National Strategy for sustainable agricultural development

I. Other Issues

1. Capital Support and Large Agricultural Enterprises

The Law on the State Support of Enterprises (Riigi Teataja I 1994,40, 652: 1995, 5, 39 and 1996,45, 853) prescribes that enterprises or trading companies formed by individuals registered in Estonia in which there are a maximum of 80 employees, whose net turnover does not exceed 100 million EEK and which do not have subsidiaries, may receive State support. An exception has been made in the case of the Agriculture and Rural Life Credit Fund which may grant up to 50% of the value of its yearly loans to enterprises involved in agricultural production and processing with more than 80 employees or with a net turnover greater than 100 million EEK. Following the amendment to the Law on the State Support of Enterprises (1996,45, 853), capital support is also considered to be support of this kind, although its concept has not been defined in any legislative act. Similarly, a set procedure for the application for and receipt of capital support is lacking. A situation may therefore arise in which larger agricultural enterprises cannot apply for capital support on the basis of the existing law, which would mean enterprises being unequally treated. This issue requires attention.

2. The Rural Policy Loan Scheme

The leader of the Rural Policy Loan scheme, J. Lokk, sees the following stages in its development:

Forming a Regional Development Foundation, through which the financing (mainly by loans) of projects of a regional nature would be concentrated.
Initiating broader cooperation (co-financing) with credit institutions from other countries.
Increasing the proportion of direct loans in other State funds.
Elaborating and legalising the conditions and procedure for writing off loans.

In the opinion of the task force for this Chapter in the Strategy, the formation of a single foundation on the basis of the RPL and PMKF should be considered.

Bibliography

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Dictionary of Finance and Investment Tennis. Barron's Educational Series Inc., 1995.

Eesti Maapanga laenuportfell seisuga 31.03.97. Andmed Eesti Maapanga laenuosakonnast.

Eesti maamajanduse ülevaade. Olukord ja tuleviku valikud. Eesti Vabariigi Póllumajandusministeerium, Tln, 1994.

Ülevaade pangandusest séisuga 28. veebruar 1997. a. Eesti Pank, pangastatistika ja analüüsi osakond.

Eesti Ühispank. Aastaanianne 1995. Tln, 1996.

EL PHARE Tehnilise abi programm 1993–1994.

Estonia: Agriculture Project. Capital Grants. World Bank, 27 June, 1995.

Ettevôtete majandusnäitajad 1994. ESA, Tln, 1996.

Ettevôtluse riikliku toetamise seadus. Riigi Teataja I 1994,40, 652; 1995, 5, 39; 1996,45, 853.

Euroopa Liit muutuvas maailmas. Olion, Tln, 1995.

Euroopa Liidu Leping. Euroopa Ühenduse Asutamisleping. Olion, Tln, 1995.

Investeeringud pôhivarasse 1995. ESA, Tln, 1996.

Kalm, Ü. Kellele anda, kellelt võtta? Maaleht, 10.10.1996.

Kaselo, R. Seakasvatajad ja aretusühistu liikmed! Postimees, 09.04.1997.

Lokk, J. Regionaalpoliitiline laen 1995...1996. 24.09.1996. Käsikiri.

Lättemäe, S. Kuidas tôusta matsist eurooplaseks? Maaleht, 7. november 1996.

Maaelu ja -majandust kasitlevate seaduste váljatootamise póhialused. Riigikogu otsus 23. veebruarist 1994.

Maaelu ja agraarkrediidiprogrammi juhtimise printsiibid. Ants Laansalu. 27.11.1995

Maailmapank: Eesti póllumajandus-ja metsandussektori ülevaade. 9. detsember 1994.

Maamajandusülevaade 1994. Tln, 1995.

Maran, K. Euroopa maaelu kümme käsku. Maaleht, 14. november 1996.

Norton, R.D. Integration of Food and Agriculture Policy with Macroeconomic Policy:

Methodological Considerations in a Latin American Perspective, FAO Economic and Social Development Paper 111, Rome 1992.

Norton, R.D. Policy Analysis for Food and agricultural Development: Basic Data Series and theirüses Training Materials for Agricultural Plannning. No. 14, ECP/TMAP/May, 14 1988.

Pôllumajanduse krediteerimine, probleemid ja vóimalikud lahendusteed. A. Laansalu. 17.11.1995.

