866 [ {ow tuownlog Sullro A pluolsl ;{"$39flffi* ffi selfiuno) upedornl urefspl PUD lprtue) eqt u! luaLudo;anap lornr puo arnllnruBy uorul uoadorn3 sl)edsord Pup uollpruls lprnrlnt!,r6v Estonia European Commission Directorate General for Agriculture (DG VI) Agricultural Situation and Prospects in the Central and Eastern European Countries Working Document This Report has been prepared by DG VI in close col­ laboration with Mati Sepp, Estonian Institute of Agrarian Economics, and Christian Boese and Bar­ bara Pohl, ASA Institut fiir Sektoranalyse und Poli­ tikberatung GmbH. Assistance was given by DG II, DG lA, EUROSTAT and TAIEX. The manuscript was prepared by Heikki Laurinen and Martin Scheele. The authors accept full responsibil­ ity for any errors, which could still remain in the text. The revision of the English text was carried out by Brian Higgins. The closing date for the data collec­ tion was March 1998. A great deal of additional information on the European Union is available on the Internet. It can be accessed through the Europa server (http://europa.eu.int). Cataloguing data can be found at the end of this publication. Luxembourg: Office for Official Publications of the European Communities, 1998 ISBN 92-828-3402-6 © European Communities, 1998 Reproduction is authorized, provided the source is acknowledged. Printed in Belgium Table of contents Introduction ...................................................................................................5 About the data••• ..........................................................................................6 Executive summary ......................................................................................7 1. General overview .................................................................................. 12 1.1. The Estonian economy ........................................................................... 12 1.1.1. Background ............................................................................. 12 1.1.2. Economic recovery .................................................................... 13 1.1.3. Employment and domestic demand ................................................ 13 1.1.4. Foreign trade ............................................................................ 14 1.2.Agriculture in the economy .................................................................... 15 1.2.1. Share of agriculture in the economy ............................................... 15 1.2.2. Structure of agricultural output ..................................................... 16 1.2.3. Price development ..................................................................... 17 2. Agriculture and rural society ................................................................ 19 2. 1 . Agricultural production and consumption ................................................. 19 2.1.1. Land use .................................................................................. 19 2.1.2. Arable crops ............................................................................. 19 2.1.2.l.Cereals .......................................................................... 19 2.1.2.4'. Fodder crops ................................................................... 21 2.1.2.3':)Potatoes ......................................................................... 21 2.1.2.4. Industrial crops and sugarbeet ............................................ 21 2.1.2.5.Permanent crops .............................................................. 22 2.1.2.6.Fresh vegetables .............................................................. 22 2.1.3. Livestock sector ........................................................................ 23 2.1.3 .1. Milk and milk products ..................................................... 24 2.1.3.2. Beef ............................................................................. 26 2.1.3.3.Pork, poultry and eggs ...................................................... 27 2.1.3.4. Sheep and goat meat ........................................................ 29 2.1.4. Fisheries .................................................................................. 29 2.1.5. Forestry ................................................................................... 31 2.2.Agricultural trade ..................................................................................31 2.2.1. Agricultural trade within global trade ............................................. 31 2.2.2. Analysis by category of product .................................................... 32 2.2.3. Analysis by partner .................................................................... 33 2.3. The evolution of farm structures and privatisation ...................................... 34 2.3.1. Agricultural enterprises ............................................................... 35 2.3.2. Private family farms ................................................................... 36 2.3.3. Household plots ........................................................................ 37 CEC Reportr - Ertouia > 1 2.3.4. The diversity of farm structure- the example of the dairy farms ........... 37 2.4. Rural development ................................................................................38 2.4.1. Regional economy ..................................................................... 38 2.4.2. Rural and urban population .......................................................... 3 9 2.5.Agriculture and the environment .............................................................39 2.6. Upstream and downstream activities .......................................................40 2.6.1. Upstream services ..................................................................... 40 2.6.2. Food industry ........................................................................... 41 2.6.3. Banking system ......................................................................... 43 3. Agricultural and rural policies ..............................................................44 3.1. The budget of the ministry of agriculture ..................................................44 3.2.Agricultural market policy ......................................................................45 3.2.1. Income policy and direct support measures ...................................... 45 3.2.2. Price levels compared to EU ........................................................ 46 3.3. Trade policy .........................................................................................48 3.4. Veterinary and phytosanitary policies ......................................................49 3.5. Structural policy in agriculture ................................................................50 3.5.1. Support to investments ................................................................ 50 3.5.2. Farming in less favoured areas ...................................................... 51 3.5.3. Taxation .................................................................................. 51 3.6. Rural development policy .......................................................................52 3.7.Agri-environmental policy ......................................................................53 4. Long term outlook .................................................................................54 4.1.Main hypothesis ...................................................................................54' 4.1.1. Overall economy ....................................................................... 54 4.1.2. Agricultural economy ................................................................. 54 4.1.3. Farm structures and food industry ...............................................· .. 55 4. 2. Commodity projections ..........................................................................56 4.2.1. Land use .................................................................................. 56 4.2.2. Cereals .................................................................................... 57 4.2.3. Livestock ................................................................................. 58 4.2.4. Milk ....................................................................................... 59 4.2.5. Beef ....................................................................................... 59 4.2.6. Pig meat .................................................................................. 61 4.2. 7. Poultry .................................................................................... 62 Glossary/Abbreviations ............................................................................63 Main sources used: ....................................................................................64 Annex 1: The veterinary sector in Estonia ...............................................67 Annex 2: Phare in the agricultural sector ................................................70 2 c CEC Repor·ts - Estonia list of tables TABLE 1: MAIN MACRQ-ECONOMIC INDICATORS .............•....................................................... 12 TABLE 2: STRUCTURE OF EMPLOYMENT: 3 MOST IMPORTANT SECTORS AND PRIMARY SECTOR ................. 14 TABLE 3: SHARE OF AGRICULTURE IN THE ECONOMY ................................................................. 16 TABLE 4: STRUCTURE OF GROSS AGRICULTURAL OUTPUT (MILLION EEK IN PRICES OF 1995) .................. 16 TABLE 5: INPUT PRICE INDEX .............................................................................................