In section I of this Chapter it was explained that the change of economic system has caused a severe dislocation in the provision of rural and agricultural services. Institutions that formerly provided most of these services no longer exist, and new skills are required such as marketing and the ability to organise and manage private service cooperatives. At the level of national policy, little attention has been paid to the requirements for advice and financing for the organisation of new modes of supplying the needed services.
Underfinancing of rural services means problems particularly for outlying areas. One of such examples can be road maintenance, that has been organised by road maintenance departments in control of the Ministry of Roads and Communication. Its quite natural that big highways with heavy traffic have to be maintained and repaired in the first order. Local roads in rural areas are mostly covered with gravel. Gravel roads have to be planed regularly. As the result of planing a layer of gravel will be removed from the road, so in every four years gravel-covered roads need to be filled in with gravel again. If this will not be done, only basic foundation layer of the road will be left and this will make the road considerably worse. As the road building/maintenance departments receive too little financing, some of the work will be left undone. So quite a number of gravel roads have not been covered with gravel for quite a number of years.
Lack of a certain support service means for a producer that he has to do something somebody else could do better, quicker and with better quality. In many cases lack of service, support system or infrastructure means there will be no access to certain resources and the production process has . to be stopped. If things go really wrong this might mean that production will be unsold.
Access to the market does not depend solely on the producer, as the following example from real life shows. In Haanjamaa there is a group of farmers who use some organic (biodynamical) technology in their production activities. This kind of production has reasonable prospects: biodynamically manufactured goods have higher prices, there exists a world demand for them and no import quotas have been set in other countries for such production. The local farmers' problem is construction of an intermediate warehouse where to store their production, because when a sales contract is signed the goods have to be delivered within a short period of time. Considering bad local road conditions there might be serious delivery problems in winter period when it is cold and there is a lot of snow.
In 1995 Haanja farmers had a chance to export their production. There were some precontracts concluded with the foreign partner, and production quality was in accordance to the requirements set. The deal was not concluded as there was no organic (biodynamical) trademark from Estonia which the partner could market, so there was no possibility to ask for a higher price. What is required is a nationally recognised brand of biodynamical production, that is, proof that the production carried out in accordance to certain quality requirements. But this was not possible as the corresponding legislation did not exist and still does not.
The example given only dealt with one group of, farmers but they could be spearheading a new trend of development. Its importance will depend in good measure upon the success (or failure) of the first ones who will try it out. Requirements that are in principle similar to the ones mentioned also hold good for any food products exported to the European Union. There can be no serious discussion concerning Estonia's consolidation with European Union when we don't have any organised, nationally acknowledged monitoring system that would prove our production is in accordance to the requirements of EU. This problem has to do with all sectors of the economy.
In the context mentioned above of the change in the economic system, the principal specific reasons why services and infrastructure are difficult to access for agricultural producers can be classified as follows:
Lack of working capital and investment capital for agricultural producers or loan interest rates that are too high to be manageable;
Lack of skills and knowledge, especially concerning accounting, marketing and organisational and management issues;
Too little and inadequate knowledge concerning existing legislation;
Lack of availability of services fitting the needs of self-managed farms and households.
Support services are weak for all farming districts, but private capital will invest in organisation of services only in areas covering the costs and giving some profit, areas with scattered population and outlying districts are in an especially poor situation. Areas with low population density using certain services suffer most from underfinancing problems. In present-day Estonia agriculture is in unfavourable conditions because quite a number of reasons. This will on its turn amplify unfavourable social situation of rural areas. The lack of adequate services in areas like training, health and family counselling then weakens the ability of these households to improve their situation as agricultural producers.
In general, provision of rural services is declining in quality. In the long run, this will cost the nation more. For example, lack of maintenance of rural roads will mean having to rebuilt many of them. Lack of adequate job training and placement services will cause more costs to society in the form of unemployment benefits, health care, family counselling, and so forth.
Local governments have not been accustomed to the degree of autonomy they now enjoy, and more to the point, to the degree of responsibility which that confers on them. Their staffs urgently need training in the management of services and infrastructure, as well as financial management.
In addition, their fiscal base needs strengthening so that basic services can continue to be provided even at the present level. These are serious problems but are worthy of attention at the highest levels, for the role played by local governments is vital to sustaining rural communities and an acceptable standard of living in rural areas.
-Privatisation is playing an increasing role in regard to rural services, and this is a healthy trend, but local governments will have a permanent role in this respect as well.
i) Determining the proprietor of roads
In connection with the renationalisation of the entire Rural Fund, all hitherto departmental and non-network roads became national roads. Some of them have been given over to the tenure of counties and a small number to private ownership. The latter are generally situated on land to be returned to use as farm land or on land on which farms will be formed according the Law on Farms. Non-national roads situated on agricultural and forest land owned by the State are neither national nor county roads and will therefore have to be classified as private roads (of State farms and forests). The holder of the register of private roads is the local authority and it is the obligation of the road owner or administrator to register it. It is therefore unclear whether, in the case of roads situated on State land but which belong to agricultural enterprises or the case of forest roads, it is the obligation of the owner (the county council as the local representative of the state) or the administrator (the enterprise or forest district) to register the roads.
In the course of land reform, previously drained land together with any roads situated on it will be handed over to farms. This process has indeed been put into operation but is progressing at a very slow pace. At the beginning of 1996, the property of farms included drained land to the extent of 15,858 ha (2.2%) together with 86.3 km (0.8%) of roads built to reach land amelioration sites. The continuation of the transfer of roads also requires alterations to be made in the various registers of roads.
ii) Financing road maintenance
The owner (proprietor) of a road bears the costs of road maintenance, keeping the necessary records and guaranteeing the safety of traffic. However, the rewards are reaped by all road users, i.e., first and foremost vehicle owners, and also by insurance companies through a reduction in the number of traffic accidents.
Large and heavy forest lorries which are often overloaded are particularly dangerous for small roads with a relatively weak construction. There was formerly a demand in place which required all forest clearers to pay a forest road maintenance charge of 1 rouble, later 1.25 roubles, for each cubic metre cleared. In theory, all road maintenance works should be financed from the Road Fund, which receives money from increases in fuel prices. In European countries, extra money is collected for county roads through a means of transport tax (at the place of registration), and for both county and private roads by means of a transit tax placed on heavy goods vehicles. The latter is paid at the place of use.
