Riga, March 25 (LETA) - Important decisions on fertilizer and fuel price issues at the European Union (EU) level must be taken quickly, otherwise a sharp rise in food prices and, potentially, a migration crisis can be expected, Juris Lazdins, Chairman of the Board of the association Farmers' Parliament, told LETA.

Lazdins explained that the approximate cost of planting crops in Latvia this year ranges from EUR 1,000 to EUR 1,200 per hectare, while the government's decision to reduce excise duty on diesel will reduce it by around EUR 5 per hectare.

He admitted that this is a small amount, which could be interpreted as a positive gesture rather than a decision that significantly addresses the soaring costs.

Lazdins pointed out that the government should also temporarily abolish the eight-cent charge for storing fuel reserves on each liter of diesel, as well as the requirement to blend biofuels from April 1, otherwise the price of diesel could increase by at least 3.3 cents per liter.

For the first time in 20 years, production costs are already higher than potential income before sowing, even if the farmer is optimistic and calculates a high yield with very good quality, Lazdins said, adding that with such calculations farmers across the EU are planning to leave some fields uncultivated.

In Latvia, the number of uncultivated hectares is also expected to triple this year. If the situation does not improve by August, the gloomiest forecasts show that farmers across Europe, including Latvia, could decide to set fields aside en masse, because even in the most optimistic scenario, every hectare cultivated will mean losses, Lazdins explained.

He pointed out that Spain plans to use EUR 877 million to cover part of the cost of fertilizer, 20 cents per liter of diesel and a working capital program.

Greece, on the other hand, plans to spend EUR 300 million to cover part of the increase in fertilizer prices and 20 cents for every liter of diesel purchased, Lazdins said, adding that Poland, Italy and other EU countries are planning similar programs.

Lazdins stressed that there is a risk that at these prices, and farmers deciding to leave fields uncultivated could lead to a global food shortage in 2027, a significant increase in food prices and, with a high probability, shortages in the world's poorest regions, which could trigger massive waves of migration to wealthier countries, including the EU.

He stressed that Latvian farmers now expect the government to be particularly active in the EU to reverse a series of Green Deal initiatives that are making food production even more expensive.

Lazdins mentioned the climate tax on fertilizers as an example. As of January 1 this year, every ton of fertilizer imported will be subject to a climate tax, which farmers will have to pay. Whereas last year a ton of nitrogen fertilizer cost EUR 300, now it costs around EUR 500 per ton.

As reported, the government on Tuesday approved a fiscally neutral draft law prepared by the Finance Ministry on reducing the excise duty on diesel fuel by about 15 percent in order to mitigate the impact of the sharp rise in fuel prices on the economy and the population.

According to the ministry's calculations, this could reduce fuel prices by around 8.6 cents per liter, including value added tax.

Under the ministry's proposal, the excise duty rate on diesel would be reduced from EUR 467 to EUR 396 per 1,000 liters.

The government also approved a reduction in excise duty on labelled diesel for farmers, for which the excise duty rate will be cut from EUR 70 to EUR 21 per 1,000 liters.