Chapter 6
SERVICES, SUPPORT SYSTEMS AND INFRASTRUCTURE
FOR AGRICULTURE AND RURAL AREAS

I. Introduction: Why A Strategy for Farm and Rural Support Systems?

There are two main reasons for furthering the development of farm and rural services, support systems and infrastructure.

1. Support services (e.g. maintenance of machinery, plant protection, animal recording, extension, marketing, input supplying) are essential for farmers to be able to produce and achieve better production efficiency. Support systems (e.g. agricultural education, agricultural science, breeding) supply producers and services with required information and materials. Some institutions that provide support services (e.g. producers' organisations, marketing organisations, legislation) effectively help to improve producers' access to resources and markets. Infrastructure (e.g. roads, telecommunications) also improves access to resources and markets.

2. For Estonia the present needs in this area originate from some specific features of socialist agriculture. The main agricultural producers formerly supported by the government were State and collective farms (although a considerable part of agricultural production always was produced on personal household plots). Collective and State farms also had important roles and tasks in additional to primary agricultural production functions, and adequate institutional arrangements for fulfilling those roles have not yet been devised in many cases. Those roles included the following:

   • non-agricultural activities: maintenance of technology, construction works, auxiliary production;

   • tasks that presently are being carried out by local administrations: local transport, construction of educational establishments (schools, kindergartens), and cultural and sports facilities, building of accommodation facilities, land administration, social care, organisation of social life, security arrangements, etc.;

   • functions and tasks that in town were fulfilled by the government: construction of infrastructure, communication, electricity lines and substation's, sales of energy, heating, construction and maintenance of local roads, sometimes also land amelioration, construction of gas lines, etc.;

   • organisation of services required by agricultural small-scale producers (household plots): land cultivation, harvesting, maintenance of equipment, transportation services, input supply services, marketing of agricultural production, veterinary services, etc.

When support services are taken into account, it is evident that the process of reform for the agricultural sector still is quite incomplete, apart from land reform questions. Agricultural reforms in Estonia during the last few years focussed on:

• compensation of historical injustice (compensation of labour shares and nationalised properties);

• reorganisation of proprietorship relations of operating assets and assets of collective and state farms;

• reorganisation of enterprises and establishment of new agricultural enterprises;

• separation of non-agricultural activities from agricultural businesses.

During the reforms relatively little attention was paid to:

1. replacement of services that were formerly offered by collective and State farms (especially land cultivation, harvesting, marketing, input supply and other agricultural services for small-scale producers);

2. new services required by conditions of market economy (e.g. marketing, advice on business management);

3. specific requirements for organisation of new service institutions established during the reforms (advice and extension for different producers' groups, processing and marketing);

4. temporary services required during restructuring of agricultural reforms and enterprises (extension and advice for realisation of agricultural reforms; advice for company restructuring; informing rural population about their possibilities, rights and obligations due to agricultural reforms; legal advice to entitled persons; extension activities concerning establishment of producers' organisations; advice and extension for organisation of service cooperatives);

5. replacement of services that were financed and organised by the government and organisation of which the government gave up during the reforms (processing, marketing, export, agricultural insurance);

6. organisation of financing of services needed by agricultural sector as a whole (agricultural research, animal recording).

Some tasks of the collective and State farms were transferred to the competence of local administrations. At the same time, several needed services have not yet been organised after the economic reforms. So we can say that in a broad perspective agricultural reforms have been realised only partially and are not completed yet. Taking into account the requirements for support services, it appears that the full costs of economic reform the expenditures required for the full range of reforms are considerably bigger than expected.

The need for improvement of general informational services in rural areas, to enable them to better cope with the nation's new economic and institutional framework, is seen clearly in the results of the following survey (carried out by the Institute of Rural Development (and reported in Loolaid and Müil, 1994):

Table 6-1
Opinions about ability to manage different problems in three rural communities, percent of
respondents (n = 111)

(Institute of Rural Development, 1994, Dembovski et. al. Nöouandevajadus … 1994, Loolaid and Müil 1994)

In regard to the need for strengthening agricultural advisory services specifically, in January 1996 the PHARE Advisory Services Project surveyed a random sample of farms. From 377 questionnaires 227 useable forms were returned. All counties were represented in the replies. The results are summarised in Table 6-2 below.

Table 6-2
Results of PHARE's 1996 Survey of Farm

The position is therefore of an industry with low yields compared with most western European countries and half of whose farmers believe they need technical advice but do not need farm business advice. When-account is taken of the fact that many farmers still do not fully understand the benefits that can be brought by advice on technologies, farm planning and other topics, it can be seen that the needs are greater yet.

II. The Nature of Support Services for Farms and Rural Areas

A. Infrastructure of Rural Areas

1. Types of General Infrastructural Services

For normal functioning of a society we need several services and types of infrastructure that we can't imagine our lives without. (In the following both services and infrastructure are referred as services.) In a market economy society such services are being offered by both the State and the private sector. The volume being handled by one or another sector usually depends whether we are dealing with a socialist or free, market-oriented society. Estonia still remembers well that in a totalitarian, socialist society all the services were offered by the State. State suppliers of services usually had a monopoly that influenced the quality and timeliness of services offered. If private persons offering a service enjoy a monopoly it usually influences the prices unless they are regulated.

Availability and quality of almost all the services depends on population density, that is, whether the services are being offered in rural or urban areas. As offering a service always brings along some expenses, there has to exist a certain minimum number of customers to make a service profitable for the supplier. Such a very simple condition is a factor that causes concentration of services into towns or town-type settlements. Secondly, the number of customers also affects the quality of a service. Bigger turnover, as a rule, guarantees better revenues and more can be invested in the quality of the service. However, different principles may have to be applied in the case of some classes of basic social services in rural areas, at least during an extended transition period.

What are those services most needed for natural functioning of a society? Based on the most wide-scale approach Table 6-2 classifies infrastructural services in rural areas. Services specific to farms are reviewed subsequently.

Table 6-3
Infrastructure and Their Association with Rural Areas
(p - private, n - national, m - municipal)

2. Availability, Quality and Need for Services

a) Education

During the last decades the Estonian educational system has undergone major changes. In the 1970s during a big campaign most of the small rural schools were liquidated, and this is probably the main reason why so many outlying districts have practically no population or are populated only with the older generation. If in a settlement, village or township there are no schools it is difficult to settle young people and families there as all parents want their children to attend schools that are close to their homes. Security, time and money play an important role here. At the present moment a new campaign aimed at closing unprofitable rural elementary schools has subsided, fortunately from a viewpoint of balanced rural development.

In towns there are new developments and uncertainties associated with education. Many different levels exist, and private schools are being started. Even in small towns there are problems with compatible education to say nothing of schools and education in rural areas.

In the countryside there are mostly basic (elementary) schools that, as a rule, have a pressing need for teachers-specialists.. The number of high schools/gymnasiums is very small in about 1/3 of the counties. One can get basic education in 80% of the counties. As a rule there are now schools in rural areas that ring surrounding towns.