In the USA, for example, the state is able to realise its regional policy basically by increasing or decreasing the participation of central government in road building projects. The national government supports the most essential traffic safety measures 100% and other work considered generally important is supported by both the national and local governments.
iii) Requirements for road construction
Compared to its peak, the volume of road construction in Estonia has been reduced significantly in recent times. In 1995, 78.7 km of roads linking villages and larger trunk roads and 52.1 km of roads linking farms were built in Estonia. Work on the construction of 29.6 km of roads linking villages and 15.9 km of roads between farms was left incomplete. The total cost of these new roads, including any bridges and culverts which had to be constructed, was 4,858,000 EEK, which makes up 21.4% of the State resources allocated for the reconstruction and maintenance of infrastructure in rural areas. The volume of road construction in 1995 was therefore 8–10 times less than the yearly volume in the 1970s. The principal reason for this is, of course, a shortage of resources (money). According to provisional estimates, the need to build new roads is at least twice as great as the possibility of doing so. This explains why, for example, of all the applications submitted to the Estonian Land Amelioration Bureaus by the end of 1995 by farmers for land amelioration work and the construction of roads, wells and communication lines (a total of 10,056 applications), only 44% were accepted and carried out. Another 1.5% were in the process of being carried out while 54.5% were left for various reasons, mostly financial, without implementation. Thus a major fiscal issue is where to obtain the financing necessary for carrying out the required volume of road construction.
During the last years agricultural research has been developed and financed in accordance to the structure, requirements and volume of Estonian agricultural production. Because of changes in the society, the transition to market economy and the agricultural reforms, the structure and volumes of agricultural production have changed a lot. At the same time, the requirements agriculture of today for agricultural research have also changed considerably. Agricultural research has not adjusted its activities in accordance to the new requirements. The agendas for scientific research are inert or declining: to the extent they are still being pursued, they still study subjects that have been studied for a long time. Researchers have not been able to start projects dealing with new areas. Agricultural producers are facing many problems for which the researchers can't offer any solutions.
The tight financial policy for agricultural research, mentioned in section II.E above, has caused a drain of expertise and started a process of institutional restructuring, whereby thematical research strategies for the institutes have not been developed. In many areas, research activities have virtually come to a stand-still, as no new incentives are being provided.
The processing of the recommendations of research into meaningful information for advisors and farmers is progressing, but expressions of the needs from the field (the farmers) hardly reach the researchers in any way.
On the other side, substantial support is provided directly and indirectly to the advisory services from the Estonian government, from the EU's PHARE programme, from the World Bank and through a number of bilaterally assisted projects. Some agricultural advisors have adequate technical knowledge of production techniques that will help farmers improve their production standards. However, most advisors would admit they are not as well informed as they believe would be valuable to their clients and therefore they seek additional, supportive information The rapidly developing advisory services require additional and up-to-date knowledge and information, which will help them to serve their clients better.
Therefore, a clear strategy for agricultural research is required in order to use the limited resources efficiently and effectively. The contribution of research and information development to Estonian agriculture and to the national economy needs to be maximised while improving the rural environment. Unnecessary duplication of activities would also be reduced to a minimum.
The criteria for allocating finance for agricultural research also leave lots of space for improvement. Up to now agriculture has been financed from a joint research foundation. In this organisation preferences are given to basic research. Many agricultural disciplines are of a more applied character. Up to now the results of both areas are evaluated based on the same criteria (number of foreign publications). In principle such an approach is altogether wrong, as the applied results of agricultural research will be used by local producers and advisors.
The role of the Government in organisation of agricultural research activities has not been fully defined yet. Priorities have not been set. Scientists try to maintain present research orientations although the circumstances and needs of the sector have changed radically.
In the longer run, as agricultural research is of an applied character, be financed in part by it users, that is; the producers. The agricultural sector is not yet ready to do it today. A situation in which public financing and organisation of research at the national level is reduced before a new system has been established is very prejudicial to agriculture's development prospects.
Based on a number of recent reviews of aspects of the advisory system, the following principal issues may be identified:
At the present moment a major problem is that circles influencing advisory activities are not able to perceive the role of an advisor-generalist dealing with a production unit as a whole, including farm management questions and the importance of a situational analysis. Advice is seen as consultations offered by. specialists in certain specific areas (plant cultivation, animal husbandry, construction, etc.), and a holistic approach is rarely adopted.
The Estonian Advisors' Association as actively helped in organising and promoting a greater understanding of advisory activities. It was established in 1994, and started activities at the end of 1995. The objectives of the association are contributing to development of rural life and agriculture through advice and training of adults. Many advisors have obtained -useful information through the advisors.' association (in November, 1995, publication of newsletter Advisor was started). The association has also represented advisors at the Ministry of Agriculture during decision-making processes. However, clearly more efforts are needed to promote an understanding of the broader role of agricultural advice
Farmers will only pay for advice if they perceive its benefit. Many farmers are still not sufficiently aware of the benefits that the advisory system can provide them. In addition, some advice may not be beneficial to individual farmers, but nevertheless it may be important from a public benefit point of view, such as the sustainable management of natural resources, or basic accounting and business skills (to assist in tax collection as well as farm management). Public extension is currently not provided on such topics.
The advisors of the Farmers' Union, currently funded by the Ministry of Agriculture, seem to be in unfair competition with commercial advisors. They use the Farmers' Union time, equipment and transport. Thus, the Ministry of Agriculture may pay the same advisor both as an employee of the Farmers' Union and on the basis of an advisory contract.
The main problem in financing advisory activities is that there are still no decisions and agreements at national level concerning principles, structures, organisational approaches, etc., of advisory activities. Because of that existing resources are being distributed between all the interest groups instead of being used to develop an advisory complex which functions efficiently and promotes effectively interests of agricultural producers. Another problem is the worthwhile principle of subsidies advisory contracts (to support persons getting advice, not organisations giving advice) has caused some cases of cheating for getting advisory subsidies because of the low degree of awareness on the part of producers. Clearly, closer monitoring of the system is required along with a campaign to increase awareness among farmers.
Some Estonian farmers may have to get out of farming, or at least supplement their income from non-farming activities. Public funding for such information seems justified, because it would speed up the process of farm restructuring, making the remaining farmers more viable. At the same time, the generation of non-farming income is an essential element of a sustainable rural economy. Currently, advice on alternative income possibilities is very scarce and difficult to access.
The Ministry of Agriculture Extension Task Force is fully occupied with the development of advisory services, and it does not have the staff to develop the public extension and rural information centre components of the World Bank supported project in this area.
A number of successful pilot projects are being implemented, often with bilateral funding, providing important lessons. However, the lessons seem anecdotal, and often based on personal contacts, rather than the result of meaningful reviews. Also, although the results among the participating farmers are encouraging, the number of farmers actually getting advice is still very low.
