According to the information of the Animal Recording Centre, the number of enterprises in rural areas has remained stable: 23,707 enterprises as of 8.09.2000 and 23,897 enterprises as of 2.04.2001.

The enterprise activity of the population is characterised by the number of enterprises per 1,000 residents. In rural areas, the indicator was 42 as of 2.04.2001, while more than 2.5-fold differences may be detected between various counties. The indicator was the smallest in the Ida-Viru county (28) and the highest in the Hiiu county (72). Estonia’s enterprise activity remained considerably below the average (52) in EU.

Enterprises in the three northern counties and in Pärnu and Tartu county account for over 51% of all the enterprises, only 49% of the enterprises are located in the remaining ten counties. Apart from Hiiumaa, also Saaremaa (62 enterprises per 1,000 residents) and Läänemaa (57) stand out by their enterprise activity.

The majority of the rural enterprises belong to the primary sector. According to the information of the Animal Recording Centre, as of 1.01.2001, the number of the servicing sector enterprises in rural areas amounted to 6,072 and the number of industrial sector enterprises to 2,239. Table 1 provides an overview of the changes in the structure of the agricultural, hunting industry and forest management enterprises.

Table 1. Agricultural, hunting industry and forest management enterprises according to legal form 1996–2001 (as of 1.07)

According to the information of the Ministry of Justice Centre of Registers, the number of registered undertakings in agriculture, hunting industry and forest management was 12,536 as of 3.07.2001, and they owned 52% of the enterprises in rural areas. Of these, 82% were sole proprietors, 14% private limited companies and 4% public limited companies and commercial associations.

The main reasons for low enterprise activity may be the shortage of relevant knowledge, lack of long traditions and financing difficulties. The higher business risk level of small enterprises relatively increases the price of a substantial part of financial products for them, as compared to large enterprises competing for loan and interest products. Acquisition of seed capital for starting a company is particularly problematic.

During 2001, the number of primary sector enterprises has seen a considerable increase (1,909, i.e. 14.6%). Sole proprietors accounted for the majority of the increase (1,534). The number of private limited companies increased by 211, that is, 11.6 %.

The survey of non-farm activities of rural municipalities, ordered by the Ministry of Agriculture and conducted by the Institute for Rural Development (IRD) in 2001 revealed that the turnover of an average rural enterprise was EEK 6m in 2000 and profit EEK 326,522, which had increased by 3.9 times as compared to the previous year. Profit in the fields of manufacturing of oil shale and peat, paper products and clothing has seen a dramatic increase. The growth remained more modest for travel agencies, mainland transport, retail sale, electricity, gas and steam production. The most substantial decrease occurred in furniture production as well as in the area of hotels and restaurants, which remained in the red on average. Losses in health care and social work and manufacturing of tobacco products decreased sharply.

The equity capital of an average non-farm rural enterprise was EEK 1.45m in 2000, which exceeded the indicator of the previous year by 1.3 times. The average number of employees was 11 and increased by two persons over the same period.

Rural operators assessed the strengths and weaknesses of their enterprises. The results of the questionnaire have been provided in Table 3.

The undertakings indicated as the strength of their enterprise the quality of products and services (24%), qualified personnel (17%), good cooperation partners (14%) and the reputation of the enterprise (13%). Accessibility of funds (26%), location (14%), competition and the qualification of personnel (12%) were considered as weaknesses. Weaknesses also included marketing opportunities and production technology base (11%).

During the next two years, 52.5% of the undertakings plan to expand production, 35.1% will retain the former production level, 6.3% close the enterprise down or sell it and 6.1% plan to change the location. The share of undertakings that considered the prospects of their enterprise to be excellent or good was 25.4%, while 13.9% of the undertakings considered their future prospects to be negative.

In order to foster enterprise and facilitate the creation of new jobs and increase the competitiveness of enterprises, the enterprise policy of Estonia has been developed, which regulates support for enterprise horizontally.

In 1999, state budget funds were allocated to supporting enterprise in the amount of 342m and in 2000 in the amount of EEK 340m. Nearly two-thirds of the funds were allocated through two foundations — the Rural Credit Guaranty Fund and the Agriculture and Rural Life Credit Fund — to the development of agriculture and rural life, through which the state supports the establishment of new enterprises outside larger cities. These amounts were divided between various areas of activity and contributed to the restructuring of economy in rural areas. Since June 2001, the task was concentrated (merger agreement) to the Rural Development Foundation (RDF).

In 2001, the budget of the Estonian Regional Development Agency (ERDA) of the Enterprise Estonia (EE) provided EEK 46.65m to support enterprise and the guarantee volume limit of the Credit and Export Guarantee Fund (KredEx) was EEK 300m.

As to the size categories of enterprises, the larger part (over 80%) of the amounts of assistance was aimed at small scale and micro-enterprises. The share of micro-enterprises has shown a constant increase (in 2000, ca 43%), which is indicative of their increasing activity and ability to submit viable applications.

The loan and export guarantees provided to small scale enterprises by KredEx in 2000 will be increased by 2.5 times, which will ease the expansion of production and commencement of enterprise.

The coalition agreement concluded between the Estonian Reform Party and Estonian Centre Party provides for an increase in assistance to small and medium-sized enterprises and agricultural producers through EE and RDF via the state budget of 2002.

Considering the main problems impeding the development of small and medium-sized enterprises, enterprise policy will focus on the development of a structure that supports human resources and enterprise, improvement of financing opportunities, distribution of enterprise information and simplification of procedures.

In 2001, the economic growth of Estonia was 5.3%. The annual economic growth of 3–5% means that the country belongs among economies that have a rapid development structure. According to the European Commission forecasts, the economic growth of Estonia will be 3.1% in 2002 and 4.1% in 2003 but the Ministry of Finance expects an actual GDP growth of 4.0 and 5.5%, respectively.

