Agriculture, Latvia, Legislation, Markets and Companies

The Audit Office explains that these privileged agricultural NGOs form a certain group that operates solely on the basis of its interests. Cooperation between the Agriculture Ministry and agricultural NGOs is not transparent, and some decisions of the ministry are possibly taken in the interests of this particular group, not the entire agricultural sector.

In total, the Agriculture Ministry each year allots more than EUR 10 million to the NGO sector, including for implementation of various projects.

Auditor General Elita Krumina emphasizes that, knowing how difficult it is for NGOs to secure financing for their operations, it is rather odd that, historically, there is a group of important players who themselves decide state financing amounts for their organizations and for other projects.

"Neither the general public nor other NGOs know how decisions important for the entire sector are taken and how money meant for agricultural NGOs is distributed. The Agriculture Ministry must ensure transparency," said Krumina.

The Audit Office has concluded that the current system at the Agriculture Ministry does not guarantee clear and unbiased attitude to all agricultural NGOs. Every year, EUR 500,000 is allocated to nine agricultural NGOs, whose representatives - together with the agriculture minister and Agriculture Ministry's state secretary, make up the Consultative Council of Agricultural NGOs (Consultative Council).

Since 2010, NGOs represented on the Consultative Council receive state financing irrespective of their objectives or past achievements. As a result, these NGOs are guaranteed annual state financing, which in some cases accounts for the largest part or almost entire financing received by the organization (state support makes up 6.6% to 97.4% of these NGOs' total revenues). Furthermore, these NGOs are allowed to use these funds as they like.

Members of the Consultative Council are selected by the agriculture minister. From 2017, the council has been in charge of strategic projects co-financed by the EU.

The Audit Office recommends the Agriculture Ministry to take measures in order to ensure open and equal cooperation in the process of policy and legislation development, as well as to ensure that the procedure of financing NGOs comply with good governance principles.