Põllumajanduse ja maaelu edendamise perspektiivsed ettepanekud. Maaleht, 3. aprill 1997

Põllumajanduse ja Maaelu Krediteerimise Fondi póhikiri. Riigi Teataja I, 1993, 52, 731.

Pôllumajanduse ja maaelu krediteerimise kord. PMKF-i Nóukogu otsus 12. august 1993.

Riikliku sihtprogrammi “Testettevótete süsteemi loomine póllumajanduses” taitmise käigust ja fínantseerimise vajadusest.

Aruanne. 30. september 1996.

Silberg, U. Makrookonoomilised otsused maaelu ja póllumajanduse mojutusteguritena. Tartu, 1997, EPMÜ magistritóó, 128 Ik.

Sirén, J. Effects of the EU-Membership in the Finnish Agriculture. Teadus ja koolituskonverentsi ettekanded-artiklid Tartu-Värska-Tartu, Tin, 1996, lk. 317–318.

Talumajanduse ja ühistegevuse toetustest ühistegevuse toetamiseks riigieelarvest eraldatud vahendite kasutamise korra kinnitamine. Riigi Teataja 1, 1996, 42, 281.

Ühistu probleeme ja uurimusi IV. Akadeemiline Ühistegevuse Selts, Tartu, 1996.

Ülevaade Eesti póllumajanduspoliitikast aastatel 1986–1996.OECD, Pariis, 1996.

Vabariigi Valitsuse protokollilise otsuse eelnóu "Kapitalitoetuse maksmise korraldamine" juurde. Seletuskiri.

Viilap.L. Mannajanduse tugisusteemidest Postimees, 4.-5. veebruar 1995.

APPENDICES TO CHAPTER 5

Lending to agriculture and rural life as of 01/01/1996.
Minimum and maximum interest rates on Agriculture and Rural Life Credit Fund loans. Interest rates (%) on Agriculture and Rural Life Credit Fund loans 1993–1996.
The utilisation of loans appropriated to banks from the Agriculture and Rural Life Credit Fund.
Lending by fields of activity and purpose.
The regional distribution of loans appropriated to banks from the Agriculture and Rural Life Credit Fund.
Certification of the movement of agricultural foreign aid funds as of 01 January 1996.
State budgetary resources allocated to supporting agriculture and rural life in 1996 and 1997. State budgetary resources allocated to state programmes and agricultural development plans in 1992 -1997.
Financial indicators of enterprises: some balance sheet data 1993–1994.
Real investments, capital repairs and non-material investments 1995 and 1994.
Selection of the most important state policy measures for supporting agriculture and rural areas.
Subsidising.

					APPENDIX 1

Lending for agriculture and rural life as at 01/01/1996

				Fund	Total volume of	Fund
				income	loans issued	balance
				million EEK	million EEK	million EEK
1. State budgetary funds via the Agriculture and Rural Life Credit Fund,				299.5	405.0	15.0
			incl. long-term		236.8
2. Foreign aid and foreign loan resources				150.7	115.8	3.4
			incl. American Foreign Aid Fund	44.2	39.3	0.5
	German Foreign Aid Fund			2.1	1.5	0.5
		Italian Foreign Aid Fund		33.7	14.0	1.6
		Fund formed by the sale go crops bought with American loan		70.6	60.9	0.8
3. Small Enterprise Credit Fund				0.5	0.5	-
4. AB Svensk Exportkredit				12.0	12.0	•
5. European Economic Community loan				12.4	12.4	-
6. World Bank loan				8.7	8.7	-
7. Japanese Export-Import Bank loan*				32.1	32.1	-
8. European Bank of Reconstruction and Development loan				0.4	0.4
TOTAL				516.3	703.8	18.4
			incl. long-term loans for agricultural enterprises		301.0
Agricultural producers' long-term loan requirement					300.0
Requirement for complementary long-term loan resources (World Bank loan)					130.0
* For these calculations, the loan issued in USD has been exchanged into EEK at the rate of 1:12
Source: Ida Norvaiŝ, Ministry of Agriculture, Department of Economics. Actinq Head

APPENDIX 2

Minimum and maximum interest rates on Agriculture and Rural Life Credit Fund loans

		Short-term loan	Long-term loan
Minimum rate		10%	5%
of which: fund risk		5%	2%
	bank's risk	5%	3%
Maximum rate		20%	15%
	of which: fund risk	5%	5%
bank's risk		15%	10%

