic farms (N,           + 175-250 %
the surface of organic farms     1999/2006/diff.)
To increase value of             Foreseen value of produced products of organic             3,6-5,4
production                       farming ( Million Euro)
To increase number of            Increasing number of employees in organic             1.000-1.500
employees       in     organic   farming
farming




                                                                           Page 61 of 140
Measure 5.2 Preservation of biodiversity and rural landscape
  Operational Objectives                     Physical Indicators                   Quantification
To give assistance to have New number of farms with environmentally                      900-1.000
new surface and new farms friedly management in the most valuable areas in
using    agroenvironmental Latvia (N of farms)
methods
                           New farms with special management measures                           49
                           for protection of migrating birds and decrease of
                           harvest losses in Latvia (number of farms)
                           New surface of meadows of national and                             9.440
                           international importance with appropriate
                           management in Latvia (ha)

To preserve rare varieties of Number of Latvian Blue Breed Cows in breeding                     80
of crops and livestock of group (N)
local origin

    Specific Objectives                        Result Indicators                   Quantification
To increase the number and     % of increased number of farms with                        + 633 %
the surface of farms with      environmentally friendly management in the
environmental       friendly   most       valuable      areas      in    Latvia
management                     (number,1999/2006/diff)
                               % of increased surface of natural and seminatural             + 83 %
                               meadows with satisfactory management in Latvia
                               (ha, 1999/2006/diff.)
                               % of new area with threatened species                          73 %
                               populations and area of protected biotopes with
                               favourable conservation status - % from the total
                               area of most valuable areas (Natura 2000 sites in
                               agricultural lands)


Measure 5.3 Reduction of agricultural run-off
    Operational Objectives                  Physical Indicators                Quantification
To involve farms to adopt Involved number of farms (N)                                    100-200
methods      for    reduction of
agricultural run-off
                                 Expected area (ha)                                    2.000-4.000

       Specific Objectives                 Result Indicators                   Quantification
To increase the number of farms % of involved number of farms with                      0,7-1,4 %
involved                        respect to the total that need
                                involvement
                                % of involved area with respect to the                    0,8-1,7%
                                total that need involvement




                                                                            Page 62 of 140
Supporting measures: Vocational training
  Operational Objectives                     Physical Indicators                  Quantification
To organise training courses: Number of courses                                                2.965
- on      alternative   rural
    business
- on environment
- -on economics
                              Number of participants in training activities (N)               58.600

     Specific Objectives                        Result Indicators                 Quantification
To improve management and      Number of participants in courses on                 Should be
marketing competences          management and marketing                             monitored
To improve quality control     Number of participants in courses on quality         Should be
competences                    control                                              monitored
To improve non agricultural    Number of participants in courses on non             Should be
activities competences         agricultural activities                              monitored
To improve environmental       Number of participants in courses on                 Should be
friendly system competences    environmental friendly system                        monitored




                                                                             Page 63 of 140
Table 4.3.4 SAPARD RDP of Latvia: Specific Objectives and Impact Indicators
            quantified for Priorities


Priority 1 Investment in agricultural holdings
       Specific Objectives            Intermediate Impact Indicators          Quantification
To increase efficiency of farms    Total number of farms with increased              6.400-7.400
                                   efficiency (N farms)
To increase quality of life and    Total number of workers with                              20.200
working conditions of farmers      improved conditions ( N workers)
To improve welfare of animals      Number of farms with animal                        2.300-3.200
and decrease agric. pollution      breeding
                                   (N farm with animals)
                                   Number of animals in better                               68.900
                                   conditions (Unit Animals N)
To increase the quality, hygiene   Quantity      of    milk  production               80-100.000
and standard of products           compliant with EU quality standards (
                                   tons )
                                   %      increased    milk  production                      +30%
                                   compliant with EU quality standards (
                                   tons, 1999/2006/diff.)
                                   Quantity      of   meat   production                      45.000
                                   compliant with EU quality standards
                                   (thou t )
                                   Quantity of grain&cereals production                  320.000
                                   compliant with EU quality standards
                                   (tons )
                                   Quantity of fruits&vegetable, and                     300.000
                                   other production compliant with EU
                                   quality standards (tons )
To increase added value per        Added value per worker                   Should be monitored
worker
To increase value of production     Increased value of production per       Should be monitored
                                    output
To improve the age structure of Increased, or maintained number and         Should be monitored
farmers                             % of young in agricultural activities
To    improve       amenity     and Area of agriculture land taken out                        9200
biodiversity of rural landscape     from further improvement (drainage,
                                    soil liming, etc) and food production
                                    (ha)
                                    Net CO2 sequestered (Mill.metric                           0,31
                                    tons)
To increase working places          Added working places, or maintained     Should be monitored
                                    N of employment in new forest                           + 100
                                    avtivities
                                    Number of agricultural holdins with                 600-1000
                                    an alternative income (N)




                                                                            Page 64 of 140
Priority 2 Improvement of agricultural and fishery product processing and
           marketing

         Specific Objectives               Intermediate Impact Indicators               Quantification
To improve the efficiency of food Total number of new or restructured                                       68
processing industry                   processing      plants     with    increased
                                      efficiency, in different sectors (N)
To improve and monitor hygiene, Total number of new or restructured                                         68
quality of products and environmental processing      plants     with    improved
impact                                conditions      compliant       with     EU
                                      requirements, in different sectors (N)
To improve working conditions in Total number of employees with                                          4.655
processing plants                     improved working conditions in different
                                      food processing sectors (N)
                                      Number of employees in milk processing                              750
                                      plants compliant with EU quality
                                      standards (N.)
                                      Number of employees in meat processing                             1.000
                                      plants compliant with EU quality
                                      standards (N)
                               Number of employees in fish processing                                    2.155
                               plants compliant with EU quality
                               standards (N.)
                               Number of employees in fruits and                                          350
                               vegetable processing plants compliant
                               with EU quality standards (N )
                               Number of employees in oil, flax and                                       400
                               other processing plants compliant with EU
                               quality standards (N )
To ensure farmers benefit from Total number of supplier (farmers or                                   32.215
improvement of food processing fishermen) benefiting from investments in
plants                         different sectors of food processing plants
                               Number of suppliers (farmers ) benefiting                              25.000
                               from investments in food processing
                               plants (Milk sector N)
                               Number of suppliers (farmers ) benefiting                                 2.000
                               from investments in food processing
                               plants (Meat sector N)
                               Number of suppliers (fishermen )                                           415
                               benefiting from investments in food
                               processing plants (Fish sector N)
                               Number of suppliers (farmers ) benefiting                                  800
                               from investments in food processing
                               plants (Fruit&vegetable sector N)
                               Number of suppliers (farmers ) benefiting                                 4.000
                               from investments in food processing
                               plants (Oil, flax , other sector N)
To increase job opportunities  Number of new empoyment created                        Should be monitored
To increase value of sales     Increasing value (and market opportunity)              Should be monitored
                               of different output meeting EU standards




                                                                                     Page 65 of 140
Priority 3 Development and diversification of economic activities providing
           alternative income


        Specific Objectives         Intermediate Impact Indicators               Quantification
To increase and diversify rural New         workplaces       created      or                 14.200
employment                        safeguarded in diversified activities in
                                  rural areas
To       increase     employment New        workplaces       created      or                    9.800
opportunities outside traditional safeguarded       in     non-agricultural
agriculture                       activities in rural areas
                                  New       workplaces       created      or                    4.400
                                  safeguarded        in     non-traditional
                                  agricultural activities in rural areas
                                  New        workplaces        in      rural                      80
                                  communication centres
                                  New workplaces in craft activities                             260
                                  created or safeguarded
                                  New number of tourists in rural                     24.800-37.200
                                  tourism enterprises
                                  % of increased number of tourists in                   400-600 %
                                  rural tourism enterprises number,
                                  (1999/2006/diff.)
To increase income of rural Increased income of population in                  Should be monitored
population                        rural areas
To       increase     employment Increased employment opportunities            Should be monitored
opportunities for young people in for young people in rural areas
rural areas



Priority 4 Improvement of rural infrastructure


        Specific Objectives             Intermediate Impact Indicators           Quantification
To increase the availability of       % Increased of :                         Should be monitored
road access, water supply, and        - rural roads
heating syastem for farms and         - water mains
rural enterprises in rural areas      - heating facilities
To improve the preservation and       % Increased of renovation of             Should be monitored
socioeconomic use of buildings of     buildings of cultural heritage
cultural and historical interest in
rural areas




                                                                               Page 66 of 140
Priority 5 Environmentally friendly agricultural methods


       Specific Objectives            Intermediate Impact Indicators           Quantification
To      increase      employment New employed in organic farming (N)                  1.000-1.500
opportunity in organic farming
                                   % of increased number of employed                  + 170-250 %
                                   in    organic    farming   (number,
                                   1999/2006/diff.)
To reduce pollution and to % of increased number of organic                           + 175-250 %
increase quality and safety farms
production increasing organic
farming
To       promote       sustainable % of increased number of farms with                   + 661 %
development       and      special environmentally friendly agricultural
measures for protection of fauna management
and flora
                                   % of increased surface with                           + 207 %
                                   environmentally friendly agricultural
                                   management



Supporting measures: Vocational training


To increase technical and             % of increased number of trainee per   Should be monitored
managerial      competences      of   sector   compared    to     baseline
farmers, processers and rural         (men/women)
population        to     facilitate
compliance with EU health,
hygiene, safety and environment
standards
To     facilitate     occupational    % of trainees that will find           Should be monitored
mobility in rural areas               employment
To facilitate the production of       N of beneficiaries for different       Should be monitored
good quality application for          Measures of RDP trained and
support under the Programme           involved in the implementation




                                                                             Page 67 of 140
4.3.5     Environmental impact


The EU Directorate-General for the Environment (DGXI) suggests to insert Strategic
Environmental Evaluation (SEE) in overall evaluation of Plans, SEE is defined as
follows:
“A systematic process meant for evaluating environmental consequences of actions
proposed - policies, plans or initiatives included in programmes – so as to ensure that
such consequences be included for all intents and purposes and suitably tackled as
from the early stages of the decision-making process, on the same level as economic
and social evaluations.”
Various phases are envisaged for SEE implementation. These include: the evaluation
of the environmental situation of the country and the compilation of reference data,
the identification of environmental objectives as well as of initiatives eligible for
financing, the evaluation of environmental effects of initiatives proposed, the
identification of environmental indicators, the integration of results of the evaluation
in the final version of the Plan.
The following paragraphs summarise the environmental situation of Latvia in
accordance with the methodology suggested (on top of provisions under Section 2 of
the RDP). Based on a number of Environmental Indicators, the effects of Measures
envisaged in the RDP on the main environmental components will be assessed, and
suggestions will be made to reduce any negative effects in the implementation phase.
Last but not least, a list is attached hereto reporting Environmental Indicators to be
assessed during RDP implementation and to be used in the phase of monitoring and
evaluation.


4.3.5.1      Account of the environmental situation in Latvia assessed by
             Environmental Indicators
The Republic of Latvia is particularly aware of environmental problems, as evidenced
by the countless technical, scientific and regulatory initiatives carried out over the last
few years, including, among others:
-       numerals laws on agricultural and environmental issues passed from 1991 to
        date, or currently under approval;
-       initiatives for the environmental protection of the Baltic, among which the
        Baltic Environmental Forum (BEF) to support the development of the National
        Environmental Action Programmes (NEAP), the Coalition for Clean Baltic,
        (CCB), the Baltic Environment Protection from Agricultural Runoff
        (BEAROP);
-       the compilation and publication (in English as well) of a “Code of Good
        Agricultural Practice for Latvia,” prepared by the Danish-Latvian joint project
        with the participation of Swedish experts;
-       the development of “Organisations of biological agriculture in Latvia”
        throughout the country, now united in the “Association of Latvian Organisations
        for Organic Agriculture (ALOOA).



                                                                           Page 68 of 140
Some parts of the document “Baltic State of the Environment Report” compiled by
BEF, Baltic Environmental Forum, are summed up below with a view to:
-     gathering information, synthetic as it may be, on different parameters
      characterising the environmental situation of Latvia;
-     accurately identifying probable effects of RDP measures on the environment;
-     checking the opportunity to use a number of Environmental Indicators proposed,
      during the Programme implementations, in sample areas considered as “case-
      studies”, for the monitoring and evaluation of effects of the RDP 2000-2006 on
      the environment.
The BEF report provides an overview of the environmental conditions in each of the
Baltic States, a comparison between the different Countries, and a comparison of the
three Countries with European Countries.
In order to make a good comparison, harmonised and comprehensive Environmental
Indicators were used, in accordance with the OECD pressure-state-response
framework as well as with the Dobris+3 report and the Nordic Environmental
Indicators report.
Significantly, this report is based on information updated until 1996.
The OECD has elaborated three types of Indicators that are widely recognised and
used:
“Pressure” indicators relate to the stress or pressure which human activities place on
the environment, for example emissions, discharges, waste disposal, etc.
“State” indicators relate to the current condition of, or trends in the environment, for
example, concentration of pollutants, diversity of species, availability of clean water.
“Response” indicators relate to the quantitative aspects of social responses, and
environmental policy measures in particular, e.g. area of protected land, level of taxes
on natural resources, number of inhabitants to wastewater treatment system.
Below are particularly interesting environmental sectors identified by the foregoing
document in view of RDP. Comparison parameters relating to EU Member Countries
are taken from the same document. Any parameters not identified therein were taken
from the Eurostat document titled “Eurostat Yearbook at a glance, Facts through
Figures” 1998.


1.    Water
Protection of surface water, groundwater and coastal sea areas, like sustainable use
and protection of water resources, is one of the priorities of the National
Environmental Strategies of Latvia.
Drinking water needs to be sufficient both in terms of quantity and quality.
Water resources must be suitable for industrial and agricultural purposes, and also for
fisheries, transport, power stations and recreational needs.




                                                                         Page 69 of 140
The strategy includes targets for reducing nitrogen (N) and phosphorous (P) emissions
from point and diffuse sources.
For Latvia, targets include: reducing total N emissions into water from point sources
and leaching of N and P from agriculture by 50% of the 1994 level by the year 2010.


