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International Internet Magazine. Baltic States news & analytics Monday, 15.07.2024, 17:00

Foresight Center: Estonian agriculture will need foreign labor also in future

BC, Tallinn, 07.12.2020.Print version
The coronavirus pandemic caused a major workforce crisis in the Estonian agricultural sector, as the closure of borders left the sector without foreign workers, it appears from a report on the impacts of COVID-19 on development trends that is being finalized by the Foresight Center, wirtes LETA/BNS.

"Agriculture is an important exporting sector for Estonia, which during the first wave of the virus crisis was hit by a labor shortage that paralyzed businesses," Uku Varblane, expert at the Foresight Center, said. He said that due to movement restrictions, foreign labor was unable to arrive in Estonia and companies found themselves in trouble keeping their business going. Attempts to ease the labor shortage with the help of local labor were not successful.   

Varblane added that the agricultural sector apparently is unable to remain internationally competitive without seasonal foreign labor also in the near future. 

"Estonian farmers' competitors in other countries have been freer in the use of foreign labor,"  Varblane said, adding that the sector's companies focusing on supplying foreign markets and the hotels, restaurants and catering (HoReCa) sector were hit hardest.

"The dairy sector has been affected most, mainly due to the reduction in exports. Demand on foreign markets has been reduced by the downturn in tourism. For instance, large amounts of Estonian cheese are sold to Italy, but it was no longer needed in such amounts due to the shortage of tourists," he said.

The business of grain producers meanwhile has been little affected by the crisis, and the grain  harvest this year was good. Also producers of spirits have gained from the crisis due to rocketing demand for disinfectants.   

As a result of the crisis, companies of the sector have started to think more about the automation of processes and digitalization. They have also started to offer their products via e-channels. 

"The rise of e-commerce may offer new opportunities specifically to small producers, for whom reaching the end consumer becomes simpler," Varblane said.

He said that the farm sector will be significantly impacted by the toughening of environmental requirements in the near term, which will bring with it the need for companies to make large and sometimes risky investments. 

Business operators say that they also expect greater cooperation from Estonia with the other Baltic governments to ensure the proper functioning of the market for agricultural products in our region.

In total 16,900 people, making up 3% of all employees, were employed in agriculture, forestry and fishery in Estonia last year. The sector's share of the added value created in the Estonian economy was 2.9%, equaling 700 mln euros.

In the period from March to October, the monthly revenue of businesses in plant and animal production was 7.9% higher than a year ago. In fishery and aquaculture it was higher by 9.4%, whereas in forestry it was lower by 12.6%.

According to the COVID-19 resilience index calculated by the Foresight Center, agriculture, fishery and forestry rank fifth for resilience among the 17 sectors reviewed.

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