Good education is the key for improving the development potential of rural areas. Education builds up many of value orientations, local identities, and other factors that give good reasons for returning to one's native town after graduating from a college. Education should be guaranteed at national level, but establishment of private schools surely will help to improve the overall quality of education. The topic of education is discussed more fully in Chapter 8 of this Strategy.

b) Medical Care and Social Welfare

The present trend of closing rural hospitals and increasing the share of dispensary treatment departments is; as a rule, correct, as because of insufficient financing and personnel. It is, anyway, not possible to organise full diagnostic services and treatment in rural areas. In those areas there are dispensary treatment departments and country surgeons under their control. As a rule, the quality of rural medical help is poor; and doctors and nurses of an older generation dominate rural health care. Considerable attention is given to treatment methods that neither harm nor improve the health of population (folk medicine). For the development of a region, local availability of medical help is not as important as availability of education. Ideally, the evolution of the health care system would guarantee the presence of primary care practitioners in all rural areas and towns, secondary care in towns, and tertiary care facilities and practitioners in the main cities. Health care at lower levels should still be organised on national level, but this doesn't exclude establishment of private medical practices.

Social welfare is mostly concerned with welfare of the elderly, and the number of retirement homes is quite large. At the same time very little attention is being to outcasts, alcoholics, that make up an inseparable part of rural life, and their tragic influence is usually left without attention. As a rule, there are no beggars and homeless children in the rural areas. The home nursing system, that is so widely used in Western society, is still quite new for our country, mostly because of insufficient financing and inertia of rural people when adopting changes.

c) Highways and roads

i) Overview

Highways are divided into two categories, national and county roads. The biggest part of road network is made up of national highways and in rural, areas both types exist. In addition there are also some private roads that only make up a very small share of the total network. The density of the road network in Estonia is rather satisfactory, but the quality needs to be improved. Because of limited resources only main highways are properly taken care of (especially during the winter period). There is very little maintenance at all of county roads. Usually only some really bad places are repaired, and that's it. This is again due to the very small budgets of counties, so after taking care of indispensable expenditures only a symbolic line for road repairs remains.

The development of rural areas is influenced by national highways, the maintenance of which might depend on the number of tourists, success in getting required investments and the attractiveness of a region as a living place. For long-run development prospects, it is essential to continue to invest in highways and form effective mechanisms to ensure their continued maintenance.

The government organises road building and maintenance, the actual work being executed by private companies. Quite a number of highways are in bad condition, and highways connecting different counties and regions have been built to different quality standards. In some farms and households smaller roads are in such a poor condition that it makes using them for driving all the year round impossible. Management of highways is not on a self-sustaining basis and corresponding work is done only to the extent that tax receipts permit it. Higher tax levels are needed for real estate located close to highways and other infrastructure, and the overall fiscal basis of counties should be strengthened.

ii) The current road network

The situation of national roads as at 1st January 1996 is shown in Table 6-3. Road lengths are given according to the territories under the jurisdiction of the Highways Boards, whose borders do not coincide totally with county ones. The data about the road surfaces shows that 54% have a hard surface, somewhat less than last year. This has been caused by the fact that a number of poor quality roads in the territory of the Valga Highways Board have been added to the' state road network. The relative importance of unsurfaced roads in the whole road network is less than 0.2%.

The information from the register of the National Road Administration about non-national roads (a total of 29,131 km) is given in Table 6-4.

According to this, only 3.7% of the total length of roads is surfaced. The term “surfaced” here refers to a hard surface. Information from 1994 shows that unsurfaced roads make up only 1 7.1% of the total length of non-national roads (this term comprises both municipal and private roads and most probably town streets and village roads as well).

Table 6-4
The Situation of National Roads as of January 1,1996

The publication “Munitsipaalomand” (“Municipal Property”) gives a general overview of the situation of county roads. According to its figures, there are 13,749 km of county roads, of which 33 km are in villages. However, if this information is analysed more closely, it becomes clear that 114 counties account for 13,693 km of roads while the other 83 counties account for only 23 km (Table 6-5).

This is obviously a conclusion based on incomplete information as the total length of roads in counties which have failed to report their data has been recorded as zero. For example, information is lacking about four municipalities in Tartu county, yet at the time of the last survey (1994) the situation of their roads was recorded as follows: Alatskivi county 66 km, Mäksa county 58 km, Peipsiääre county 33 km and Vônnu county 100 km. Just from these four sample counties, an average of 64 km of roads per county went unrecorded'. That could add anything around 5,100 km of county roads to the total for the whole country. If this were the case, the total length of county roads would be some 18,800 km and of private roads approximately 10,300 km. Roads used in the oil shale industry and quarrying were also included in the figures for the departmental road network. Of those roads 78.1 km have a cement-concrete surface and have now been omitted from the register as technological roads. It is also fair to say that the majority of roads at airfields, artillery ranges and other places abandoned by the Russian armed forces have probably not been taken into consideration either.

Table 6-5
The Situation of Non-national Roads as of January 1,1995

The depreciated value of county roads has been calculated as approximately 134 million EEK, but according to expert evaluation both the original unit cost of 1 km of road and its depreciated value have been underestimated by at least ten times. The original cost of the entire network of municipal roads would therefore be 3–4 billion EEK and of private roads approximately another 1 billion EEK. The majority of approaches to private houses, farms and small production centres have been taken into consideration neither in the register of roads nor in any previous road inventory. Research carried out in 1969-on the basis of maps of land use produced by TPI (Tallinn Polytechnic Institute) estimated the network of agricultural roads in the then ESSR to be 46,200 km long and the total road network to be 68,700 km.

iii) The location of roads

The national road network is more sparse than average in Ida-Viru and Lääne-Viru (East and West Viru) and Pämu counties - areas with many forests and marshes - and denser than average in Valga, Vôru and Pôlva counties, where the variable relief creates a greater requirement for roads. The network of all roads is denser than average also in Rapla and Viljandi counties with their more intensive agriculture.

Table 6-6

The Situation of County Roads as of January 1,1995
(without village roads)

d) Railways

Railways, railway stations and the associated labour force are mostly located in towns. Estonia has rather sparse railway network that goes through very limited rural areas. At the same time the well-being of some a areas might depend upon the employment at railways (Mõisaküla). Existence of railways in some rural areas might have a favourable impact on investments and attractiveness of living environment, through enhancing the possibilities of commuting to work in cities and towns. Above all. the quality of the rail service needs to be upgraded, and the anticipated privatisation of Estonian Railways should help in that regard

e) Sea ports

Most sea ports are located in towns; only Dirhami, Veere. Lehtma, Loksa, Mahu and some others are located in rural areas. Efficient use of a port depends very much upon availability of roads and railways and in such a case it can have a favourable influence on the development of a given area. It can also offer good landing possibilities for yachts and if there are also some interesting sights for the tourists, the potential for development is also there. However, the availability of fishing piers needs to be increased, as discussed in Chapter 9 of this Strategy.

Lack of ports or no navigation during the winter period creates seclusion and stops some economic activities or increases expenditures connected with other activities (mail, food supplies, health care). Up to now the state has been the owner of ports, and presently they are being handed over into municipal and private ownership. The bigger ports are able to finance themselves and quite well developed. Connection with islands continues to be subsidised by the government.

f) Logistics

Some border districts have certain development potentials, based on their role in international trade. Other rural areas have potential for development as agricultural wholesale trade centres, provided the warehouses and trading companies can be developed. Here service of both private and national character can play a role.