1.1   Pressure Indicators:
The contribution of agriculture (non point source of pollution) to eutrophication is
indirectly indicated by the quantity of livestock and the sale of fertilisers.
a)    Livestock: thousand animal units per year: 1,400 in 1990, 500 in 1996. (Animal
      unit: cow 1, young cattle 0.4, pig 0.33, poultry 0.0004). The pressure is much
      lower in comparison with European Countries.
b)    Livestock per ha of arable land: animal unit/ha. 1.1 in 1990, 0.4 in 1996.
      (Austria 2.4, Denmark 2.4, Netherlands 10.4 in 1996).
c)    Supply or sale of fertilisers: thousand tonnes per year: 400,000 tonnes in 1990,
      30,000 tonnes in 1996.
d)    Fertiliser per hectare: kg per ha of agricultural land: 160 in 1990, 12 in 1996.
      (EU 126 kg per ha of agricultural land). The reduction in Latvia is due more to
      economic reasons than to environmental awareness. In the future, surveys on
      yield increase may entail a considerable increase in the use of fertilisers, hence
      the need to disseminate good agricultural practices. As for point sources of
      pollution:
e)    Pollution load from point sources: kg per capita, BOD :8.9 in 1992, 3.6 in
      1996; N: 1.5 in 1992 and in 1996; P: 0.27 in 1992, 0.23 in 1996. The reasons for
      a decrease in point source of pollution load include: the decline of industrial
      production, the investments in water purification measures for large cities, the
      increased efficiency in wastewater treatment.
f)    Groundwater abstraction: million m3 per year: 300 in 1991, 180 in 1996.
      Groundwater provides 70% of drinking water in Latvia.


1.2   State Indicators
g)    Nitrate concentration in wells: % of samples where national nitrate standard of
      50 mg/l is not met, the 200 samples taken in Latvia all meet the requirements.
      However, according to a case study conducted by the University in 1994,
      approximately 13% of the 2,100 wells in Latvia were identified as not meeting
      national standards.
h)    Mean annual concentration in major rivers: mg/l: BOD 1.8, N 2.5, P 0.050, in
      1996. The average quality of Latvian rivers is good and concentrations, except
      for P concentration, are close to naturally-occurring levels. The Lielupe river has
      a relatively high concentration of BOD, N and P, due to point source pollution
      from the cities of Jelgava and Bauska, agricultural pollution, slow flow and
      transboundary load.




                                                                         Page 70 of 140
1.3    Response Indicators
i)    Wastewater treatment: % of total wastewater amount in 1996: 85% of total
      population in cities and towns (more than 5000 inhabitants) connected to the
      centralised system. (Over 95% in UK, Sweden, the Netherlands).
l)    Investment in water management: Investment in wastewater treatment plants
      and improvement of water supply systems is 70% of total environmental
      investment in Latvia in 1996.


2.    Air
The main sources of air pollution are the energy, transport and industrial sectors. In
Latvia over the last few years, primary energy consumption decreased by about 40 %
between 1990 and 1996, as a result of economic and social transition. Atmospheric
emissions also decreased parallelly with consumption.
In Latvia, emissions of SO2 and CO2 are relatively low due to the high share of natural
gas and domestic hydropower in Total Primary Energy Supply, the share of imported
electricity (49% of gross electricity supply in 1996) and the combined generation of
electricity and heat in Riga.
The large forested areas also contribute significantly to the absorption of gases.
The nitrogen oxide concentration is clearly influenced by traffic emissions.
Considering the relatively reduced influence of RDP intervention on the quality of air,
the numerous related indicators are skipped in this document. Only an indicator is
worth noting:
a)    Renewable energy resources: % of total energy supply: 8% in 1990, 18% in
      1996. The percentage is very high compared to EU Countries: less than 1% in
      UK and Ireland, 7% in Denmark.
The high percentage of renewable resources in Latvia is due to both economic factors
and policy measures, i.e. subsidies from the Environmental Protection Fund for
investments in wood based heat generation.


3. Biodiversity and Landscape
Maintenance of biodiversity and landscape has a very high priority in the National
Environmental Strategies.
The Pressure Indicators describe anthropogenic impacts on the landscape, which
diminish and fragment wildlife habitats, reduce biodiversity and disturb animal
migration patterns.
The Pressure Indicators reflect the impact of industry, transport and agriculture.
Land use structure is used to provide a very rough approximation of the size and types
of natural, semi-natural and man-made areas which cover the territory.
The area of forest stands has been chosen to illustrate potential biodiversity. The
percentage of forests older than 100 years indicates the area which provide the most
favourable conditions for species diversity in this particular habitat.


                                                                          Page 71 of 140
3.1   Pressure Indicators:

a)    Sown area: defined as “arable land currently under cultivation, excluding
      natural grassland and pasture”, 25% of total Country’s territory in 1990 and 15%
      in 1996. (EU 24%).
b)    Built –up area: defined as “the area of land under buildings and yards,
      excluding green areas and roads”, 1.2% of total Country’s territory, in 1996.
      (2.7% in Lithuania).
c)    Area of mining activities and peat cutting: % of total Country’s territory: 0.5%.
d)    Road density: km per 100 km : 32.5 km per 100 km in 1996. (460 km per 100
      km in Belgium).
      Low fragmented impact on biodiversity and landscape than in European
      Countries.
e)    Number of passenger cars per capita: 0.12 in 1996. (Denmark 0.32; Germany
      0.50).
      The potential impact on biodiversity is low in comparison with European
      Countries.

3.2   State Indicators:
f)    Structure of land use: Agricultural land 39.0 %; Forests 44.2 %; Mires 9.9 %;
      Water bodies 3.9%; Buildings 1.2%, Others 1.7%. (In the EU Agricultural land
      43%; Forests 33%; Others 24%.)
g)    Forest stands older than 100 years: % of total Country’s territory: 8.9 %.
h)    Threatened species on an international scale: meant as the share of the
      endangered and vulnerable species, from IUCN Red List of Threatened Animals
      (1996). Mammals 6%, birds 5%, fish 2%, a relatively low number in
      comparison with European Countries.

3.3   Response Indicators:
i)    Protected Areas: from 4% of total Country’s territory in 1978 to 6.6% in 1996.
      (Estonia 9%, Italy 10%)

4.    Soil
Document “Baltic State of the Environment Report” compiled by the BEF, Baltic
Environmental Forum, makes no mention of the issue of soil conservation, although
BEF has envisaged to examine such issue in the future. Soil conservation is in fact an
essential environmental component, and is of course covered by the RDP Measures.
With reference to the normative literature on the issue, specifically the “Code of Good
Agricultural Practice for Latvia,” prepared by the Danish-Latvian joint project with
the participation of Swedish experts, the following concise considerations are reported
below on soil degradation and major prevention actions.




                                                                        Page 72 of 140
The main types of soil degradation include:
-     Soil erosion (water and wind), consisting in the translocation of soil particles by
      water or by wind, with the pollution of waterbodies by soil particles and
      biogenic elements.
-     Acidification, consisting in the lowering of soil reaction below the plant
      optimum.
-     Compaction, consisting in the reduction of normal volume of soil, closing
      spaces between soil particles with unfavourable conditions for plant growth and
      low water infiltration.
-     Pollution, consisting in the accumulation of chemical compounds – harmful for
      plants, animals and humans – in the soil.
The main prevention actions are:
-     against soil erosion: afforestation, crop rotations of perennial grasses
      dominating, special methods of soil tillage, small canals, fields covered by crops
      or stubble in the rainy and windy season;
-     against soil acidification: soil liming;
-     against soil compaction: crop rotation, selection of soil tillage methods, liming
      and use of organic fertilisers for strengthening of soil structure, subsoiling;
-     against soil pollution: technology development for the reduction of emissions,
      use of sludge, fertilisers and pesticides according to good agricultural practice
      recommendations.


4.3.5.2     Forecast of environmental impacts of the RDP Measures
To check foreseeable effects on the environment of Measure of the Latvian RDP
2000-2006, the related situation was summed up in Table 4.3.5.
The first column of the table reports Measures envisaged in the RDP, and specifies the
most significant actions constituting such Measures.
Other columns report main environmental components: soil, water, air, biodiversity
and landscape, for which the previous paragraph reports data of Environmental
Indicators in Latvia related to “Pressure”, i.e. the effects of human actions on that
environmental component, “State”, i.e. the specific situation of that environmental
component in the country, “Response”, i.e. steps taken to counter the effects of human
action on that environmental component.
The last column reports “Notes”.
For each Measure and/or action, the forecast effect on the environmental component is
identified by a symbol, as detailed below:
-     xx    A very positive effect on the environmental component considered;
-     x     A positive effect on the environmental component considered;
-     o     No effect or a negligible effect on the environmental component
      considered;



                                                                         Page 73 of 140
     -     on Moderate impact, if steps are taken to reduce or compensate for the
           negative effects on the environmental component considered. Such steps
           should be envisaged and accurately defined by beneficiaries to obtain
           project approval.
     -     n Negative impact on the environmental component considered;
           consequently, steps should be taken to “mitigate” or offset negative
           effects. Mitigation or compensation actions of negative effects on
           environmental components should be envisaged and accurately defined by
           beneficiaries to obtain project approval.
Based on an examination of the Table, Measures fall into 4 groups with foreseeable
effects on the environment as detailed below:
a)   The first set of Measures are expected to have very positive effects on
     environmental components.
     Such Measures pertain to the concepts of “Environmentally friendly
     agriculture”, “Afforestation of agricultural land”, “Vocational Training” and
     “Technical Assistance”.
     Foreseeable effects on environmental components for different Measures should
     be as follows:
     -     “Organic farming”: minimisation of environmental pollution on soil,
           water and air; maintenance of biological diversity and long term soil
           fertility.
     -     “Preservation of biodiversity and rural landscape”: improvement of
           biodiversity and landscape, protection of flora and fauna, reduction of
           pollution of soil, water and air.
     -     “Reduction of agricultural run-off”: reduction of water pollution,
           preventing soil erosion and expanding semi-natural vegetation. Positive
           effects are also envisaged for biodiversity and landscape.




                                                                   Page 74 of 140
                 Tab 4.3.5 SAPARD RDP 2000-2006 of Latvia: environmental Impact of
                           Measures

                Measures                       Soil    Water     Air      Biodi-    Land-                                 Notes
                                                                          versity   scape
Me.1.1 Modernisation of agricultural                                                          Impact on the environment can be positive in case of
machinery, equipment                                                                          equipment and buildings for the management of manure, and
and construction of buildings:                                                                in case of the renovation of stables for animals.
-    buildings and equipment for manure        xx          xx    xx           x          o    Intervention is needed for the reduction of effects on the
     management                                                                               environment of other new buildings.
-    animal houses                              x           x     x           o          on
-    other buildings                           on          on    on           n           n
Me.1.2 Afforestation of agricultural Land      xx          xx    xx           xx         xx   The creation of afforestated areas on agricultural land
                                                                                              deserted or about to be deserted, if made in accordance with
                                                                                              suitable criteria, may have general positive effects on the
                                                                                              environment.
Me. 2.1 Improvement of processing                                                             Impact on the environment can be positive in case of
and marketing of agricultural and fishery                                                     equipment and buildings for the treatment of wastewaters of
products:                                                                                     agroindustrial processing, for the processing and disposal of
-    water purification or treatment                                                          by-products and for the improvement of wastewaters from
     plants;                                    x          x         x        on         on   the agroindustry.
-    by-product processing or disposal                                                        Actions are needed for the reduction of effects of new
     plants;                                    x          x         o        on         on   buildings or structural enlargements on the environment.
-    improvement of water quality for           x          x         x        on         on
     agroindustrial uses;
-    processing plants.
                                               on          on    on           n          n
Me 3.1 Development and diversification                                                        Impact on the environment can be positive in case of
of                                                                                            alternative agricultural, forestry and fishery activities, if
economic activities providing alternative                                                     these are carried out with the utmost care: forest nurseries,
income:                                                                                       medicinal herbs, cranberries, crayfish, etc.
-    alternative agricultural, forestry and                                                   Actions are needed for the reduction of effects on new craft,
     fishery activities;                        x          x         x        on         on   SME and rural tourist initiatives on the environment.
-    craft, SME, and rural tourist                                                            The overall effect of preventing the outflow of population
     activities.                               on          on    on           n          n    from rural areas is expected to be positive.
Me 4.1 General rural infrastructure                                                           Generally speaking, actions are needed for the reduction of
development.                                                                                  the effects of new infrastructures on the environment.
-    rural     housing     of     historical    o          o         o        o          x    In case of restoration of buildings of historic interest or
     importance;                                                                              energy saving, effects are expected to be positive (i.e.
-    alternative heating,                       o           o        x        o          o    sustainable).
-    rural roads, water mains                   n          on        o        n          n    The overall effect of maintenance of population in rural areas
                                                                                              should be positive.
Me. 4.2 Modernisation and reconstruction        x          x         o        x          x    Keeping the artificial system of water regulation at efficient
of                                                                                            level should help maintain the delicate man-made balance
hydrotechnic equipment in polders                                                             with the environment.
Me 5.1 Organic farming                         xx          xx        x        x          o    Sizeable positive effects are expected especially on soils and
                                                                                              waters.
Me 5.2 Preservation of biodiversity and        xx          xx        x        xx         xx   Sizeable positive effects are expected on all environmental
rural landscape                                                                               components..
Me 5.3 Reduction of agricultural run-off       xx          xx        x        xx         xx   Sizeable positive effects are expected on all environmental
                                                                                              components.
Supporting Me.1 Improvement of             xx              xx    xx           xx         xx   Training is essential to obtain sizeable positive effects on all
vocational training                                                                           environmental components.
Supporting Me 2 Technical assistance to xx            xx        xx       xx         xx        Studies and activities for the dissemination of objectives and
the SAPARD programme                                                                          results of environmental actions are expected to considerably
                                                                                              contribute to positive effects on the environment.
  - xxA very positive effect on the environmental component considered;
  -x  A positive effect on the environmental component considered;
  -o  No effect or a negligible effect on the environmental component considered;
  - onModerate impact, if steps are taken to reduce or compensate for the negative effects on the environmental
      component considered. Such steps should be envisaged and accurately defined by beneficiaries to obtain
      project approval.
  - n Negative impact on the environmental component considered; consequently, steps should be taken to
      “mitigate” or offset negative effects. Mitigation or compensation actions of negative effects on environmental
      components should be envisaged and accurately defined by beneficiaries to obtain project approval.




