The European Union is allocating €500 million for agriculture in the crisis caused by Russia's attack on Ukraine, with Estonia looking at a share of €2.5 million. Minister of Rural Affairs Urmas Kruuse (Reform) said that this would come together as €7.5 million in unplanned support for Estonian agricultural producers with additional sums from the government.
"The EU aid package is aimed at food security being just as important as national defense. The allocation of €500 million considers two aspects. The share of direct agricultural support in the EU common agricultural policy and the value of indigenous production. Estonia's envelope comes to around €2.5 million to which the state can choose to add 200 percent or €5 million," Kruuse said on the "Terevisioon" morning show on Tuesday.
"It could be another government aid package for the agricultural sector, following two in the past year," the minister said, adding that earlier rounds have been to mitigate the effects of Covid.
Kruuse said that while states have been given freedom to decide which areas to support, he believes pig farmers should be prioritized in Estonia.
He explained that feed makes up 70 percent of costs in pig farming, while the prices of cereals started going up even before the Ukraine crisis hit. "At the same time, pork prices are down due to massive overproduction," Kruuse said.
Price advance inevitable
The rural affairs minister said that price advance is inevitable for certain products due to animal feed and fertilizer supply problems in the wake of the crisis and sanctions against Russia.
Kruuse said that Europe should see no food shortages and can swallow modest price advance. Problems may be created in states that import EU agricultural products, he added.
"The extent of price advance will also depend on how much materials producers have stockpiled, as well as the reaction of retailers and their contracts. "I would urge supermarket chains to be flexible under the circumstances, as farmers being saddled with all of the cost would be highly regrettable," Kruuse said.
The minister remarked that the aid package will be discussed as part of Estonia's supplementary state budget where he will propose adding sums to the EU support.
It should also be possible to pay €35,000 per producer in additional state support.
Editor: Marcus Turovski