estonian agriculture, rural economy and food industry

3.
Mark of
origin and
quality
Quality
Mark
3,00
2,50
2,00
1,50
1,00
0,50
0,00
30
25
20
15
10
5
0
Russia is relatively modest trade
partner to Estonia
While exports to Russia accounted for 44% of
Estonia’s foreign trade in 1994, it consisted of only
4% by the year 2000. This decrease is due to higher
basic import tariffs on Estonian products entering
Russia, which are set twice as high as those established
for its most favoured trade partners.
Exports to Estonia’s neighbouring countries,
Lithuania and Latvia have grown rapidly. While the
share of Estonian agricultural products exported to
these countries in 1994 was 15.6%, by the year 2000
it had increased to 39.4%.
The relative share of Estonian agricultural products
exported to European Union countries has continually
grown. Export to the EU accounted for
23.2% of the total agricultural exports in 1994, and
39.4% in 2000.
In July 1994 a free trade agreement was signed between
Estonia and Europe, which entered into force on
1 January 1995. The agreement enabled the marketing
of Estonian products in European markets with the favourable
conditions of 60% lower custom’s tariff rates.
The Europe Agreement signed in 1995 gave Estonia
the status of an associated country of the European
Union, resulting in wider access to EU markets. The
agreement also helped make Estonia more attractive
to foreign investors.
Fish and milk products are the major articles of
agricultural export, accounting for 39.4% and 24.7%
of exports in 2000.
The export of meat products also increased in
2000 when 99% of its pork was exported to Latvia
and Lithuania.
The import of agricultural and food products to
Estonia has also significantly grown. In 2000, the
amount of imported milk products was 44,000
tonnes, which accounted for 10% of the domestic
market consumption. Import of meat products in the
same year was 40,600 tonnes, which accounted for
46% of the domestic market consumption.
Import of grains and grain products amounted to
Milk purchasing price in 1994–2000 (EEK/kg)
1994 1995 1996 1997 1998 1999 2000
Dynamics of beef and pork purchasing prices (EEK/kg)
pork
beef
1993 1994 1995 1996 1997 1998 1999 2000
222,000 tonnes, consisting of one-third of the domestic
market consumption.
From 1 January 2000, customs duties were imposed
on agricultural and food products imported from
countries with which Estonia has no free trade agreement.
This was the first step toward changing the previously
liberal trade policy. However, as the relative
share of the countries affected by the new customs duties
is rather insignificant in total imports, the economic
effect of the customs duties was modest as expected.
Overall figures indicated the foreign trade balance
in 2000 as negative: imports substantially exceeded
exports.
Estonian consumers prefer domestic goods
The Estonian consumer prefers domestic products
over imports for three main reasons: price, traditional
tastes, and naturally cleaner raw materials.
Since 1994, in order to assess the position of
domestic products in the domestic market and consumer
preferences depending on product origin, the
Estonian Institute of Economic Research has conducted
surveys and performed research studies for the
Ministry of Agriculture. Results indicate that the
assortment of domestic goods available to consumers
has continually grown. The market shares of domestic
goods that have increased the most are of ice cream,
yoghurt, curds, boiled sausage and frankfurters,
smoked sausage, smoked meat, bread, and biscuits.
Competition between producers is tough in several
product groups, corresponding to more and more new
products being brought to the market.
In certain product groups (pasta, margarine, vegetable
oil, poultry meat), the local market has been
occupied by importers. Following the launch of vegetable
oil production in Estonia, many consumers
started to prefer domestic vegetable oil.
The Estonian food industry considers it necessary
to value domestic raw material, which is why the
Estonian Chamber of Agriculture and Commerce
developed the mark “Approved Estonian Taste” in
2000. The mark of origin is given to products of
100% Estonian origin which have successfully passed
laboratory and quality assessment. The requirement of
domestic raw material cannot be applied to all foods
(such as confectionery products), which is why the former
quality mark is also still in use.
179,5
130,8
Export of agricultural products in 2000,
in millions of kroons
64,1
275,5
249,3
942,4
1252
European
Union
Baltic States
Russia
Ukraine
EFTA
CEEC
Others
12