                                                                                                                    Page 75 of 140
-    “Afforestation of agricultural land”: prevention of soil erosion and water
     pollution, improvement of biodiversity and landscape, improvement of air
     quality.
-    “Vocational training” and “Technical Assistance”: training, demonstration
     schemes and involvement of rural population play a fundamental role on the
     adoption of agricultural and environmental measures.
     EU Member States experience shows that the changeover from traditional
     agricultural models to models sensitive to pollution problems, biodiversity and
     landscape can succeed provided that accurate training is made, combined with
     such initiatives as demonstration schemes, dissemination of information and
     persuasion/involvement of potential beneficiaries, associations and the public at
     large.
     The final Declaration of Rio de Janeiro Conference for the Environment and
     Development of 1992 equally draws attention to the involvement of the general
     public and parties concerned.
     In conclusions, the two Measures are very important for the success of
     environmental and agricultural Measures and, if accurately implemented may
     result in very positive effects on the environment.


b)   The second group of Measures should have – in part – foreseeably positive
     effects on the different environmental components as a consequence of specific
     actions for environment protection and improvement; on the other hand
     mitigation and compensation actions will be needed in relation to the negative
     effects that Measures will have on environmental components.
     The latter group includes Measures for “Investment in agricultural holdings”,
     and “Improving the processing and marketing of agricultural and fishery
     products”.
     In both cases, a part of actions is specifically designed for the improvement of a
     number of environmental components, namely:
     -     actions related to equipment and buildings for a better management of
           manure, as part of Measure “Modernisation in agricultural holdings”;
     -     actions for the treatment of wastewaters in agroindustrial plants;
     -     actions for the recycling or disposal of by-products in industrial plants;
     -     actions for water quality improvement in fish processing plants.
     However, such Measures include actions that may negatively impact a number
     of environmental components and consequently require mitigation and
     compensation initiatives, such as:
     -     actions for the construction or enlargement of production-unit buildings as
           part of the Measure for “Modernisation in agricultural holdings ”;
     -     actions for the construction or enlargement of agroindustrial plants.



                                                                         Page 76 of 140
c)      The third group of Measures are expected to have partly neutral and partly
        positive effects on the different environmental components. This group includes
        Measures for “Polders” and “Land reparcelling”.
        Regarding the “Polders” Measure, the replacement of old pumps regulating the
        flow of waters is envisaged. Effects on the environment are expected to be
        positive as they should keep or restore the delicate balance created by man
        between waters, soils, vegetation, fauna and human activities.
        In case of “Land reparcelling”, environment-improving actions should be
        envisaged, such as the creation of hedges, windbreaks, etc, to counter any
        negative effects on the landscape due to the regularisation of forms vis-à-vis the
        past. In addition the Measure is expected to allow a better management of soils
        and more easily implement standards of agricultural good practice that may
        decisively improve the environment.


     d) Finally, the fourth group of Measures will foreseeably tend to have negative
        effects on the different environmental components, if taken individually;
        consequently they need mitigation and compensation actions.
        For any such actions, beneficiaries will have to be requested to submit the best
        possible corrective, improving or compensational actions, prior to
        implementation.
        For Measures of this group it shall be noted that, while their constituent
        individual actions may in many cases negatively impact a number of
        environmental components, as a whole they may have a positive effect on the
        environment. In fact they are aimed at improving living and working conditions
        of population of rural areas and may consequently assist such population in their
        assiduous activity in favour of environment conservation and improvement.
        This group includes Measures for “Rural infrastructure development” and
        “Development and diversification of economy”.
        Such Measures comprise actions requiring a cautious approach, such as those
        pertaining to the construction of rural roads and water mains and to new craft
        and SME activities as well as actions with directly positive effects.
        Among positive actions of the “Rural infrastructure development” Measure, a
        key action termed “Support for alternative heating” encourages a better use of
        energy in buildings and consequently a reduction in the consumption of non-
        renewable energy resources, while the action for the “Improvement of rural
        housing of historical or cultural importance” favours the conservation of the
        historical or cultural heritage, i.e. a limited resource comparable to non-
        renewable natural resources.




                                                                          Page 77 of 140
     4.3.5.3        Proposed Environmental Indicators
     In other parts of the Ex-Ante Evaluation (see Annexes 1, 2 and Table 4.3 2 ), remarks
     are made on the need to identify Indicators, as well as on Indicator types envisaged by
     the EU, their use, and methods of calculation. One of the Annexes features a list of
     Indicators divided into Physical, Result, and Impact Indicators, for each Measure.
     Indicators outlined are mainly of a general or socio-economic nature and provide key
     information relevant to the evaluation of environmental aspects, such as “Organic
     farming”: no. of projects, no. of hectares, % increase in the surface of organic farming
     and in the number of agricultural holdings, etc.
     This paragraph lists, over and above Indicators by Measure listed above, a number of
     environmental indicators that may be measured, ( also by means of suitable case
     studies), so as to provide an accurate account of the situation prior to and following
     Measures implementation.


     Priority 1 Investment in agricultural holdings
     Me.1.1 Modernisation of agricultural machinery, equipment and construction of
     buildings
     Me.1.2 Afforestation of agricultural Land
     Me.1.3 Land reparcelling


 Measures                                              Indicators

Me 1.1            No. of farms with new plants or machinery for the handling of wastewater
                  Quantity of waste waters handled by new systems


     Priority 2: Improvement of processing and marketing of agricultural and fishery
     products


     Me. 2.1 Improvement of processing and marketing of agricultural and fishery products


 Measures                                             Indicators

Me 2.1            No. of Processing Plants with wastewater treatment
                  No. of Processing Plants with waste processing
                  Quantity of water treated in processing plants
                  Quantity of waste treated in processing plants




                                                                                  Page 78 of 140
      Priority 3 Development and diversification of economic activities providing
                 alternative income
      Me 3.1 Development and diversification of economic activities providing alternative
      income
 Measures                                              Indicators

Me 3.1           No. of Craft and SME activities producing waste
                 No. of Craft and SME activities with waste processing
                 Quantity of waste produced and treated in new Craft and SME activities



      Priority 4 Improvement of rural infrastructure
      Me 4.1 General rural infrastructure development
      Me 4.2 Modernisation and reconstruction of hydrotechnic equipment in polders
 Measures                                              Indicators

Me 4.1           No. of improved houses of historical or cultural importance
                 No. of alternative heating systems
                 Energy saved with the new heating systems



      Priority 5 Environmentally friendly agricultural methods
      Me 5.1 Organic farming
      Me 5.2 Preservation of Biodiversity and rural landscape
      Me 5.3 Reduction of agricultural run-off
  Measures                                             Indicators

 Me 5.1, 5.2, Reduction in use of mineral fertilisers (N,P,K), kg/ha
 5.3          Reduction in use of N (organic+mineral), kg/ha
              Reduction in livestock density, units animal/ha
              Reduction in use of pesticides, active ingredients kg/ha
              Improving crop rotation
              Ha of protected areas near water bodies
              Increased ha of soils covered by vegetation
              Increased N of protected species (flora and fauna)
              Surface water quality: Ntot,Ptot concentration in the surface water
              Ground water quality: NO3 concentration




                                                                                    Page 79 of 140
    Supporting measures
    Supporting measure 2 Technical assistance to the SAPARD programme


Measures   Indicators

Me 6.1     No. of activities for dissemination of environmental practices
           No. of people involved in dissemination of environmental practices
           No. of studies and researches concerning the environment




                                                                                Page 80 of 140
4.4     VERIFICATION OF              THE     PROPOSED         IMPLEMENTATION
        ARRANGEMENTS


4.4.1    Competent authorities and bodies, economic, environmental and social
         partners that were consulted or associated:
Elaboration of this plan is supervised by the inter-ministerial SAPARD working
group, comprising representatives from the Ministries of Agriculture, Finance,
Economy, Environmental Protection and Regional Development, Education and
Science, Welfare, the European Integration Bureau, International Support Co-
ordination Office and the Union of local self-governments of Latvia.


4.4.2    The consultation process:
The Guidance Group for Pre-accession assistance and the Inter Ministries’ SAPARD
Working group were formed in 1998. In the first meetings, the Ministries’ officials
were informed of the opportunities to use the EU pre-accession support for rural
development and restructuring of agriculture.
The first seminar on SAPARD was held in Jurmala in December1998. The
Ministries’ officials and social economical partners, Table 4.4.1, were consulted about
the priorities and actions that should be co-financed under SAPARD.
The papers from this seminar were sent to regional (26 districts) departments of
agriculture with the intention of informing the potential beneficiaries: farmers,
processors, local associations, farmer groups, self-governments.
Seven seminars were organised by the Ministry of Agriculture at regional level for
discussion, consultation and agreement of suggestions between potential beneficiaries
and Ministry.
When the first draft of the plan was prepared, in February 1999 the Ministry of
Agriculture carried out an enquiry to check whether the draft priorities corresponded
to the opinion of the potential beneficiaries and the social partners. Local
governments, regional agricultural departments, regional offices of the Latvian
Agricultural Advisory Centre, Latvian Farmers Federation, non-governmental
organisations and sectoral advisory committees (see Table 4.4.?) participated in this
inquiry. They were asked to choose 5 out of 14 eligible measures indicated in Article
2 of the SAPARD Regulation as top priority support programmes to be included into
the Rural Development Plan for Latvia.
On the basis of the results of the inquiry, and taking all previous research and
discussions into account, a second draft of the plan was prepared with the assistance
and advice of foreign experts.
In June 1999 the development plan was submitted to EU Commission for
consultation. Concurrently, there are ongoing discussions among Ministry of
Agriculture, several producers’ associations, commercial banks about relevant matters
relating to the implementation of the plan. They are consulted and could submit their
proposals and defend their interests. Information has also been provided through
television and newspapers. There was performed informative work for society



                                                                       Page 81 of 140
    through TV and newspapers, particularly the «Lauku Avīze», a newspaper for rural
    people.
    In August 1999 the plan was accepted by the Latvian Cabinet of Ministers and sent to
    the Minister of Special Assignments for Co-operation with International Financing
    Agencies for submitting to European Commission.              In December 1999,
    representatives of the European Commission visited the Ministry of Agriculture in
    Riga and one of the aims of visit was to discuss the arrangements for the
    implementation of the SAPARD plan.


    Table 4.4.1: Bodies consulted on the preparation and implementation of the
                 Latvian RDP
    Key:      1) Bodies of Latvia, which are not involved in preparation and implementation
                 process of SAPARD;
              2) The bodies which were involved in the discussion and selection of
                 SAPARD priorities;
              3) The bodies which are involved in process of preparation of implementation
                 rules;
              4) The bodies which submitted their suggestions for implementation of
                 SAPARD in Latvia. The bodies are potential beneficiaries and will be
                 involved directly or indirectly in implementation of SAPARD.


                                             Do not need
                                                to be    Selection of Implementing
               List of bodies                 involved    priorities      rules      Feedback
                                                 1           2            3              4
PRIVATE BUSINESSES
Agricultural holding, farms/farmers                          X            X              X
Local non-agricultural enterprises                           X            X              X
Enterprises of several meat processing                       X            X              X
Dairy and Milk Processing enterprises                        X            X              X
Processing enterprises for crop production                   X            X              X
Enterprises of fishing and Fish Processing                   X            X              X
Processing enterprises of fruits and
vegetables                                                   X            X              X
Enterprises of wood-working                                  X            X              X
Nursery gardens                                              X            X              X




                                                                              Page 82 of 140
                                               Do not need
                                                  to be    Selection of Implementing
              List of bodies                    involved    priorities      rules      Feedback
                                                    1           2             3            4
ECONOMIC AND SOCIAL PARTNERS
Latvian Farmers Saeima                                         X            X              X
Latvian Farmers’ Federation                                    X            X              X
Latvian Young Farmers’ Club
Association of Statute companies of
Agriculture                                                    X            X              X
Association of Latvian Rural assistance
Federation of Food enterprises
Club of Latvian rural entrepreneurs
Latvian Central Society of Dairy producers                     X            X              X
Confederation of Latvian Cereals growers,
preservers and processors co-operative
societies                                                      X            X              X
Association of Latvian Meat producers and
processors                                                     X            X              X
Association of Latvian Pig growers                             X            X              X
Stock Company - Association of Latvian
Beef meat producers                                            X            X              X
Incorporation     of    Latvian     Biologic
Agriculture organisations                                      X            X              X
Association of Sugar beets growers
Union of Potatoes growers and processors
Association of Latvian Fruit growers                           X            X              X
Society of Cereals
Association of Rape growers
Association of Seed growers                                    X            X              X
Confederation of Latvian Breed animal
growers Ltd.
Association of Latvian Eggs producers Ltd.
Society of Animal husbandry SELEKSS
Ltd.
Association of Small Meat producers                                                        X
Society of National Co-operation
Association of Latvian Horse-breeders
Association of Sheep farming
Association of Latvian Bee-keepers




                                                                                Page 83 of 140
                                              Do not need
                                                 to be    Selection of Implementing
              List of bodies                   involved    priorities      rules      Feedback
                                                   1           2             3            4
ECONOMIC AND SOCIAL PARTNERS
(continued)
Association of Flax                                                                       X
Association of Latvian Horticulturists Ltd.
Association of Latvian Rural tourism
,,Lauku celotajs,,                                            X            X              X
Association of Agronomists
Association of Bear producers                     X
Association of Latvian Holstein breed
growers
Association of Bog-berry                                                   X              X
Union Latvia's Vulnerary plants                                            X              X
Association of Mushroom growers                                            X              X
Association of Crawfish growers                                            X              X
Association of Field mushroom growers                                      X              X
Association of Oyster mushroom growers                                     X              X
Association of Latvian Ostrich growers                                     X              X

COMPETENT          AUTHORITIES        AND
STATE BODIES
Ministry of Agriculture                                       X            X              X
Union of Local and Regional Governments
of Latvia                                                     X            X              X
Regional Development Council                                  X            X              X
State Veterinary Service                                      X            X              X
State Forest Service                                          X            X              X
National Board of Fisheries                                   X            X              X
Camera of Craft activities                                                 X              X
Camera of Trade and Industry                                  X            X              X
Ministry of Economics                                         X            X              X
Ministry of Environment Protection and
Regional Development                                          X            X              X
Ministry of Finance                                           X            X              X
State Authority of Land Reclamation system                    X            X              X
Ministries of Education, Welfare, Transport
etc.                                                          X            X              X




                                                                         Page 84 of 140
                                               Do not need
                                                  to be    Selection of Implementing
              List of bodies                    involved    priorities      rules      Feedback
                                                    1           2             3            4
COMPETENT            AUTHORITIES        AND
STATE BODIES (continued)
Latvian Development Agency                                                                 X
Regional Agricultural Departments                              X            X              X
Rural Support Agency                                           X            X              X
Regional and Local Governments                                 X            X              X
Regional agricultural advisory
 centres                                                       X            X              X
Latvian Agricultural Advisory and Training
centre                                                         X            X              X
Centres of Entrepreneurship support                                                        X
Latvian State Institute of Agrarian
Economics                                                      X            X              X
Latvian Adult Education Centre                                 X            X              X
Universities:     Latvia     University   of
Agriculture, University of Latvia                              X            X              X
State Institutes of Sciences and Research,
and study farms                                                X            X              X
Professional and technical schools for
agricultural, forestry and processing                          X            X              X
Rural Innovation centre                                        X            X              X
Horticulture advisory centre
Environmental Advisory and Monitoring
Centre                                                         X            X              X
Latvian State Statistic Bureau                                                             X
Units of Land reclamation of departments of
Agriculture of Districts                                       X            X              X
Study Centre of Latvian Municipalities                         X            X              X

FINANCIAL INSTITUTIONS
Latvian Guarantee Agency, Ltd.                                                             X
Regional Development Fund.                                     X            X              X
Municipal development Fund                                                                 X
Rural support fund                                                                         X
Latvian Hypothec and Land Bank                                                             X
Latvian Unibank                                                                            X
Other Latvian banks                                                                        X
Latvian Environmental Investment Fund                                                      X
Latvian Environmental protection Fund                                                      X




                                                                          Page 85 of 140
4.4.3    Implementing Authorities and implementation procedures
Section 10 of the RDP of Latvia describes the Implementing Auythorities at national
and local level and the implementation procedures.
More informations should be added after clarification with the EU about financing
Regulation and related procedures.