In 2001, The average number of working-age people in the countryside was 348,600, of which 206,200 were economically active. The number of the employed in the countryside has been stable over the last five years: in 1997, it was 177,100 and in 2001, it amounted to 178,500, whereas meanwhile in 1998, the number of the employed ranked higher — 183,500.

The annual average number of unemployed people in the countryside was 28,500 in 2000 and the unemployment rate reached 13.8%. In 2001, the average number of the unemployed in the countryside decreased by 800, which decreased the unemployment rate to 13.4%.

In towns, the unemployment rate reached 13.6% in 2000, which decreased to 12.3% in 2001. In 2000, the unemployment rate was higher among the people having basic education — 24.5%, being 6.6% among people having higher education or a degree.

The unemployment rate that had increased to 14.2% in the countryside in the first quarter of 2001 decreased during the next quarters, the annual average being 13.4%.

When we compare Estonia to the Central and Eastern European countries, the unemployment rate is on the average level, while it is the lowest of the Baltic States. However, if compared to the average in EU (8.2%), the situation appears considerably worse.

Simultaneously with having a relatively high unemployment rate, we suffer from the shortage of qualified labour. The survey of non-farm enterprise, ordered by the Ministry of Agriculture and conducted by IRD in 2001, revealed that there was an inadequate supply of vacant employees in rural areas, whose qualification and skills would satisfy undertakings. As a rule, skills are related to agriculture, but people have neither the willingness nor opportunities to retrain themselves. Young people who leave due to studies do not return since no jobs matching their education level are available in the countryside.

According to the labour survey (LS 2000), 34.2% of the employed rural people worked in towns, 8.2% in another rural municipality and only 57.2% worked in the same rural municipality.

As to regions, the unemployment rate was the highest in northeast Estonia in the fourth quarter 2001 — 20.3% (I q. 20.7%) and the lowest in west Estonia — 8.4% (12.4%). According to the average annual assessment, the unemployment rate in northeast Estonia decreased by 14.2% in 2001 as compared to the previous year and was 18.1%. When compared to the same period of the previous year, the decrease in unemployment was more substantial in west Estonia (25%) and south Estonia (23%) during the fourth quarter 2001.

Table 5. Unemployment rate by regions, 1st quarter 2000–4th quarter 2001 in %

A dramatic decrease in the number of those employed in the agricultural sector has caused social problems in the countryside and requires creation of jobs in other sectors. This would increase local revenue base, decrease the need for social benefits and would have an indirect positive impact on the general development of the state.

Compared to 1997, by the beginning of 2000, the employment of rural municipality people working in their own enterprise had increased by 1,425 people (1.3 times) and as individual employees or freelancers by 849 (1.5 times).

During the same period, the number of salaried employees in rural areas has decreased by 6,353 people (4.5%).

When creating additional jobs, it is crucial to support the development of small and micro-enterprises providing services or using primarily local raw materials. By nature, such enterprises are flexible and also uphold the lifestyle characteristic of the rural area.

The main tool for ensuring the development of non-farm economic activities in rural areas is investment aid to undertakings and companies for implementing their business ideas, provided for in the rural development plan of Estonia and SAPARD, which was successfully launched in 2001.

Estonian Regional Development Agency of the Enterprise Estonia (through the enterprise centres in counties) primarily provides setting-up aid to undertakings (that have operated for less than two years) in the areas the development of which is lagging behind, which comprises non-repayable financial assistance, consulting and training. The budget of 2001 provided EEK 10m for that purpose. The setting-up aid package contains apart from training and consulting also up to EEK 50,000 of non-repayable state support that should help a company or sole proprietor to overcome financing difficulties.

The low education level of the unemployed (31% of the unemployed with primary education and 63% of the unemployed with secondary education) and the nonconformity of their skills with the labour market requirements present a problem. When analysing unemployment in the countryside by duration, it appears that in 1998–2000, the share of the long-term unemployed (people searching a job for over a year) has increased slowly (1.1%) but is rather high — 47% (43.2% in towns). The long-term unemployed lose their qualifications and the habit to work and become a social burden for the society. Their re-employment is time-consuming and expensive.

The reduction of unemployment rate requires a consistent and effective implementation of various active employment measures, which, in turn, presumes larger investments in employment policy. Estonia currently spends only 0.24% of GDP on labour market policy, which is the smallest indicator also among the candidate countries (on average, EU states spend 3–4% of GDP). The Estonian National plan for Employment for 2002 states that an increase in employment and decrease in unemployment by means of active employment measures presumes an increase in the expenditure on labour market policy to at least 1% of GDP.

The Estonian Farmers’ Federation (since 1989), Estonian Cooperative Association (since 1992) and Estonian Agricultural University (since 1994) have taken the lead in restoring and developing cooperative activities.

The 1990s saw the establishment of over 1,500 unions, associations and central associations; as of 1 September 1999, after the re-registration of commercial associations, 924 private limited companies, unions and commercial associations were registered in the commercial register in the areas of agriculture, hunting industry and forest management. By 1 July 2001, their number had increased to 2,200.

Table 3 provides an overview of the changes related to joint enterprises and companies in the primary sector over the last six years.

The number of public limited companies has considerably decreased (5.5 times), whereas the number of private limited companies has increased 4.5 times. Commercial associations have replaced the old-fashioned cooperatives and associations.