Logistics, or wholesale trade and trade regulation, make resources, services and markets available for agricultural producers, using different means of transport on that purpose. Logistics presume existence of certain standards in spheres of products and means of transport. Poorly developed logistics handicaps marketing possibilities and makes production inputs and marketing more expensive. Both the government and the private sector are dealing with logistics, the former as a regulator and the latter in an entrepreneurial sense. The government should support development of logistics and help along with establishment of related standards. Wholesale trade in Estonia is underdeveloped, many standards do not exist, there is too little control over keeping to the standards.

g) Communications

The quality of communication lines plays an increasingly important role in the present-day post-industrial information society. Most of Estonia is already covered with an NMT mobile phone network, and GSM networks penetrate more and more rural areas. The Estonian Telephone Company has made big investments to turn analogue systems into digital systems that by the year 2000 will probably cover Estonia as a whole. There has been quite a lot of discussion concerning long-distance employment through the means of Internet, but in rural areas it has not had much response yet. mostly because of low living standards and the inertia of the population in the face of fundamental changes in the economic system. Still the quality of communications plays an important role in development of rural areas. Every investor needs a well-functioning telephone and fax and computer communication facilities that are always available. (For example, Sweden monitors the production process of layered timber in Iisaku constantly, using a modem.) The same goes for making the living environment of ordinary people more attractive. The existence of Internet helps to widen the horizon of students of rural schools and make them more competitive. These services are most effectively provided by the private sector.

Telecommunications enable people to exchange information very quickly and therefore to act in a timely fashion. Lacking of a telephone causes waste of time, additional expenditures and risk (it is not possible to call for help in cases of danger or an accident). Telephone communication is being organised by private companies and is a self-supporting system, except areas with scattered populations, where there are no telephone lines. The situation could be improved by using radio or mobile phones, and the government assist the development of the system for remote areas.

h) Mail

As the quality of communication network (especially E-mail) improves, the share and importance of mail service will decrease, but will still have quite a secure position in the future (trade by mail helps to ensue this position). There are post offices in ever}' county of Estonia, sometimes also in bigger villages, and so the quality of mail services is quite satisfactory. This is both a private and public service.

Mail enables us to transfer written information and smaller packages. During the last years mail has been used for delivering goods ordered from catalogues, paying retirement pensions, and also for the transportation of milk and agricultural and environmental samples. Lack of mail in certain areas makes these functions more expensive and time-consuming. Mail is a state-owned system and acting in accordance to self-support principles, in areas with too little population it isn't very profitable and that is the reason why there are applications for closing down smaller post offices and shortening mail routes. As faxes and electronic mail become more available agricultural producers will have less need for mail as a channel for exchanging information. Private courier services also are a supplement to mail.

i) Energy

Electricity failures are one of the biggest problems of outlying areas. Smaller power stations are out-dated, transmission lines depreciated, and to remedy this situation requires investments the consumers are not very willing to pay for. In this sphere in Estonia a major role has been played by the Settlement Activities that have helped to build quite a number of substations and many kilometres of power lines. The condition of power lines and existence of substations of sufficient capacity is also an important factor for making rural areas attractive for investors. It is essential when contemplating establishment of local production (a sawmill, for example). Lack of substations of sufficient capacity has been the reason why quite a number of farms and sawmills have not been established. Electricity can be supplied by both the national government and the private sector.

In regard to energy supplies, only limited number of producers use services offered by central heating, but most of them do need petrol stations, as only some of them get the fuel they need from wholesale stations. A very few have their own petrol stations, offering the service also to other consumers: Petrol stations are owned by private companies, they are self-financed units and the quality of the service is quite good and substantially better than before, at the same time the mark-up has also increased.

Local electricity networks are insufficient to maintain stable voltage, and in many households there is also no industrial electricity. Some distant villages have no connections with electricity networks.

j) Public safety,

Public safety is very important to individuals and households, but it is also important for entrepreneurs (especially small enterprises). It has deteriorated markedly in most rural areas in recent years. In most counties only constables are being employed, while in bigger counties police departments still exist. Very low wages paid to policemen cause underemployment and so the public safely function in rural areas is mostly being provided by Security Squads (previously also Home Defence Squad, but that is liquidated by now). Probably assistant policemen should be used more extensively, but this would mean developing a substantial dialogue between local authorities and the police head office. The public safety situation is different in different areas - in outlying districts the situation is usually better compared to the surroundings of big towns. This service should be organised nationally and locally.

k) Rescue services

In county centres there usually still exist fire-fighting teams (from the collective farm period), but nothing more. There are also life-saving teams on the bigger bodies of water. The operative organisation of rescue services does not depend on the distance; it does not matter whether it is necessary to go 5 or 15 kilometres when the roads and communication lines are in poor condition. This service can be organised both nationally and locally.

Rescue services are being reorganised, and the purpose is to combine fire-fighting with other areas of rescue service. Employees will get a special training, foreign countries will help with equipment that has been written off. For a while the organisation of rescue activities was the responsibility of the counties, but at the present moment the national government will be in charge again. The availability of rescue services in areas with scattered population is decreasing. Constant alerts are being organised in bigger centres. The quality of rescue services depends crucially on the efficiency of communications systems.

l) Communal services

Local authorities with good common sense have succeeded in privatising these services, and those who still try to supply them do so inefficiently.

Water supply and sewer systems spell a problem mostly for bigger water consumers, and in areas that have less water supplies and are more vulnerable to pollution. Lack of water limits production volumes or increases considerably costs. Lack of sewer systems causes pollution and damages the quality of water. Water supply and sewer systems are mostly handled by agricultural producers, services of municipalities, private companies and other institutions. The government issues water utilisation licences, asks for water utilisation reports and can also set certain limits for water consumption. The service is self-supporting. The government should support establishment of sewer system and water purification equipment in nature reserve areas. The present situation can be characterised by low quality of water in mains, deterioration of mains, and in many cases also lack of water in many mains.

Waste handling and collection enables the producers to get rid of their by-products. In case of recycling the waste can also be used as raw material. Getting rid of our waste products gives aesthetic results and also frees up some land for other uses. Lack of a centre for processing animals that have died or have been slaughtered because of A-group diseases prevents us from selling animal husbandry products to the European Union. Most waste is being processed by agricultural producers themselves (compost, etc.). Private companies, municipal institutions and counties should support sorting and recycling of waste products and try to raise the awareness of the rural population about the importance of proper waste handling. In the future waste handling might be self-supporting, except in areas' with scattered populations. Up to now in Estonia very little attention has been paid to recycling (remains of oil, plastic, glass, paper), while pollution caused with fertilisers and plant protection chemicals has decreased.

m) Local administration

Local administrations (counties) grew out of the former village Soviets, although the tasks of administration were mostly carried out by State and collective farms. In 1990–1992 the rights of counties were increased rapidly, and their economic possibilities also increased without bringing along corresponding responsibilities. During the last years responsibilities have increased, and rights and economic possibilities, in turn, have decreased. The situation of local administrations is different by different areas. In some counties systematic training has been organised, corresponding legal frameworks do also exist and their implementation is being monitored. In many counties local administrations are not doing anything, commissions do not work, and there are no legal basic acts or other general acts, nor modern development schemes. Lack of a secure financial base is a mjor problem for local administrations. Some counties have taken up loans they are not able to repay, the laws are being abandoned and assets of the county are not being used for the right purpose.

Civil servants of local administrations are mostly engaged with offering governmental functions: passport management, army files, land reforms, agricultural reforms, payment of social subsidies, and verification of signatures. This is mainly due to the small size of counties. In most counties the population is no bigger than 3,000 people and so it is not possible to employ people offering the usual range of civil services (education specialists, child protection specialists, construction inspectors, etc.). Nevertheless, many counties' are busy with developing an environment favourable for agricultural producers and entrepreneurs (information gathering and distribution, training, advice, development of infrastructure).

n) Weather services

This is a service particularly relevant to farmers who could make use of accurate long-term forecasts for better business. There is no special reason why such establishments should be located in rural areas. It can be both private and a national government service.

o) Passenger transport

The number of bus lines taking specific routes is decreasing, but they will not disappear completely, as the demand will stay. Most people have some business to be taken care of outside their home areas and quite a few of them have no personal vehicle. Bus transport is most effectively organised by the private sector.