4.4.4    Procedures and selection criteria defined in order to reinforce the project
         selection in terms of effectiveness and efficiency:
In addition to the general information contained in Sections 8 and 10 of the Plan, the
principle source of information on selection procedures and criteria is the technical
sheets which set out the regulations for the implementation of each measure. These
sheets are still at an early draft stage and it is understood that their preparation will
continue after the Plan has been submitted to the EU for approval. The comments
below relate to the arrangements for programme promotion, application procedures
and project assessment.


Programme Promotion:
There are no details provided on the standard approach that will be used to inform the
potential beneficiaries of the opportunities that are available. Beyond the obvious use
of television, radio and the press, consideration should be given to the organisation of
workshops or classes in each district where groups or individuals would have the
opportunity to hear a presentation by the Rural Support Agency, ask questions and
collect an information pack containing an application form. The clear presentation of
information on what grant is available for, to whom, at what rate, tendering
arrangements, selection procedures etc, is a very challenging task for a programme as
complex as SAPARD. Consideration should be given to the use of some of the
resources for Technical Assistance to employ a communications expert to prepare an
information pack.
Experience of implementing rural development programmes in other countries shows
that the greatest slippage in participation rates occurs between the number of people
who ask for application forms and the number who complete and return these forms.
Surveys of those who did not return the form show that a significant proportion were
people who had good projects and needed grant aid to implement them. The most
common reasons for not making a formal application are lack of confidence, fear of
engaging with officialdom, length and complexity of the application form, or failing to
understand the information provided. Consideration should be given by the Support
Agency to the deployment of some resources under the Technical Assistance measure
to the provision of a short-term animation service which would offer advice and
assistance on the completion of application forms.




                                                                         Page 86 of 140
Application Procedures:
The copy of the proposed form, which is included in the annex to the Plan, is
commendably short. It should be remembered, however, that this form can be a very
important source of information for monitoring progress and measuring the impact of
the programme. If only for this reason, it is inevitable that the form will become
longer. The Technical Sheets for all the measures indicate that a business plan should
be submitted along with the application form. However, applications for some of the
farm investment projects, such as the construction of on-farm accommodation for
tourists, will be very similar. It should be possible to assess and make decisions on
these applications by applying well-established, basic benchmarks on costs and
incomes to the basic information provided in an application form. This would reduce
the time and expense of preparing business plans and facilitate faster and more
efficient decision making. The disadvantage is that the application form will be
longer and more complex, but this may be partly overcome by having a two stage
application procedure. In the first stage a very short and simple application form
would allow officials at local level to make a quick decision on whether the
application would meet minimum eligibility criteria.
While grant aid will be available for the preparation of business plans under measure
2.1, this is apparently not the case for innovative rural enterprise projects submitted
under 3.1, or more complex rural infrastructure projects under 4.1. Technical
expertise will also be required in these cases for carrying out market research,
feasibility studies, preparation of project design, etc. Consideration should be given to
the expansion of the LAAE capacity to provide advice on non-farm enterprise
development and the provision of grant aid towards the cost of preparing business
plans.


Project Assessment:
There is still a lot of clarification needed on eligibility and selection criteria. It will be
useful to differentiate between minimum entry criteria and project selection criteria.
The latter should be capable of measuring the potential contribution of the project to
the overall or specific objectives of the measure. Scoring and weighting systems need
to be developed.
Finally, but by no means least important, the Rural Support Agency should try to
avoid reinventing the wheel. These implementation issues have been tackled with
varying degrees of success in other countries, and the agency should carry out
comparative studies of their systems and procedures and pick the best practice out of
all that is in use.


4.4.5    Arrangements for monitoring and evaluation
The RDP of Latvia has a section titled “Monitoring and evaluation”; however it has
many limits and only defines the composition of the two bodies, i.e. the Monitoring
Committee and the National Guidance Committee.
Regarding monitoring, a few articles of the related Regulations are summed up below.


                                                                             Page 87 of 140
Art. 5 of Council Regulation (EU) 1268/1999 provides that “The Commission and the
applicant Country shall monitor the implementation of the programme. Such
monitoring shall be carried out by way of jointly agreed procedures.
Monitoring should be carried out by reference to specific physical, environmental and
financial indicators agreed and established beforehand.”
Art. 10 of Commission Regulation (EU) 2759/1999 provides that “The specific
physical, environmental and financial indicators applied in the monitoring of the
implementation of the programme shall take into account the elements mentioned in
article 36 of Regulation (EU) 1260/1999.”
Art. 36 of Regulation (EU) 1260/1999 provides that “The managing authority and the
Monitoring Committee shall carry out the monitoring by reference to physical and
financial indicators specified in the operational programme, single programming
document, or programme complement. In drawing up their indicators, they should
take into account the indicative methodology and list of examples of indicators
published by the Commission”.
In this ex-ante evaluation, the issues of Monitoring, Evaluation and use of Indicators
were addressed on various occasions. More specifically, the following documents
submitted in our short Seminar in Riga (during the Ex-Ante Evaluation phase) are
worth mentioning:
-    Annex 1: “The Sapard Programme advancement follow-up and the use of
     indicators”
-    Annex 2: “Definition of indicators for Sapard RDP and example of calculation”.
Over and above the foregoing documents, further documents were submitted, namely
a list of Physical, Result and Impact Indicators suggested for each RDP Measure, an
analysis of the Indicators quantification by Measure and by Priority and finally an
analysis of forecast data on the impact of the RDP of Latvia in line with the Common
Evaluation Questions of the DG for Agriculture, contained in Section 4.3 of the
current Ex-Ante Evaluation.
In short, the Monitoring activity includes the organisation and management of a
system of gathering and processing of data related to Indicators (Physical, Result and
Impact), as well as financial and physical data. It is further aimed at identifying the
advancement of intervention implementation and the degree of attainment of specific
and global objectives of the RDP of Latvia.
In the latter respect, for the organisation of the Monitoring system we recommend
that, as part of the Measure Technical Assistance, an analysis of a number of
Monitoring systems deployed in EU Member Countries be made, in view of a valid
organisation and arrangement of the system to be adopted in Latvia based on suitable
examples.
Mid-Term and Ex-Post evaluations are described in Annex 1 mentioned above.




                                                                       Page 88 of 140
4.4.6 Arrangements for controls
The RDP does not describe any arrangements for control and penalties; in line with
the contents of other RDPs, the following items should be described:
-    objectives of control
-    control types
-    control effects
-    roles and responsibilities for controls.


Objectives of controls
To ensure effective and correct implementation of the Programme, controls are
envisaged with the following objectives:
-    checking the conditions for eligibility of beneficiaries on submission of their
     applications;
-    checking compliance with conditions provided for at the time of aid granting
     (with checks made prior to aid disbursement, during advancement, and before
     final disbursement);
-    checking compliance with conditions approved at the time of commitment (after
     aid disbursement, for multiannual commitments);
-    checking the continued adherence to objectives and restraints envisaged for
     intervention targets (e.g. a building rehabilitated for rural tourism is to remain
     such), at the end of intervention, after the last disbursement received.


Control types
In line with art. 47 of Regulation 1750/99, controls are envisaged both in the fact-
finding phase and after the disbursement of aid.

In relation to Measures defined in the RDP of Latvia, control types may include:

1.   fact-finding missions
2.   assessments of the actual implementation of activities
3.   work-in-progress checks
4.   ex-post follow-ups.


Control effects

Control activities may impact
    the definition of expenses eligible for intervention as well as of the related aid
     grantable and/or payable, for Structural Measures;




                                                                       Page 89 of 140
     the implementation, where applicable, of administrative sanctions in case of
      submission of false data or information merely in order to unlawfully receive
      aid, bonuses, indemnities, refunds, contributions or other disbursements, for all
      Measures.


Roles and responsibilities for controls
The MoA is required to define such roles and responsibilities.




                                                                       Page 90 of 140
5.   CONCLUSIONS AND RECOMMENDATIONS


Relating to Section 4.1 “Evaluation of the analysis of the current situation in the
agricultural sector and rural areas of Latvia.”


-    In general terms, the analysis is comprehensive and although the parts are not
     necessarily presented in the order recommended in the aide memoire issued by
     DG/6 on the preparation of the plan, they are all there. A review of the
     information sources verified that they did support the evidence and arguments
     put forward in the plan.
-    The amendments and additions to the first draft that were recommended by the
     evaluators have largely been integrated into the second draft. The MOA has
     provided an explanation for those areas they were not able to address.
-    The description of the ten different types of region in rural Latvia should be
     presented more succinctly by describing the distribution, characteristics and
     development needs of each region.
-    The SWOT analysis should be checked to make sure that it provides a
     comprehensive summary of the strengths, weaknesses, opportunities and threats
     described in the analysis of the current situation.
-    The linkage between the analysis of the current situation and the specific
     objectives of the Plan needs to be formally explained.
-    The previous operations on agricultural and rural development are very clearly
     described. Some of the relevant lessons arising out of those operations are
     summarised by the evaluators in section4.1.6.


Relating to Section 4.2 “Assessment of the relevance and consistency of the
proposed strategy”.


-    The key issues identified in the Plan are well reasoned in relation to the analysis
     of the current situation.
-    The MOA should keep the situation under review in relation to the possibility
     of providing encouragement under SAPARD for greater specialisation in those
     branches of agriculture for which Latvia may have comparative advantage in an
     enlarged EU.
-    The MOA should give further consideration to their reasons for excluding “town
     areas” of towns with rural territories from the areas designated for assistance
     under SAPARD.
-    Under the new arrangements for spatial planning the MOA should contribute to
     the development of a vision of the future role of the different rural regions in
     Latvia and the integration of SAPARD interventions with those of the Regional
     Development Programme in pursuit of those roles.



                                                                        Page 91 of 140
-    The MOA should monitor the extent to which SAPARD assistance is reaching
     those parts of the farming and rural population who really need that assistance.
-    Subject to some minor amendments to the overall objectives of the programme
     and some specific objectives of the measures, the proposed actions are
     consistent with the objectives of the Plan.
-    The balance between measures is appropriate for the stage of development in
     Latvia. The consolidation of the social and economic role of family farming will
     make an important contribution to the stabilisation of rural communities.
     Measures 3.1 and 4.1 are also essential to the process of helping the rural
     population to adapt to the very significant social and economic changes that are
     in prospect. On their own they are not capable of addressing the gap in
     employment opportunity , incomes and quality of life between rural and urban
     areas and need to be complemented by considerable investments under Regional
     Development Programmes.
-    The SAPARD programme needs to harness the knowledge and experience of
     the private and voluntary sectors at local level and these people will need to be
     provided with a much wider range of technical advice and expertise than is
     currently available.
-    The research community in Latvia has made a very significant contribution to
     the preparation of a well targeted SAPARD Plan. There are a number of areas
     where research can add very significant value to arrangements for the
     implementation of this programme and consideration should be given to the
     funding of such research under measure6.
-    Evidence has been presented that would justify the projected financial
     allocations to the measures. The ceiling on maximum grant per beneficiary
     under measure2.1 seems to be high.
-    If an opportunity to re-allocate some funds does arise, then the added value to be
     derived from investment in research, the enormous need for investment in rural
     infrastructure and long term gains from reafforestation could be taken into
     account.
-    The complementary and additional contribution of SAPARD to National
     policies is clear. There is also a high degree of compatibility with the Common
     Agricultural Policy and subject to the caveat that the development priorities are
     more basic in Latvia there is good correspondence with EU level policy
     objectives.


Relating to Section 4.3 “Assessment and quantification of the expected impacts of
the selected priorities”


The RDP of Latvia, in its first version provided to evaluators was fully lacking the
part focussing on Indicators identification and quantification.
Based on talks at MoA, it was understood that there was insufficient knowledge on
the use of Indicators.



                                                                       Page 92 of 140
Consequently, a lot of work was carried out during the ex-ante evaluation to remedy
the insufficient knowledge and correct the numerous shortages.
Activities performed by the evaluators in association with the MoA, are summed up
below (each phase is described in detail in chapter 4.3):
-    organise a short seminar for MoA officers in charge of the RDP on monitoring,
     evaluation, Indicators characteristics and methods of Indicators use and
     calculation;
-    provide the MoA with the documentation on Indicators compiled for the
     Seminar;
-    request MoA to insert Indicators in the RDP for each Measure to be used for
     monitoring and evaluations, with an attached list of suggested Indicators,
     classified into physical, result and impact;
-    request MoA to quantify at least a part of Indicators so as to check consistency
     of amounts envisaged by Measure and estimate expected results and impacts;
-    check with Moa quantifications and perform changes and integrations;
-    assess results and impacts expected of the Programme, by answering the
     “Common evaluation questions” as reported in the Guidelines For Evaluation of
     RDP 2000-2006, compiled by the DG for Agriculture in 1999;
-    evaluate the RDP impact on the environment, by considering the following
     environmental components: soil, water, air, biodiversity and landscape.
At the end of the foregoing phases, the following conclusions and recommendations
can be made.
Regarding results and impacts expected of the Programme:
When the tables on the quantification of expected impacts and results, and answers to
Common Evaluation Questions, as outlined in section 4.3 are considered, the
following remarks can be made:
-    Major results and impacts are expected in the agro-industrial sector, in which
     the Programme envisages the improvement of 100% of plants needing
     intervention in the milk and slaughterhouses sector, by making them compliant
     to EU requirements; in addition, for the meat, fruit & vegetable and fish sectors,
     70%, 70% and 34% respectively of plants are expected to be made compliant.
     Such sizeable intervention will probably bear a considerable impact on such
     staple suppliers as farmers and fishermen. As a matter of fact, nearly 32,000
     suppliers are expected to benefit from investments in favour of the agro-
     industry.
-    Considerable impacts and results are also expected of direct intervention in the
     agricultural sector as well, for the production of produce, and in related sectors,
     based on the improvements identified in the item above. For instance, expected
     advancements will include: the enhanced efficiency of nearly 6,400-7,400 farms
     is expected, improved working conditions for nearly 20,000 workers, improved
     welfare for nearly 69,000 animal units and improved quality of sizeable
     quantities of agricultural products, e.g. 80-100,000 tons of milk, 45,000 tons of
     meat, 320,000 tons of fruit & vegetables, etc.