Source: Pôllumajanduse ja maaelu krediteerimise kord. PMKF Nôukogu otsus 12.08.1993. (Procedure for crediting agriculture and rural life. Agriculture and Rural Life Credit Fund Council decision 12/08/1993)

Interest rates (%) on Agriculture and Rural Life Credit Fund loans 1993–1996

	1993	1994	1995	1996
Short-term loan	15	15	15	13
Long-term loan	15	15	13–15	11
			loaned up to 300 000 EEK	loaned over 300 000 EEK

Source: PMKF

Appendix 3
The utilisation of loans appropriated to banks from the Agriculture and Rural Life credit Fund as of December 1995A
	Total		Incl. Credit institutions
			Union Bank		Land Bank		Virumaa Comm Bank		Leie SLC		Polva People's Bank		Union easing Ltd
	no.	sum	no.	sum	no.	sum	no.	sum	no.	sum	no.	sum	no.	sum
1. LOANS ARREAR TO FUND at start of year	X	198181	X	123721	X	35668	X	16294	X	800	X	14998	X	7000
2. LOANS FROM FUND in reporting period	X	148375	X	69800	X	29501	X	35578	X		X	10616	X	2880
3. TOTAL FUND RESOURCES at Bank's disposal(p1+p2)	X	346556	X	193521	X	65169	X	51872	X	800	X	25614	X	9880
incl. 3.1 SHORT-TERM	X	113372	X	73190	X	22750	X	8000	x:	500	X	6932	X	2000
appropriated by Fund Council decision	X	105870	X	70870	X	20900	X	7000	X	500	X	6600	X	0
on bases of distribution plan	X	99738		65570	X	20900	X	7000	X		X	6268	X
on bases of business projects	X	6132	X	5300	X	0	X	0	X	500	X	332	X
appropriated by decision of managing director	X	7502	X	2320	X	1850	X	1000	X		X	332	X	2000
on bases of business projects	X	5170	X	2320	X	1850	X	1000	X		X		X
3.2 LONG-TERM	x'	233184	X	120331	X	42419	X	43872	X	0	X	18682	X	7880
appropriated by Fund Council decision	X	45085	X	85776	X	30797	X	14250	X	0	X	9262	X	5000
on bases of distribution plan	X	80725	X	53025	X	15952	X	6250	X		X	5498	X
on bases of business projects	X	54639	X	30989	X	7050	X	8000	X		X	3600	X	5000
for financing concrete projects	X	9721	X	1762	X	7795	X	0	X	0	X	164	X	0
of which: land amelioralion	X	140	X		X	108	X		X		X	32	X
purchase of grain driers from Finland	X	9449	X	1762	X	7687	X	X			X		X
flax growing	X	132	X	X			X	X			X	132	X
appropriated by decision of managing director	X	88099	X	34555	X	11622	X	29622	X		X	9420	X	2880
on bases of business projects	X	88099	X	34555	X	11622	X	29522	X		X	9420	X	2880
4. TOTAL APPLICATIONS SUBMITTED	3175	475692	1683	306331	768	79063	336	55439	33	2303	188	23691	167	8865
of which: land amelioration	43	955	36	768		108					7	89
purchase of grain driers from Finland	45	8182			45	8182
flax growing	14	702	8	520	1	50					5	132
incl. farmers	2220	123802	1160	70153	535	32476	237	9142	23	1573	125	5353	140	5105
legal persons	955	351890	523	236178	233	46587	99	46297	10	730	63	18338	27	3670
incl. short-term	1249	117873	743	79721	303	24065	132	9630	17	725	54			3732
long-term	1926	357819	940	226610	465	54998	204	45809	16	1578	134	19959	167	8865
incl. Up to 300,000 EEK	2770	206755	1461	130982	697	37494	295	18567	33	2303	119	10609	165	6800
over 300,000 EEK	405	268937	222	175349	71	41569	41			36872	69	13082	2	2065
5. CONTRACTS CONCLUDED	2752	335500	1416	192414	693	65784	287	48372	13	500	185	20491	158	7939
of which: land amelioration	53	965	35	768	10	108					7	89
purchase of grain driers from Finland	42	7746			42	7746
flax growing	5	132									5	132
incl. farmers	1841	95207	911	49574	471	26830	197	9050	6	221	125	5353	131	4179
legal persons	911	240293	505	142840	222	38954	90	39322	7	279	60	15138	27	3760
incl. short-term	1249	107572	694	72083	369	23257	119	8000	13	500	54	3732
long-term	1503	227928	722	120331	324	42527	168	40372			131	16759	158	7939
of which: On bases of Bank decision	2561	188677	1416	119250	617	38426	172	13475	13	500	185	9087	158	7939
incl. farmers	1426	79225	694	45744	431	18589	69	6161	6	221	95	4331	131	4179
legal persons	1135	109452	722	73506	186	19837	103	7314	7	279	90	4756	27	3760
incl. short-term	1241	96020	694	63803	353	21217	76	7000	13	500	95	3500
long-term	1320	92657	722	55447	254	17209	96	6475			90	5587	158	7939
On bases of Fund Council (incl Finnish grain driers)	45	61100	0	36289	42	14355	3	8000	0	0	0	2455	0	0
incl. farmers	28	4824			28	4824
legal persons	17	56276		36289	14	9532	3	8000				2455
incl. short-term	0	5300		5300
long-term	45	55800		30989	42	14356	3	8000				2455
On bases of decision of managing director	146	85723	0	36875	34	13002	112	26897	0	0	0	8949	0	0
incl. farmers	15	8629		3830	12	3407	3	370				1022
legal persons	131	77094		33045	22	9595	109	26527				7927
incl. short-term	7	5602		2320	6	2050	1	1000				232
long-term	139	80121		34555	28	10952	111	25897				8717
5. Loans repaid to Fund in reporting period	X	75349	X	49901	X	13373	X	4452	X	500	X	5123	X	2000
7. Loans arrears to Fund al end of reportinq period (p3-p6) 8. Interest on arrears paid to Fund	X	271207	X	143620	X	41796	X	47420	X	0	X	20491	X	7880
9. Penalties paid to Fund	X	0	X		X		X		X		X		X
10. Loans repaid	X	77040	X	48794	X	21839	X	4573	X	500	X	740	X	594
11. Clients' loan arrears to Bank at end of period (P5-P10)	X	258460	X	143620	X	43945	X	43799	X	0	X	19751	X	7345
12. Free Fund resources in Bank at end of period (p7-p11)	X	12747	X	0	X	7851	X	3621	X	0	X	740	X	535
13. Clients deferred loans to Bank at end of period	X	1713	X	1177	X	536	X		X		X		X
14. Interest on arrears paid to Bank by clients	X	31	X	20	X	4	X		X		X		X	7