In rural areas bus transport also is needed for taking children to schools and kindergartens. In most counties it is available. It should be subsidised by local authorities so that all the children have equal opportunities for getting a good education.

p) Sports establishments

In rural areas these usually go together with schoolhouses and is under municipal control. They are especially important as positive social outlets for unemployed youths.

q) Business services (banks, trade, real estate, legal services, accounting, etc.)

These services can develop to the extent that the customers' purchasing power grows. Banks and trade are the fastest developing economic activities in Estonia. Liquidation of offices of the Saving Bank has caused quite a lot of annoyance, but it is likely that as the rural living standard improves they will be opened again.

Business services usually are established and prosper only in more well-developed (developing) areas, and a challenge for policy is how to make them available to farmers and other entrepreneurs in poorer areas.

Banking has developed well in Tallinn, and there are regional offices in county centres. In former centres of collective farms, as a rule, there also is an office of one bank. The number of officially registered saving and loan cooperatives is very small. There are no banks specialised on agricultural loans. Chapter 5 presents proposals to improve this situation.

Insurance of agricultural production and resources is little developed. Lack of epidemic insurance is one of the barriers that prevents export of animal husbandry products to Europe.

r) Print media

Distribution of printed media is in direct correlation with the presence of a mail service and makes information and entertainment available through newspapers and magazines. In rural areas very few people buy newspapers and magazines over the counter. Most newspapers and magazines are published by private companies, but the government also helps their publishing and distribution. At the same time there is no control over the quality of materials published. The situation in Estonia is exemplified by the termination of newspaper oriented toward the rural population, “Eesti Maa,” in 1996. Most of the rural population does not subscribe to newspapers or only subscribes to local newspapers or watches TV programmes. The government uses the magazine “Põllumajandus (Agriculture)” for spreading required information.

s) Broadcast media

Radio and TV (also local cable TV) enable people to get operative information and entertainment. For people who do not subscribe to newspapers this is the main source of information. Some radio and TV channels are state-owned, and some of them are managed by private companies. When discussing the content of the programmes, we can say that people, who subscribe for newspapers and magazines, do not suffer much from not watching TV and listening to the radio. Programmes are mostly aimed at watchers and listeners, that is, people who do not work. So, the target groups for publicly-financed radio and TV programmes should be better defined and their needs considered. At the present moment agricultural programmes are of occasional character, and they have no system and regularity.

Printed media, radio and TV should give agricultural producers information about and assessments of different options of further development, and also information about the situation in Estonia and abroad that the producers could use for making future economic prognoses. As newspapers and magazines are mostly owned by private companies the information transmitted tends to reflect their philosophies or orientations. Internet is a cheap way for exchanging information. It is available at the bigger schools, and agricultural producers have made little use of this option. In more distant areas Internet creates for the first time equal chances for receiving and distributing information, and also participating in training. The government should support purchasing corresponding hardware, development of networks and training, as part of a poverty-alleviation programme for rural areas.

t) Land management

Land management issues are being handled by counties and they can order corresponding services from different companies. Their main sphere of activities is restitution of land within former boundaries, and there is little to do with actual land management except for the maintenance of property registry systems in the form of the Title Books., (See Chapter 3 of this Strategy for a fuller discussion of the topic of land management.)

B. Infrastructure and Services Required for Agricultural Production

These classes of services include drainage systems, irrigation, technical maintenance of machinery, veterinary services, plant protection services, animal recording, breeding, specie inspection, soil analysis, feed analysis, output marketing, food supervision and product certification, procurement of inputs, obtaining credit, accounting and bookkeeping services, insurance, processing of raw products (meat, milk, grain), water purification, manure collection areas, burial places for animal carcasses, storage of outputs and storage facilities for chemicals and fertilisers, apicultural services. These services are described schematically in Table 6-6 below.

Table 6-7
Infrastructure and services required for agricultural production

C. Forest Services

What should and could be the factors that would make forests serve the interests of agriculture, independently of their form of ownership? Those could be general recreational uses of forest; the forest as an important producer of oxygen; a resource that balances temperature, reduces impacts of wind and water erosion, creates humidity regimes and microclimates that facilitate land cultivation; and a biological factor that improves soil fertility (for example, nodule-forming bacteria that live on the roots of grey alder bind up nitrogen that will help to get better yields after those areas are used as arable land). The forest is home for many useful species of birds, who feed on rodents and pests of fields and gardens, in the forest there live bumble bees who make cultivation of clover seed possible for us, etc. The forest is a place where people can spend their holidays, hunt, and pick berries, mushrooms and herbs. Even in case of an agricultural revival the share of forests shouldn't decrease, as this is not in the interests of agriculture. The share of forest could even increase by a couple of per cent on account of the lower productivity of arable land.

Services of this nature depend very much on ownership forms, which can be divided into two basic categories, apart from forest land not yet restituted:

1. State-Owned Forests

During the last period of independence State-owned forests played quite an important role in rural life. In winter forests meant a source of additional income for farmers: cutting the forest, transporting the timber to the storing areas and rafting places. Forests also provided most of the building material the farmers needed (logs, shingles, etc.) for building farmhouses and the wood that they needed to keep their houses warm. In some areas the farmers were given permission to use State-owned forests for making hay and grazing animals. In summer people were employed to raft logs, bark trees at the storing areas, load timber into the wagons, etc. State forest managers, many of whom had a college education, were real leaders of social life; they initiated many cultural events that took place in rural life. For the older generation of rural people all this is only a pleasant memory of days long gone.

The present-day economy has also penetrated areas of State forest management and the whole system works more as a source of raw material for the Scandinavian timber industry. Under existing regulations the whole volume to be cut should be sold at a public auction while the original price will be calculated by multiplying stump price by regional reclamation coefficient, that, as a rule, is close to two. Revenues received at the auctions will be transferred to so-called fund of forest capital that will be used for sustaining expenditures of the present state forest system as a whole. So the management of the State forests is only interested in offers that are as high as possible.

Imagine now - there is a forest auction, a farmer interested in purchasing wood will be participating, and with him will be sitting a representative of a large Swedish company. Another change is that purchasers do not need local labour for cutting the forest. They have got good equipment and well-trained labour who will take care of the job. Very often all that remains for the local residents will be spoiled roads, the maintenance of which will be a responsibility of local administrations. The active campaign for establishing State-owned forest management organisation (SSFMO) won't improve the situation for rural people (producers), except maybe increasing the rate of employment in this region. Under these circumstances it is not possible to count on State-owned forest when contemplating material requirements of rural construction contractors, but that's exactly what is needed for rebirth of agriculture. There are no restrictions against farmers buying growing forest at an auction or timber from a local forest management office, but the prices! Farmers are not able to break through those barriers without a change in policies.

What are the services that State forest management offers rural economy at the present moment?

• Employer: officials of forest management offices are part of rural population and within certain limits additional labour is always required in areas that big companies prefer to ignore, for example regulative felling of trees, but also planting of forest during spring period, tending of forest cultures, etc.

• Source of fiscal revenue: it is paying land charges that are the main tax basis for local administration of several areas and that will be used to serve the interests of local population through the local budget.

• Social services: in some areas with rural economy in very poor condition (southeast Estonia) forest management has to play some roles that are not its normal function. In the winter, for example, it cleans roads of snow, takes children to school, procures wood for schools and other social-cultural institutions, and carries out other social functions.

