Investment support is aimed at attracting investments to agriculture. Although an extensive use of investment support is subject to criticism, it accounts for a great deal of support for producers in the EU countries. In 2002-2008, the investment support for Latvian farm modernisation co-financed by the EU investment programs amounted to LVL82.5 million. The amounts allocated for this type of support account for 30-40% of the total funding for structural measures under EU support programs. In view of the extensive support amount, it is all-important to evaluate the efficiency of supported investment. An evaluation was performed for a group of 324 Latvian farms representing rural enterprises from all Latvian regions. As a result of the research, an increase in the efficiency of supported investment was identified – owing to an increase in the farm sizes and performance efficiency; on the other hand, investments were recognised as a risk factor, which has a negative impact on the farm viability indicators.
Key words: investments, investment support, efficiency of supported investment, investment profitability, return on investment
JEL Classification: Q18