Appendix 4
Lending by fields of activity and purpose with funds from the Agriculture and Rural Life Credit Fund as of 31 December 1995
	Total		Incl. Credit institutions
	Total		Union Bank		Land Bank		Virumaa Comm Bank		Leie SLC		Pôlva People's B		Union leasing LTD
	no	sum	no	sum	no.	sum,.	no.	sum	no.	sum	no.	sum.	no.	sum.
1.FIELDS OF LENDING ACTIVITY
1 .1 Fund resources el disposal of Bank In reporting period	X	346556	X	193521	X	65169	X	51872	X	500	X	25614	X	9880
1.2 Contracts concluded	X	335500	X	192414	X	65784	X	48372	X	500	X	20491	X	7939
of which: farmers	1245	95204	911	49574		26830	197	9050	6	125	125	5353	131	4179
legal persons	629	240293	505	142840		38954	90	39322	7	279	60	15138	27	3760
incl. agricultural fields of activity	0	266965	0	152005	0	58332	0	32732	0	386	0	17321	0	6189
of which: production of plant growing products	X	81323	X	48934	X	12182	X	13046	X	215	X	5353	X	1593
production of animal husbandry products	X	126079	X	75802		31767	X	10640	X	171	X	6297	X	1402
industry processing agricultural products	X	29367	X	15368		5175	X	3080	X	X		2775	X	2969
enterprises supplying agriculture	X	9620	X	4400		2149	X	151	X	X	X	2896	X	24
enterprises serving agriculture	X	20576	X	7501		7059	X	5814	X	X	X		X	201
for sea and inland fishing as well as fish breeding		2890	X	10		380	X	2500	X	X	X		X
for non-agricultural enterprises in rural areas	X	65645	X	40399		7072	X	13140	X	114	X	3170	X	1750
II. LOANS BY PURPOSE	X	335500	X	192414		65784	X	48372	X	500	X	20491	X	7939
2.1 SHORT-TERM	X	107572	X	72083		23257	X	8000	X	500	X	3732	X
of which: for purchasing current assets	X	107469	X	72083		23257	X	8000	X	397	X	3932	X
of which: feed	X	19646	X	15551		2699	X	721	X	115	X	560	X
fertilisers	X	23861	X	13463		6072	X	2776	X	60	X	1490	X
fuel and lubricants	X	31643	X	20159		8177	X	2187	X		X	1120	X
seeds	X	8446	X	5139		1980	X	749	X	30	X	370	X
other	X	23871	X	17591		4329	X	1567	X	192	X	192	X
plant	X	103	X				X		X	103	X		X
2.2 LONG-TERM	X	227928	X	120331		42527	X	40372	X		0	16759	X	7939
incl. for purchasing equipment	X	44250	X	23656		6526	X	7433	X		X	1748	X	4887
of which: agricultural equipment	X	34276	X	19085		6010	X	7433	X		X	1748	X
for purchasing plant	X	39401	X	18423		7497	X	4618	X		X	7561	X	1302
of which required for agricultural field of activity	X	18245	X	8333		5994	X	3918	X		X		X
for construction and purchasing fixed assets	X	97775	X	42488		22526	X	25418	X		X	5593	X	1750
of which grain driers	X	50307	x		X	7745	X	74	X		X		X
mills	X	1137	X	700	X	437	X		X		X		X
other agricultural	X	80197	X	40943	X	14010	X	25344	X		X		X
for purchasing animals	X	11273	X	7735	X	1275	X	823	X		X	1440	X
of which cattle	X	2361	X	570	X	540	X	511	X		X	640	X
pigs	X	3337	X	1935	X	479	X	73	X		X	800	X
poultry	X	4238	X	3950	X	49	X	239	X		X		X
other	X	1137	X	1130	X	207	X		X		X		X
other	X	35229	X	28029	X	4703	X	2050	X			117	X