• Infrastructure maintenance: it can take care of drainage systems, roads and other constructions that can be parts of bigger systems serving the interests of agricultural production.

2. Private Forests

Which services can private forest management offer to agriculture? The most direct ones in all the spheres mentioned before. Lucky are the land claimants who have some forest growing on restituted land. They have no worries and need to participate in State forest auctions, competing with big business tycoons for the right to cut some forest. Of course, there are also some legal limitations they have to observe when exploiting their assets (forest), for example, developing forest management programmes (felling volumes permissible, obligatory investments into new forest, etc.). But as it turned out before, during the last couple of years very large felling volumes are being permitted in private forests. Theoretically this should give a chance to get all the timber needed for maintaining agricultural production quite painlessly from private forests. Still, there are some “buts” - it only goes for producers who have enough forest to satisfy their own needs. It won't make the situation better for producers who are lacking their own forest. They still have to buy all the timber they need and the forest owners will still sell their timber (that will be left over after the needs of their own farm have been covered) to a purchaser who is willing to pay more.

D. Agricultural Extension (Advice)

1. The Role of Advisory Services

Economic difficulties faced by agricultural business are mainly caused by a cost of production being too high for competing at prevailing market prices; insufficient professional and business skills and knowledge, especially on the part of new farmers, that make effective management very difficult; and weak supporting services. Estonian agricultural sciences have achieved important results that could be used for making the most of the potentials of ever productive unit and region. Extensive application of those results is being limited by insufficient communication on the part of scientists and practitioners, insufficient professional knowledge of agricultural producers/farmers, and a generally low level of existing informational materials. In such a situation extension and training aimed at agricultural (rural) business becomes indispensable.

The main role of advisory activities in an agricultural information and knowledge system is to distribute knowledge generated by research subsystem (science) and using it in applicable subsystems (producers/entrepreneurs), and also assisting farmers to define their own objectives, evaluate their operations, identify problems and seek solutions.

Advisory activities can be observed as a service that offers agricultural (rural) producers.

• knowledge needed to understand and manage production and marketing processes that would give them motivation for setting objectives and solving problems using additional knowledge and information - this is the training (educational) function of advice (extension).

• information with a timely and definite value enhanced by training that has an individual meaning for every entrepreneur - this is the informative function of advice/extension.

Extension methods can be divided in accordance to the target audience as follows:

• Mass advice - advising via mass media (newspapers and magazines, radio, TV, Internet) and publications (newsletters, leaflets, textbooks, manuals, etc., of a large number of publications with a wide area of distribution);

• Group advice - advising a group of persons of similar characteristics and/or interests at the same time; usually organised through training events, courses, information days, etc.

• Individual advice - definition and evaluation of possible ways for achieving one's objectives based upon the present situation analysis and desired objectives; this kind of advice will as a rule be imparted during individual communication process with the entrepreneur during a visit to the farm.

As a rule there exists the following connection: the better is the education of entrepreneurs and producers, the bigger will be their demand for information, or, we can say, the training function of advice and extension increases the demand for its informative function.

2. Target Groups for Advisory Services

Different groups of agricultural producers/entrepreneurs need, as a rule, advice of different levels and different types. When determining target groups for advisory activities we can use categorisation of the same type that has been used for expressing economic results and aspirations of agricultural business entities:

1. Developing enterprises and farms. Economic results reasonably good. Efficiency: yield of grain over 3500 kg/ha (dry weight), production of cows more than 4500 kg per year. Economic orientation of personnel. Awareness of development factors, marketing

   options, investments for improving quality and updating of technology. Able to service a loan and pay for advisory service.

   Advisory requirements: In the first place they need specific, professional advice for intensifying agricultural production. For getting required information they communicate with research institutions and companies 'offering new technologies, participate in information and training days, and take courses. Are actively looking for new information.

2. Enterprises and farms with a potential for development. Economic results at a satisfactory level. Enterprises started their activities after the reforms in unfavourable conditions, with insufficient technology and material liabilities. Economic orientation of personnel, sufficient skills. Efficiency relatively high. Weak points are technology, insufficient turnover. Will be able to service a loan in 2–3 years after reorganisation.

   Advisory requirement: In the first place they need development schemes, business plans, advice based upon situation analysis. Are quite willing to pay for advice after they have been convinced of its quality and usefulness.

3. Degenerating enterprises. Negative profitability. Such enterprises exist on account of liquidation of assets. Low efficiency. Large number of owners and shareholders. Orientation of personnel: production and social welfare. No investments. Possible solutions: facilitation of structural changes through reorganisation programmes.

   Advisory requirement is not being recognised, and they are not willing to pay for advice. Would need advice based on development schemes and special training.

4. Small farms and households. Nostalgic orientation. Efficiency: relatively high production of livestock, small turnover and low efficiency of labour. There are either no investments at all or investments in out-dated and low-level production technology. Possible solutions: in case of lack of alternative occupations, direct income support in accordance with the number of livestock and acreage and people being supported (see Chapter 2); special programmes and compensation for transport in outlying regions and border districts, including islands.

   Advisory requirement is not recognised (it can be better called a need for communication); these families are not able to pay for advice. Would need encouragement and situation analysis to take principal decisions in the first place, but also training for obtaining new knowledge and skills. However, many small farms have a chance to prosper to some degree by growing fruit, vegetables and other special crops.

3. The Benefits of Agricultural Advice

When observing advisory activities as a part of an agricultural information and knowledge system we can see the benefits working in two ways: producers and entrepreneurs get information generated by advisory research, and the research subsystem in turn gets feedback on applied problems through the advisory activities.

As communication between agricultural sciences and practice is somehow insufficient in Estonia, because of underdevelopment of advisory systems and the lack of a participatory tradition at the farm level, we cannot yet speak about the role of advisory activities in characterising farm-level problems for researchers and obtaining feedback from farmers. Nevertheless, the benefits of agricultural advisory activities can be evaluated from the standpoint of a producer or entrepreneur who obtains more economic profit (direct or indirect) and very often also motivational and psychological assistance (the value of which shouldn't be underestimated) from advisors.

In addition, to the extent that advisory activities help to improve economic results of producers and entrepreneurs, production will increase and business will develop, profits will grow and this will mean some direct benefits for the nation as a whole (greater tax receipts, for instance) and the population as a whole will also benefit from it through multiple effects on income and employment.

4. Advice as the Everyday Job of an Advisor

Advisors can be divided into specialists and generalists (comparable to specialized physicians and family physicians). Lately there has been an increasing demand for generalist advisors and quite a number of advisors have received corresponding training (within the framework of PHARE advisory service project and several other foreign aid projects).

An advisor should be able to:

• give advice to a manager or owner of an agricultural production unit;

• understand the vision of a manager of a production unit (farmer) and draw conclusions within the framework of that vision based upon the discussion with the farmer;

• carry out a situational analysis of an agricultural production unit (farm), covering all classes of management decisions the farmer must make;

• involve the farmer as much as possible in carrying out the analysis;

• provide some suitable alternatives that are based upon the interests of the manager of the production unit (farmer);

• assist the manager of a production unit (farmer) in his or her decision making process;

• select the most relevant information using limited sources and under limited time availability.

5. Sources of Information for Advisors

As advisory activities can be considered in part as a process of communicating information between research and practice, it becomes clear that a portion of advisory work is associated with information gathering, processing and transmission. Based on the issues mentioned and discussed at different events of Advisors' Association (brainstorming organised by the Estonian Advisors' Association, advisory methodology courses organised by PHARE project, advisors' days at Jäneda) we can point out the following types of information that are of importance for the advisor:

1. Market information; on paper, in computer, over telephone; mostly got from newspapers, telephone, business catalogues, companies, fairs and exhibitions, farmers' unions, and personal contacts.