                                                                        Page 93 of 140
-    Interesting results and impacts are further expected of diversification activities
     and infrastructures in rural areas: e.g. 14,000 new or maintained jobs by
     diversifying activities, 25,000-37,000 new tourists in rural tourism enterprises,
     with increases vis-à-vis current tourist flows of 400-600%;
-    Agro-environmental measures are further worth noting, as extremely high
     increases are expected in this respect (+ 200%) as against current levels;
-    Great importance is attached to training, an area in which 3,000 courses and
     58,000 participants are expected.
Regarding the operational part:
-    The MoA is required to insert into RDP most of the Indicators suggested, a part
     of which has already been quantified;
-    The MoA is required to organise the system of quantitative data gathering
     relating to indicators as part of the monitoring system, by requesting
     beneficiaries to provide the following information for relevant Indicators: the
     ex-ante state, the expected state after the Programme implementation, and a
     periodical account of the state during Programme advancement;
-    The monitoring system is to be supplemented by Mid-Term ed Ex-Post
     evaluations, which can be instrumental in the optimum assessment of a number
     of results and impacts expected of the Programme by means of suitable case
     studies;
-    Finally, for Measures that are found to bear a number of negative impacts on the
     environment, based on the impact analysis described in section 4.3.5, the MoA
     is required to request beneficiaries, ever since the submission of their projects,
     to introduce more suitable measures to soothe the effects on the environment.
     Obviously, during the Programme implementation, environmental indicators
     will equally have to be monitored and evaluated by means of, if need be, case
     studies.


Relating to Section       4.4     “Verification   of   the   proposed   implementation
arrangements”.
-    Consultation with government and non government bodies and social and
     economic partners has been meaningful, broadly based and is ongoing.
-    Project selection criteria and procedures still have to developed for most
     measures.
-    The allocation of some resources under measure “Technical assistance” to the
     preparation of a well illustrated information pack and the provision of hands-on
     support with the completion of application forms could significantly increase the
     participation of those who are really in need of grant aid.
-    The evaluators would query whether business plans would be needed for all
     projects and whether all grants should be allocated by competitive tender. More
     flexibility between projects and measures could increase efficiency and
     effectiveness.



                                                                         Page 94 of 140
-    More technical advice and technical assistance grants should be made available
     for the planning of innovative rural enterprise development projects and rural
     infrastructure improvement projects
-    There are a lot of examples of programme implementation systems and
     procedures in other countries. Some comparative studies could help to identify
     and collate the best practice.
Regarding monitoring, evaluations and controls, refer to Section 4.4 for a more
accurate overview of the situation.
The following points are worth observing in this section:
-    Monitoring and evaluations are essential activities provided for in EU
     regulations and will have to be performed during Programme implementation in
     order to: a) check its advancement and identify any technical, organisational or
     procedural problems delaying advancement and consequently, intervene to
     remove them; b) check Programme results and impacts.
-    The performance of Monitoring and evaluations requires the identification, ever
     since the planning phase, of physical, result and impact Indicators, as well as the
     quantification of major indicators to verify whether Measures identified and
     resources earmarked are conducive to the objectives envisaged.
-    In its first version, the RDP made no mention or quantification of Indicators;
     during the Ex-Ante Evaluation, the evaluator proposed Indicators by Measure
     and suitable quantifications were made.
-    Monitoring includes the organisation and management of a system for the
     gathering and processing of data related to Physical, Result and Impact
     Indicators, as well as financial and procedural data. It further identifies the
     advancement of intervention implementation and the degree of attainment of
     specific and global objectives of the RDP of Latvia.
-    For the organisation of the Monitoring system, we recommend that, as part of
     the Measure ‘Technical Assistance’, an analysis of a number of Monitoring
     systems deployed in EU Member Countries be made, in view of a prior valid
     organisation and arrangement of the system to be adopted in Latvia based on
     suitable examples.
-    We further recommend to request beneficiaries to provide useful data for the
     quantification of Indicators in relation to the state both prior to the programme
     start and during its implementation phases.
-    The RDP makes no mention of controls; in this respect, section 4.4 identifies
     and concisely describes the following control definition requirements: objectives
     of controls, control types, control effects, roles and responsibilities for controls.
     The MoA is required to provide such definitions.




                                                                          Page 95 of 140
6.   THE  EXTENT  TO   WHICH    THE  CONCLUSIONS     AND
     RECOMMENDATIONS HAVE LED TO CHANGES TO THE RDP.


Significantly enough, the Ex-Ante Evaluation included a number of phases
summarised below, limited to phases that involved the MoA:
-    Analysis of the RDP of Latvia by evaluators, by means of meetings and talks
     with officers from the MoA;
-    Evaluators’ submission to the MoA of a list of changes and integrations, (see
     Annex A and Annexes 1-8) inclusive of very accurate suggestions, as was the
     case for Indicators;
-    Compilation by the MoA of new RDP versions, while bearing in mind
     integrations and changes required (please note that such sizeable work phase for
     the MoA took more than one month);
-    Check on integrations and further talks of evaluators with MoA officers;
-    Compilation of the current final version of the Ex-Ante Evaluation with the
     most recent requests submitted by evaluators to the MoA, following which the
     Moa is required to directly underscore any changes and/or integrations made.


In relation to Section 4.1 “Evaluation of the analysis of the current situation “.
1.   In the General Overview more maps are used to describe the geographical
     aspects, including the organisation of Local and Regional government. This
     section now includes a thorough description of the country ”s environmental
     assets. A wider range of macro-economic indicators is used to provide more
     quantitative information on the current situation and recent trends.
2.   A new section, “Characterisation of Rural Territory” is introduced to add
     analysis of the wider rural economy and the state of rural infrastructure. There is
     more description of rural-urban comparison of socio-economic conditions. This
     section also includes a succinct description of ten distinctive rural regions in
     Latvia, as defined by a recent research project.
3.   There is more quantitative information provided on the structure of farms , the
     pattern of agricultural production, farm incomes and the situation in the food
     processing industry.
4.   More background information is now provided on Polders, wildlife habitats and
     the distribution of agricultural run-off which now provides an explanation of
     why these areas have been targeted for co-financing under measures 4.2,5.2,
     and5.3.
5.   The SWOT analysis is prepared in a more structured format and clearly defines
     the linkages with the analysis of the current situation in Sections 1,2, and3. A
     list of development issues arising out of the SWOT analysis is now included at
     the end of Section 3.
6.   There were issues raised by the reading of the first draft, for example, the cost
     and availability of credit to co-fund farm and rural enterprise investments, which



                                                                        Page 96 of 140
     have been thoroughly discussed with MOA staff and other key informants and it
     has been agreed that no further elaboration of these issues is necessary.


In relation to Section 4.2 “Assessment of the relevance and consistency of the
proposed strategy”.
1.   The inclusion of a structured policy option analysis for all the issues listed at the
     end of Section3 helps to describe the coherence between the RDP and the
     National development Programmes.
2.   Some tables are now included at the beginning of Section 4 to clarify the linkage
     between development issues, investment priorities, broad development needs
     and specific objectives of the Programme.
3.   Some changes have been made to the presentation of the structure of the Plan
     which improve its strategic logic.
4.   There were extensive discussions of a number of issues relating to the
     possibility of including tighter targeting of investments. The outcome is now
     reflected in a decision to give priority to applications from the rural Special
     Support Areas under measure3.1. There is also a recognition of the need to
     integrate interventions under SAPARD with those that will be taken under
     Regional Development Programmes as they evolve. The MOA recognise the
     need to keep the allocation of grant aid to sectors, beneficiaries and regions
     under review .


In relation to Section 4.3 “Assessment and quantification of the expected impacts of
the selected priorities”


The RDP of Latvia, in its first version submitted to evaluators was fully lacking the
part focussing on Indicators identification and quantification.
Based on talks at MoA, it was understood that there was insufficient knowledge on
the use of Indicators.
Consequently, a lot of work was carried out during the ex-ante evaluation to remedy
the insufficient knowledge and correct the numerous shortcomings.
Activities performed by the evaluators in association with the MoA, are summed up
below (each phase is described in detail in chapter 4.3):
1.   Organise a short seminar for MoA officers in charge of the RDP on monitoring,
     evaluation, Indicators characteristics and methods of Indicators use and
     calculation.
2.   Provide the MoA with the documentation on Indicators compiled for the
     Seminar; request MoA to insert Indicators in the RDP for each Measure to be
     used for monitoring and evaluations, with an attached list of suggested
     Indicators, classified into physical, result and impact.
3.   Request MoA to quantify at least a part of Indicators so as to check consistency
     of amounts envisaged by Measure and estimate expected results and impacts.


                                                                          Page 97 of 140
4.   Check with Moa quantifications and perform changes and integrations.
5.   Assess results and impacts expected of the Programme, by answering the
     “Common evaluation questions” as reported in the Guidelines For Evaluation of
     RDP 2000-2006, compiled by the DG for Agriculture in 1999.
6.   Evaluate the RDP impact on the environment, by considering the following
     environmental components: soil, water, air, biodiversity and landscape.
By way of conclusion, insofar as Indicators and their quantification are concerned, the
MoA has worked intensively on the estimate and quantification of a wide range of
indicators, a part of which has already been discussed with evaluators.
The MoA is further required to insert into the RDP most of Indicators suggested, a
part of which has already been quantified, for them to be used for monitoring and
evaluation activities.


In relation to Section 4.4 “Verification of the proposed implementation
arrangements”.


1.   The Plan now includes an analysis of the all the stake holders who have been
     consulted on the preparation of the Plan and are being consulted on its
     implementation.




                                                                       Page 98 of 140
            SAPARD RDP OF LATVIA:
 LIST OF SUGGESTED INTEGRATIONS, AS RESULTS
OF THE EX ANTE EVALUATION PRELIMINARY PHASE



                 ANNEX A




                                     Page 99 of 140
1. Identification and quantification of Indicators


For each Measure, in the Technical Sheet, the EU expect to find the identification and
quantification of relevant Indicators, (like tables A and B of Annex 2), according to
the following classification:
a)    Physical Indicators
b)    Result Indicators
c)    Impact Indicators
For better understanding about Indicators see some descriptions and examples of
calculations of Indicators in the papers of Seminar prepared by C.A. Pelagallo and
held the 2/2/2000 in the MOA.
Please find enclosed in Annex 1, “The Sapard Programme advancement follow-up
and the use of indicators” in Annex 2 “Definition of Indicators for SAPARD RDP and
example of calculation”.


2.    Amendments of the Annex I Projected Expenditure by measure


2.1   There are differences between Table 24 (page 64 ) of the RDP and Tables
      concerning the Measures 1.1, 1.2, 1.3 and Priority 2, in fact the sums of Priority
      1 and 2 in Table 24 are different in respect to the figures of the relevant
      Measures.


2.2   In some Measures, like Rural Infrastructure, Self-governments play a role, if it is
      possible is suggested to include in the financial Tables the expected contribution
      by them.


2.3   In Measures 1.2 Afforestation, there is an incoherence: in the Table the private
      participation is zero, and then is written “Maximum rate of public funding shall
      not exceed 50% of the eligible project cost”.


2.4   For some Priority (4 Rural Infrastructure, 5 Environment) lack of division of the
      projected expenditure. If it is possible it is better to have a clear definition for
      each Measure.


2.5   There is no financial table for Technical Assistance.




                                                                         Page 100 of 140
2.6   Some suggestions for the financial Table 24 (page 64) :
      - Clear identification of all the Priorities and also the Measures, with relevant
        number (Priority 1, 2, etc, Measure 1.1, 1.2, 1.3, etc);
      - Following the sequence: Priority 1, Measure 1.1, 1.2, etc, Priority 2, etc
      - Evidence of the percentage of each Priority and Measure in respect to the EU
        money and to the Total money. (See an example in the Table 1 “SAPARD
        RDP of Latvia: Financial Plan 2000-2006” enclosed in Annex 3).




3.    Clarification about the reasons to select some Measures or actions


3.1   SAPARD Measures not included
Art 2 of SAPARD Regulation EC 1268/99 provides a list of possible Measures. Can
you explain why the following are not included?
-     Setting up farm relief and farm management services;
-     Setting up producer groups.


3.2   Possible actions that can be included in the RDP Measures.
It is our experience that the following actions are also often included in the following
Measures:
a)    In Priority 3 Development and diversification: support for manufacturing and
      processing as well as services businesses.
b)    In Measure related to Training, assistance for the training of management and
      staff in management, marketing, and quality insurance (HACCP). .
c)    In the Technical Assistance Measure:
      - brochures, seminars, workshops, advertising, for dissemination of
        information;
      - market researches, ( for key agricultural products, for organic products, for
        rural tourism, for SME’s activities, for fish products, for forest products, for
        innovative products);
      - price information systems for key sectors, like agriculture, fish, forestry;
      - marketing and promotional activities for typical Latvian products, services or
        products, for some rural areas, exhibitions, brochures, etc;
      - studies in support of intervention envisaged by the Programme, (studies on
        opportunities and methods for developing handicraft or SME’s or rural
        tourism in rural areas; research and development on new products);
      - studies on integrated rural development of selected areas;
      - studies on the opportunities to develop new professions in rural areas;



                                                                        Page 101 of 140
      - studies on the training requirements of potential beneficiaries;
      - studies on the situation of capitalisation of farms, on needs for credit and for
        guarantee, and on possible actions;
      - on comparative studies of the Programme organisation and implementation
        procedures in Latvia and those in some other pre-accession Countries and in
        some EU Countries;
d)    In Measure 1.1 Farm modernisation, investment in perennials (fruits or small
      fruits) replanting or planting, nurseries for the propagation of rootstock, primary
      breeding livestock.


