The Riigikogu discussed the importance of the role of agriculture and food production in Estonia’s economy and food security
At today’s plenary sitting, the Riigikogu deliberated “Agriculture and food production as a strategic branch of the economy” as a matter of significant national importance, initiated by the Rural Affairs Committee.
Presentations were made by Chairman of the Rural Affairs Committee Urmas Kruuse; Head of Agricultural Policy of the Estonian Chamber of Agriculture and Commerce Ants-Hannes Viira; Member of the Management Board of Sadala Agro Ltd Ahti Kalde, and Member of the Management Board of Hexest Materials Ltd Randel Veerits.
In his presentation, Chairman of the Rural Affairs Committee Urmas Kruuse said that Estonia’s agriculture and food production have undergone significant development since joining the European Union, which is evidenced by both the growth of production volumes and the technical capabilities of the sector. “If we compare the beginning of 2000 to the present day, the production of cereals, legumes, and oil crops has increased by 157 percent, and milk production by 54 percent,” Kruuse said, stressing the work done by farmers and breeders.
According to him, today’s discussion has been prompted by the changing international and European Union political environment and the approaching post-2028 financial period. Kruuse pointed out that Estonia’s agricultural subsidies had risen from about 25 percent of the European Union average to over 80 percent. However, the next step in improving competitiveness requires investments. “Statistics demonstrate that Estonian farmers earn less profit from the market than their colleagues elsewhere in Europe, and this does not have to stay that way,” he said.
As an important topic, Kruuse addressed food security and self-sufficiency, which had become particularly prominent in the context of both the COVID crisis and the war in Ukraine. He noted that although Estonia was self-sufficient in several sectors, crises had demonstrated the vulnerability of supply chains and production. “The important thing is not some mysterious self-sufficiency figure but knowing our level of consumption and our actual capacity to produce,” he stressed.
Chairman of the Rural Affairs Committee said that, hopefully, today’s discussion would provide direction for future decisions, but serious debates awaited once the actual funding possibilities of the European Union’s next financial period were known. He stressed that there was consensus in the Rural Affairs Committee that the funds intended for agriculture had to remain within the sector.
According to Kruuse, for a country with a small internal market like Estonia, export orientation and a greater processing of raw materials in cooperation with the food industry are inevitable. He stressed that the future of agriculture depended on the ability to use new tools and directions: “The question is whether we are rich enough to leave even one blade of grass unused, or smart enough to add value to it and to use it to create our wealth.”
At the beginning of his presentation, Head of Agricultural Policy of the Estonian Chamber of Agriculture and Commerce Ants-Hannes Viira stressed that the core of the discussion lay in the choices made: decisions would determine whether the production and food security capacity became stronger or weaker.
Viira’s main message was that Estonia could not fully supply itself with food, and this situation could worsen as Estonia had imported food for years. He pointed out that although competitive sectors (dairy, beef, cereals, and oil crops) in total generated a significant net export, self-sufficiency in several everyday product categories (e.g. meat, eggs, and vegetables) was low and imports, according to his estimates, amounted to ca one billion euros per year. “In other words, we give a total of 500 million euros per year to other countries, to companies abroad, just to have enough food,” he said. According to Viira, the situation does not have to remain this way, as Estonia is in a relatively good position in terms of agricultural land resources, but it uses this potential with too low productivity.
As a solution, Ants-Hannes Viira stressed the role of productivity, the processing industry, and investments: “Our productivity per hectare is low.” He directly linked the poor performance to a gap in capital and investments. He explained that the food industry “doubled the value of agricultural produce”. However, according to his examples, Estonia’s multiplier lagged behind that of many other countries. At the same time, according to his calculations, if we reached, for example, Finnish levels of productivity and value addition, the sector would gain considerable extra sales revenue.
Viira warned that unless policy choices of the following period boosted investments, Estonia would, at best, remain at its current level, while dependence on imports would grow in several sectors.
In terms of funding, Viira directly linked the future of the sector to the decisions on the EU’s following budget period and to the agri-prosperity gap funding, stressing that without this component, support levels would drop dramatically, and it would hit companies’ income and investment capacity hard.