According to the Tax Board, the taxable supplies of the commercial associations operating in the areas of agriculture, hunting industry and forest management have increased from 219.3 in 1999 to EEK 274.9m in 2000 (increase 25.3%). The associations operating in this area have declared EEK 23.4m of paid social tax in 1999 and EEK 19.9m in 2000 (the number of declarants has decreased from 174 to 157). Thus, the social tax declared per one association amounted to EEK 134,500 and 126,000, respectively, in those years. There is a trend towards a decrease in the number of operating associations in this area and also in the average social tax. The data allow for an assumption that associations have expanded their activities and simultaneously also downsized their staff.

The Ministry of Agriculture supported various associations with EEK 16m from the budget of 2000. The aid was allocated to 42 projects. In doing so, the positive experience in supporting national breeding associations in 1992–1993 was taken into account. Associations actively participated in the privatisation of artificial insemination centres etc. and became the owners of the entire existing breeding potential. Breeding associations, to which the majority of Estonian stock farmers belong, have provided their members with opportunities to purchase insemination services at minimum prices, and ensure the correctness of pure-bred animal statistics and their registration system. A correct distribution of aid by the state and supervision of the use of the aid are also ensured.

The state supported a joint project of the Animal Breeders Association of Estonia and Breeding Cooperative “Estonian Red Cattle” with EEK 1.95m in 2000. As the productivity of cows has to considerably increase in Estonia in coming years, the comparative test of the maximum yield of cattle breeds must provide answers to important questions that will influence the intensity and economic efficiency of milk production in Estonia.

With a stronger association-based dairy system, the income of rural people would considerably exceed their current income. Dairy associations have assumed up to one-fourth of the volume of crude milk production, they can pay up to one more kroon per milk litre to their members than capital companies.

The associations operating dairies have assembled in the central association Eesti Piim. The state’s support to the reconstruction project of the Vändra dairy of the Union of Estonian Milk Producers amounted to EEK 1m in 2000.

The commercial association E-Piim (owned by 325 milk producers) invested EEK 20m in cheese production in Põltsamaa, while the state support to the association amounted to EEK 1.6m, which was used for environmental protection — for the processing of whey generated in the manufacturing process. In 2000, the state supported the development of cheese production with EEK 1.4m and the preparation of the marketing and advertising strategy with EEK 236,000. E-Piim supplied approximately 11% of crude milk in Estonia in 2000. In 2001, the realised net turnover of the enterprise increased by EEK 102m, reaching EEK 323m, while profit amounted to EEK 10m.

The state support to the project of the commercial association Jõhvi Piim aimed at increasing competitiveness and profitability was EEK 400,000.

As to meat production, the largest national company is the meat cooperative Viru Lihaühistu, comprising 42 pig farmers (state support to the development project in 2000 — EEK 1m). The members sell meat together through the meat cooperative and as a result collect higher prices. In 2000, the realised net turnover increased 1.5 times as compared to the previous year and reached EEK 92.8m, while profit exceeded one million.

Grain associations operate in Tartu and Valga; they also manage processing on the first level. In 1999, the national grain association Estonian Grain was founded. The state support to the projects of the commercial association Estonian Grain amounted to EEK 2m in 2000.

Commercial banks have closed down the majority of their offices in rural areas, giving thus rise to an actual need for the establishment of credit unions in rural areas. As necessary resources are not available in the countryside, it is obvious that the state must interfere. February 1999 saw the development of a micro-credit system, which lasted until July 2000. The aim of the project was to develop a new system of giving limited credit (savings and loan associations (S&L)).

The state supported the preparation of the savings and loan associations development plan with EEK 170,000 in 2000. The micro-credit system has been designed for providing an alternative opportunity to borrow in rural areas, where the security requirements of commercial banks cannot be met as a rule. The system of the Central Union of Savings and Loan Associations currently comprises 11 S&L. The issues related to equity capital, long-term credit resource, guarantee and development fund (the total need being approximately EEK 40m) and central review as well as mandatory external review need to be settled yet. One of the possible solution variants is to support the S&L system through the Rural Development Foundation.

The state can offer help more effectively for the expansion of business cooperation between the producers of milk, meat, grain, etc. and support the merging of small associations into central associations. The main difficulties include producers’ insufficient skills to manage businesses of another level, that is, processing industry. Sometimes people fail to understand that all the members of an association are owners, thus also liable for the association and its activities. Producers are in short supply of funds for collecting up to 30% of equity capital. They also fear to pledge their assets for loans assumed on behalf of the association.

Over the years, the government has supported national non-profit associations: the Estonian Farmers’ Federation, Estonian Agricultural Producers Union, Estonian Chamber of Agriculture and Commerce and Estonian Cooperative Association. Support has been offered to the activities of non-profit associations aimed at increasing the income of their members (product development and introduction, market surveys, training of the members of unions, publication of instructions and training materials, etc.).

Since 2001, the payment of assistance has been founded on bases that preclude any inaccuracies. Partial compensation for the foundation and administrative costs during five years following the establishment is implemented as a new form of assistance. Through this form of assistance, commencement and development of joint activities in rural areas receives support, a motive is established for the development of private enterprise and more money is channelled to rural areas and an attempt is made to restrain large companies of processing industry from having a monopoly position.

In 2001, 154 vessels engaged in fishing in the Baltic Sea and 15 vessels in the Atlantic Ocean. The number of small vessels used for coastal fishing amounted to 600. The fleet is dominated by fishing vessels built during the Soviet era, which are characterised by poor-quality material and unreliable engines. Over the last years, fishing vessels built in western countries have been acquired, the years of construction of which coincide with the Soviet vessels but their operational value is considerably higher.

In order to update the fishing fleet, the financial assistance of the EU financial instrument FIFG could be used after Estonia’s accession to EU. Fishing ports should develop in line with the development of the fishing fleet.

