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International Internet Magazine. Baltic States news & analytics Friday, 30.10.2020, 22:00

Estonian farmers want transitional natl aid payments ensured in full permitted amount

BC, Tallinn, 18.09.2020.Print version
The Estonian Chamber of Agriculture and Commerce has described it as very important that the government pay the transitional national aid to agricultural producers in the biggest permitted amount next year and in the year after that, writes LETA/BNS.

According to the chamber, low market prices have delivered a blow to the incomes of farmers. Besides, a significant reduction in direct support will take place for many Estonian agricultural companies next year. Also the sum total to be received from the EU budget in direct support is to decline a bit in 2021. 

"The purchase price paid to Estonian dairy farmers has been significantly lower than the costs incurred for the production of milk already for the fifth month in a row, which poses a serious risk to the sustainability of the Estonian dairy sector. Past crises have shown that serious efforts have to be made for the preservation of the dairy herd, as otherwise we will lose a portion of the Estonian dairy herd for good," said Vahur Tonissoo, board member of the Estonian Chamber of Agriculture and Commerce.

A significant price reduction has taken place also on the market for pork, which has been strongly accelerated in recent weeks by the find of African swine fever in Germany. The price paid to pork farmers has dropped significantly below the production cost.

"In the previous crisis we lost self-sufficiency in pork. This is why extraordinary supporting of pig farmers is necessary as well for preventing a new decline in production," Tonissoo said.

"Uncertainty in the economy continues, which is why we must be prepared also for a situation where the market situation will not improve rapidly," Tonissoo said, describing its as positive that the state allocated funds for the provision of loans and underwritings in spring to ease the sector's problems. However, a major reduction has taken place in both the milk and the pork market by now, which is why extraordinary interference by the state is necessary.

The chamber said that transitional national aid payouts have a significant effect on ensuring the incomes of agricultural producers. Under valid rules, it is possible to pay out altogether 15.3 million euros in transitional support per year in Estonia.  

Latvia and Lithuania have supported their farmers with a dairy cow subsidy this year. Similar state aid is necessary also in Estonia for the preservation of herd. 

The chamber observed that, unfortunately, there was not enough money in this year's state budget for the payment of transitional support in the full possible amount. Compared with the permitted amount of 15.3 mln euros, only approximately 10 mln euros has been earmarked for national top-ups in the state budget for the current year. 


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