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Supplementary budget to boost rural economy with 200 million euros

17. April 2020 - 16:09
Ministry of Rural Affairs. Photo: Simo Sepp

The adoption of the supplementary budget at the Estonian Parliament gave a green light to direct 200 million euros to the agriculture, food, fisheries, forestry and other rural enterprise sectors to alleviate the impact of the coronavirus crisis to businesses and ensure the preservation of the country’s food security.

„We can see the importance of food production and self-supply capacity for a country and its people during a time of crisis. That is why agriculture has an extremely important role for a country’s food security,” Minister of Rural Affairs Arvo Aller said. “I am very pleased that the proposals of the Ministry of Rural Affairs were supported at the Estonian Parliament and 200 million euros will be channelled to the rural enterprise sector as part of the national crisis aid package to preserve our domestic food production capacity and mitigate economic difficulties. This will help our businesses to prepare for a price depression on the world market, as well as to support rural tourism enterprises facing difficulties.”

The Ministry of Rural Affairs will offer various measures with a total budget of 200 million euros to the agriculture and food sector, as well as rural enterprises through the Rural Development Foundation (RDF). “With that money, we will support our farmers, food industries and all other rural entrepreneurs,” Minister Aller stressed. In order to get out of this crisis as fast as possible and mitigate its negative impacts, the following measures are being developed:

1. Loan guarantees with a total budget of 50 million euros. Loan guarantees will be offered to agricultural and food sector businesses and rural enterprises for loans issued by commercial banks;
2. Working capital loans with a total budget of 100 million euros. Working capital loans will be offered to rural enterprises to overcome liquidity issues due to the COVID-19 outbreak;
3. Land capital with a total budget of 50 million euros. Sale and leaseback transactions will be offered to owners of arable land to overcome liquidity issues due to the COVID-19 outbreak.

The budget for farmers’ back-up servicer support will be increased by 0.5 million euros to ensure the work replacement of not only livestock farmers but also for the plant production sector in the conditions of COVID-19. The frequency for payment application deadlines will also be changed. April and May are peak seasons in plant production and any disruptions in springtime land cultivation and sowing will have a long-term negative impact on food production.

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