Institutional reform, contract arrangements and staff training are only means to an end. Current monitoring tends to focus on efforts made to recognize the advisory services, but less on the effects of the advice, for instance, the effects of advice on farmers' income.
The private advisors need backstopping and communication. The training and advisory centre in Jäneda has done an outstanding job but needs to look beyond local expertise and intensify their networking nationally and internationally. Advisors do not have easily accessible, relevant, applied research findings from around the world at their disposal, nor do they have the skills yet to search for economic information, such as marketing trends or computer programmes for farm management. At the same time, many advisors express the need to consult with colleagues, the Ministry, or research institutions more frequently and effectively.
The long-term sustainability of the advisory services will depend on the profitability of farming which is still low. This concern is reflected in an increase of unutilized land from 19,000 ha in 1991 to 280,000 ha in 1996, representing about a fifth of the total arable land. Chapter 2 of this Strategy deals with this issue, but the role of the private advisory services in informing policy makers on the effects of policies on farming realities has not been developed yet, although the Association of Advisors certainly has the potential to implement simple polls among its members.
The January 1996 farm survey of the PHARE Advisory Services Project (carried out to identify what they considered were their needs for advice, where they obtained advice and what was their view of advisors) confirmed that farmers wanted technical advice but that many had not yet requested help from an advisor. The importance of business management advice was not widely appreciated. Newspapers and magazines were the most common source of information. The majority of the farmers had higher agricultural education or agricultural vocational training. The advisors from the Estonian Farmers' Union stated that the higher the level of the farmer's education, the greater the demand for advice.
Observation and experience from a wide range of specialists, both Estonian and foreign, confirm that improved forage production and conservation is essential to improve dairy cow performance and profitability. Cereal yields can be increased by improved husbandry and increased use of fertiliser and weed killers. The position for pork production is less obvious because less is known about market demand for the Estonian type of pork, and probably neither the breed nor the buildings are suitable for achieving the feed conversion rates (say 3.5 kg concentrate/kg meat) necessary to compete on world markets. Notice that the economic analysis reported in Chapter 2 suggests that in the long run pork production will not be competitive in Estonia.
Small farms will not be viable if they rely only on cereal production. Many farms will expand and many more will be absorbed into larger units. Other will diversify into fruits, vegetables, honey, spices and other specialty crops, as well as nonfarming activities of which tourism is, perhaps, the most obvious. This restructuring will be more rapid, effective and possibly more socially acceptable if the farmers are assisted to identify their options sooner rather than later.
The environmental, hygiene and quality standards required of farmers will change. This will be particularly so with regard to the intention of the Government to align legislation with requirements of the EU accession. Farmers therefore require help with the selection and implementation of appropriate measures.
There is no doubt that farmers require both better utilisation of their existing capital efficiently and access to credit if they are to develop their businesses. Few farmers have the skills and knowledge to produce a business plan which provides a bank with sufficient data on which to lend money. Lack of collateral to obtain commercial loans is a problem as land titles have not been provided to many landowners and the fact that land has little market value at present. The introduction of the Rural Credit Guarantee Fund (RCGF) is beneficial for the application and implementation of appropriate technology, as would be the initiation of cooperative credit systems (see Chapter 5 of this Strategy).
Lack of appropriate machinery for (particularly small scale) farming in Estonia is recognised as a major limitation for increased agricultural production by the emerging private (family) farming community. The inherited stock of Soviet machinery often is too heavy for the soils and is designed for cultivating large expanses of land.
The State-owned forest management system with its business activities, could, or to be more appropriate, should, first of all, serve the interests of developing Estonia's regional economies, agriculture included, while developing at the same time on its own. But our present-day integrated national market economy excludes such an option - you can't be a fairy-godmother, if you want to survive. So the government should be interested in establishing in rural areas special forest reserves of limited extent that will guarantee successful agricultural producers the above-mentioned benefits of forests and which enables them to procure wood for local uses. There is one more possibility -privatisation of part of the State-owned forests to local population on long-term instalment terms, as a cooperative or union forest. This would maintain employment for well-trained personnel of the forest management system and would prevent economically inappropriate activities that might come from inexperienced single owners. Such a system would give rural construction contractors the timber they need but at the same time it will cut down timber export volumes to a degree.
The choices are still open for the government. One thing is quite clear - without locally-available utility timber (construction logs and swan material) and timber products (boards, doors, gates, windows, different construction materials) you can't have any serious plans concerning restoration of farming as a part of Estonian lifestyle. Without timber it is not possible to keep existing and functioning production units going. Even for minor repair work one has to nail somewhere-a piece of wood. If you haven't got this piece of wood, everything will collapse. The same goes for country houses, both small and big, the appearance of which is getting worse day by day To restore an economy able to supply food products consumed by the population we need lots and lots of timber. The timber is there - in the forest. It only waits the time when the heads of government change the mechanisms so that the timber will reach construction sites of farms, instead of all of it going into the holds of seagoing ships.
It may be argued that such schemes of local forest reserves or privatisation of selected State forest areas to local cooperatives would represent a subsidy to agriculture, at the expense of the timber industry, by diverting timber from its most profitable markets and therefore holding down local timber prices. But it must be remembered that Chapter 2 of this Strategy points out that our existing macroeconomic system contains some features which represent a definite bias against the possibilities of agricultural development. Thus local forest reserves, or local privatisation of pans of the State forest, would represent a partial correction of this bias and not a subsidy.
The private forest owners of today have major problems as they are not organised, they lack some essential information about forest management and timber marketing. They are not able to deal with experienced purchasers as equal partners. So they can be an easy prey for all the cheaters that are trading land, forest or forest cutting contracts. As many owners don't know anything about different grades of timber, they receive as little as 40% of the price a competent owner could have obtain selling their forest. Advice should be given for the formation of private forest marketing cooperatives and training provided to their members in timber grading, pricing and marketing.
To ensure that services of the required types are available to all categories of farmers, including those with household plots.
To ensure that the services are available in areas where the population is widely scattered as well as in areas where it is more densely concentrated in towns and villages.
To ensure that the nonagricultural rural population has access to services related to finding employment and carrying out entrepreneurial activities.
To ensure that local government and voluntary associations are strengthened to be able to play their corresponding role in the provision of rural social services and infrastructure, including proper management for community benefit of forests belonging to localities.
It is necessary that the following types of services and infrastructure be made as widely available as possible:
Services and infrastructure for securing wider access to markets and better prices in those markets.
Services to enable farmers to comply with regulatory requirements in markets, e.g., food safety requirements, EU standards for quality.
Export marketing services.
Storage services.
Transport services.
Services for more timely purchase of inputs which are required (agrochemicals, seeds, tools, materials).
