European Commission Government of the Republic of Estonia Ministry of Agriculture ESTONIAN RURAL DEVELOPMENT PLAN 2004–2006 Tallinn 2004 CONTENT 1 INTRODUCTION ..................................................................................................... 6 2 MEMBER STATE AND ADMINISTRATIVE AREA ............................................ 6 3 AREA OF APPLICATION ....................................................................................... 7 4 PLANNING ............................................................................................................... 7 5 QUANTITATIVE DESCRIPTION OF CURRENT SITUATION ........................... 8 5.1 POPULATION DYNAMICS ............................................................................. 8 5.2 ADMINISTRATIVE STRUCTURE AND POPULATION ............................... 9 5.3 NATURE .......................................................................................................... 11 5.3.1 Climate ........................................................................................................ 11 5.4 CULTIVATED AREA ..................................................................................... 12 5.4.1 Land reform ................................................................................................ 12 5.4.2 Agricultural land use ................................................................................... 12 5.4.3 Soils ............................................................................................................. 14 5.5 MACROECONOMIC OVERVIEW ................................................................. 14 5.5.1 Gross Domestic Product and agriculture .................................................... 14 5.5.2 Employment ................................................................................................ 18 5.5.3 Producers’ organisations, third sector ......................................................... 21 5.6 AGRICULTURE .............................................................................................. 23 5.6.1 Farm structure and ownership ..................................................................... 24 5.6.2. Crop production ........................................................................................ 25 5.6.3. Animal production .................................................................................... 25 5.6.4 Agricultural economy ................................................................................. 27 5.7 ENVIRONMENTAL IMPACT OF AGRICULTURE ..................................... 29 5.7.1 Water ........................................................................................................... 30 5.7.2 Plant protection ........................................................................................... 35 5.7.3 Soil .............................................................................................................. 35 5.7.4 Air pollution ................................................................................................ 37 5.7.5 Biological and landscape diversity ............................................................. 40 5.7.5.1 Preservation of genetic resources ............................................................. 40 5.7.5.2 Biodiversity .............................................................................................. 41 5.7.5.3 Impact of agriculture on landscape .......................................................... 42 5.7.5.4 Protected areas in Estonia ....................................................................... 43 5.7.5.5 NATURA 2000 ........................................................................................ 45 5.7.5.6 Framework for Community action in the field of water policy ............... 46 5.7.5.7 Protection of waters against pollution caused by nitrates from agricultural sources ................................................................................................................. 47 5.7.5.8 International environmental agreements .................................................. 50 5.7.5.9 Estonian environmental legislation .......................................................... 52 5.7.5.10 Forest fires ............................................................................................. 54 5.8 FORESTS ......................................................................................................... 54 5.8.1 Historic developments ................................................................................ 54 5.8.2 Forest policy ................................................................................................ 56 5.8.3 Support for afforestation of agricultural land ............................................. 57 5.9 KNOWLEDGE AND INFORMATION .......................................................... 58 2 5.9.1 Advisory service ......................................................................................... 59 5.9.2 Information dissemination system .............................................................. 60 5.10 EQUAL OPPORTUNITIES ........................................................................... 61 5.11 SUPPORT FOR AGRICULTURAL PRODUCERS ...................................... 61 5.11.1 General overview ...................................................................................... 61 5.11.2 EU Common Agricultural Policy .............................................................. 63 5.11.2.1 Nature of the EU Common Agricultural Policy .................................... 63 5.11.2.2 Developments of the EU Common Agricultural Policy ........................ 64 5.11.3 World Bank loan project ........................................................................... 65 5.11.4 SAPARD ................................................................................................... 66 5.11.5 EU PHARE projects for updating ARIB registers ................................... 68 5.11.6 EU PHARE projects and bilateral cooperation projects developing agri- environment support scheme ............................................................................... 68 5.11.7 Agri-environment supports ....................................................................... 70 5.11.8 Lessons learned ......................................................................................... 72 5.12 SUMMARISING ANALYSIS OF CURRENT SITUATION ....................... 73 6 STRATEGY ............................................................................................................. 75 6.1 STRATEGIC OBJECTIVES ............................................................................. 75 6.2 CHOSEN STRATEGY ..................................................................................... 76 6.2.1 Support for less-favoured areas ................................................................. 76 6.2.2 Agri-environmental support ........................................................................ 77 6.2.3 Support for afforestation of agricultural land ............................................. 77 6.2.4 Support for semi-subsistence farms undergoing restructuring ................... 77 6.2.5 Support for meeting standards .................................................................... 77 6.2.6 Technical assistance ................................................................................... 78 6.3 RELATIONS TO SPD MEASURES ............................................................... 78 6.3.1 Investment into Agricultural Holdings (EAGGF) ...................................... 78 6.3.2 Investment Support for Improving Processing and Marketing of Agricultural Products (EAGGF) .......................................................................... 79 6.3.3 Diversification of Economic Activities in Rural Areas (EAGGF) ............ 79 6.3.4 Integrated Land Improvement (EAGGF) .................................................... 79 6.3.5 Renovation and Development of Villages (EAGGF) ................................. 79 6.3.6 Local Initiative based Development Projects – LEADER (EAGGF) ......... 79 6.3.7 Forestry (EAGGF) ...................................................................................... 80 6.3.8 Support for Setting-up and Provision of Farm Advisory and Extension Services (EAGGF) ............................................................................................... 80 6.4 AREAS COVERED BY SPECIAL MEASURES ............................................ 80 6.4.1 Rationale ..................................................................................................... 80 6.4.2 Proposal for defining less-favoured areas .................................................. 82 6.4.3 Differences in applying measures to less-favoured areas .......................... 97 6.4.4. Implementation of agri-environmental activities regionally ...................... 97 7 EX-ANTE EVALUATION / EXPECTED IMPACT ............................................. 98 7.1 RESULT OF EX-ANTE EVALUATION ......................................................... 98 7.2 ASSESSMENT OF IMPACT OF ERDP MEASURES BY MINISTRY OF AGRICULTURE ................................................................................................... 102 7.2.1 General impact ......................................................................................... 102 7.2.2 Support for less-favoured areas ............................................................... 103