The reduction of excise duty and value-added tax (VAT) on diesel fuel and gasoline in Poland allows entrepreneurs in that country to increase their competitiveness compared to neighboring states.
This is a salvation for Polish farmers, for whom spring fieldwork will be cheaper than, for example, for farmers in Latvia. At the same time, both Poland and Spain have already received warnings from the European Commission about possible violations related to the reduction of VAT on fuel.
The chairman of the board of the association "Latvijas dārznieks", Jānis Berziņš, reminds that during the "Covid-19" pandemic, the Poles reduced VAT on resources, which allowed them to produce cheaper products. In his opinion, Latvia should take a cue from Poland. "We need to do the same as the Poles do - at least during the sowing period. It will all come back with a return - more will be sown and done. But it's not just about diesel fuel - mineral fertilizers are also becoming more expensive," says the farmer.
Last year, vegetables worth 26 million euros were imported from Poland to Latvia, which is one of the highest figures in recent years. This year, volumes may increase precisely due to cheaper resources. The "Farmers' Union" predicts that due to expensive resources, farmers may not sow about a third of the sown areas this year.
Currently, the main news is that the USA and Iran are moving towards a ceasefire, noted economist Jānis Priede. Immediately after the announcement of the ceasefire, oil prices dropped significantly - by 16% overnight. However, it should be noted that fuel will not become cheaper immediately. "It is clear that it will take some time for the lower price to be transferred to gas stations. And here arise certain reflections on how much this may affect inflation, as it is clear that additional costs must remain somewhere, and obviously they will remain in the price that is passed on to consumers and buyers," the expert noted.