Mechanisation services (plowing, planting, harvesting).
Advisory assistance in the formation and operation of users' associations for drainage systems.
Advisory assistance regarding land registration, land purchase and sale, and land rental.
Agricultural advisory services regarding technologies of production and post-harvest handling.
Services to improve capabilities in bookkeeping and farm management.
Services to assist in applying for and obtaining loans for production and investments.
Advice on biodynamical (ecologically sound) technologies of farming.
Advisory services to assist farmers in forming and managing private service cooperatives, or joint companies, for output storage and marketing, input purchases, supplying machinery services, and other supporting services.
Producers' associations to raise issues with and propose solutions to governmental and political entities.
General information services on developments in agriculture (new crops, new markets, new technologies, special projects, etc.).
Information services about job openings.
Training services for non-agricultural occupations.
Personal and family counselling regarding unemployment and changes of occupations.
Maintenance of rural roads and other infrastructure.
Improved telecommunications services in rural areas.
Forestry services for agriculture (see below).
Why should farmers need advice? The production levels in Estonia offer great opportunity for improvement. The background of the majority of farmers does not yet equip them to produce at world class levels. Financial investment is often necessary for developing the business. Few farmers have the skills and knowledge to produce a 'business plan which provides a bank with sufficient data on which to lend money (lack of collateral is also a problem). To make sound decisions all businesses need information. The farmer usually does not have the time, knowledge or resource to obtain all the information necessary to make informed decisions. In this regard, the advisory services can make a substantial contribution to meeting the farmers' needs. Indeed, high-quality cost-effective advice for farmers is essential if their needs are to be met and their businesses become fully competitive in the world markets.
The starting point should be helping the farmer to identify the strengths, weaknesses, opportunities and threats to his or her business. This requires an ability to analyse a situation and think creatively, an appreciation of economic principles, an ability to produce plans and wide knowledge of agriculture and related business.
Technical knowledge of production techniques that will help farmers improve their production standards is available from Estonian advisors. The current knowledge of advisers, if applied by farmers, would result in considerably improved production. However, most advisors would admit they are not as well informed as they believe would be valuable to their clients and seek additional supporting information and training.
To complement advice on technical aspects of fanning, it is essential that the advisory services become capable of providing assistance regarding legal, organisational and management aspects of private service cooperatives for the kinds of supporting services mentioned in this Chapter.
Knowledge necessary be transmitted to farmers in three main ways. The mass approach, group activities, and individual advice. Each has its advantages and disadvantages. In general, the mass approach is very good for creating awareness and transmitting urgent information to many people, but is unsuitable for providing anything but the most simple and straightforward advice.
Group activities can stimulate individuals to take action because the advisor can tailor the advice to the local situation, and participants are able to have their questions answered and perhaps get the advisors proposals amended. They can also be supported in their action or subjected to peer group pressure to change. They may be able to obtain resources through sharing them with other members of the group, e.g., bulk purchase of fertiliser, machinery rings.
Individual advice is the most expensive but most satisfactory way in which to assist the farm business to develop. It ensures that the advice provided is appropriate to the particular farm, allows a trusting relationship between advisor and client and provides direct feedback to the advisor on the results of the advice provided.
All these techniques are valuable tools in assist in the development of a profitable agriculture, but they share a common limitation. They all represent a “top-down” approach in which the farmer is viewed as the recipient of specialised information transmitted by those who supposedly have superior technical knowledge. While this approach is useful for dealing with many kinds of farm-level problems, it is not so helpful in some other cases. For example, an advisor who has only a brief acquaintance with a farm, and is not familiar with the personal objectives of the farmer and the farm family is not in a good position to develop the best farm management plan. In fact, usually there is no single “best” plan, and the preferred option has to be developed jointly with the farmer, through a process in which the advisor also learns from the farmer.
For these reasons, it is important that the training of agricultural advisors include more materials and experiences which help them understand better how to work together with farmers in developing diagnoses of problems at the farm-level and evolving solutions jointly with the farmers.
In order that agricultural advisory work may achieve its objectives, all experts agree it is urgent that the links between agricultural research and extension be strengthened very substantially. Similarly, State funding for agricultural research must be increased until the possibilities for producers to contribute to its support have improved.
The broad objective of agricultural research can be defined as application of knowledge obtained through experimental work and international research activities to further the agricultural development process, through the use of the corresponding results in education, additional training and advising. Agricultural research is inherently international in character and should be closely related both with preparation of specialists with college education and development and advisory activities. The stronger the agricultural science is, and the better its relations with education and advisory' system, the faster the new knowledge will reach the consumer, and the faster the agriculture will develop.
The following guidelines have been adopted regarding the institutions that provide services and their method of financing:
The services may be provided through a variety of institutional forms, including by farmers' associations, private enterprises, service cooperatives, export brokers, input suppliers, processing industry, municipal governments, and national government agencies.
To the extent possible, beneficiaries of the services should pay for them. This relation correlates costs with benefits and ensures that the beneficiaries (clients) are in a position to monitor the quality of the services and demand improvements when necessary. There are exceptions, however, under which beneficiaries may pay only part of the cost or, in extreme cases, nothing at all. In such cases the source of financing of the service must be identified.
The exceptions, under which beneficiaries of the services do not pay the full cost, conform to the following rules:
If beneficiaries are not fully aware of the benefits of the service, then part of the cost of the service may have to be temporarily subsidised by taxpayers for a transitional period. Example: agricultural advisory services.
If society in general receives part of the benefits of a service, then society as a whole (taxpayers) should pay part of its cost. Examples include the following:
If a job-information service or a job-training programme succeeds in placing a person in a job, then society has to pay fewer unemployment benefits and suffers less crime and other problems that arise from unemployment. Therefore, society should pay part (but not all) of the cost of such services and programmes.
If advisory services on techniques of sustainable agriculture succeed in convincing farmers to adopt such methods, then society as a whole benefits by less chemical contamination of groundwater, less loss of soils to wind erosion, etc. Therefore, there is a justification for society supporting part of the cost of such services.
Poorer farmers may be unable to afford some services that would benefit them substantially. It is in the interest of society to support services and programmes which help poorer farmers raise their incomes, for two reasons:
there is a moral obligation to help the poor:
by helping the poor onto an economically self-sustaining path, they will require less assistance of an emergency nature for poverty (food aid, public medical care, public shelter). In other words, society benefits by successfully treating the causes of poverty rather than only its symptoms.
