Agriculture and Rural Life 2007/2008
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AGRICULTURE AND RURAL LIFE 2007/2008 AGRICULTURE AND RURAL LIFE 2007/2008 Published by Ministry of Agriculture, Republic of Estonia Compiled by Ants Laansalu Edited by Sirje Pärismaa (Estonian University of Life Sciences) Designed by Hele Hanson-Penu / Ecoprint Printed by Folger Art Ltd ISSN 1736–4582 (Print) ISSN 1736–4590 (Online) Tallinn 2008 DEAR READER You are holding a publication refl ecting the activities of the ministry. Here you will fi nd infor- mation about the changes that took place in the food chain during the year – from the fi eld to the consumer’s table. Last year was benefi cial for the farmer. The fi elds gave good harvest, incomes of agricultural holdings increased and the export volume of food products grew. It is a great recognition for our farmers that after the accession to the European Union, the en- trepreneurial income of agriculture and the level of salaries per employee increased, among the ten new members, the most in Estonia – 2.7 times. The results were certainly aff ected by the new economic environment. Nevertheless, the main driver for development was skillful usage of EU support. Despite the achieved good results, the diff erence in economic capability compared to old Member States is still more than double. Higher salary is an inducement enough for our workers, who sometimes prefer to taste the bread of a farmhand abroad, rather than strive for a better life in homeland. We were successful in the competition of the European Union’s solvent product market, which gives hope that we can manage also in the EU labour market, in the near future. Achieving this goal depends on the work of farmers, food processors and handlers, as well as political choices. It seems surprising to many that the ministry is not involved in the organization of produc- tion. The main goal of our activities is to work towards a sustainable, competitive and socially acceptable agriculture. Until recently, the objective of the Common Agricultural Policy was to fulfi ll the general growing demands of the public in food safety, food quality, product diversi- fi cation, animal welfare, environmental quality and the protection of nature rural areas. The price rise of food products all over the world, which started last year, adds a question to the list of problems: how to increase the productivity of agriculture and ensure reasonable prices of food products to the consumer. The results of more successful farmers convince 3 us that Estonian agriculture still has growth potential. The “health check” of the Common Agricultural Policy, where we also have a say in, defi nitely helps to achieve that goal. The fact of how wisely we are able to do it, aff ects the development of farmers, rural life, as well as that of Estonia as a whole. Minister of Agriculture Helir-Valdor Seeder 4 TABLE OF CONTENTS Foreword 1. Food sector’s role in the national economy ......................................................... 7 2. Agricultural production, fi shing, processing, market and trade .......................... 8 2.1. Production ................................................................................................... 8 2.2. Dairy market: production, processing, trade ................................................ 14 2.3. Meat market: production, processing, trade ................................................. 26 2.4. Cereals and legumes: market, processing, trade ...........................................31 2.5. Production of fruits and vegetables ..............................................................41 2.6. Potato market, production, processing and trade .........................................47 2.7. Honey production .......................................................................................51 2.8. Development of renewable energy ............................................................. 53 2.9. Organic farming ......................................................................................... 55 2.10. Fishing, fi sh market and processing .............................................................61 2.11. Trade in agricultural and fi shery products .................................................... 72 2.12. Alcohol market ........................................................................................... 84 3. Agricultural policy .............................................................................................. 92 3.1. Strategic decisions ...................................................................................... 92 3.2. Support and state aid ..................................................................................94 3.3. Issues discussed and decisions adopted by the Special Committee on Agriculture (SCA) and the Permanent Representatives Committee (COREPER) .................................................................................................101 5 TABLE OF CONTENTS 4. Economic situation in agriculture and the food industry 4.1 Economic situation of agricultural holdings ................................................114 4.2. Economic situation in the food industry .....................................................122 5. Rural development ............................................................................................131 5.1. Development of villages ...........................................................................131 5.2. The LEADER programme ............................................................................132 5.3. National rural network ..............................................................................135 5.4. Private forestry .........................................................................................136 5.5. Land improvement ................................................................................... 138 6. Agricultural education, research, and advising ............................................... 140 6.1. Agricultural vocational education ............................................................. 140 6.2. Higher education ......................................................................................143 6.3. Advice and dissemination of information ...................................................144 6.4. Agricultural research and development ......................................................152 6.5. Activities of agricultural museums..............................................................157 7. Food safety and veterinary activities ............................................................... 160 8. Foreign relations .............................................................................................. 169 6 . FOOD SECTOR’S ROLE IN THE NATIONAL ECONOMY Ants Laansalu 20 900 people were employed in agriculture in 2007, which is 6.6 times less than in 1990 when agriculture was According to preliminary data, the value of agricultural the main provider of employment in rural areas. Out of all output was BEEK 10 in 2007. Total output increased by employed people in rural areas, 56% and 11.3% worked in 18.2% in basic prices compared to the previous year. Crop agriculture in 1990 and 2007, respectively. production increased 1.5 times and accounted for 44.2% of total agricultural output in terms of value (34.6% in 2006). An average of 16 713 people work in the food processing Livestock production remained stable and its share in total industry. Of these, 3421 worked in the meat sector, 2481 agricultural output dropped by 8.3% to 45.3%. in the fi sheries sector, 2373 in the dairy sector and 2000 in the beverages sector. Gross value added in agriculture was BEEK 4.2, i.e. 22% more than in the previous year. Value added in agriculture Foreign trade in agricultural products was BEEK 27.2. accounted for nearly 1.8% of Estonia’s GDP. Entrepreneurial Agricultural exports and imports amounted to MEEK income was BEEK 2.7, which was 37% more than in the pre- 11 034.9 and MEEK 16 164.5, respectively, in 2007. Export vious year. and import accounted for 40.6% and 59.4% of turnover, respectively. Agricultural products made up 8.8% of The total output of the food industry amounted to BEEK total exports and 9.2% of total imports of commodities. 16.9 or 16.7% of the processing industry’s total. Dairy Agricultural export grew by 30.7% and agricultural import (28.4%), beverages (20.7%), meat (18%) and fi sh industries grew by 33.1%, compared to the year 2006. (9.4%) still account for the largest shares in the Estonian food industry in terms of output. Value added by the food industry was BEEK 3.8 and its share in GDP was 1.6% in cur- rent prices. A total of 80 244 t of fi sh was caught in the Baltic Sea in 2007, accounting for 81% of the total catch. Deep-sea fi shing accounts for 15% of Estonia’s total catch in terms of quantity, but signifi cantly exceeds the Baltic Sea and inland waters’ fi shing in terms of value. 2568 t of fi sh was caught in inland waters in 2007. The fi sh processing indus- try accounts for 1.6% of Estonia’s processing industry. 7 . AGRICULTURAL PRODUCTION, FISHING, PROCESSING, MARKET AND TRADE 2.1. Production cultural industry for 2007, including refunds, was BEEK 10, of which 2.4% (MEEK 242.7) were product refunds for crop Kristel Bankier, Kristel Maidre, Elsa Nurk, Viive Alliksoo, Liina Jürgenson, Matti Piirsalu, Merle Saaliste and livestock farming. The value of output increased by 18.2% in basic prices and 22.6% in producer prices, while Total agricultural production the quantity of output increased by 10.1%, compared to