						APPENDIX 5
The Regional Distribution of Loans Appropriated to Banks by the Agriculture and Rural Life Credit Fund
as of 31 December 1995
						(thousand EEK)
County	TOTAL	of which credit institutions
		Union Bank	Land Bank	Virumaa Com. Bank	Leie SLC	Põlva People's Bank	Union Leasing Ltd
HARJUMAA	31053	20385	7240			950	2478
HIIUMAA	7048	980	6068
IDA-VIRUMAA	11877	108	5438	6284			47
JÕGEVAMAA	17531	1000	16261				270
JÄRVAMAA	28314	12164	917	15100			133
LÄÄNEMÄA	21730	17790	3940
LÄÄNE-VIRUMAA	43118	14866	1600	26268			384
PÕLVAMAA	28008	4620	126	700		21851	711
PÄRNUMAA	27821	21829	5466			70	456
RAPLAMAA	22350	19767	2395	20			168
SAAREMAA	6700		6549				151
TARTUMAA	30823	25026	2582	1000		985	1230
VALGAMAA	22827	19456	796				2575
VILJANDIMAA	26737	20578	4846		500		813
VÕRUMAA	20619	14952	945	2500		1758	464
Total resources at disposal of bank	346556	193521	65169	51872	500	25614	9880

				APPENDIX 6
Certification
of the movement of agricultural foreign aid funds
as of 1 january 1996


				(thousand EEK)
		Donor country
		America	Germany	Italy	USA
Indicators		corn	equipment.	concentrated	crops	TOTAL
			spare	feed, oranges.	received
			parts	lemons	as a loan
I. Incoming resources.		44208.3	2100.6	33753.1	70632.2	150694.2
incl. from sale of goods		28090.0	1893.0	30720.2	60888.7	121591.9
	from interests				747.5	747.5
	from penalties				11.3	11.3
	from loan interest, repaid loans	16118.3	207.6	3032.9	8984.7	28343.5

II. Utilisation of resources		43729.7	1608.1	32164.9	69821.3	147324.0
incl. as loans		39348.0	1500.0	14022.8	60885.0	115755.8
	no. of loan contracts	278			160
	irrevocable aid	6.0		14065.3		14071.3
	recovery of loans, interest			3692.0		3692.0
	interest repayment				7673.9	7673.9
	Estonian Land Bank statute fund	2000.0
	risk fund	2288.8		364.4	1262.4	3915.6
	other	86.9	108.1	20.4		215.4

