The study analyzes the long-term development prospects of the Latvian dairy sector until 2032, using an integrated modeling approach that combines the AGMEMOD partial equilibrium model with the TOPSIS multi-criteria evaluation method. The study addresses the main challenge facing the sector—how to maintain productivity in the context of structural consolidation and increasing environmental requirements. The AGMEMOD model was recalibrated using updated data for Latvia for 2015–2023. Two scenarios were developed: A1 “Targeted and intensive farm modernization” and A2 “Limited farm modernization”. Scenario A1 is characterized by gradual technological adoption, leading to higher productivity while keeping total milk production almost unchanged relative to the Baseline scenario, whereas scenario A2 reflects slower modernization and reduced productivity growth. The TOPSIS evaluation identified scenario A1 as the most attractive alternative, as it combines productivity gains and greater adaptability to policy and environmental requirements. The results confirm that technological modernization and flexible policy mechanisms are essential to maintain the competitiveness and productivity performance of Latvia’s dairy sector. The integrated AGMEMOD–TOPSIS approach provides a methodological tool for evidence-based policy analysis and strategic planning in agricultural market management.
Rizojeva-Silava et al. (Sat,) studied this question.