Fishing in the Baltic Sea is divided into deep-sea fishing and coastal fishing. The species of deep-sea fishing are Baltic herring, sprat, cod and flounder, and small quantities of salmon. The main vessels are trawlers.

There are many species of coastal fishing: economically, the most important ones include bass, pike perch, flounder, but also vimba, ide and sea pike; the quantities of eel, sea trout and whitefish are smaller. The main fishing gear includes fyke net, nets and long lines.

Industrial fishing takes place primarily in Lakes Peipsi and Võrtsjärv. The main species are perch, pike perch, bream, sparling, whitefish and eel. The fishing gear includes nets, fyke nets, pound nets and Danish seines.

Estonian deep-sea fishing takes place in the Atlantic Ocean. The main species is shrimp. Small quantities of mackerel, bass and horse mackerel are also caught. The fishing vessels are trawlers.

Twenty-five commercial fish farms the employees of which earn their income from fish farming operate in Estonia. According to the expert assessment, nearly 60 full-time employees are employed in the commercial fish farms in Estonia. There are fewer fish farming enterprises since some enterprises own several fish farms.

About 12 fish farms specialise primarily in rainbow trout, three specialise in carp and two are specialised fish farms engaged in providing restocking material for restoring fish resources. Several fish farms operate in combined fields. Three to four crayfish farms are about to be founded, and there is one eel farm.

The number of the registered fishing tourism enterprises that offer fishing services at ponds amounts to 50, while for approximately ten of them this is a main activity. In addition to that, there are relatively many (over 100) minor fish farmers, the yield of which only amounts to hundreds of kilograms.

According to the official statistics, the annual fish farm yield in Estonia in 1995–2000 was 200–300 t of rainbow trout and 20–30 t carp, which is apparently an underestimation. In order to restore the resources, the juveniles of seven species of fish (salmon, sea trout, brown trout, whitefish, pike, pike perch, tench) and crayfish are bred, which has received state support from the funds of fishing right charges. The total value of the commercial fish yield in producer prices amounted to EEK 14.8m in 2000.

The main shortcoming of Estonia’s fishery as compared to EU is the lack of the intervention system that is applied in EU. The infrastructure related to fisheries, primarily fishing ports and acknowledged first buyers, is also poorly developed. Yet viable fishermen associations have not been established. Fishing vessels and ports do not meet the EU requirements.

An increase in the production volume can be achieved, above all, through the introduction of new fish feeds and fish farming principles, such as deep sea pound farms and farms where water is reused (closed system). Fish resources have decreased, therefore catch quotas have been also reduced. The fishing fleet of Estonia is currently too large and outdated for our fishing opportunities. In order to ensure the competitiveness of the fisheries sector, the condition of the vessels, fish processing establishments and ports must be brought into compliance with the EU standards and supervision and intervention systems corresponding to the EU fisheries policy must be created.

In 2001, the number of international tourists visiting Estonia amounted to 3.23m, which meant 800,000 fewer people than in 2000. However, the number of foreign visitors who sought accommodation in Estonia increased. According to the preliminary data, by 9%, and the number of nights that they spent in Estonia increased by 14 %. The average stay has increased from 1.53 to 1.59 nights. The occupancy was 48%. Apart from longer trips, another positive change is that according to the survey of international visitors, conducted by the Estonian Tourist Board in the summer of 2001, tourists have started to travel more around in Estonia (the share of tours in trips with overnight stays increased from 22% to 28%). Yet the demand has not increased outside the tourism season.

The rural tourism sector comprises rural accommodation establishments, which are located in rural areas, i.e. in villages and small towns with the population of less than 10,000, according to the World Tourism Organisation (WTO) definition.

The number of rural accommodation establishments in the Estonian rural tourism sector was 585 as of December 2001. Compared to the same period of the previous year, the number of establishments has increased by 44.5%. Of these 585 establishments, 337, that is 57.6%, have been certified according to the mandatory requirements.

The distribution of rural accommodation establishments by regions is uneven, 26% of rural accommodation establishments are located on islands and 37% in South Estonia. The share of the certified establishments varies greatly from county to county.

The concentration of rural accommodation establishments per 1,000 km² may differ in different counties. When the average is 17, then the number of rural accommodation establishments exceeds the average considerably in the Hiiu, Saare, Valga and Võru counties. The number of establishments remains considerably below the average in the Ida-Viru, Järva, Rapla, Tartu and Viljandi counties (Figure 1). The reasons for the uneven distribution call for a closer inspection; however, it is evident that the number of establishments is affected by diverse nature, many attractive sights and effective advertising in South Estonia and on the islands, while in the Tartu and Viljandi counties, the number of rural accommodation establishments is affected by strong attractive centres the towns of Viljandi and Tartu, Raplamaa benefits from its proximity to Tallinn and well-developed tourism infrastructure.

Distribution of rural accommodations establishments by types

The most common types of rural accommodation establishments are bed-and-breakfast and holiday homes, which account for 53% of the total number of establishments. There are somewhat fewer holiday villages and homes (28%), while hostels, hotels, motels and visitor’s apartments (total 19%) constitute the smallest part. Currently, the hotels, guest houses and holiday homes have the best position as 75%, 65% and 65% of the establishments conform to the mandatory requirements to accommodation establishments. One-half or fewer of the motels, hostels and holiday have been certified (50%, 49% and 39%, respectively).

The annual average occupancy of rooms in the rural accommodation sector was 26.67%, which remains considerably below the Estonian average (48%).

The summer of 2001 saw the launch of the programme of special pre-accession assistance for agriculture and rural development of the Central and Eastern European countries or SAPARD. The main objective of the programme is to foster the adjustment of the agricultural sector to the EU requirements and to solve the development problems of rural areas.