III. Surplus of resources		478.6	492.5	1588.2	810.9	3370.2

Compiled by: Juta Toompuu
	60 91 50

APPENDIX 7

State budgetary resources allocated to state programmes and agricultural development plans in 1992 – 1997

(million EEK)

Programme, development plan	1992	1993	1994	1995	1996	1997
1. State programme for cultivating oil-bearing crops and producing vegetable oil	-	-	-	0.80	1.30	1.40
2. Development plan for flax cultivation, primary processing of flax and export of flax fibre	-	-	-	1.10	1.20	1.10
3. Agricultural engineering targeted programme	-	-	-	-	-	0.84
4. Stale programme “The creation of a system of test enterprises in agriculture”	-	-	-	-	0.43	1.07
5. Stale programme “Milk”	-	-	-	-	-	3.70
6.Development plan for grain	1.17	3.45	4.95	8.00	9.63	9.97
7. Development plan for growing and processing potatoes	0.63	1.02	1.29	1.00	1.30	1.00
8. State programme of agricultural advising	-	-	-.	2.30	4.10	4.51
9. Ecological agriculture programme	-	-	-	0.50	-	-
10. Sweetener and sugar production programme	0.82	0.34	0.34	0.30	-	-
11. Applied microbiology programme	-	-	-	-	-	1.00
12. Guaranteeing sustainable development in agriculture	-	-	-	-	-	0.10
TOTAL	2.62	4.81	6.58	13.9	17.96	24.69

Source: Compiled by Ida Norvaiŝ

State budgetary resources allocated to supporting agriculture and rural life in 1996 and 1997
(in million EEK)

		1996	1997
1.	Supplementary resources for the Agriculture and Rural Life Credit Fund	100.0	97.0
2.	Stale programmes (excluding state programmes within the consulting service	18.0	19.6
3.	Expenditure on the maintenance of land amelioration systems	16.0	25.1
4.	Regional support for infrastructure	53.2.	43.0
5.	Liming of acidic soil	4.0	4.4
6.	Expenditure on eugenics	10.9	12.2
7.	Expenditure on epidemic control	2.0	2.2
8.	Direct support to agricultural producers (compensation for engine fuel excise	38.5	60.0
9.	Development of the farming economy	6.7	7.5
10.	Stale advising service and infotechnology	5.1	4.5
11.	Maintenance of the Chamber of Agriculture and Commerce: market research	1.0	2.6
	TOTAL	2554	2781

Financial indicators of enterprise: some balance sheet data 1993–1994											APPENDIx 8
											(thousand EEK)
Balance sheer entries		Agriculture and hunting				Forestry				Fisheries
		12/31/94	%	12/31/93	%	12/31/94	%	12/31/93	%	12/31/94	%	12/31/93	%

Liqund assets		249574	9.3	229754	9.9	100768	27.1	60249	22.8	75232	26.5	52564	25
Inventories		838483	314	627039	27.2	63076	17.0	58720	22.3	48785	17.2	29670	14
Long-term financial investments		55828	2.1	59752	2.6	13660	3.7	4113	1.6	15078	5.3	10428	5
Fixed assets		1513704	56.7	1377127	59.6	180543	48.6	133950	50.8	144739	50.9	116684	55
Intangible assets		8580	0.3	9837	0.4	1946	0.5	2312	0.9	397	0 1	472	0
Other assets		5741	0.2	5924	0.3	11462	3.1	4571	1 7	2	0.0	181	0
Total assets		2671910	100.0	2309433	100.0	371455	100.0	263915	100.0	284233	100.0	209999	100