Viira listed several specific investment needs, from animal welfare requirements and building new farms to greenhouse complexes in horticulture, storage and processing, grain processing, biogas and nutrient recycling, and the automation of the processing industry. He concluded his presentation by calling for the income gap funds allocated for agriculture (546 million euros, including co-financing) to be invested in the agricultural and food sector.
At the beginning of his presentation, Member of the Management Board of Sadala Agro Ltd Ahti Kalde said that Estonia’s food security directly depended on the viability of its agriculture and food industry. He noted that agriculture and food industry accounted for about 15 percent of Estonia’s goods exports, but in several categories dependence on imports was high.
Kalde pointed out Estonia’s self-sufficiency gaps: the amount of meat produced is around one third lower than consumption, eggs cover about half of demand, vegetables about a third, and potatoes just over half of the required amount. In this context, he gave the following assessment: “It means that a substantial part of our food supplies comes from other countries’ contributions, from their exports to us, and, in my view, this is not normal.”
Kalde described the reality for enterprises: constant investments and new technologies are inevitable, but requirements are growing faster than enterprises’ capacities. “You could even say that at times you feel you are no longer a food producer but an administrative company, managing various requirements that must be met in order to be able to produce food,” he said. Kalde pointed out that both the international and domestic markets simultaneously expected low prices and high product quality.
In the context of the European Union’s next budget period, Kalde stressed the importance of political decisions, as the EU support under consideration was not automatically allocated to agriculture. He called on legislators for rapid adaptability and linked the funding issue to the national goal of investing in Estonia’s food security.
In conclusion, Kalde said: “If the Riigikogu and the Government view agriculture and food production as a strategic sector in terms of ensuring Estonia’s national security, if the answer is yes, then mere declarations will not suffice; decisions are needed that will enable agricultural sectors to realise their full potential.”
Randel Veerits, Member of the Management Board of Hexest Materials Ltd, introduced himself as a developer of industrial projects. In his presentation, he gave examples including a plywood factory near Jõgeva, the launch of the Paide cheese factory, and an explosives industry project. “So, Estonia, Estonia, Estonia – these have been my last three projects: refining Estonian timber, processing Estonian milk, and today’s defence sector, that is, strengthening our defence capability,” Veerits said.
He stressed that in developing industry, it was reasonable to rely on domestic resources (forests, agriculture, dairy) and to increase value added.
According to Veerits, the common denominator of international projects was the harsh reality of negotiations and the need to mitigate risks through contracts. “That actually means – excuse my choice of words – a struggle from start to finish,” he described cooperation with large producers. He added, that in such projects, a permanent team needed to be built already during the construction of the factory, so that after handover they would be capable of running it independently.
Veerits linked increased productivity to automation and data-driven management: automation creates a constant data repositary and enables process optimisation. “And now, speaking of the fact that automation can add up to 30 percent of efficiency to industry, one can say that if you are also able to integrate AI into the process, you can gain an additional 15 percent of efficiency,” he said.
Veerits aligned defence capability with food security, highlighting the regional impact of industry. “If you have a powerful cannon with explosives, but people have no food, then we will not last long,” said Veerits. He called for speeding up knowledge transfer and pilot projects to enhance cooperation between enterprises and the state.
Lauri Laats from the Estonian Centre Party Group; Maido Ruusmann from the Reform Party Group; Anti Allas from the Social Democratic Party Group; Arvo Aller from the Estonian Conservative People’s Party Group, and Toomas Uibo from the Eesti 200 Parliamentary Group took the floor during the debate that followed the reports. Jaanus Karilaid took the floor on behalf of Isamaa Parliamentary Group. Peeter Ernits and Anti Poolamets also took the floor.
The sitting ended at 1.28 p.m.
Verbatim record of the sitting (in Estonian)
Photos (Erik Peinar / Chancellery of the Riigikogu)
Video recording will be available on the Riigikogu YouTube channel.
Riigikogu Press Service
Maiki Vaikla
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