Peat in Latvia 1918–1940: Insights from Economic History

Viesturs Pauls Karnups If Latvian forests are sometimes called Latvia’s “green gold”, then in the interwar years peat was called Latvia’s “brown gold”. Although Latvia has huge amounts of peat deposits, peat commenced to be used only in the late 18th and early 19th centuries. In the interwar years peat was mainly used in three ways – as fuel peat (combustible peat – briquettes and charcoal), peat litter and peat dust (a by-product of fresh peat litter). In the 1930s the manufacture of peat insulation sheets was begun. Immediately after the First World War there was a great enthusiasm for the use of peat as fuel. At this time the fuel produced was used mainly for domestic purposes and/or for the railways. Part of the state-owned peat deposits were utilized by the prison department of the Ministry of Justice using prisoners as a labor force. The peat produced was mainly used to heat the prisons or sold to Latvian railways. Nevertheless, the use of fuel peat on an extensive scale depended on the price of coal and wood and in the 1920s peat was dearer than available coal and wood. The economic crisis of the Great Depression increased the government's interest in peat production and use, both to reduce coal imports and to boost exports of wood instead of it being used as fuel. And of course, to combat unemployment as the peat industry was very labor intensive. After K. Ulmanis’ coup d’état the authoritarian regime’s policy of self-sufficiency (self-sufficing) also affected the production and use of peat. In 1936, the production of peat insulation sheets was commenced. Peat sheets were used as insulation material for ceilings, walls and floors. In 1937, the state joint-stock company “Peat” was established and took over the ownership of a number of peat factories – by 1940 the state enterprise owned 13 out of a total of 15 peat factories in Latvia. In the interwar period Latvia both imported and exported peat products, albeit on a small scale. Peat imports consisted mainly of fuel peat briquettes until domestic producers could fully satisfy the demand. Imports came from several countries – mostly from Germany, but also from Denmark and Poland. The main exports were of peat litter and peat dust. The main market for Latvian peat was the USA. A small export market for peat insulation sheets was established in 1938 – mainly to Egypt, Poland and Sweden. During the interwar period, the Latvian government not only organized peat extraction and exploitation, but also put a lot of effort into the scientific study of peat deposits, as well as the promotion and facilitation of its use. Up to 1934 the main obstacle to the wider use of peat was the cost imbalance with other fuel prices. The Ulmanis regime activated and intensified the extraction and use of peat. Not only did the use of fuel peat increase, but also of peat litter and peat dust, and later peat insulation sheets. There was an increase not only in the domestic use of peat, but a broad export opportunity for Latvia peat was also found.