Because Estonian agriculture is still in a transition from one economic system, farmers and rural populations in general may need temporary subsidies for the start-up costs or transitional costs to the new system. The reasoning is similar to that of poverty alleviation measures. Society as a whole will have less costs if farmers can successfully make the transition between systems. Also, it should not be forgotten that higher incomes mean a larger market for domestic producers of manufactured goods, commercial services and other products. A principal example of a service which should be subsidised on these grounds for a transitional period is an advisory service which teaches farmers how to establish and operate service cooperatives, as described above. Another major example of a transitional subsidy which is required on these grounds is a subsidy on capital for new investments and production. Estonia requires a transition programme for agriculture of 5 to 10 years, at the end of which period subsidies on credit and transitional activities will be phased out. But now, with the low profitability of fanning and the fact that new organisational forms are just starting to operate, many farmers cannot make the investments needed for a successful transition if they have to pay commercial interest rates and the full cost of supporting services.
A final principle regarding organisational forms is that services should be provided at the most decentralised level possible, i.e., at the level of the village, private service enterprise, etc., rather than by national government or national farmers' associations, when possible. Nevertheless, national institutions may have to give financial and technical support to local provision of services.
Rural social services are clearly vital to our standard of living but are becoming progressively less adequate in light of the growing social problems in rural areas. The role in rural development of all these important classes of services can be enhanced by:
Strengthening the fiscal basis of local government. Most local governments are on fragile ground in this respect. The land reform programmes would result in, among other benefits, an increasing stream of revenues for local governments, from land rentals and sales.
Intensified training programmes for local government officials, in all areas of management of services.
Continuation of the trend of privatisation basic communal services (potable water, sewerage, garbage classification, recycling and disposal).
Improved national programmes for health, education and infrastructure development.
More active participation of local authorities in business development in their counties, and greater awareness of the ways in which they can make their counties more attractive to investors.
National assistance for retraining rural populations.
Greater participation by the rural citizenry in local affairs, individually and through voluntary associations, making the best of the opportunities offered by a democratic society.
Programmes for building awareness among public employees, and staff of publicly-financed institutions, of the value of country life.
The future development of Estonian agriculture is likely too involve increases in both exports and imports (Chapter 2). Many of the prerequisites of infrastructure for this to happen were formerly put in place through land amelioration activities and the building of internal roads. Such infrastructure will soon deteriorate without continual maintenance of these infrastructures. The building of new roads is at least ten times more costly than working to keep existing roads up to a suitable standard. Unfortunately, considerably less road maintenance has been carried out in Estonia in recent years than has actually been necessary.
It can be anticipated that wear from the influence of natural factors (water, wind) on an unmaintained gravel surfaced road could be as much as 2 cm per year. After around 10 years, the road surface would have worn to such an extent that the road would be virtually unusable. Maintenance work must be continually carried out on the roads to avoid this. Smoothing the road will significantly help to reduce the wear of the surface (by insuring that rainwater drains away more easily). The frequency of smoothing depends on how intense the traffic flow is and on the quality of the materials used when constructing the road surface. However, smoothing should be carried out not less than twice a year irrespective of other circumstances. The road should be repaired with additional gravel at least every ten years. Taking into consideration the fact that the total length of non-national roads in Estonia is 28,000 km, this kind of work should be carried out on 2,500–3,000 km of roads yearly.
Because there is a lack of precise information about maintenance work carried out on county roads, the work of the Tartu Highways Board, where it is concerned with the maintenance of national roads, will be used as an example. There are 555 km of gravel surfaced roads.(49% of the total road length) in the territory, of the Tartu Highways Board. They were not repaired during the period 1992–1994 but merely maintained. In 1995, 11 km of roads were repaired, i.e., 2% of the total length or five times less than required. According to the assessments of the Tartu Highways Board, the sum allocated for the maintenance and repair of roads in 1995 was four times less than that which would have been required to keep the roads up to the same technical standard.
It is clearly necessary that, from now on, greater attention is payed to the maintenance of roads. The passage of heavy vehicles along roads which cannot be continually maintained must be restricted.
Maintaining the current standard of the county road network in the Republic of Estonia and increasing as planned the number of roads of a high technical standard will require the putting into practice of various organisational and technical measures:
It is necessary to regulate the calculations of roads - all non-network or departmental roads thus far not considered must be taken into consideration, the construction costs and depreciated values of roads must be reappraised according to today's levels, and the obligations of the road owner or administrator regarding registering and maintaining the road must be more clearly defined.
In every county there must be an employee who is familiar with road maintenance problems and is capable of organising any necessary work. This person could be, for example, the rural organiser of the county (or another specialist). If necessary, essential training or seminars should be arranged with the help of the county Highways Board.
County and local roads belonging to the network should be surveyed both functionally " and from a maintenance point of view (along the route of smoothing gravel roads), and rectification work should be carried out if necessary.
Road construction concerns should be more involved than hitherto in the maintenance and repair of municipal roads and in the acceptance of work carried out (fixing the volume and assessing the quality of work). Road construction concerns often have spare production capacity but this is not used because of the lack of cooperation between such concerns and county authorities. Work carried out by road construction concerns ought to be of high quality and ought to enable the scarce State budgetary resources allocated to the maintenance of county roads, in order to be used more effectively.
Work to be carried out on county roads should be put out to tender, in which road construction concerns could also participate. Similarly, work to be carried out on national roads should be offered to local enterprises (so reducing transport costs contingent on the size of the territory of the foreman).
The movement of heavy goods vehicles on county and private roads for which it is not possible to maintain to a sufficient standard should be restricted or a road use tax should be enforced on such vehicles (particularly those transporting timber from forests).
Simplified rules for the registration of hard surfaced roads and for the designation of the length of a section of road should be enforced. The current rules require road width to be specified to an accuracy of 0.1 m and the length of a section of road to an accuracy of 1.0 m. Accuracies of 0.5 m and 10 m respectively would be entirely sufficient as grading a road may alter its width, and such precise measurements of road width would require special equipment which only road construction concerns have.
As noted above, on a nation-wide scale, measures need to be taken to improve municipal (county) finances, in addition to instituting the road user tax mentioned above.
It is estimated that 80% of all the problems agricultural producers face can be solved using 20% of available information, provided it reaches producers in a timely and usable form. Communication between agricultural research and users of research results has to become more effective.
It is essential to arrange functioning of the system of agricultural research so that:
it can determine the most important problems the producers encounter,
it will develop or retrieve the information needed to solve those problems;
there is a properly articulated information transmission process that gives the advisors and producers clear, understandable and well-formatted information in a timely manner.
Traditionally, in agricultural research model of technological push has been prevailing. First of all, new technological solutions were developed, then there will be attempts to apply them in production. To make agricultural innovations more effective it is necessary to apply a market pull model: in response to market demands and the problems producers encounter, scientific and technological solutions are sought and applied in production. If research responds to problems actually perceived in practice, the chances of its being applied are considerably enhanced.