As to the diversification of rural economic activities (measure 3), 12 projects were approved, of which eight plan the allocation of investments in rural tourism to the extent of EEK 5m.

The Estonian Rural Tourism Association commenced its activities in 2000. The association started with 19 members; to date, their number has increased to 271, of whom 61 are associated members, that is, those who are starting an enterprise or offer rural tourism services (catering) without accommodation. The association organises for its members training, consulting, product development, marketing, etc. The association owns a database of the majority of the rural accommodation establishments in Estonia.

· Development of the quality standards system for rural accommodation establishments.

· Organisation of basic and further rural development training in Ida-Virumaa.

· Participation in the Scottish Agricultural College seminar on new trends in rural tourism.

· Phare Access programme “Development of Capacity Increasing, Product Development and Marketing of Rural Tourism Sector”.

The project aims at:

1) strengthening the operation of the organisation (creation of an intranet, staff training, provision of new equipment);

2) organisation of three specialised rural tourism training courses (nature and culture tourism, active tourism and farm holidays);

3) seminars/workshops on the development of rank system in 12 counties;

4) preparation of rural tourism marketing materials (brochures, catalogue).

The project will also continue in 2002.

· Kreditanstalt für Wiederaufbau, Beratungsleistung im Rahmen des Kurzzeitberatungsfonds “Training of Rural Tourism Trainers”.

The providers of the training from Germany represented the Eifel region in the Nordhein-Westfalia federal state, the population of which amounts to one million. The region is not very well developed as to agriculture and forestry, their only expanding branch of economy is tourism. To that end, the highlights of nature and culture have been identified and combined into attractive product packages for various target groups, and training has been provided to guides in nature. The most interesting packages are: the beaver and its natural environment, seminars on science, bird monitoring at the river Ruhr, apple juice making, national cuisine.

German tourists looks forward to enjoying luxuries such as pure nature, food with no added preservatives, clean water and air. At the same time, they need convenience and clean and modern amenities. Tourists prefer holiday homes and visitor’s apartments where they can have privacy. They are also interested in bicycle routes and maps with all the necessary information provided on the spot.

Finnish tourists increasingly travel outside Tallinn. The majority of the travellers are townspeople. Estonia is the closest competitor to Finnish internal tourism. Marketing activities should be aimed at tourists who take interest in tourism focussed on rural life and cultural heritage, nature and open-air recreation. The potential target groups are families who would like to travel by car and also bus trippers.

The target groups primarily consist of seniors; special groups should be designed for people interested in nature, animals and cultural heritage and for students and pupils.

The condition of the roads and also personal security are considered as weaknesses. From the point of view of hygiene, security issues relate to food, overnight accommodation and hygiene conditions.

Tourists’ interests lie with guided hikes, bike trips, fishing trips. They prefer to hike and bicycle with a guide or on clearly marked trails, assisted by a map.

Family holiday budgets are tighter but more emphasis is placed on security. The group of senior travellers shows a constant increase. Here attention must be dedicated to movement difficulties, more stops should be made when travelling and holiday-makers are demanding of food.

· Survey of internal rural tourism

Estonians take more interest in internal tourism. They mainly participate in cultural events but the popularity of open-air activities (canoe trips, riding) is also increasing. Only 15% of the total stay is in official accommodation establishments. The age group 20–39 is the most active. As to the consumers if internal tourism services, the majority come from larger cities. Non-Estonians more frequently spend their holidays on beaches or engage in sports or other active hobbies, Estonians tend to prefer cultural and family events.

Internal tourism is largely dependent on the weather. The providers of tourism services in smaller settlements should join their forces and potential to attract tourists out of the centres and to offer as diverse services as possible.

The main factors impeding travelling among Estonians include shortage of money, time and interest, bad health, failure to find a suitable transport route or means of transport.

The price and quality ratio of accommodation establishments causes dissatisfaction.

· Bases and criteria for categorising services provided by rural tourism undertakings in the areas of nature and culture tourism

A nature and culture tourism farm should serve as a local centre providing training in nature and culture to those interested. The farms specialising in nature and culture tourism should have a described, marked and safe nature trail, which preferably starts on the estate or nearby and makes sustainable use of natural resources, adheres to local traditions (food, buildings, restoration of semi-natural biotic communities, availability of materials on nature and cultural heritage and code of conduct as well as right of public access). It is advisable that the host family be able to provide information as guides, hike leaders, they should have taken a course in nature and culture issues and/or be able to communicate their knowledge. A tourist farm offering nature and culture holidays is aimed at a separate target group of holiday-makers whose primary goal is to gain educational nature or culture experience.

Several source documents have been prepared in Estonia over the last years in order to rearrange education system; unfortunately, the treatment of the development of the contents and geography of the agricultural section of vocational education system in them has been superficial.

Led by the Ministry of Agriculture, the development plan of agricultural education for 2002–2004 was completed at the end of 2001, which provides a brief overview of the current situation of agricultural education, its strong and weak points and a list of opportunities and threats arising from the external environment. The paper contains a vision of agricultural education and strategic objectives, the development components and results required to achieve them, an action plan for achieving the goals set and the basic notions belonging to the area of vocational education.

On 12 March 2001, the cooperation protocol for 2001–2004 was signed between the Ministries of Education and Agriculture, according to which the parties consider it important to continue cooperation in issues concerning vocational and higher education and science. An annex to the cooperation protocol provides specific activities for both ministries, which need to be reviewed once a year.

The cooperation protocol provides that the parties will continue cooperation upon the submission of commissioned education quota to educational institutions providing secondary vocational education and higher education.