NB In general Horizontal actions are suggested to reinforce the specific actions: for
example: training, marketing research, price information system, etc


4.    Further elaboration of Technical Sheets


4.1   Technical sheet for Technical assistance needs developments in the same
      formats as the other Measures
4.2   Elaboration of the Scope of the Measures by giving more detail of eligible
      actions for example what types of machinery and buildings in Measure 1.1.


5.    Provision of following information from the implementing regulations for
      each Measure:
5.1   Eligible actions
5.2   Project and beneficiary selection criteria (minimum entry and priority)
5.3   Project tendering and selection procedures.




                                                                        Page 102 of 140
6.     Suggested revisions to Sections 1 and 2 of RDP
6.1   A detailed page by page specification, already explained to Nina and Daina is
      enclosed in Annex 4.


7.    Strengths and weaknesses
A suggested new format is enclosed in Annex 5.
Additions suggested by us will appear in brackets with question mark.(…….?)


8.    A development issues and policy option analysis
A list of the development issues that reflect the overall agricultural and rural
development needs in Latvia is enclosed in Annex 6.
You should amend as you feel necessary.
The Option Analysis table allows you to identify the complementarity and
additionality of SAPARD in relation to other national actions and programmes. The
analysis has been started for illustration and should be completed by MOA.


9.    Questions on consultation
A list of questions on consultation for Mr. Lapins is enclosed in Annex 7.


10.   Implementing arrangements
In addition to the information provides on pages 60 to 64 of the RDP we would like:
-     a brief explanation of the roles of the departments, national and regional, the
      number of people that will be employed as shown in the enclosed organisational
      chart of the rural Support Service,
-     progress on staffing and definition on training needs,
-     briefly explain the flow from application to decision to final payments as shown
      in the enclosed flow chart,
-     a brief progress report on the designation of the competent Authority, Certifying
      body, and Paying Agency,
-     a brief progress report on the accreditation by the EU of the Paying Agencies
      proposals for financial procedures and control,
-     proposed composition of the Monitoring Committee,
-     a brief explanation of the arrangements for monitoring and evaluation.


11.   Suggested changes to classification of Measures by Priorities.
Suggested changes to classification of Measures and Priorities, (and Reasons for
suggested changes) are enclosed in Annex 8.



                                                                         Page 103 of 140
SEMINAR IN THE MINISTRY OF AGRICULTURE OF LATVIA




THE SAPARD PROGRAMME ADVANCEMENT FOLLOW-UP
             AND THE USE OF INDICATORS


                            ANNEX 1




                          Riga 2/2/2000




     C. A. Pelagallo – Ex ante evaluation of Sapard RDP in Latvia




                                                             Page 104 of 140
The SAPARD Programme advancement follow-up is made up of the following
components, ( see EC Regulation N. 1268/1999, SAPARD, Art 5”Ex ante appraisal,
monitoring and evaluation”):
a)   Monitoring activity;
b)   Monitoring committee;
c)   Evaluation.


a)   Monitoring activity
The monitoring activity consists in the periodical gathering of information on the
Programme advancement, by means of indicators, to check both quantitative and
qualitative advancement vis-à-vis objectives envisaged, for the purpose of promptly
intervening with improvements relating to:
-    the Programme contents, i.e. measures;
-    procedures;
-    the organisation structure of the Programme management.
The following Monitoring tasks are performed:
-    financial monitoring,
     to check the actual use of earmarked financial resources, with such main
     indicators as amounts committed (by the National Authority in favour of
     beneficiaries), and costs paid (by beneficiaries);
-    physical monitoring,
     to check the degree of implementation, with such “physical implementation
     indicators” as planted forest, in hectares, beds deployed, processing plant
     improved, etc;
-    procedural monitoring,
     to check the advancement and efficiency of procedures by the local government
     or institution and beneficiaries involved, with such indicators as mean lead
     times for technical and administrative phases;
-    results monitoring,
     to check the direct or immediate effects of intervention, e.g. quantity of good
     quality milk production, as a result of SAPARD grant, ( new or restructured
     processing plants);
-    environmental monitoring,
     to check the positive or negative impact of intervention on the environment.




                                                                     Page 105 of 140
For the purpose of assessing the effectiveness and efficiency of the Programme, the
following indicators are used:
-    for effectiveness,
     the ratio of deployed works or implemented activities to envisaged
     works/activities: e. g. % indicator of commitments made on overall investment,
     % indicator of payments made on overall investments, % hectares deployed on
     total envisaged hectares;
-    for efficiency,
     the lead time of a given technical/administrative task, the amount spent to
     deployed quantity ratio, e.g. cost per hectare, cost per beneficiary, etc.
Monitoring is crucial as a means of Programme management, in order to follow up its
advancement and highlight any criticalities needing further intervention.
Obviously, the EU provides financing commensurate with programme advancement.


b)   The Monitoring Committee
With a view to monitoring the degree of Programme advancement and making
decisions on any transfer of resources across intervention activities, a joint Committee
is set up with members from the National Authority, (the Central Government,
represented by many Ministries), from the the Local Authorities, from some social-
economic partners, and from the European Union (principle of partnership), such
Committee is called “Monitoring Committee”.
Should changes apply which need approval in the intervening period between the half-
yearly Committee meetings, the National Authority may request such changes by
Written Procedure sent to the European Union.


c)   The Programme Evaluation
Structural Funds procedures envisage three types of evaluation:
-    ex-ante evaluation;
-    mid term evaluation;
-    ex-post evaluation.
In the programming phase the Programme document must be complemented by an ex-
ante evaluation, which should help in:
-    clarifying the objectives of the plan and their relevance to the needs,
-    assuring consistency between the proposed strategy and the selected targets with
     the existing situation in the region or sectors concerned,
-    evaluating the expected impacts of the co-financed activities,
-    verification of the proposed implementing arrangements.
The mid-term evaluation – together with the monitoring activity (on whose data the
evaluation is based) – runs parallel to the Programme implementation, so as to provide
support to the operational monitoring.



                                                                        Page 106 of 140
It consists of the following phases:
-     evaluation of the Programme advancement, with an analysis of financial and
      physical advancement by efficiency and effectiveness indicators;
-     evaluation of technical/administrative procedures used;
-     highlights on individual problems and proposals to change and/or re-
      programme procedures;
-     case studies analysis, for an evaluation of intervention results and impact.
The mid-term evaluation is performed in order to check – together with the
Monitoring activity – the Programme advancement and consequently support the
Monitoring Committee in its decisions pertaining to:
-     changes in a number of Programme intervention activities;
-     a number of procedures;
-     a number of national or regional facilities which proved to be insufficient.
Finally, the ex-post evaluation cross-checks the results evaluation, both in terms of
project and in terms Programme advancement, through:
-     a top down analysis , consisting in a set of interviews with the officials
      responsible for checking the consistency of the overall Programme results with
      the general development objectives;
-     a bottom up analysis, i.e. an analysis of case studies, to check the impact of
      individual measures on local needs and, an analysis of the overall impact of the
      SAPARD Programme, starting from the result and the impact indicators of the
      measures.




                                                                        Page 107 of 140
SEMINAR IN THE MINISTRY OF AGRICULTURE OF LATVIA




     DEFINITION OF INDICATORS FOR SAPARD
           AND EXAMPLE OF CALCULATION


                            ANNEX 2




                          Riga 2/2/2000




     C. A. Pelagallo – Ex ante evaluation of Sapard RDP in Latvia




                                                             Page 108 of 140
CATEGORIES OF INDICATORS FOR SAPARD RDP


The European Union deems it vital for each Measure of the Rural Development
Programme (RDP) to include quantitative indicators for the purposes of the ex-ante
evaluation, (and the other evaluations), as well as of the monitoring tasks to be
performed during the Programme implementation.
Indicators should provide information useful to improve the quality and the
effectiveness of the assistance.
They should also be relevant and measurable at different stages of programme
implementation.
This means that it is important to choose the appropriate indicator for each level of
assistance in order to be able to measure the corresponding quantifiable advancement,
result and impact. (See in Fig 1 the Sapard intervention Logic).
Three categories of indicators are identified in:
a)    physical indicators
b)    result indicators
c)    impact indicators
Physical indicators will be used to identify quantities to be the target of different
actions financed from the Programme, (They can determine Operational Objectives)
e.g.
-     surface of new forest in hectares,
-     no. of renovated processing plants per sector,
-     n. of machinery and equipment,
-     n. of buildings,
-     n. of SME,
-     n. of ha of polders reclaimed,
-     n. of beds for rural tourism, etc.




                                                                     Page 109 of 140
         Fig. 1 The Sapard intervention logic, example for Priority 1, Investment in
                agricultural holdings

         1) Top down

         AnalysisNeedsGlobal ObjectivesSpecific Objectives Operational Objectives
   Analysis             Needs                    Global Objectives                   Specific Objective               Operational Obj.
Agriculture    1 Modernisation of        To increase the competitiveness of    Improvement of agriculture         1 Improvement of
decline,       mobile and fixed          farming and food processing           competitiveness and living         machinery and buildings.
high           assets,                   industry.                             standards of farmers:              2 Afforestation of land
employment     improvement of            To increase in income of              >efficiency, >income, better       with low capability for
in             market                    agricultural                          working conditions,                agriculture
agriculture    efficiency,               enterprises                           compliance with EU standards       3 Reparcelling of
Preaccessio    environmental                                                   for quality , hygiene,             fragmented land.
n,             conditions, income                                              environment, animal welfare;
necessity of   and working                                                     improvement of age structure
compliance     conditions,                                                     of farmers, increasing added
with EU        age srtucture, quality                                          value per worker, decreasing
standards      of life.                                                        agriculture
                                                                               pollution.
               2 Better use of
               natural resources.
               .

         2) Bottom - up

         ActionsMeasuresPrioritiesProgramme
Actions                             Measures                     Priority 1                         Programme
a) New machinery                    1.1 Renovation of            1 Investment in agricultural       Priority 1, as part of 5 Priorities and 2
b) New buildings                        machinery and            holdings                           Supporting Measures: Vocational
c) Afforestation                        buildings                                                   Training
d) Water point                      1.2 Afforestation of                                            And Technical Assistance
e) Forest roads                         agricultural land
f) Land reparcelling                1.3 Reparcelling

         3)      Indicators
Operational Objectives                    Specific Objectives                                   Global Objectives
Physical Indicators                       Result Indicators                                     Impact Indicators
Me 1.1                                    % of new machinery compared to the total that         No. of more efficient agricultural holdings
No. of machinery                          need improvement                                      Increased income compared to the baseline
No. of buildings                          % of new buildings compared to total buildings        data
No. of projects                           needing improvement                                   No. of people that will work in better
                                          % of farms improved compared to total farms           conditions
                                          needing improvement                                   Quantity of products compliant with the
                                                                                                EU requirements
                                                                                                Increased number of young in agricultural
                                                                                                activities
                                                                                                N of animals in better conditions

Me 1.2                                    % of afforested land/ abandoned land                  No. of agricultural holdings with an
No. of ha of new forest land              % of farms with new forest land/ total farms with     alternative income
No. of projects                           abandoned land                                        Increased income compared to the baseline
                                          Wood increment                                        data
                                                                                                Added working places
Me 1.3                                    % of ha with reparcelling/total that need             No. of agricultural holdings with improved
No. of ha with reparcelling               reparcelling                                          situation
No. of farms                              % of farms / total that need reparcelling             Increased income




                                                                                                            Page 110 of 140
Hence each measure needs:
-    the identification of physical indicator types
-    and consequently the quantification of the action to be implemented within the
     Programme.
For forecasts expected results or quantities envisaged for the measures of the 2000-
2006, knowledge is required of:
-    the average amounts needed for individual intervention activities
-    the characteristics
-    and size of intervention from potential beneficiaries.
The quantification of physical indicators, i.e. objectives expected, is consequently
vital for an examination the Programme expected achievements - by means of an ex-
ante evaluation - as well as for the assessment of the Programme advancement and its
impact on sectors and area covered by the intervention - by means of intermediate and
ex post evaluations.
Result indicators will be used to identify any direct results of the Programme
implementation, (They can measure Specific objectives), e.g:
-    quantities of improved products following plant refurbishment, ie. weight in
     metric tons of improved quality products;
-    % of processing plants meeting new standards;
-    % of afforested land over the land that need afforestation;
With reference to the second indicator, i.e. % of processing plants meeting new
standards, knowledge of the data pertaining to the total quantity needing intervention
is used to calculate the rate of improvements obtained with the Programme
investments, compared to the total quantity needing improvement: for instance the
rate of improved plants for milk processing on the total plant quantity needing
improvements.
The ratio between the foregoing data measures the degree of the Programme
contribution to problem-solving in the area being considered.
Significantly, the calculation of this type of indicators requires data related to
individual intervention as well as more general data on the situation associated with
the intervention areas and sectors.
Impact indicators will be used to identify any indirect/general results of the
Programme implementation, e.g.
-    increases in incomes,
-    jobs,
-    skilled jobs, .
Knowledge of data, e.g. data on employment or income levels both prior (baseline)
and subsequent to the investment, is instrumental in the calculation of impact
indicators. (To determine “global objectives”).



