The government will boost extraordinary support for agriculture by €3.8 million in response to the effects of the COVID-19 pandemic on the sector. Applicants will be able to start filing their requests mid-March, and the move follows a relaxation of the European Union's state aid framework.
The aid increase, approved by the cabinet Thursday after being proposed by rural affairs minister Urmas Kruuse (Reform) will bring total support for agriculture to €15.8 million in total, i.e. a 32 percent increase.
The extraordinary (in the sense of outside normal state budget procedures – ed.) funds will come out of Rural Development Foundation (MES) coffers, BNS reports.
Kruuse said: "Agriculture and food production are areas of strategic importance for the state. The coronavirus crisis has had an averse effect on agriculture and rural entrepreneurs, and in order for the sector to survive the crisis, support needs to be directed to where it is needed most. Principles of equal treatment must be followed here, to ensure honest competition."
Challenges facing the sector since the pandemic began, over and above the usual restrictions and measures, have included labor shortages arising from tightened-up work migration and travel strictures.
The sector relies quite heavily on short-term foreign labor during harvest time, particularly involving workers from Ukraine.
EU state aid regulations changed last month, which also allowed a more flexible approach to domestic state aid, Kruuse added.
The project is not unique – the Rural Development Foundation has provided funding in past crises, which is in fact a large part of its raison d'être, Kruuse added.
The support still requires a Riigikogu vote, and will be put to parliament's rural affairs committee accordingly.
Kruuse was hopeful about the chances of his and his government's proposal passing.
"MES committee chair Tarmo Tamm, as a former minister of rural affairs himself, undoubtedly understands farmers' concerns," he said.
Applications for aid are open via the Agricultural Registers and Information Board (PRIA) e-portal March 15-22, BNS reports.
Agricultural output overall actually rose in 2020.
Editor: Andrew Whyte