Deputy chairman of the Riigikogu's Rural Affairs Committee and former rural affairs minister, Urmas Kruuse (Reform) said on Friday that in this extraordinarily dry year, Estonia's farmers don't need loans, but crisis aid.
"The government's decision to give agricultural producers loans of €20 million through the Rural Development Fund (MES) is not enough to bring the agricultural sector out of its crisis. A possibility must be found to pay extraordinary crisis aid already this autumn," Kruuse said in a press release.
"If farmers are not given extraordinary support already this autumn, the agricultural sector will fall into deep crisis by next year. Issuing a national loan to the agricultural sector through the Rural Development Fund is not enough to prevent this deep crisis. Also, many companies may not be eligible for loans anymore due to the drought damage," Kruuse added.
Kruuse said that he will raise the topic of paying extraordinary crisis aid in the extraordinary sitting of the committee on 13 August in Jõgeva.
"Estonia's aim is to guarantee its food security and the competitiveness of its agricultural sector in the future, which is why we can't let agricultural companies go bankrupt for reasons beyond their control," he said.
"If the European Union isn't planning to help the agricultural producers of the regions affected by drought, Estonia needs to get the right from the European Commission to pay extraordinary support itself at the national level," Kruuse insisted.
The government on Thursday approved a capital allocation of €20 million to the Rural Development Fund (MES) to help alleviate the damage caused to farms by the lasting drought period. The money will be used by the fund to issue loan guarantees to farmers as well as providing them with working capital loans.
The aim of underwriting loans to producers is to ensure better access to loans for producers by improving their eligibility for credit.
This spring and summer in Estonia have been especially dry and warm. According to the Estonian Weather Service, the average precipitation in May was nearly 60% below the long-term average. The average temperature was also higher than usual, and there were up to 48% more days with sunshine than usual.
Editor: Dario Cavegn