                                                                     Page 111 of 140
SETTING OUT AND DESCRIPTION OF THE CALCULATION SYSTEM OF
INDICATORS
The system that can be utilized for the calculation of “indicators” for different
Measures included the following phases.
1.   Identification of indicator typology, divided into three categories as mentioned
     above, according to the actions and to the operational objectives forecast for
     each measure:
     -     physical indicators,
     -     result indicators,
     -     impact indicators:
     -     for example the first: kilometres of improved roads; number of housing
           improvements by type of animals;
     -     the second: new forest as percentage of area that needs afforestation;
           improvements in milk production as percentage of commercial output;
     -     the third: number of agricultural holdings with a higher incomes, number
           of work places in better conditions.
2.   Estimate of the possible economic investment, (according to the available
     money), for the various sectors that include the Measure and, within each sector,
     for each action, keeping in mind the needs verified in a previous stage; (sector
     studies with analysis and interviews of potential beneficiaries involved, their
     needs, actions and cost foreseeable);
3.   Estimate of unit cost for each action, looking at available cost for past
     experience, or at similar actions or projects;
4.   Definition of physical indicators, or rather of the quantities that can be obtained
     with the assumed investments.
     The calculation can be done by dividing the amount of point 2. by the unit costs
     of point 3, or trying to multiply the unit costs of point 3 by the number of
     expected projects;
5.   Research on the present situation in the Country in relation to some of the
     physical indicators, for example surface of orchards that needs to be renewed;
     quantity of commercialised milk, etc.
6.   Definition of result indicators, defined by the relation between the physical
     indicator (expected quantity with the foreseen investment) and the present
     situation in the Country, percentage of point 4. on point 5.;
7.   Verification of the coherency of the “scenario” of the expected results between
     sectors, actions, and/or other measures, with the available amount of money;
8.   Probable elaboration of new “scenarios” changing the amount of money
     between sectors, action and/or other measures, to find the better solution;




                                                                       Page 112 of 140
9.    Definition of impact indicators, by evaluating the effects of investment on
      people working in better conditions, on employment, on firms that improve their
      efficiency etc.
It is obvious that for the calculation of indicators elements with a varying degree of
uncertainty are utilised.
Indeed while data on the present situation or data on unit costs obtained by studies or
statistical surveys result relatively certain, data on the utilisation of investments
within single actions are very uncertain, as they result from estimates (and they are
often not easy especially in CEEC Countries, as such estimates are carried out in
transition situations or without elements of comparison) relative to the behaviour of
potential beneficiaries.
On the other hand it is foreseen that data relative to indicators are updated, corrected
and improved on the basis of the actual progress of the Programme during the
monitoring phase.
The setting up of Tables with financial and technical “scenario” enables the
Administration responsible for the Programme, to preliminarly evaluate, in the
planning phase, the results to be expected, on the whole and in relation to the various
sub-sectors.
The Administration therefore acquires a series of elements that enable it to evaluate
the probable effects of the foreseen investments and it consequently can better decide
on how to divide funds among the various Measures and sectors.
The Tables, once they are drawn up and completed, can be utilised to build alternative
scenarios, through changes in investments among the various sectors and various
actions and the effects can be rapidly evaluated.
The tables provide a practical instrument to recalculate indicators on the basis of
financial changes of the Programme. Such changes, can be quite frequent.




                                                                       Page 113 of 140
EXAMPLE OF CALCULATION OF INDICATORS


An example of calculation system for the physical and result indicators is described in
Table 2, ( which concern a preliminary draft elaboration for an other Country),
different than Latvia, for a Measure concerning “Improving the processing and
marketing of agricultural and fishery products”.
The table is divided horizontally in five parts:
-     In the first part the Measure is divided into sectors, for example: wine,
      fruit&vegetable, milk, meat, fish.
      For each sector each action for which financing through the SAPARD
      Programme is foreseen, is described.
      In some cases the actions are divided according to the size of the investment, for
      example for fruit and vegetables processing plants with different “average
      capacity” are foreseen;


-     In the second part the “Physical Indicators” and “Expected results” are
      described, or rather the accomplishments foreseen at the end of the programme,
      with the improved quantity, for example: for fruit&vegetable n 2 plants of
      15,000 t/y, for a total quantity of 30,000 t/y, n 6 plants of 5,000 t/y for a total
      quantity of 30,000 t/y;


-     In the third part the “Investment costs” are described, the unit and total cost of
      the actions reported in the first two parts are mentioned, for example: for
      fruit&vegetable, n 2 plants of 1,200,000 Euro, for a total of 2,400,000 Euro; also
      the percentage of the sector in respect to the total is calculated;


-     In the fourth part the “Existing situation” is reported, or rather the present
      situation of the Country in that sector for example: for fruit&vegetable, the
      number of existing plants and the present productive capacity in the Country;


-     In the fifth part the “Result indicators” are described.
      The foreseen improvements through investments of the SAPARD Programme
      are calculated      in respect to the present situation, for example for
      fruit&vegetable the percentage of new or restructured cultivation in respect to
      the total and the productive capacity improved with SAPARD in respect to the
      total.
Actions foreseen by sector are various, among the recurrent ones the following are
mentioned:
-     building new processing plants
-     restructuring processing plants.




                                                                        Page 114 of 140
The following “Physical indicators” are estimated:
-     N of projects per sector
-     N of processing plants improved or constructed per sector
The following “Result indicators” are estimated:
-     tons of improved quality products per year, for each sector
-     % of improved plans, in respect to the total plans that need improvement, for
      each sector
-     % of output with improved quality, in respect to the total that need to be
      improved, for each sector
The following “impact indicators” are estimated:
-     work places in better conditions under Sapard, per sector and per men and
      women
-     number of people that consume products improved under Sapard.
The first type of “impact indicator” has been evaluated with the help of an other table
2.2 that reports the estimations regarding staff that should work in better conditions
(more safety, better sanitary conditions, less strain due to more efficient machinery) in
the improved plants.
Number of men and women has also been estimated.
The second type of “impact indicator” has been evaluated with the help of table 2.3
that enables to estimate the amount of population that, at the end of the Sapard
programme and thanks to its investments, should be able to utilise improved
agricultural products from the processing industry (milk and cheese, meat, fruit and
vegetables).
In order to make calculations the quantity of product that can be obtained from
processing plants and that could be beneficiaries of funding have been estimated. Such
quantities have been then divided by the average yearly pro-capita consumption, thus
obtaining the theoretical population (eventual exports have not been considered), that
would yearly consume products of improved quality.
Table 2.1, includes data relative to the processing sector: the existing capacity, the
improved capacity needed, the capacity that Sapard can improve and the “Result
indicator” i.e the percentage of the improved capacity in respect to the total needed
capacity.
Table B includes the presentation in a theoretical Rural Development Programme of
the “Indicators” of the Measures described above in table 2 concerning the processing
sector.
NB Table 2 and Table B are connected through Excel programme, therefore eventual
changes in Table 2 produce changes in Table B of the linked indicators.
Different scenarios for calculation of physical indicators for the meat sector are
included in table 3.
Table 4 includes calculation of result indicators for milk sector at production level.




                                                                         Page 115 of 140
The following “Result indicators” are estimated:
-    % of farms
-    % of animal improved in respect of the total that need improvement
-    % of milk improved in respect of the total that need improvement.
The following elements are reported in order to estimate investments concerning
mechanization in table 1.2:
in the first part:
-     category of tractors, per Horse Power class
-     average size of farm , for each category of tractors
in the second part:
-     cost of tractors and cost of equipment for each category of tractors
in the third part:
-     the investment foreseen by Sapard for mechanization, divided by each category
      of tractors
in the fourth part:
-     the number of farms with new tractors and equipment, the area cultivated with
      new equipment, and Hp coming from investments through Sapard.
Table 1 include an example of quantification of Investment in agricultural holdings
with “Physical indicators” and “Result indicators”.
Data are divided as follows:
A)    Crops
      1. Vineyards
      2. Perennial: orchards, small fruits
      3. Flowers, essential oils, medicinal and edible herbs, mushroom, vegetables
      4. Other field crops
      Subtotal crops, also including sub-totals relative to:
      - number of projects
      - new machinery purchased
      - new equipment power
      - surface equipped for irrigation
      - surface replanted or planted with vineyards, orchards, small fruits, other
         perennials

A)    Livestock
      5. Milk production
      5.1. Cow milk
      5.2. Buffalo milk
      5.3. Sheep milk
      5.4. Goat milk
      6. Meat production
      6.1. Pig
      6.2. Cattle
      6.3. Lamb


                                                                        Page 116 of 140
      6.4. Poultry
      7. Horse breeding
      8. Bee breeding
      Subtotal livestock, also including sub-totals relative to:
      -   number of projects
      -   new machinery purchased
      -   new equipment power
      -   number of building for animals improved
      -   number of animal improved.
The following “Physical indicators” are estimated:
      -   N of projects per sector
      -   N of agricultural holdings improved
      -   Ha of new plantation or replantation
      -   Ha of glasshouses improved
      -   N of housing improvements by type of animals
      -   N of new machinery purchased
      -   Ha of on-farm irrigation
      -   N of animal improved per sector
The following “Result indicators” are estimated:
-   improved quality products as % of commercial output that needs improvement, for
    milk and wine
-   ha replanted in respect to the total ha that need replanting, for orchards and small
    fruits
The following “impact indicators” are estimated:
-   number of agricultural holdings with higher incomes
-   number of farms with improved efficiency
-   number of people in agriculture with improved working conditions
-   number of women in agriculture with improved working conditions
Table A includes the presentation in a theoretical Rural Development Programme of
the “Indicators” of the Measure described above in table 1 concerning investment in
agricultural holdings.
NB As for Table 2 and Table B, Table 1 and Table A are connected through Excel
programme, therefore eventual changes in Table 1 produce changes in Table A of the
linked indicators.




                                                                       Page 117 of 140
Latvian SAPARD - Ex Ante Evaluation




     SHAPARD RDP OF LATVIA:
     FINANCIAL PLAN 2000-2006

             ANNEX 3




                                  Page 118 of 140
          Latvian SAPARD - Ex Ante Evaluation




     Point 6.1 of the List with Suggested Integrations

Detailed page by page specifications for revision of Section 1
                       and 2 of RDP

                         ANNEX 4




                                                  Page 119 of 140
Point 6.1 of the List with Suggested Integrations

Suggested Amendments to text of ….


Pages 3 & 4             Include further information on the width and depth of the
                        consultation - the questionnaire survey, the SAPARD
                        Steering Group, consultations with interest groups (eg,
                        Association of Fruit & Vegetable Growers) on individual
                        measures - particular emphasis on social partners, research
                        bodies etc;

Page 5                  Geographical situation - include a map showing location of
                        Latvia in Western Europe - comment on climatic,
                        accessibility considerations;

                        Illustrate and explain the SAPARD target area. Justify the
                        exclusion of municipal towns which have a rural area;

Page 6                  Map 1 needs explanatory key, ie:

                        Riga
                        Jelgava              Republic Cities
                        Rezekne

                        Colour               Name of region - or put name on
                                              map;

                        Map 2 - Can this       Pagast boundaries;
                        show:                  Municipal areas;
                                               District boundaries;
                                               District towns;

                        Also, Diagram:
                         National                                   NUTS I

                         4 Regions                                  NUTS II

                        26 Districts                                NUTS III

                        553 Pagasts & Municipalities                NUTS IV




                                                                       Page 120 of 140
Page 7   Comment on:  The role of Pagast Authorities in planning local
                       development. Their capacity to plan and implement
                       projects - (building their capacity a development need??);
                      Non-Government organisations - types and function -
                       Local Development organisations?
                      MOA/Rural Support Agency/Local Advisory service
                       activity at district/regional level = Accessible
                       development and administrative support for SAPARD
                       participants;

                       If possible, include a table showing recent trends and
                       prognosis for indicators;

Page 9                 Under discussion on pages 7, 8 and 9:

                       “Gross salary 69% of national average and net salary 72%” -
                       does not make sense - other way around?? Do these figures
                       include or exclude wages/salaries for farm labour - make the
                       basis of calculation clear.

                       Recommend the inclusion of a section:

                       “The demographic and socio-economic situation in Latvia’s
                       rural pagasts” - Using maps from Regional Development
                       Agency of Daina Saktina 5.6 and 5.7. To show important
                       regional variations in need - unemployment, dependence on
                       agriculture, land quality etc. Also see attached table (page
                       12). (Is there not a case here for regional targeting?
                       Include table comparing:

                                                        Sapard   Excluded    All
                                                         Area    (Urban)    Latvia
                                                                   area
                       Population:

                       1999
                       198?
                       197?
                       196?
                       % population <16 & >65
                       % employed in agriculture
                       % unemployed
                       Female economic activity
                       rates
                       (Females in age 16-65,
                       registered for work as % total
                       16-65 years)
                       GPP/Head




                                                                    Page 121 of 140
          - To show distinctiveness and needs of the targeted area?

Page 10   Agriculture in National Economy:

           Trends in % GDP and % employed - demonstrates
            important but declining role - decline in exports; increase
            in imports; degree of self-sufficiency in main products;
           Take out Table 2 and sentence before. End with
            summary of national vision of role of agricultural sector
            (Economic Development of Latvia - Report June 1999);
           Prognosis for farm incomes - action being taken by
            national Government to stabilise incomes - ref page 11
            forestry contribution to income - what proportion on
            average?

Page 11   Table 2 - the structure of farm production of agricultural
          products - there is no proper explanation of what this is - ie,
          is it proportion of total agricultural value? The %s do not
          add to 100. In any case, more information would normally
          be included on the pattern of agricultural production, eg:

                                        Crop       1990        1995     1999
                                        areas
                                        Livestock numbers and value of outputs
          For each crop and livestock   Yields
          product                       Total production (ie, wheat area x
                                        tons/ha)
                                        % Self sufficiency
                                        %/Quantity exported
                                        Prices/Value of production
          would be a substitute for information on page 15. (Does this
          information indicate production types with growth potential
          - see report on Economic Development of Latvia - page 82 -
          are data in paragraph 2 correct?)

          Summary of objectives/main actions of current national
          programme.

Page 12   Land Reform - would recommend moving this to page 8 or 9
          - Section called “Privatisation and Land Reform” - Strengths
          and Weaknesses refer to land prices and labour costs -
          information?




                                                            Page 122 of 140
          Table 5 - this table and information like that on Table 6
          should be used to indicate SAPARD target groups. Possibly
          you should talk to Director of Information in Rural Support
          Service. He suggests a total of 150,000 commercial farms
          and may have information on breakdown by size groups
          Have you any information on farmers’ age?? Ref to
          retirement and targeting young

Page 16   Description of fixed assets - good information - what is the
          source? - Could a table be formed? - showing situation on:
           machinery;
           equipment; in each type of production.
           buildings
          This is the justification for 30% of SAPARD fund?

          Climate and Climate related problems
          There should be sufficient evidence here to justify
          investment in modernisation of pumps - earlier it is
          suggested that there is surplus production - it would
          therefore be hard to justify on increased productivity
          grounds. The conservation of some of the better land and
          stabilisation of incomes/reduction of risk in grain farming
          would be a stronger case.         Words like “crops are
          occasionally lost” are too weak. A map(s) showing location
          of polders and correspondence with better quality land
          would also strengthen the case.

Page 18   Before section on food processing would suggest section on
          regional variations in the agricultural situation
             Land resources        Map 5.1 Daina Saktina
                                    Other maps - Regional Development
                                     Agency
             Socio-economic        Map 5.2 Daina Saktina
              conditions            Others?
             Farm Structure        Map 5.3
             Age Structure         Map 5.4
          Is there not a case here for some regional/geographical
          targeting of measures on afforestation, modernisation of
          types of production prevalent in this area - land re-
          parcelling?