2. Technological information: obtained through training events, consultations, scientific conferences, reports, research memoranda, publications, promotion events of different companies, and from colleagues and producers, through personal contacts.

3. Legislation and regulations: at the present moment mostly received only occasionally, mainly through news media.

4. The economy: trends in economic variables, comparative data, etc. Up to now only publications developed by the Board of Statistics have been available and they are insufficient. Statistical indices including agricultural economic data should be made available as a package by the Ministry of Agriculture.

5. Training possibilities for both advisors and producers and entrepreneurs: announcement of such events are mostly received from media, and also through personal contacts.

6. Methodologies: methodological information concerning multi-faceted treatments of specified farm problems; such information is not generally available yet.

As common sources of information advisors have mentioned:

• Ministry of Agriculture, county administrations;

• research institutions, conferences, scientific reports;

• training courses;

• fairs, exhibitions, commercial information and promotion events;

• farmers' unions, Estonian Advisors' Association;

• media, manuals, other publications;

• data bases, computer software;

• telephone catalogues, business catalogues, catalogues of companies;

• personal contacts with producers, entrepreneurs, colleagues, plant scientists, etc.

When describing sources of information we also have to consider their development. Some of them are working efficiently; some exist, but do not work very efficiently; and others have only started to develop. There are also sources of information that do not exist yet, but there is a clearly expressed need for them. For example, a need for advisors' information centre(s) has been clearly expressed.

6. Supporting Services Required for Advisors

An advisor also needs certain services for successful performance. In addition to self-evident services (like telecommunications and mail services) advisors need services of different laboratories: to develop feed rations they will need analysis of available feeds, for a fertilisation plan they need the results of soil samples, etc.

A short description of the situation (as of late 1996) in processing of soil and feed samples is as follows:

Soil samples are being analysed by the Department of Soils Research of the State Plant Protection Board (in Saku) and the Plant Biochemistry Laboratory (in Tartu). The price of sampling depends on the ingredients analysed. The cost of an ordinary sample is 60–70 EEK, and on average 1 sample per 2 ha will be taken. If it is requested that the laboratory also take the samples, it might be necessary to wait for 1 year. In case the samples will be taken by the advisors and transported to the laboratory, the results will be available in 2 months. The problem for the advisor is the long waiting time and also relatively high costs.

Feed samples are analysed by the State Veterinary Laboratory in Tallinn, two laboratories in Saku, three laboratories in Tartu and one in Kehtna. (The Tartu and Saku laboratories are used most often.) Feed samples can be, as a rule, also analysed at laboratories of the regional veterinary centres, but not all of them carry out a complete zootechnical analyses, but rather only determine the content of dry matter and crude protein. The prices in those laboratories also vary significantly, as there is no regulation for unification of prices. Zootechnical analysis of silage costs from 120 to 16 EEK; hay and silage sampling is 80–110 EEK. It is possible to determine 19 different nutrients at the State Veterinary Laboratory and the prices are all different for every nutrient: from 23 to 89 EEK (higher than the average). The problem for the advisor is the fact that laboratories give different information for feeds (apparatuses and methods being used are different, different ingredients are being sampled, so it is not possible to compare the results of analyses carried out at different laboratories).

These conditions of laboratory services are not sufficient for extensive and good quality advisory work.

7. Organisation of Advisory Activities

a) Situation of Advisory Activities and PHARE Advisory Project

The first Estonian advisory system was organised by Estonian Central Farmers' Union in 1993. This system includes regional advisory stations of farmers' unions, training centres working at two farmers' unions (Harju and Viljandi) and the Jäneda Advisory and Training Centre. The Farmers' Union advisory system was planned to consist of two levels: advisors working at regional advisory stations to advise and train farmers, while Jäneda Advisory and Training centre takes care of additional training and advising of advisors and development of advisory support materials. At the moment of establishment the total number of advisors working in this system was 60–70; during the last years this number has considerably decreased.

Following the experience of 25 milk producers of Tartu County, who established a livestock extension cooperative called Herd of Tartu (Tartu Kari), farmers advisory cooperatives were established in 3 other counties (Viljandi, Järva, Jõgeva) in 1994–95. In such cooperatives 8 advisors are presently employed.

In 1996 the PHARE Advisory Service project was started in Estonia, to support the Ministry of Agriculture in the process of developing an advisory service system. The objective is to encourage farmers to use advisory services and in such a way to increase production efficiency. In principle the government supports activities (advising), not organisations. For payment of advisory subsidies so-called advisory contract system has been developed: agricultural producers can conclude an advisory contract with an advisor within the limits of a certain amount, part of which (in 1996 and 1997 10%) will be paid by the producer, the rest of the amount will be paid to the advisor as advisor)' subsidy by the government after the advisory contract has been fulfilled.

To apply the advisory subsidy system all the advisors were asked to become registered at the Ministry of Agriculture. By the end of 1996, 630 companies and private persons giving advice were registered; 94 of those were companies with 411 advisors, and 125 were private entrepreneurs. In 1996, 111 advisors of this total number mentioned had concluded contracts with producers.

The results of contracts concluded in 1996 have been published. 80% of advisory contracts were concluded by 20% of advisors, all of which were companies with advising being the main operating area, where, as a rule, at least 2 full-time advisors were employed. The price of one contract for a producer or a group of producers was from 100 EEK onward. Bigger contracts with prices up to 2200 EEK mostly included group advice. The main share of the contracts -1098 - were concluded for maximum advisory subsidy amount, that is, 2200 EEK. The average hourly fee of an advisor varied between 11 and 1387 EEK, for most advisors it was between 50–150 EEK. Fulfilment of one contract took between 6 and 150 hours in almost all cases, while most advisors (leaving extreme cases out) it took 16–50 hours to fulfil one contract.

According to the 1996 results, 12.3% of all the agricultural producers registered in Estonia made some use of advisory subsidies. The most active were producers of Rapla county, 19.7% of which concluded an advisory contract. They were followed by Harju, Ida-Viru, Järva, Lääne, Põlva, Saare, Valga, Viljandi and Võru counties. Less than 10% of producers concluded contracts in Hiiu, Jõgeva, Lääne-Viru, Pämu and Tartu counties. The latter with its participation percentage of 7.5% took the last place in Estonia.

There were no important correlations between advisory activities and sizes of production units being advised. Although the average acreage of producers entering into advisory contracts was 145 ha, it turned out that almost 50% of the producers making use of advisory subsides had arable acreage of 10–30 ha. or less, which is an indicator of the potential of smaller farms. The average number of dairy cows was 53, but 33% had no dairy herd at all and 53% had less than 50 dairy cows. The 545 producers involved in swine raising had on average 140 fattening pigs; 51% only had 1–5 pigs.