The Ministry of Agriculture has been of the opinion that in order to ensure the training of a new generation of agricultural producers (taking into account the number of students studying agricultural subjects, interest in the area and actual opportunities), two agricultural training centres, supplied with modern teaching and study facilities, should be developed in the state. They should provide practical training conforming to the requirements to students and agricultural producers, distribute information about new technologies, offer practical training. In order to ensure the availability and wider dissemination of agricultural information that conforms to modern requirements, the training farm would make use of new varieties, animal breeds, plant protection products, fertilisers, feedstuffs; the farms should cooperate with research establishments, and provide agricultural advice and consulting. The Türi School of Technology and Rural Economy and Olustvere School of Service and Rural Economics, in which investments have been made over the last years, were intended to become such centres.

The regional vocational educational institutions would retain study groups focusing on basic agricultural education, on training of people with special needs and additional training of adults (in Taebla, Põltsamaa, Vana-Antsla, Kuressaare and Kuremaa), educational institutions specialising in the areas of horticulture (Räpina), forestry (Tihemetsa, Luua), fishery (Suuremõisa, Kallaste) and food technology (Õisu) would also be retained.

The development of technology and changes affecting the entire area of rural life have imposed new requirements on the additional training offered to agricultural producers. By the end of 2001, a curriculum of additional training was completed, which meets the requirements to agricultural producer professional standard III and has been aimed at the producers who have not received professional training.

The curriculum consists of cycles (plant production, animal husbandry, mechanisation, forestry, land use and building, economy, law, occupational health and safety, environmental protection, computer studies, in-plant work experience) and a farmer may choose between taking a full course or training modules. The course will end with a complex examination covering all the modules contained in the curriculum. In the future, the graduates may combine the complex examination in the specialty with the acquisition of agricultural producer professional standard III.

The courses will be arranged using the resources of the Kehtna Economy and Technology School, Kuremaa Agricultural Technical School and Luua Forestry School, Olustvere School of Service and Rural Economics, Põltsamaa Farming and household School, Tihemetsa Technical School, Türi School of Technology and Rural Economy, Suuremõisa Technical School and Võru Vocational Education Centre. Information can be obtained from the homepages of the Ministry of Agriculture and Agricultural and Rural Information Coordinating Centre.

Teachers of vocational educational institutions play the major part in training young people and organising further training of adults. The development of cooperation with foreign countries helps to improve teacher’s knowledge and enables them to gain various experiences. For this reason, the vocational educational institutions specialising in rural economy have decided to join the organisation EUROPEA.

EUROPEA is an association of vocational educational institutions specialising in rural economy in EU. The organisation was founded in 1992 and it consists of a national EUROPEA (15 EU countries and Slovakia, comprising the total of nearly 600 agricultural, horticultural and forestry schools).

Proceeding from the main goals of EUROPEA, the association provides an opportunity to increase the exchange of teachers and students, to establish direct contacts with educational establishments in various countries, to participate in different international projects and student events, to improve the foreign language training provided to teachers and to develop further training of adults.

The Danish–Estonian cooperation project “Development of agricultural vocational education and training of adults in Estonia” (2000–2001) was completed, in the framework of which two conferences and an additional training session (teachers, young farmers, agricultural advisors) were held in Denmark and Estonia and some investments were procured for developing the practical training bases of the Türi School of Technology and Rural Economy and Olustvere School of Service and Rural Economics.

Similarly to the previous years, traditional events promoting agricultural specialties were organised also in 2001 (professional contests for young farmers, ploughing contests), the best pupils and teachers were acknowledged (the reception of the Minister of Agriculture for the best graduates, scholarship “the best student of agricultural specialty”, “the best teacher of agricultural specialty”) and schools participated in the youth fair “Teeviit”.

Taking the number of farms and the staff employed therein as the basis, approximately 500 students should be admitted to schools each year to ensure the training of new generations of agricultural producers; proceeding from the size of arable land, the number would be as large as 1,000. Currently, the planned annual admittance to agricultural specialties is 300 students. In fact, 178 students were admitted, of which one-third was made up by youth with special needs.

Due to the declining popularity of agricultural specialties it is vital to provide scholarships and specific benefits to support the studies of agricultural students and to publish promotional materials (advertising materials of educational institutions, an album featuring positive examples of rural life, etc.).

The Rural Development and Agricultural Market Regulation Act provides for training support, to partially cover the cost of training services necessary for agricultural producers and undertakings engaged in other spheres of rural economy to acquire and improve knowledge of the development of economic and other related activities.

The end of 2001 saw the completion of the draft Rural Development and Agricultural Market Regulation Act Amendment Act, which enables also the school farms of vocational education institutions to apply for income support. Practical training aid was introduced as a new form of support to the amendment act of the same Act.

Advising is an activity in the course of which practical help is provided to the client in various forms for resolving their (the enterprise’s) current problems and conflicts, for increasing adaptability and competitiveness and for identifying their development opportunities.

There are tree forms of advising:

1) individual advice — based on specific production activities and aimed at improving production efficiency,

2) group advice — advice is given to a group of producers with similar interests,

3) mass advice — advisory activity aimed at a larger interest group via radio, newspapers, etc. 

Certification of agricultural advisors is organised to ensure the quality of advice. In the course of the certification, the certification committee evaluates the specialist knowledge and advisory skills of an agricultural advisor with the help of experts.

The persons using the advisory service may obtain support that partly covers the cost of the service provided to a producer by an attested agricultural advisor under an advisory contract. In 2001, 1,235 producers used advisory support (in 2000, their number was 2,021). Of the 184 attested agricultural advisors, 89 advisors concluded agreements that received support.

One of the conditions for receiving support is that the producer must pay a part of the cost of advice. Such advisory support scheme increases the responsibilities of consumers of the advice in selecting the advisors and defining their tasks. The producer and advisor determine the cost of the advice by agreement according to the volume and quality of the activities.