          A detailed case is made for improvements in the meat and fish
          processing sector. These improvements are probably needed in
          all sectors as suggested by scope of the measure. Suggest some
          re-organisation - giving list of common needs in
          introduction/overview and elaboration of this where necessary in
          separate sections on each sector.
          Statistical sources? - Discussions with technical staff suggest


                                                        Page 123 of 140
          good consultation with producers’ associations - eg Fruit &
          Vegetable, Fish should be mentioned here.

          Case for rationalisations is inferred but not strongly made -
          eg, table 10 and map.

          (Discussion of need to balance economies of scale and
          competition in raw materials markets should be shown here.
Page 18   Figures on % employed ….. 3%/% contribution to GDP …..
          8% should be checked and sentence - “Share of latter in
          processing industry was 40% of GDP” should be explained?

          Case for horizontal co-operation - particularly producer
          groups - is not strongly made, also marketing and product
          development?

Page 26   Alternative occupations in the countryside

          Should section on page 32 be moved to page 26? ie,
          introduction to theme of alternative employment (could this
          information regional variations be explained better? - would
          a table help? - sources of information?)

          (The role of manufacturing/processing SMEs is neglected -
          could be a very important source of alternative employment
          and employment growth?)

          Could more information be provided on crafts and value of
          inland waterways for angling?

Page 30   Structure of Fuel Resources (and heating systems)

          Measure 4 includes support for alternative heating systems -
          there needs to be a justification here.

Page 34   Before agricultural impact on environment there should be a
          section on the proposals contained in “The Rural
          Development Programme of Latvia” for:
           Entrepreneurship in rural areas;
           Infrastructural improvement;
           Education provision;
           Settlement development;
           Inward investment?




                                                       Page 124 of 140
                (As background to explain choice of actions targeted by
                SAPARD and make EU aware that SAPARD is not the only
                instrument for rural development in Latvia - or as a source of
                ideas for SAPARD, eg, Enterprise Award Scheme)
                Also, spatial planning policy in Latvia?

Pages 34 & 35   Include some maps on designated environmental assets - ie,
                national parks - emphasis on the positive side.

                At this stage, develop the case for pilot actions on:
                 organic;
                 run-off;
                 biodiversity.
                Ie, need to demonstrate, evaluate and disseminate.

                Farmers unaware of environmental assets - their role in
                pollution.




                                                               Page 125 of 140
      Latvian SAPARD - Ex Ante Evaluation




  Point 7 of the List with Suggested Integrations

Suggested new format for Strengths and Weaknesses

                    ANNEX 5




                                            Page 126 of 140
Strengths and Weaknesses


                Strengths                                   Weaknesses

                            National economy in transition

Sustained and predicted growth in GDP        Agriculture contribution declining
Inflation under control                      Variable farm costs trends exceed
                                             inflation rate
Domestic food market will grow               Food imports increasing
Land reform almost completed                 Registration of land very slow
Growth in foreign investment                 Low levels of credit for private sector
Good start to development of private         Interest rates high
banks and credit unions                      Collateral (land) not legally established
Progress on membership of EU                 Traditional export markets collapsed
Trade quotas and agreements negotiated       Farm incomes falling rapidly
Agricultural factor costs (and labour) low
Positive response from newly formed
farms to national grant aid schemes

                                  Natural Resources

Climate and soils permit high yields of      Sowing and harvesting weather uncertain
temperate crops and good quality timber      High proportion of land needs drainage
                                             Flooding of Polders makes farming
                                             incomes uncertain
Attractive rural landscape for tourists      Liming required on 40% land
                                             Evidence of agriculturally related
                                             pollution
Many national parks and areas of             Majority of farmers not aware of their
valuable wildlife habitat and species have   environmental assets and their impact
been designated for protection
Good research on environmental               Overgrown land has poor appearance
pollution
Large areas of unfarmed land suitable for    Shortage of young trees
forestry
Lakes and inland water ways very             Private landowners reluctant
suitable for angling

                       Farm Production and Food Processing

Agriculture makes an important               Output/labour unit much lower in
contribution to GDP                          agriculture than other sectors
Agriculture is an important source of        Employment in agriculture is declining
employment
Majority of new owners of family farms       Decline is expected to accelerate


                                                                        Page 127 of 140
are committed to making a success of
their business
There are some large farms with                In some areas there is too much
sufficient capability to be self-reliant and   dependence on agricultural employment
competitive producers for world markets
(Some considerable opportunity to              The majority of commercial farms are too
substitute imported food with Latvian          small to justify investment in modern
produce?)                                      machinery and equipment
(Some opportunities for export of Latvian      (Poor age structure of farmers?)
food products?)
                                               (Low educational status of farmers?)
                                               (Production levels of most types of
                                               farming are falling)
                                               (Quality of produce is often low)
                                               Buildings outdated and inefficient
                                               machinery
                                               Geographical concentration of structural
                                               problems
                                               (Sectoral (branch) concentration of
                                               structural problems)
                                               (Too many small food processing firms?)
                                               Outdated processing technology
                                               Inefficient collection, storage and
                                               distribution
                                               Small number meeting EU hygiene/
                                               environmental standards
                                               Environmental pollution from processing
                                               plants
                                               (High waste levels?)
                                               (Investment in market promotion and
                                               product development is low?)
                                               (Low levels of producer involvement?)
                                               (Inadequate market information and
                                               information flows to producers?)

                                      Human Resources

(Rural population, rural communities and       Ageing population in most rural areas
rural workforce are vital, social, cultural    Poor demographic structure producing
and economic resources?)                       cumulative decline in rural population in
                                               many rural areas
Local government structure favours local       Regional concentrations on poor
involvement in project planning and            demographic structure/chance
development                                    (Limited capacity of local government to
                                               plan and implement development projects?)
(Craft skills of rural population?)            Low levels of entrepreneurship in rural
                                               areas
                                               Low levels of hosting skills for tourists


                                                                          Page 128 of 140
                   Economy and Infrastructure in Rural Areas

Resource potential for development of:    Low levels of enterprise development
 tourism;                                Heavy dependence on agriculture as a
 manufacturing and service SMEs;         source of employment
 Farm diversification (micro             Low population densities
   businesses);                           Poor roads
(Evenly distributed network of district   Poorly developed mains water and
and municipal towns?)                     sewage treatment
                                          Electricity not available on may farms
                                          Dispersed farm houses in poor repair
                                          Geographical concentrations of rural
                                          economic and infrastructural problems
                                          Concentration of markets and enterprise
                                          development in Riga region




                                                                   Page 129 of 140
      Latvian SAPARD - Ex Ante Evaluation




  Point 8 of the List with Suggested Integrations

List of development issues for agricultural and rural
       development in Latvia. Option analysis

                     ANNEX 6




                                             Page 130 of 140
Development Issues and Option Analysis


The following is an attempt to produce a comprehensive list of all the development
issues that are relevant to agricultural and rural development in Latvia. Some are not
within the remit of either national or EU funded agricultural and rural development
programmes. It is important, however, that they are highlighted as issues that need to
be addressed at national level for SAPARD to succeed. The identification of issues
that are covered by national agricultural policy helps to clarify the complementarity
and additionality of SAPARD. The table is completed for the first few issues, just for
illustration. MOA should complete the table. The list of development issues is of
course offered for discussion.




                                                                     Page 131 of 140
                                                     Option Analysis
        Development Issues                Do      National     National     SAPARD
                                        nothing    Action    Agricultural
                                                              Programme
Negotiation, management and                         Yes           Yes
monitoring of relevant trade
agreements and quotas
Speedy land registration                            Yes
Tailored credit facilities                          Yes
Short-term farm income support                                    Yes
Introduction of social security                     Yes
system for farmers
Improvement of drainage
Improvement of crop drying and
storage
Improvement of soil lime status
Increase area of forest
Increase supply of young trees
Reduce private land owners’
resistance to afforestation of their
land
Concentrate farm production on
farms capable of producing at
competitive rates
Modernisation of farm buildings,
equipment and machinery
Improvement of breeds, seeds and
perennial root stock
Training farmers
Targeting public resources at regions
most in need
Development of farm management,
technical advisory and extension
services
Orientation of pattern of production
to market opportunity
Reduce number and increase scale of
food processing enterprises
Modernisation of equipment,
buildings, waste technology, quality
control systems, storage, collection
and distribution systems of food
processing enterprises
Promotion of competition in raw
materials markets
Improvement of market information
available to food producers and
processors




                                                                     Page 132 of 140
                                                        Option Analysis
        Development Issues                  Do      National     National      SAPARD
                                          nothing    Action     Agricultural
                                                                 Programme
Improvement of linkages between
food research bodies and the
processing industry
Encouragement of increased co-
operation between food processing
enterprises
Training for managers and workers in
food processing enterprises
Introduction of run-off reducing farm
management techniques
Introduction of farm management
practices that increase biodiversity
Develop organic production methods
for all types of farming in Latvia
Diversify employment and enterprise
structure in rural areas
Diversify farm businesses
Hands-on support for new business
start-up
Promotion of innovative and export
orientated businesses in rural areas
Concentration of new productive
investment in rural areas of greatest
need
Building the capacity of local
authorities to plan and implement
local development projects
Improvement of rural roads
Improvement of rural electricity
supply
Improvement of rural water supply
and sewage treatment
Repair of farm houses
Concentration of investment in rural
infrastructure in regions most in need
Equitable distribution of new
productive investment across all rural
areas
Commission         research,    develop
databases         and       management
information systems, carry out
feasibility studies and support study
tours
Promote all forms of SAPARD
assistance with targeted beneficiaries




                                                                       Page 133 of 140
       Latvian SAPARD - Ex Ante Evaluation




    Point 9 of the List with Suggested Integrations

List of question relating to consultation for Mr. Lapins

                      ANNEX 7




                                                Page 135 of 140
QUESTIONS ON CONSULTATION WHICH DAINA WILL PUT TO MR.
LAPINS:


1)   Consultation on needs:
Copy of questionnaire?
List of persons/organisations completing the questionnaire (or summary)?
Summary of results?
Other consultations eg government agencies,non governmental bodies, interest
groups,research bodies etc?


2)   Consultation on priorities emerging from the analysis of needs:
Range of bodies/persons consulted?


3)   Consultations planned on operational arrangements[eg eligible actions,
     selection criteria, grant rates etc] ?


4)   Proposed composition of the Partnership Councils?


5)   Proposed composition of the SAPARD National Guidance Group?




                                                                      Page 136 of 140
          Latvian SAPARD - Ex Ante Evaluation




      Point 11 of the List with Suggested Integrations


Suggested changes to classification of Measures by Priorities

                         ANNEX 8




                                                  Page 137 of 140
REASONS FOR SUGGESTED                    CHANGES            TO   CLASSIFICATION      OF
MEASURES BY PRIORITIES.


In general Measures should be classified on the basis of how their operational objectives
relates to the specific objectives.
Enclosed are 3 Scenarios:


Scenario 1.
It is the actual presentation of Priorities and Measures.


Scenario 2.
In Scenario 2 we suggest moving the Measure “On investment in Polders” to Priority 1
because we interpret that the reason for taking this action is to stabilise and perhaps
improve farm incomes which is one of the specific objectives of Priority1.
In Scenario 2 we include “Improvement of rural infrastructure” in Priority 3 because we
interpret the objective is to improve the quality of life and facilitate the creation of
alternative employment in rural areas
In Scenario2 we have taken “Training” from Priority 4 and describe this as an horizontal
Measure because it contributes to almost all the specific objectives


Scenario 3.
In Scenario 3 we combine Priorities 1 and 2 from Scenario2 because we think that they
both contribute to the overall objective of improving competitiveness and market
efficiency in agriculture.




SAPARD RDP OF LATVIA: Present structure of Priorities and Measures
(Scenario 1)


Priority 1 Investment in agricultural holdings
Me.1.1 Modernisation of agricultural machinery, equipment and construction of
buildings
Me.1.2 Afforestation of agricultural Land
Me.1.3 Land reparcelling




                                                                        Page 138 of 140
Priority 2 Improvement of processing and marketing of agric. and fishery products


Priority 3 Development and diversification of economic activities providing
alternative income


Priority 4 Improvement of rural infrastructure and vocational training
Me 4.1 General rural infrastructure development
Me 4.2 Modernisation and reconstruction of hydrotechnic equipment in polders
Me 4.3 Training improvement


Priority 5 Environmentally friendly agricultural methods
Me 5.1 Organic farming
Me 5.2 Preservation of Biodiversity and rural landscape
Me 5.3 Reduction of agricultural run-off


Technical assistance to the SAPARD programme


SAPARD RDP OF LATVIA: Suggested structure of Priorities and Measures
(Scenario 2)


Priority 1 Investment in agricultural holdings
Me.1.1 Modernisation of agricultural machinery, equipment and construction of
buildings
Me.1.2 Afforestation of agricultural Land
Me.1.3 Land reparcelling
Me. 1.4 Modernisation and reconstruction of hydrotechnic equipment in polders


Priority 2 Improvement of processing and marketing of agricultural and fishery
products
Me. 2.1 Improvement of processing and marketing of agricultural and fishery products


Priority 3 Integrated development of rural areas
Me 3.1 Development and diversification of economic activities providing alternative
income
Me 3.2 General rural infrastructure development



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Priority 4 Environmentally friendly agricultural methods
Me 4.1 Organic farming
Me 4.2 Preservation of Biodiversity and rural landscape
Me 4.3 Reduction of agricultural run-off

Priority 5 Investment in human resources
Me 5.1 Improvement of vocational training

Priority 6.Technical assistance to the SAPARD programme
Me 6.1 Technical assistance to the SAPARD programme


SAPARD RDP OF LATVIA: Suggested structure of Priorities and Measures
(Scenario 3)

Priority 1 Improvement of the production, processing and marketing of
agricultural products, and the processing of fishery products.
Me.1.1 Investment in agricultural holdings
Me.1.2 Afforestation of agricultural Land
Me.1.3 Land reparcelling
Me. 1.4 Modernisation and reconstruction of hydrotechnic equipment in polders
Me 1.5 Improvement of processing and marketing of agricultural and fishery products

Priority 2 Integrated development of rural areas
Me 2.1 Development and diversification of economic activities providing alternative
income
Me 2.2 General rural infrastructure development

Priority 3 Environmentally friendly agricultural methods
Me 3.1 Organic farming
Me 3.2 Preservation of Biodiversity and rural landscape
Me 3.3 Reduction of agricultural run-off

Priority 4 Investment in human resources
Me 4.1 Improvement of vocational training

Priority 5 Technical assistance to the SAPARD programme
Me. 5.1 Technical assistance to the SAPARD programme




                                                                      Page 140 of 140

				
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