Utilising this approach is consistent with the above-mentioned participatory focus to agricultural advisory services, in which advisors work together with farmers and agricultural enterprises to analyse their problems and seek solutions.
For better utilisation of resources, a distribution of research tasks between Estonia and neighbouring countries should be organised and implemented. Estonia should guarantee some financing to get required information in all the important areas, and for Estonian researchers it should be possible to participate in the activities of research institutes of neighbouring countries. Northern countries, in principle, have expressed their consent to give partial support to projects in which every Baltic State makes its contribution and the application for financing is presented jointly. The same principle prevails in research projects financed by the European Union.
In this regard, it is in Estonia's interest to pursue the possibility of a CGIAR institute being established for northeastern Europe. The agroclimatic conditions in this part of the world are unlike those encountered anywhere else, so Estonia and neighbouring countries cannot benefit from any of the research carried out by existing CGIAR institutes.
In the longer run, producers should bear a larger share of the burden of financing agricultural research. At the same time, they should participate in decisions about priorities for research programmes. Nevertheless, in the medium run more national funding for research will be essential. Salaries for researchers have fallen so low that the system is losing expertise rapidly. The future productivity of Estonian agriculture depends to a considerable degree on maintaining an adequate research capacity.
Criteria for allocating research funding need to be reviewed and brought up to date as well. Researchers should no longer be allowed the luxury of pursuing their own professional interests, but instead the priorities should be established by the needs of the sector.
In Estonia of today the word “cooperation” has acquired a slightly political flavour, very often in common discussion one can put sign of equality between “cooperative” and “collective farm”. In reality, the meaning of those two phrases is completely different, and private service cooperatives offer a large opportunity to improve the delivery of services to farms (including agricultural enterprises, an opportunity which has been insufficiently exploited to date).
To take an example from Estonia of today, several dairy farms are modernising their milking equipment (milk production has lot of perspective, the processing companies lack raw material, there are quite favourable conditions for taking a loan for buying required equipment). A German expert, who visited Estonia, discovered that in a certain area several dairy farmers had bought new milking equipment from the same company. They all concluded separate contracts with the company. The expert evaluation of the situation was as follows: if the milk producers had made such a big purchase together, buying from the company five sets of milking equipment at the same time, each of them would have obtained new equipment at considerable lower price.
If three families join their money and subscribe for one newspaper (this happens both in the town and in the country) this is also a form of cooperation.
Cooperation among farmers or companies can be divided by two main types: vertical (for example, the chain of production-processing-marketing) and horizontal (cooperation of similar type of companies in similar areas). In traditional situation cooperation will be used as one form of horizontal cooperation. At the same time cooperation can be both official and unofficial. If three people use one taxi it will be much cheaper than one person using the taxi.
Purchases of seed, animal feed, feed supplements, fertilisers, plant protection chemicals, etc. (when buying a bigger volume the price will be lower);
Purchase of machinery services for land preparation, harvesting, and other tasks on the farm.
Ordering and purchasing required computer programmes (for bookkeeping, feeding, etc.). Also it is possible to have a programme considering the specific features and needs of each company, even though orders for the programmes are made jointly.
Purchase and use of equipment. For example, a grain farm needs harvesting equipment, but is not able to buy it alone, and. using expensive equipment alone won't be profitable.
Joint planting decisions. When a farm in a certain location has specialised in growing seed of a certain grain culture all the other grain farms should grow the same specie. For example, rye is a cross-pollination culture, and when cultivating rye for seed it is important to ensure that no different species are been cultivated in the area.
Purchase of processing services (output of one farmer is not sufficient to interest a processing company, but together several farmers can offer an amount that will be acceptable for processing.
Joint purchase of storage services for inputs and outputs.
Joint marketing (offering amounts that are acceptable for the buyer, thereby decreasing transportation costs per unit). Sometimes joint marketing gives farmers access to niche markets that otherwise would be closed to them.
Maintenance of land amelioration systems (provided they have been rehabilitated).
Receiving training and advice tailored to personal requirements (cheaper price, better information: the best advisor for a farmer is another farmer!).
Organisation of cooperation also presumes some expenditures that are different when compared to acting individually. In cases of cooperative relationships, management and co-ordination of activities is needed. This supposes existence of organisations. Here an important role can be played by agricultural advisors who are trained to address the legal, organisational and administrative issues concerning service cooperatives. Estonian farmers so far do not have much experience with these kinds of organisations.
There are some historical reasons for that: before the World War II Estonia was one of the countries with very well developed private cooperatives. But unfortunately the continuity of experience with agricultural cooperation was been interrupted. When the Soviet power was established in Estonia in 1940 one of the first steps taken was to prohibit all the activities of such organisations. During the socialist period the role of developing organisational and social activities was taken over by the collective and state farms.
Cooperation should be seen as a means for:
decreasing unit costs and therefore expenditures;
allowing middle-size and small producers to procure, process and market products and services.
providing farm support services in areas with scattered population, where private capital has no interest to invest in organisation of such services.
organisation of self-assistance and mutual assistance.
Organisation of cooperation asks for:
Development of organisations of local producers.
Identification of local leaders and innovators.
Training and advising leaders and participating farmers in how to establish and manage service cooperatives.
Obtaining credit for the organisation of cooperative services (through a cooperative processing company, a cooperative store, an equipment pool, etc.).
It also is necessary to take into consideration the negative attitude towards cooperation, that prevails in some circles in Estonia. So it would be important to use positive examples of this area when introducing and developing Estonian cooperation.
The tradition of cooperation among producers in services has not been entirely lost. The above-mentioned examples of formation of dairy producers' extension cooperatives in four counties attests to the awareness among producers of the value of such cooperation.
The analysis presented in this Chapter makes it clear that at present the provision of agricultural supporting services is inadequate and constitutes a constraint on the development of the full productive potential of the sector. As mentioned in section I, in promoting the transition to a market economy, the Government so far has paid little attention to this gap. Full transition to a market economy requires not only elimination of controls on prices and production and changes in the forms of asset ownership, but also development of new institutional forms for the provision of essential services that support production.
The importance of re-training, additional training, extension and advice during the reform process has to be pointed out as a related but separate topic. Collective and State farms were big enough to hire and maintain specialists in specific fields, i.e., chief agronomists, chief auxiliary production specialists, etc. Agricultural production units that were established during the agricultural reform process (private farms, limited liability and stock companies, cooperatives) usually are too small to have so many specialists in various fields. At the same time, there still exists a need for those specialised skills and knowledge.