In accordance with the experience of 1996, on average the most use was made of animal husbandry advice (31 %), followed by plant cultivation (26%), farm economies (26%), and miscellaneous (17%). During the last years (1995–1997) the Ministry of Agriculture has organised public competitions for the organisation of group and mass advising events, and all the advisory organisations have had a chance to participate with their projects. In 1996, with resources allocated by the Ministry 450 days of training events, courses and seminars were organised in counties, research institutions and other centres. Participants in those events included almost 8500 persons whose everyday lives are intimately linked with agricultural activities.

b) The role of universities and input suppliers

The Estonian Agricultural University, several research institutions and agricultural educational establishments and advisors of companies selling agricultural inputs and processing industries (their number is now in Estonia close to 50) have also been active with advisory activities and additional training of producers and entrepreneurs. Some of their activities have emphasized farm management as well as cultivation techniques, and they have worked with farms of all sizes.

c) Institutional types of advisory services

At the present moment in Estonia there does not exist a homogeneous advisory complex but rather a variety of programmes and institutions working in that field. The following different main institutional types of advisory services can be distinguished:

• National advisory services, for example, advisory services established at the Ministry of Agriculture, supported largely by PHARE.

• Advisory services managed by two (or several) institutions, for example, government (Ministry of Agriculture) has established a joint advisory service together with producers' associations.

• Subcontracted public sector advisory services: the government delegates the management and organisation of advisory services via a contract with a public-legal institution established for that purpose.

• Private advisory services: profit-oriented companies, companies based on shareholding principles (producers' associations) or non-profit organisations.

• Advisory services based on educational institutions.

d) Financing of Advisory Services

In 1996 from the budget of Estonian Government 4.1 million EEK were allocated for financing advisory activities, 1.46 million EEK of which was meant for group and mass advising (allocated through a public competition) and 2.46 million EEK for advisory subsidies (based on advisory contracts). PHARE promised to give additionally up to 2.46 million EEK to be spent on advisory subsidies. The Estonian Central Farmers' Union and Jäneda Advisory and Training Centre also received additional financing from the State budget. Advisory' activities have also been supported by several foreign countries (Germany, Denmark, Sweden) which have donated know-how, money, and equipment.

E. Agricultural Research

Agricultural research in Estonia is carried out by the Estonian Agricultural University at Tartu and some 6 institutes. The University employs 1300 people, including 72 research workers. The 1996 regular research budget amounted EEK 10.47.000; the allocated regular research budget for 1997 is set at EEK 11.515.000.

The 6 institutes are:

• the Estonian Research Institute of Agriculture at Saku:
  (46 researchers, 2.074.000 EEK in 1996, 1.666.00 EEK in 1997)

• the Estonian Institute of Agrarian Economics at Saku:
  (16 researchers, 645.000 EEK in 1996, 364.000 EEK in 1997)

• the Estonian Institute of Agricultural Engineering at Saku:
  (14 researchers, 453.000 EEK in 1996, 94.000 in 1997)

• the Research Centre EVIKA at Tartu:
  (8 researchers, 453.000 EEK in 1996, 112.000 EEK in 1997)

• the Estonian Agrobiocentre at Saku:
  (14 researchers, 1.272.000 EEK in 1996, 168.000 EEK in 1997)

• the Jõgeva Plant Breeding Institute at Jõgeva
  (48 researchers, 2.056.000 EEK in 1996, 2.210.000 EEK in 1997)

As can be seen from the above information on the accumulated budgets for infrastructure and scientific research, most institutes are facing a tremendous cut in public funding. This process has been going on now already for some years.

III. Support Services in the Past

We can distinguish three periods in management and development of services and infrastructure:

1. The Period of Socialist Agriculture 1949–1990

2. The Period of Fast Changes and Reforms 1991–1993

3. The Stabilisation Period Following Reforms 1994 onward

A. Period of Socialist Agriculture 1949–1990

This period has probably been studied in quite a thorough and detailed way and everything should be clear already. There are still some aspects that should be stressed separately in connection with support services and establishments of infrastructure. The period of socialist agriculture can be generally characterised by national-level financing and national-level management of infrastructure and marketing (both for domestic and export market) and processing. In quite a number of sectors the national government also fulfilled the tasks of a local administration.

One of the specific features of economic activity in rural areas was the presence of quite a number of agricultural services for household plots, that is, services needed in agricultural production (inputs, maintenance, marketing, processing), and services that imparted knowledge, skills and technologies. All these services were financed, managed and provided by collective and state farms.

In addition, quite a number of national and local government administrative functions were being financed and managed by collective farms.

So agricultural large-scale production units, especially collective farms, had the role of a local administration in addition to its main objective of production of agricultural products. The provision of services important for country people by state and collective farms was one of the main reasons why so many large-scale production units were maintained during the last agricultural reforms (already the third during this century!). Although the political objective of the reforms was to give advantages to private farms and farmers' co-operatives, quite a large share of the older generation voted for maintenance of big collective farms. Large-scale farms offered some real services that the newly emerged county administrations were not able to offer and the state had not yet created new options for developing such services.

As one of the important conditions influencing development of agriculture and agricultural services we have to point out lack of producers' organisations. The most important fact to be considered when studying this period is national policy's predominant role in the shaping of the agricultural sector and the services and financial and organisational instruments used for executing this policy.

B. Period of Fast Changes and Reforms 1991–1993

Here we can make a distinction between two types of changes: changes due to general development processes, and changes initiated by the government.

The first group includes general democratisation, decomposition of the communist regime, hyperinflation for a period, loss of important parts of the external market for agricultural production.

The second group includes administrative reforms, agricultural reforms, privatisation of companies producing and trading agricultural inputs and the processing industry, trade policies, tax legislation, and the starting of farm advisory services working in accordance with a new set of principles.

This period can be characterised by the following issues:

1. Termination of national financing and management of several services, while the government has not supported starting of a new, alternative service. Changes in export management were of utmost importance for the agriculture. After leaving Soviet Union Estonia lost its traditional, and at that time its one and only foreign market for agricultural products. In such a situation there would have been a need for active search to find some new markets to maintain the income of the producers. At the same time some changes also took place in marketing management. Up to that time export of agricultural products had been managed nationally (although using distorted tools). The government gave up financing and management of such services, but at the same time the producers also lacked export organisations of their own. The government also gave up domestic market management. As the producers also had no domestic marketing organisations producers (including newly formed private farms) were left face to face with the monopoly of processing industry. This also affected the third group of producers - subsidiary households, for whom collective and State farms used to organise quite a number of services, marketing included.

2. When starting the changes and reform the government did not organise any necessary support services and compensation mechanisms that would have made it easier to adjust and would have softened negative influence of reforms and changes upon rural population. As one of the examples we could give agricultural reforms that were started by the government but the expenses of which were 'covered by newly formed agricultural enterprises (5% of the assets of collective farms were spent for settling reform expenses). During the reforms national financing of extension concerning the changes was also not taken care of. The government did not finance a national information campaign that was supposed to inform people about their rights and obligations. The government also lacked realistic financial assets to transfer some functions that had nothing to do with the main objectives of collective farms to other concerned institutions and establishments. There are also analogical problems concerning other reforms and innovations.

3. Emphasis was laid upon one producers' group (private farms) for national subsidising and organisation of services. In state budget Ministry of Agriculture subdivision there is a separate programme oriented toward this group of farms and called “Support for Agriculture”; at the same time there are no similar programmes for other producers' groups. As one of the innovations important for Estonia with some social financing (government and foreign grants) and organisation from the farmers' unions advisory service was started. But such a service was only formed for one group of producers, and during its foundation other similar services were liquidated (financing was terminated).

C. Stabilisation Period Following Reforms, 1994 onward

Several services and types of infrastructure that should be financed at least in part by society at large haven't been organised yet. There have been applications for foreign grants or loans to develop and finance certain services, several projects have been started, but they have not been co-ordinated on national level and in the Ministry of Agriculture.

