The Minister will have to explain the decision that reduced forest revenues by 30 million euros

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Coalition partners have expressed doubts about the government decision made at the time, which resulted in the state-owned enterprise "Latvijas valsts meži" (LVM) losing about 30 million euros in the interests of certain wood processing enterprises. This was reported on Sunday by the program "Nothing Personal" on TV3.

Agriculture Minister Armands Krauze (Union of Greens and Farmers) claims that without this decision, many wood processing enterprises would have ceased operations. However, coalition partners are not so sure about the correctness of this step.

At the end of 2023, the government ruled that the largest wood processing enterprises could purchase timber from LVM at a more favorable price than stipulated in previous contracts. The author of this initiative was the agriculture minister, who outlined a grim picture in a document submitted to the government, claiming that Latvian sawmills urgently needed support as they were losing in competitive battles with Scandinavian countries.

Explaining this decision, Krauze stated that the prices previously agreed upon by wood processors with LVM did not correspond to the then-current market situation.

"If the government had not made this decision, the situation would have continued for another year, and many wood processing enterprises would have been forced to cease operations, and thousands of people would have lost their jobs. Therefore, I believe the decision was correct," the minister stated.

According to TV3's calculations, due to this favorable decision for wood processing enterprises, LVM's revenues decreased by approximately 30 million euros. Was such support for wood processors beneficial for the state? Finance Minister Arvils Aseradens (New Unity) responded that a detailed analysis is necessary for conclusions.

"The state resorts to such measures when a particular industry faces problems. Long-term contracts were concluded at high prices, and the industry faced a shutdown, so LVM was allowed to lower prices," the minister explained.

Doubts about this decision also exist within the Progressive Party, confirmed the head of its parliamentary faction Andris Shuvaev. Prime Minister Evika Silina (New Unity), when asked whether the decision made two years ago to support the wood processing industry, which caused LVM to lose 30 million euros, was correct, did not respond, noting that it was a joint decision of the coalition.