Short-term liabilities		476658	17.8	316441	13.7	183448	49.4	120499	45.7	73020	25.7	46948	22
incl bank loans		67466	x	24411	x	65313	x	44657	x	5179	x	4345	x
	loans from oilier individuals	38095	x	25941	x	22999	x	8938	x	5566	x	46.57	x
	debts to suppliers	182882	x	129689	x	33916	x	28792	x	32285	x	15331	x
Long Menu liabilities		447679	16.8	393317	17.0	116836	31.5	73026	27.7	18495	0.5	4944	9
incl bank loans		60723	x	3411 9	x	79011	x	40476	x	12161	x	3544	x
	other liabilities	370794	x	343360	x	22477	x	19252	x	6334	x	1400	x
owners' equity		1733966	64.9	1587504	68.7	70971	19.1	70314	26.6	192668	67.8	158082	75
incl capital stock		712491	x	616884	x	49676	x	45311	x	54551	x	36423	x
	net profit for the vear	30266	x	0	x	2417	x	0	x	9096	x	0	x
Other liabilities		13697	0.5	12171	0.5	200	0.1	76	0.0	50	0 0	25	0
Total liabilities and owner's equity		2671910	100.0	2309433	100.0	371455	100.0	263915	100.0	284233	100.0	209999	100

No of enterprises		1540		1540		335		335		158		158

Working capital		611399		540352		-19604		-1530		50997		35286
Deb: ratio		0.35		0.31		0.81		0.73		0.32		0.25
Source ESA. Euevótete majandusnäitajad 1993 ja 1994					(Financial indicators of enterprises 1993 and 1994)
Working capital = liquid assets + inventories - Short-term liabilities
Debt ratio = long-tern and short-term liabilities/liabilities and owner's equity

APPENDIX 9
Real investments, capital repairs and non-material investments 1995

(in thousand EEK)

Indicator	Real investments		Capital repairs		Non-material investments
	volume	proportion %	volume	proportion %	volume	proportion %
Estonian enterprises and institutions together	8760700	100.00	1628253	100.00	123767	100.00
Of which: a) agriculture	116795	1.33	8039	0.49	234	0.18
b) forest management	17959.2	2.04	23401	1.43	184	0.14
c) fisheries	57749	0.65	1519	0.09	-	--
Processing industry	1740433	19.86	280472	17.22	22026	17.79
Hotels and restaurants	237107	2.70	92519	5.68	853	0.68
Construction	550879	6.28	102819	6.13	1172	0.94
Finance and insurance	509610	5.81	107386	6.59	22873	18.48
Health care and social security	150055	1.71	42357	2.60	473	0.38
Transport, storage industry, communications	1845041	21.06	185067	11.36	14048	11.35
Energetics, gas and water equipment	771076	8.80	147616	9.06	3301	2.66

Literature: Investeeringud põhivarasse 1995, ESA, Tallinn. 1996 (Investments in fixed assets 1995)

Real investments, capital repairs and non-material investments 1994

(in thousand EEK)

Indicator	Real investments		Capital repairs		Non-material investments
	volume	proportion %	volume	proportion %	volume	proportion %
Estonian enterprises and institutions together	5569676	100.00	1273700	100.00	85890	100.00
Of which: a) agriculture	59017	1.05	5681	0.44	244	0.28
b) forest management	71383	1.28	3889	0.30	...	...
c) fisheries	37132	0.66	2689	0.21	---	---
Processing industry	1325340	23.79	100215	7.86	16327	19.0
Hotels and restaurants	149580	2.68	1996	0.62	24	0.02
Construction	274570	4.92	42783	3.35	476	0.55
Finance and insurance	429279	7.70	98897	7.76	17234	20.06
Health care and social security	181780	3.26	23378	1.83	195	0.22
Transport, storage industry, communications	1460414	26.22	374005	29.36	1365	1.58
Energetics, gas and water equipment	337660	6.06	328925	25.82	5663	6.59

Literature: Investeeringud põhivarasse 1994, ESA, Tallinn. 1995 (Investments in fixed assets 1994)

APPENDIX 10

Selection of the most important state policy measures Tor supporting agriculture and rural areas