The amount of support has increased year by year. When in 1996 the amount of support per producer was EEK 1,980, by 2001, it had increased to EEK 7,200. When the cost of individual agreements concluded with one producer was up to EEK 4,000 in 2001, the applicant paid 20%. In addition to the above amount, agreements with the total cost of up to EEK 8,000 received supplementary support; the producer had to pay half of the amount to the advisor.

The distribution of the supported agreements according to counties in 1996–2001 has been provided on the card contained in Annex 1.

In relation to changes in administration (in 1996–2000, processing of support was managed by the county governments, and since 2001, the Estonian Agricultural Registers and Information Board (EARIB) is in charge of all benefits), the use of the support considerably decreased as compared to 2000. In 2001, the number of applications submitted to EARIB for advisory support amounted to 1,550. Of these, 1,525 were entered in the register of advisory support and 1,410 were approved as the recipients of the support. During the year, EARIB received 1,423 reports on the payment of advisory support. Only 1,134 of them were approved for the payment of the support.

A group advice involves working with a group that has specific needs. Group advising includes subject-specific (plant production, animal husbandry, economy, etc.) events. It must be possible to relate the information aimed at a group directly to practical activities and allow for the implementation of the knowledge in production.

The objective of ordering group advising and projects is to furnish agricultural producers and rural people with an opportunity to participate in information events that are necessary for them and to obtain information materials at affordable prices. County government specialists who can more clearly identify the needs of local producers decide on the need for group advising and financing of county projects.

The number of county training days organised was 314, nine different information bulletins were published in the county, etc. In 2001, the decision-making concerning projects that are of county level importance and aimed at the producers of the particular county was delegated directly to county advisory committees.

The majority of the training days were free of charge for the participants, the total number of participants was 5,140, the average per day being 55 participants.

The agricultural project of the World Bank launched in August 1996 was intended for financing the agricultural areas for which the state lacked sufficient budget cover. The component of agricultural advisory service consisted of the following fields: (a) private advisory service support scheme; (b) strengthening of public advisory services (technical assistance and training) and (c) support for rural region information centres.

During the project that lasted until the beginning of 2002, various training sessions were arranged for advisors: an introduction to the participation method principles, efficiency training, group advising and project management training and training of economic advisors and advisors in other fields to develop their specialty skills (animal husbandry, plant production, economy, incl. marketing, alternatives, environmental protection, forestry).

Important work has been done in monitoring advisory activities and quality assessment. Without the monitoring, we could nothing but predict whether undertakings would benefit from what is offered. To date, surveys have revealed a very positive assessment of the advisory activities: 81% of the agricultural producers were of the opinion that the advice that they received was value for money paid by the producer and the state and 90% of the producers wished to continue with the same advisor.

In 2000 and 2001, the most important activity has been the development of advisory cooperation groups. A conference has also been arranged to bring together advisors from various areas, the activities of an idea group have been commenced, cooperation between scientists has been promoted, the activities of the Agricultural and Rural Information Flow Co-ordination Centre (ARIFCC) have been launched, a homepage for agricultural advisors (www.epk.ee) and ARIFCC portal (www.pikk.ee) have been created.

In addition to the direct development of advisory activities, attention has been paid also to other sectors: to the preparation of the agricultural sciences development plan, organisation of private forestry advice, reorganisation of vocational schools as additional training centres, development of the service chain of rural information centres. The information bulletin Hüva Nõu has been established. Advisors and their support centres have been provided with an opportunity to purchase equipment that is essential for their activities.

In 1999, the common opinion was that agricultural sciences had largely developed by way of self-regulation and the state did not have a plan to express its interest to develop the sciences. Proceeding from that, the Ministry of Agriculture took a lead in preparing the development strategy and development plan of Estonian agricultural sciences, which should be submitted to the Government of the Republic for approval this year. The document is the first more important step in defining and analysing the problems related to agricultural sciences and in offering possible solutions and setting up goals.

Depending on the existing basis, the needs for developing it and the determination of the fields and priorities of research, the organisational and thematic structure of agricultural sciences has to be rearranged. In 2001, the Ministry of Agriculture continued to change the structure of the research and development institutions in its area of government. On 1 January 2002, the Estonian Institute of Agricultural Engineering merged with the Estonian Research Institute of Agriculture.

A common network of experimental stations and laboratory facilities is being created by the Plant Material Control Centre. The tasks of the network of experimental stations would be to both provide experiment services to the research system and more widely to the entire agricultural sector. The common laboratory facilities will serve national supervision organisations and research establishments as well as the entire agricultural sector.

According to the new statutes, the areas of activities of ERIA include basic and applied research of growing of crops, post-harvest processing and preservation, development and innovation as well as testing of agricultural equipment.

In 2001, the number of researchers working for ERIA was 31, one-third of them had a PhD and one-third was aged below 50. The number of researchers working for the Estonian Institute of Agricultural Engineering (EIAE) was 14, while the majority of them had PhD. Only two researchers are aged below 50.

In 2001, ERIA mainly engaged in applied research aimed at the development of plant production and increasing the competitiveness of agricultural products. An agricultural sciences seminar “Agricultural Chemistry — Past, Present, Future” and “Handbook of Oil-seed Crop Producers” was prepared in order to increase competitiveness. The Estonian–Danish cooperation projects “Testing and Implementation of an integrated computer advisory system in Estonia” and “Good Experimental Practice” (GEP).

EIAE engaged in the research and improvement of agricultural technologies and equipment and testing of agricultural equipment. The agricultural equipment testing laboratory was adjusted to the EU requirements. Development of the testing and safety standards of agricultural equipment and tractors was also commenced.