As one of the examples we can give development of advisory services. For more than 2 years in the Ministry of Agriculture, that is, on national level, there were no specialists whose task would have been co-ordination and financing of advisory services and corresponding programmes. At the same time there have been a number of foreign support programmes in Estonia (USA, Canada, Holland, Germany, Denmark, Finland, Sweden, European Union) aimed at development of advisory activities. Furthermore, big part of those programmes were centred upon issues of dairy herd management. Those activities were also not coordinated. The first meeting mutually introducing scopes of foreign programmes took place only in the beginning of 1996 when quite a number of those programmes had already finished their activities.

Up to today financing of advisory activities has not been co-ordinated on national level. The Ministry of Agriculture (Department of Science and Education) started a national programme for developing advisory services in 1995, in the framework of which quite a number of project activities have been financed in accordance to principles of public competition. The advisory activities development programme also supports agricultural producers when buying advice.

In the autumn of 1995 the PHARE advisory service programme was started. The national advisory activities programme and the PHARE advisory service programme prepared together (the British Know-How Foundation also participated) a scheme for utilisation of advisory subsidies that can also considered as preparation work for utilisation of advisory component (about 15% of the loan project) of World Bank agricultural loan. At the same time the government has financed several advisory activities that have not been co-ordinated with other activities on national and Ministry of Agriculture level:

• Farmers' Union's advisory services (In the State budget, “Development of Farm Management”)

• Jäneda Training and Advisory Centre

• Development of Producers' Union advisory services (financed from national reserve fund in autumn 1996)

• A number of national programmes that include advisory component. Financing of a national programme concerning ecological (biodynamical) agriculture was finished although it also included advisory component as one of the essential parts.

Because of lack of co-ordination some organisations and activities will get multiple financing while some of them get no support. There is unfair competition going on between different organisations and that has been also pointed out by several foreign experts (PHARE, World Bank).

Simultaneously with general stabilisation some new changes have taken place (such as the approval of the Food Act) and are ongoing (food quality supervision, preparations for consolidation with European Union), but we still can say that the government has paid insufficient attention to financing and organisation of information for concerned interest groups. Most of all, clear objective in this area have been lacking.

In their short history, Estonian advisory services have had considerable success in spite of some expected start-up difficulties. Some of the main achievements include:

• Farmers who have been in contact with advisors already report considerable increases in income through better yields and higher returns from better quality, often without major capital investments

• A large number of contracts between private, commercial advisors and farmers have been signed and approved. Farmers are now paying 10% of the costs of the contracts and will pay more in the future.

• A registry for advisors has been created and eligibility criteria were developed. Advisors are required to register themselves as private businesses. The register was widely disseminated on disk, making searches for specific expertise easier.

• An advisory council has been created, chaired by the Ministry of Agriculture, with representation from different categories of farmers, research, education, private and public advisors, processing industries and the Parliament. The council meets at least twice a year.

• An Association of Advisors has been established and continues to grow, gathering about a hundred of the most dynamic advisors in the country.

• About 120 private advisors have been trained in business planning and advisory methods, while a number of key staff have been on an international study tour.

• An impressive number of extension materials have been developed, and seem generally of practical value to the farmers, reflected in significant numbers sold.

• A public relations campaign has been initiated to promote the advantages of advisory work. An attractive brochure was designed, produced and disseminated, while a professionally-made video will be launched at the Jäneda farmers' days.

• A discussion has started on a training programme for commercial bank employees in agriculture and in evaluating technical proposals.

D. Past and Current Policies regarding Roads

i) Early historical information

Following the Kärde peace treaty (1661), the whole of Estonia was under the control of Sweden. The dependency of Estonia was formed in the north of what is currently Estonia and the dependency of Livonia was formed in what is currently south Estonia and north Latvia. The island of Saaremaa was a separate entity altogether. Both of the dependencies had their own, somewhat differing, state provisions. The foundation for Livonia was the “Lieffländische Landes-Ordnung” from 1668. The state roads or military roads of Livonia were surveyed and charted in 1669. The lowest Livonian court was responsible for attending to the roads, bridges and ferries. (In Estonia, the same task was performed by the highest rural police court.) Keeping the state roads in good condition was a payment in kind given to the estates or manors, who in their turn had authority over the farm workers. In the Tartu district there were six principal roads at that time with a total length of 464 km. That was the beginning of the national road network.

The beginnings of county roads were church roads. Churchwardens were responsible for keeping them in good condition. The local masters were responsible for the private roads of estates and villages.

The same provisions were fundamentally retained during the period of Russian tsarist power. Northern Livonia was only unified with Estonia in 1917, immediately before the formation of the Republic of Estonia.

In 1923 it was calculated that the Estonian road network consisted of 11,500 km of post and parish roads and 6,500 km of county and village roads. Smaller (private) roads were not taken into consideration.

At the 1934 road conference in Kaunas, road standards which divided roads into three classes were brought into use. On this basis, the Estonian road network in 1938 was as follows:

In 1945, the areas beyond Narva and the majority of Petseri county were merged with Russia, so reducing somewhat the size of the road network in the Estonian Soviet Socialist Republic (ESSR). In 1946 there were 21,163 km of roads in the (national) road network. There were no such things as county or private roads. By 1958 the national road network had been reduced to 17,691 km, of which 678 km were called national roads (of importance for the whole Soviet Union), 6,150 km were called republic roads (only of any real importance within Estonia) and 10,863 km were local roads. However, road construction had begun in forestry and agriculture (forest and land amelioration, also construction). In 1959 the least used sections (3,987.5 km) were separated from the national road network and their upkeep was passed over to the kolkhozes (collective farms), sovkhozes (State farms), forestry cooperatives and other enterprises situated in rural areas. A departmental road network was; formed - the then analogue of county roads. A number of roads also remained outside the departmental road network - they were non-network roads or the then analogue of private roads. Road construction gained great momentum in Estonia in.the 1960s and 1970s - the EPT (Estonian Agricultural Technology) system built up to 600 km of roads yearly, the KEK (Kolkhoze Building Bureau) built and repaired up to 100 km of roads and the forestry enterprises around 300 km of forest roads a year.

Up to 1989, 10,384 km of maintenance roads were built at sites of land amelioration (according to 1996 figures there is now a total of 10,443 km) and 7,540 km of forest roads at forestry enterprises. A large proportion of these roads are technological roads and are not currently taken into account in the register of roads. Yet the inventory of forest and agricultural roads still showed that a number of roads with virtually ideal surfaces or even asphalt concrete surfaces had been left out of the network. Data about roads situated on land used by the military were totally lacking.

ii) The registration of roads

The national roads of the Republic of Estonia are recorded in a national register and municipal and private roads in a local register using a procedure prescribed by law. All roads situated in the territory of the country and all constructions on them must be registered in the Register of Roads, with the exception of roads situated within the closed territory of an enterprise and of forest and field roads or tracks which are used only temporarily for technological transportation. The holder of the central register which embraces the collected data from both the national and local registers is the National Road Administration. The registration of a road is the obligation of the road owner or its administrative body.

iii) Road maintenance and its financing

Road maintenance is an activity guaranteeing the operation of the road network and involving the planning of the development of the road network and of work to be carried out on the roads, the construction and repair of roads, the regulations for their use, and any other activities connected with road administration. The maintenance of national roads is financed from the Estonian Highway Fund (reorganised into the Estonian Road Fund on 12th March 1992 by decree no. 80 of the government of the Republic of Estonia). The maintenance of county roads is financed by the local authorities and that of private roads by the road owner. Subsidies for the maintenance of county roads may be allocated from the national budget and for that of private roads from the national budget or by the local authorities.