	Estonia	European Union		WTO Agricultural Agreement
1	2	3		4
1. Market and trade
Export subsidies	Not implemented	Implemented		USA and EU obliged to reduce by 36% by year 2000
Import and export quotas	Not implemented	Implemented		Obligation to reduce export volumes by year 2000
Customs tariffs	Not implemented	Tax rates of 193% on butter, 95% on beef and 83% on wheat		USA and EU obliged to reduce by 36% by year 2000
Variable import tax	Not implemented	Implemented (difference between trigger price and world market price)		Obligation to replace non-customs measures with tariffs
Customs value	Law in existence, but not	Implemented		Protective measures permitted (Art. 5) but the price of imported products is below the trigger price or the volume of imports exceeds the trigger level - 5% Possibility of implementing balancing (compensating) tax in the case of serious losses (subsidies exceeding 5%)
Stabilising the domestic market	Security reserve	a)	intervention intervention fund for stabilising the market:	Maintaining food supplies Internal food aid
		b)	food reserve
Distortions in world market prices and the dumping effect	Counter measures not implemented	Counter measures implemented		Anti-dumping (Art VI) standard value criterion. Agreement on balancing measures.
Ascertainment of country of origin	Not implemented	Implemented		Requirement to ascertain origin of imports (country of origin agreement)
Market transparency	Partially	Supported at state level		Requirement to disclose - affects the fields of licensing, support measures, market information and structures
Veterinary and phytosanitary measures	Partially implemented	Implemented		Requirement to implement at internationally accepted level
2. Production
Price support	Not implemented	Not implemented since 1992		Support not permitted if connected with:
				•	production volume and
				•	product price
Income support (hectares or livestock per region)	Not implemented	Implemented		Permitted
Adjustment support for structural change	Not implemented	Implemented		Leaving the agricultural sector Falling resources
Income support in connection with a reduction in income	Not implemented	Implemented		In cases of income reducing by over 30%, 70% of lost income is compensated
Compensation paid in cases of losses caused by natural disaster or epidemic as accepted by the government	Implementation under the discussion	Implemented		Compensation for losses is permitted as long as the government has accepted that a natural disaster or animal cpidemic has occurred
Investment support for young farmers modernising production etc.	Implementation under the discussion	Implemented		Permitted in connection with privatisation or the restructuring of production according to criteria defined by the government
Production quotas (milk)	Not implemented	Implemented		Regulated
3. Services for the development of infrastructure in rural areas	Implemented	Implemented		Electricity grid, communications network, roads, water supply, dams and drainage systems are permitted.
4. Regional aid is granted if it is possible to determine the drawbacks of given areas compared to other areas and classify them as
relatively inaccessible and sparsely populated areas or mountain regions	Implemented. Terms and criteria do not meet WTO	Implemented		Permitted if: each area is defined via its neighbouring areas it has been confirmed that the difficulties are not temporary the criteria have been set down in law or by decree
5. Social support early retirement etc.	Implemented	Implemented		Permitted with means not involving production or income
6. Environmental support	Partially implemented	Implemented		In accordance with governmental programme as long as the limiting conditions are accompanied by additional expenditure or a reduction in income
1.Services offered by government research connected with products and the environment pests and disease control methods training lectures and advising services. supervision and inspection to guarantee health and safety	Implemented	Implemented		Granting of support should occur through publicly financed governmental programmes

APPENDIX 11

SUBSIDISING

Negative aspects	Positive aspects
Subsidising the agricultural producer
1. Requires the existence of a policy for agricultural structure as well as an agricultural development conception. 2. Requires the existence of principles for distributing subsidies. 3. The State bears great responsibility. 4. Problems may arise with agricultural producers in neighbouring countries. 5. Irrevocable aid does not encourage rapid reorganisation or improvements in competitiveness. 6. Subsidised objects are very numerous and responsibility is therefore dissipated. 7. The possibility of the emergence of pseudo-farmers.	1. Investments are made in agriculture and the prerequisites for the restructuring of agriculture are created. 2. Money is paid directly to the producer.
Subsidising processing enterprises
1. The extra money does not reach those agricultural producers who sell their produce in the market and who slaughter animals in their own farm households. 2. A certain part of the subsidy may remain in the hands of the producer and therefore never reach its intended destination. 3. The designating of producers is a problem. 4. Subsidies may enable industries to avoid taking measures to improve competitiveness.	1. The subsidised object is more concrete. 2. The agricultural producer is guaranteed a profit and from a certain volume of production upwards there will also be investments. 3. The pricing conditions are more or less the same for all agricultural producers and there therefore no unfair competition. 4. Stimulates the producer to increase production volume. 5. Creates favourable conditions for the emergence of new producers and so increase competition between them.
*Subsidising the final*
1. The subsidised object is extremely loosely defined and subsidising is hard to implement (an increase in the purchasing power of risk groups is conceivable first and foremost). 2. The real effect on production is indirect.	1. Theoretically guarantees all agricultural producers the possibility of asking a higher price unless, of course, overproduction is. occurring.

Source: Adapted from Viilup,L., Postimees, 4–5 February 1995