The agrarian reform law of 1920 sought to transfer most of the land from Baltic German nobles to Latvian farmers.
Due to their small size and unfavorable grain prices, the new farmers rapidly developed dairy farming.
As a result of agrarian reform the country's main natural treasures - land and forests changed it owners.
The previous landowners affected by the reforms, mostly ethnic Baltic Germans, did not receive any compensation, however they were left with a small fraction of their former lands.
In 1924 the Baltic Germans demanded a payment of 1200 million gold francs for expropriated land properties through a group of six their representatives in Latvia's parliament.
However just before the crucial vote on the 30th of April 1924, the Baltic German faction abandoned the hearing room, which led to the dismissal of the claim by a small majority.
Later, the German-speaking parliamentary faction appealed against the State of Latvia in the League of Nations, requesting compensation for seized land, but that claim was also rejected.
The Latvian government paid 5 million lats for estates that were expropriated from Polish noblemen in course of agrarian reform.