On the one hand, the knowledge and skills of new mangers of agricultural production units now have to be more varied that before. A manager of an agricultural business must now deal not only with planning cultivation tasks and animal husbandry but also must be well versed in business management and legislation. On the other hand, there is a need for new types of knowledge that were not required before. Examples include marketing, quality control in accordance with market requirements, price negotiation, risk analysis, development of business plans and financing plans, and the organisation of cooperation among private entities.
The requirements for developing service institutions and providing the required training throughout the sector imply a considerable amount of technical assistance that reaches well beyond the scope of the current agricultural advisory programmes. Furthermore, the reduced agricultural profitability that has accompanied the macroeconomic reforms means that financial assistance will be required to pay for such services during a transition period and to capitalise the new service institutions (private service cooperatives, service-providing companies).
Therefore, as a fundamental recommendation of this Strategy, it is necessary to establish a Transition Fund for Agricultural Support Services. It is expected that such a fund could receive financial contributions from donor countries and international organisations as well as from the national budget. It would organise the provision of information and advice regarding services and training, and it would finance the capital costs of new private organisations (of both cooperative and joint stock types) dedicated to supplying services to agricultural producers. In order to ensure the viability of the financial assistance, it also would provide management advice to such organisations.
The fund would give special emphasis to the organisation of: processing cooperatives, marketing cooperatives, input purchase cooperatives, cooperatives for obtaining marketing information and agricultural advice, mechanisation cooperatives, and other private cooperatives to support production. It also would give special emphasis to outlying areas, and it would devote important efforts to informational campaigns to make rural populations aware of the opportunities for organising private service cooperatives and companies and the benefits that could be obtained from them. It would respond to requests from groups of farmers that wished to explore the formation of service cooperatives, giving them detailed explanations and then working with them to develop the form of cooperative most suited to their needs. It also would assist individual rural entrepreneurs that wished to found companies dedicated to supplying specified agricultural services. The most obvious example here would be a company that purchases machinery and supplies land preparation services and harvesting services to farmers in the area.
The fund would also provide advice to local governments in the management of their services to rural populations. Upon the implementation of the recommendations in Chapter 3 regarding the broadening of the scope of the land reform, local governments should receive a greater flow of revenues from land sales and rentals that would enable them to better maintain infrastructure and provide essential services, but they need training in this field.
Only through such an effort can the bottleneck represented by inadequate provision of supporting services be overcome. This Transition Fund for Agricultural Support Services can be regarded as the third leg of the sector's reform process, the first two of which concerned agricultural reform (ownership of structures and machinery) and land reform.
The characteristics of a strong extension system have been described by Watts (1984) as follows:
Effective linkages with research organisations.
Clear statutory basis and mission.
Stable financial support.
On-going and effective in-service training.
Adequate field offices, transportation and communications systems.
An orientation to understand and serve the farm family.
Freedom from regulatory or input supply responsibilities.
Continuing feedback from farmers to guide the programme's priorities.
Competitive remuneration of advisors with incentives for professional development and advancement.
Effectiveness in communications.
It is recognised that the responsibility for developing some of these characteristics depends in growing measure on the initiative of the private agricultural advisors. Nevertheless, national policy has an important role to play in that regard as well. The policy recommendations for strengthening the advisory service include:
Review experiences with the PASDF and formulate concrete proposals for improvements in the following areas:
The amount to be distributed per contract.
The distribution of funds among counties based on actual demand.
Monitoring of the use of funds based on random visits to farmers who have received advisory services.
A more elaborate set of eligibility criteria for farmers, based on the economic viability of the individual farms, using a simple points system that gives weighted values for the major farm assets and farmer skills, under prevailing market conditions.
A skill gap analysis to assess the training needs of the advisors, including an inventory of most needed advisory tools and references.
Support to the Association of Advisors. Such support could include funding for a newsletter and the development of professional standards.
Future ownership of the PASDF.
Carry out a participatory needs assessment to define a number of priority programmes that would have a public benefit, but would not be paid for by the farmers. Such programmes could include a brochure on sustainable manure disposal, a training programme on integrated pest management, or a television series on simple accounting skills, for instance. Each individual priority programme could be contracted to —for instance- the Farmers' Union, the mass media, the Janeda centre, an agricultural college, or a research institution. Financing for these priority programmes could come from savings made by no longer providing the Farmers' Union with a lump-sum subsidy for non-specified extension activities.
Establish an Agricultural Training Centre to assist agricultural teachers and advisors to maintain the levels of competence in all relevant areas. The Training Centre would be a communication point and initiator of mass information campaigns as well. Its core work programme would include:
Offering high-quality training modules and courses for rural advisors and extensionists.
Offering high-quality training modules and courses for teachers in agricultural schools.
Offering facilities with lodging for workshops and other meetings, designed to provide an optimal working atmosphere for adult learning and exchanges of experiences.
Organise a workshop on advisory services to promote alternative rural income, possibly hosted by the Jäneda centre, inviting a wide range of relevant actors, with the objectives to: (i) develop an inventory of ongoing activities; (ii) assess the possibilities for inclusion of rural concerns in existing and future rural business information centres and telecottages; and (iii) formulate a request for the World Bank InfoDev grant programme.
Strengthen the Ministry of Agriculture extension task force with two additional positions: one to focus particularly on the priority programmes, and one to assist in the PASDF development and alternative income advice. This would leave the task force leader in charge of the PASDF development, but allow him to work on the upscaling of successful pilot projects, more extension policy development, and monitoring of results on the ground.
Restore and increase the funding provided to associations that provide advice on ecologically sound (biodynamical) techniques of agriculture. As well as benefiting our environment, this kind of programme will be very important in the long run for gaining and retaining access to foreign markets for our agricultural products.
Organise or participate in international advisory services workshops that would draw lessons learned from different experiences across the Baltic countries.
Develop a monitoring system that would provide rapid, manager-friendly information on inputs, outputs and impact of advisory work.
Carry out a feasibility study into ways of linking advisors more effectively and efficiently through and electronic network. Relevant Estonian farm management programmes are being developed, while many off-the-shelve programmes such as desktop publishing, word processing and database management have a lot to offer to advisors. In addition, the need for more intensive communication —possibly through electronic mail- among advisors and with other parts of the agricultural community, is evident.
A priority for Estonian agriculture must be to develop the dairy sector, as confirmed by the comparative advantage analysis presented in Chapter 2. Markets for the produce will need to be developed as production increases but the improved efficiency should ensure that product is competitive in world markets. Not all existing markets are fully exploited; Estonia failed, for instance, to use its quota for the export of cheese to the EU in 1995.
