Government Pledges to Seek New Export Markets, Will Ask Banks to Work With Investors ({{commentsTotal}})

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With the Agriculture Ministry saying the EU is unlikely to decide support for sectors hit by Russian sanctions before September, Estonian officials and producers focused today on what the national government can do. The focus will lie on finding new markets and working with banks to secure more favorable terms for dairy farm investors.

Agriculture Minister Ivari Padar and Foreign Trade Anne Sulling said after meetings with lobby groups today that the sanctions were a political conflict between the EU and Russia and a united front would have to be agreed on the EU ministerial level. A meeting is due to take place in Brussels on Wednesday.

But domestic efforts will also be at center stage for now, with ministries pledging to work with banks to institute grace periods for dary farm investors and possibly to roll out more export subsidies in the 2015 state budget, Padar and Sulling said.

Farmers and milk producers said going into the meeting that they expect decisive action, including more direct subsidies and government intervention on milk prices.

Seeder: Russia May Enforce Embargo Selectively

Former agriculture minister Helir-Valdor Seeder told ERR radio earlier in the morning that Estonia's efforts should be focused on keeping the EU united.

"I'm not quite sure that Russia is going to carry out the embargo in this form against all countries," he said.

Seeder said the government should also rush to the air of the fishery sector, as Estonia didn't have much choice in export destination for its sprat and herring - something that echoed a remark from Russia's ambassador to Latvia.

Seeder said the state should look into additional guarantees and other measures.

Minister of Agriculture Ivari Padar told ERR radio in a morning interview that it would take at least one month to decide on support for farmers and food industry.

Before that happens, Padar said, Estonian banks should be lenient toward Estonian investors who have built major new dairy farms using loan capital.

Sanctions Have Immediate Effects

The effects on producers have been dramatic and immediate. For example, instead of four milk trucks, a Lithuanian milk processing company sent only two to one Tartu milk farm. And instead of 3.3 euros, the plant paid producer only 1.8 euros per liter.

A Tartu County farmers union leader, Jaan Sõrra, said the government should provide subsidies and push the EU to intervene and buy up milk.

Sõrra said direct subsidies to farmers would decrease as much as 40 percent in the year ahead. "If you add in now the price drops, for meat, milk and grain, I can't imagine how the agriculture sector will survive."

Dairy Association head Jaanus Murakas also said rapid intervention was necessary.

"An intervention price hasn't been used for long years, as so the prices are out of date. The intervention price would guarantee farmers only half of the cost price of producing milk," Murakas said.



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