Last year, the number of researchers working for the Jõgeva PBI was 20, about one-third of them have PhDs. Nine researchers are aged below 50.

In 2001, the institute engaged in the plant breeding and varietal improvement of grains and legumes, oil-seed crops, potato, vegetables and fodder crops. Surveys were conducted of the agricultural technology of flax, agricultural technology of the seed multiplication of new grasses and suitability of seed blends for pastures. The representatives of the Institute also participated in international cooperation projects on the collection and preservation of genetic resources and organised the final seminar of the international cooperation programme PSO 98/ES/1/1 “National and private partnership in Estonian plant breeding”.

The year 2001 marked the 50^th anniversary of the establishment of the Estonian Agricultural University (EAU). As all the other universities, EAU also has to keep up with the changes affecting the field of higher education and make efforts to provide competitive education.

Proceeding from the EAU development plan until 2006, the development tasks for the academic year 2001/2002 were prepared last year, which provided for the continuing reorganisation of the university, improvement of management and activities aimed at society, fostering of integration in research and development and introduction of further measures to develop studies and quality, reduce the maintenance costs of infrastructure and optimum use of premises.

The reforms of curricula continued actively. Instructions for the preparation of the curricula were compiled alongside with the new curricula corresponding to 3+2 system derived from the Bologna declaration, as well as a new list of areas, fields and specialties.

In 2001, students were admitted to 22 specialties, while in four of them, students could be admitted only outside the state commissioned education budget. All the specialties in the faculties of economy and social sciences also remained outside the state budget. In the last years, the most intense competition for state-financed places has been in the Agricultural University — 9.83 applications for one place. Planning and valuation of real property, landscape conservation and management as well as the use and protection of natural resources continued to be the most popular specialties. Even in the less popular specialties (animal husbandry, agricultural equipment) more than four applications were submitted for one place.

At the beginning of 2002, the student body of EAU consisted of 3,850 students, while 464 of them were post-graduate students. Last year, the number of students completing their basic programme in EAU was 317, with 36 students receiving MA, 6 PhD and 15 teacher training diploma. In the academic year of 2001/2002, 956 students were admitted to the basic programme (of them, 227 were admitted to distance learning programmes), 114 were admitted to MA studies, 26 to PhD studies and 17 to the teacher training programme. The total number of students admitted was 1,113, which remained nearly 2.5% below that of the previous year. The number of student places within state commissioned education quota was 340 in the basic programme.

The Ministry of Agriculture governs three museums the responsibilities of which include collection and research of the history of agriculture and its introduction to the public:

• Estonian Agricultural Museum in Ülenurme,

• C. R. Jakobson’s Farm Museum in Kurgja,

• Estonian Dairy Museum in Imavere.

The areas of activity of the museums have been determined by their specialty.

The Estonian Agricultural Museum collects, explores, conserves and introduces to the public the artefacts of cultural value reflecting Estonian agriculture and peasant history. The purpose of the collections of the Agricultural Museum is to conserve as diverse and complete overview of the development of Estonian agriculture, the changes occurring in agriculture and its uniqueness in the form of artefacts, photographs and documents.

Exhibitions provide an overview of grain production, flax dressing, poultry farming and animal husbandry and gardening and apiculture in Estonia throughout history. In the coach house, the means of transportation and vehicles of the past have been displayed. The most valuable part of the museum is a unique collection of agricultural equipment.

According to the preliminary data, the agricultural museums hosted over 30,000 guests in 2001 and arranged various entertainment activities (Tartu autumn exhibition, flax fair, etc.) and opened a selection of temporary exhibitions (“Potato — Our Second Bread”, “From Crime to Curiosities,” etc.). Fruitful cooperation with schools and child care institutions continued (the project “Controversies about Hemp”, bread week and many other events).

The C. R. Jakobson’s Farm Museum collects, explores, conserves and introduces to the public artefacts of cultural value that characterise the life and activities of Carl Robert Jakobson and his family as well as farmer’s life in the second half of the 19^th century. The staff of the museum show how farm work was done (incl. how animals were kept) at the time when C. R. Jakobson lived.

In 2001, the farm museum hosted over 30,000 guests. The museum arranged theme training programmes and introduced activities related to farm works and rural life (“Shrovetide on a Farm”, “Day on a Farm”, “Christmas on a Farm,” etc.). Cooperation was continued for the second year with the Pärnu Theatre Endla that presented its summer play Meil aiaäärne tänavas in Kurgja. The Museum also cooperates with the schools interested in the life and activities of C. R. Jakobson.

The C. R. Jakobson’s Farm Museum has managed to preserve farm life traditions characteristic of the Jakobson era. Having a large territory (85 ha), the museum has become an excellent place for assemblies and camps.

The Estonian Dairy Museum collects, explores, conserves and introduces to the public artefacts of cultural value related to the history of Estonian dairies. The Museum exhibits milk processing equipment and inventory. The Estonian Dairy Museum has been operating as a public museum since 14 July 2001.

To date, the Museum has a permanent exhibition, the repair works on the premises and planting and landscaping have been completed. The first permanent exhibition on two floors provides a brief overview of the period starting with the commencement of activities of the field in the form of manor dairies and the development of dairying on farms at the end of the 19^th century and at the beginning of the 20^th century. The first floor exhibits an associated dairy with installation.

In 2001, in cooperation with the Estonian Health Care Museum the exhibition “Milk and Health” was organised, which introduced new packaging and promoted the consumption of dairy products (the official opening in the Estonian Dairy Museum on 9 February 2002).

The actual number of visitors can be assessed in the future; however, already in 2001, the preliminary data show that 1,000 people visited the Museum. The Museum is favourably located and an increase in the number of visitors may be expected in 2002.