To meet the above requirements the advisory services policy should ensure that enough advisors have the skills, knowledge and support to meet the farmers' needs in relation to milk and cereal production, farm management capabilities for any cropping pattern, and hygiene requirements. Government, international and bilateral support should support achieving this objective. The great majority of farms have dairy cows and produce forage crops (grass and legumes) the quality of which whether grazed in situ and, even more so, when harvested and stored, is very poor. There is unanimous agreement amongst all foreign consultants and from many Estonian specialists that improvement of forage and forage conservation is essential if dairy cow yields are to be improved.
Most dairy farms and many others produce cereals. The technology to improve cereal yields and profits, is readily available and fairly easy to implement. Many smaller and medium sized farms already cultivate fruits, vegetables and specialty crops, which may have an attractive future in Estonia, and they are urgently in need of advice on marketing and farm management.
Improved production from cows, cereals and other crops will often require investment and the provision of credit. It is important for the farmer that the credit is used for the right purposes and to this end banks require business plans. Good farm business advice must therefore be available to farmers for them to make best use of credit facilities. For farmers that do not need or wish to use credit, it remains important that they manage their business so as to make the best use of their resources in order to achieve their own specific objectives.
Longer term considerations.
If farmers are to diversify profitably from traditional agricultural enterprises guidance on the opportunities is essential whether it is high-value specialty crops, tourism, manufacturing, establishing a contracting business or other activity. In the UK the success rate of those who diversify is low. Training in the identification of opportunities will permit advisors to reduce the failure rate by assisting farmers to give full consideration to all the implications of diversification.
Intensive livestock production has been practised in Estonia for many years. There is considerable scope for improving the efficiency of production.
Advisors require the essential information on which to base their advice and the skills and equipment to utilise the information once it has been obtained. Estonia is lacking in much basic information that is available to advisors in other countries. Much of what is available is not readily accessible to advisors and is certainly in an unsuitable form for them to use. Establishment of a system for the collation and dissemination of existing data relevant to milk and cereal production is required.
Sound business decisions and preparation of business plans require accurate information on the financial health of the farm business, a knowledge of the resources available to the farmers, including his/her own capabilities and motivation. This means technical performance measures and financial standards need to be determined against which the individual farm performance, whether in the past or planned, can be assessed. Prospects for the market and access to information on the prices of both supplies and produce are also essential for farm planning.
Specific requirements to meet these needs include:
A farm management survey to provide basic performance standards.
The Agricultural Training Centre mentioned above.
Supply, by the research institutes and universities, of the most up-to-date information on production methods appropriate to the current economic situation, e.g., the optimum quantity of nitrogen to apply to winter wheat that will produce the best margin at today's prices and with today's varieties. (Information on the way in which this changes with different price ratios should also be provided so that the advisors and farmers can make their own assumptions on future price movements and act accordingly.)
A farm management handbook to present the above information in an easy to use format.
Audiovisual and visual material for uses by advisors in promoting the value of advice to farmers and to support the advice provided.
Laboratory facilities for the analysis of soil, plant, feed and milk samples.
Sampling equipment and soil PH indicator kits. Pocket calculators. Transport for farm visits.
Training in hygiene standards necessary for production within the EU. (It is insufficient to leave this to the milk purchaser who will not primarily have the farmers' interest at heart or to the public health authorities whose role is the enforcement of regulations.
Better training in ecologically sound means of production and post-harvest handling.
Other useful aids are worksheets and computer programmes for a range of activities such as bookkeeping, farm account analysis and ration formulation.
In the next 3 to 5 years all sections of the advisory services policy should concentrate on the milk production sector, particularly in grass and fodder crop production and conservation, cereal production, farm management for all crops, including fruit and vegetables, improving hygiene standards, and assistance in forming service cooperatives.
Training of advisors and links with agricultural research need to be strengthened. Supervision of the programme of subsidised advice requires improvement, while the programme is continued for several more years. Establishment of an Agricultural Training Centre to support advisors is essential.
All training of advisors include materials aimed at improved milk production. This does not mean all advisors can be expected to be specialists in all aspects of production but that specialists in one section should have an appreciation of the requirements in other sections. Training in farm business management, including marketing, should also be a basic requirement for all advisors. They should be made fully aware of the rapidly growing markets for specialty crops, including those produced with ecological sound (biodynamical) techniques.
Every effort must be made to provide the required support for advisors. This will required, amongst other things, a strengthening and redirection of research policy and training of researchers to consider their results in an economic context. The 'development' link in the research-development-extension chain must also be addressed.
The resources used for developing bookkeeping and farm management computer programmes should be reviewed and the diverse systems currently under development using government or international funds should be reduced to one, agreed system, with a commensurate savings of resources.
The advisory system should investigate ways in which farmers can overcome shortages of suitable equipment, the legacy of inappropriate buildings and the inadequacy of support service by, for example, the establishment of machinery pools or cooperatives, forming storage and marketing cooperatives, and the encouragement of other agricultural service cooperatives and contractors.
Training of advisors in the area of service cooperatives would be supported by the establishment of the Transition Fund for Agricultural Support Services.
Serious consideration should be given to establishing a nation-wide network of local forest reserves that can be used for recreational purposes, for harvesting berries, mushrooms, etc., that can be used for hunting in cases where it would be safe, and that can be a source of supply of small amounts of timber for local, personal purposes. The compelling reasons for establishing such reserves were mentioned in section IV.E above. Established on an appropriate scale, such reserves would not affect Estonia's position as a supplier of large amounts of commercial timber, and yet they would provide very substantial benefits to rural life. This kind of programme would be an example of combining a clear orientation to a market economy with adequate provision for meeting basic social concerns.
The establishment of local forest reserves should be accompanied by training of local officials in their multiple-use management. Among other considerations, assistance should be provided in establishing transparent schemes for awarding permits for harvesting small quantities of timber from these reserves for strictly local and personal use.
Regarding dispossessed forest that has not been restituted, in accordance with existing legislation, all such forests have been left out of economic spheres of activity. The State forest management system manages such forests, with some reservations, of course; but still their use does not take into account the agricultural interests discussed above. Measures needed for these forests include:
Faster realisation of land reforms to give the forests back to the legal claimants.
Quick privatisation of compensated forests or forest areas nobody has applied for (with a pre-emptive right of purchase or at an auction). This should be done with a precondition - local farmers and cooperatives should be favoured, especially those who didn't have any forest before. Here we should give some solutions to the farmers' needs for long-term, low-interest loans, perhaps through expanding the activities of the Agriculture and Rural Life Credit Fund.
Setting aside some of these forests also for local reserves, to be managed locally in a multi-purpose way.
