The grapes of banking wrath

NEAR JELGAVA, LATVIA – Janis Vitins strides across his farmyard, his camouflaged parka coat buttoned up tight because it is minus four degrees out here, though with the wind it feels like minus eight.

I say “his farmyard”, and it is true that his cat is snuggled up in the barn and his dog still tethered to a wooden post. But otherwise the place is deserted.

The abandoned hay bales are turning from golden brown to black and the muddy ruts and puddles left by Janis’s tractor and his cows are frozen over. Janis only comes back to feed his dog and cat, and today to give us a tour of what might have been.

In the milking shed, the floor is littered with cowpats, gnarled and cold like fossils. 112 dairy cows used to live here, but last 21 December a letter from the bank arrived, ordering Janis to slaughter them all.

He and his brother loaded them onto lorries to be taken away. His mother was too stricken with grief to watch. And amid their tears, the family decided they could not stay here any longer.

Janis is now 24 and has driven a tractor since he was 11. He had always wanted to be a farmer. He is burly and red-faced and loved the way his cows recognised him as he walked among them through the meadow.

But last year Latvia’s economy nosedived, along with that of its Baltic neighbours. The price farmers could get for their milk halved. So Janis asked for a “holiday” from paying back the big loan from a Swedish bank which had made his venture possible.

The bank said no. “They sent a banker over,” Janis remembers. “She was dressed like a Barbie doll in stilettos, and it was raining. So she counted the animals from her car and then she left.”

I asked Janis what financial sense there was in the bank slaughtering cattle which had been bred for milk. “Ask the bank,” he shrugs.

Now the bank owns Janis’s farm, though he hangs onto the keys until a new farmer can be found to run it. The property was once worth 300,000 lats (about £380,000) but Janis reckons they’d be lucky to get 100,000 lats for it now. For all the surrounding dairy farmers who took out bank loans are going bust, too.

Watch the video report from Latvia and Hungary

Nowhere in Europe grew as fast as Latvia; and nowhere in Europe is collapsing as quickly now. The global credit crunch means that banks are calling in their debts from thousands of businesses. And it’s a bitter irony that many of those businesses had been encouraged to savour the freedom of the post-Communist era by borrowing money for the very first time.

Janis’s farm was once part of a Soviet collective. And a Soviet sign which reads “The Future” still stands at the entrance to his land, the letters hewn out of grim concrete. His brand new red tractor stands idle nearby.

“This was my dream,” says Janis at the end of my tour, vowing that he’ll never try to run a farm again. He has now moved to a house in town and earns a living as a lorry driver – taking the cattle of other farmers to slaughter.

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