Economic and financial section > Agricultural crisis > Volume 1

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profits are at present in Latvia, as in other countries, disproportionately high. The
transport costs and other expenses for preparing the crop for sale and placing it at the
disposal of the consumer are also too high. It is an undoubted evil that the organisation
is inadequate both in the country itself and in international trade.
A decrease in the cost of production would no doubt relieve the depression. Such
an organisation would necessarily mean a reduction in the rate of interest and in wages,
which are among the highest costs of production. It would also involve a reduction
in taxation, which in Latvia, as elsewhere, is much higher than formerly. It should also
include the more extensive use of agricultural machinery and fertilisers and the carrying
out of improvement work on a large scale.
These considerations inevitably lead to the important question of credit that is
to say, cheap and, at the same time, sufficiently extensive credit. In Latvia, apart from
the co-operative dairy societies and co-operative consumers’ societies, there are credit
and savings banks in almost every commune. In addition, loans are granted to farmers
by the State Land Bank and by the Bank of Latvia (Latyijas Banka), but these credits are
insufficient to meet all justified requirements, as capital has accumulated too slowly
in the country on account of the agricultural depression. It is precisely this absence of
cheap agricultural credits which forms the principal obstacle to relieving and overcoming
the agricultural depression, or which, at any rate, prevents an improvement in the position
during the years which must still pass before the farmers, overwhelmed by hard work
and sacrifices, will have the satisfaction of seeing the end of the world agricultural
depression, and also of that in their own country.