Hendrik Johannes Terras: Where will agriculture's €546 million go?

Estonia's lower level of agricultural support was taken into account when calculating funding for the next EU budget period. This increased Estonia's allocation by roughly €546 million. The European Commission left it to Estonia to decide how to use this opportunity, writes Hendrik Johannes Terras.
At the Ministry of Finance, a working group of 17 specialists assessed ministries' requests and drafted the first allocation proposal. According to the sector, only €295 million of this would actually go toward developing agriculture and food production: €245 million for food security and €50 million for the food industry.
Finance Minister Jürgen Ligi has said he fought to keep the money within the agricultural field. Looking at the budget lines, that is true. But within those lines, the money is intended for very different purposes.
The Ministry of Climate is slated to receive €117 million from agricultural funding. This would go toward biodiversity in private forests in Natura 2000 areas, maintaining heritage meadows, protecting water and soil, and forestry investments. To find this money, agricultural measures had to be reduced.
These expenses serve environmental goals. Agriculture needs fertile soil and clean water, and heritage meadows can combine nature conservation with livestock grazing. But biodiversity support in Natura 2000 private forests does not build pig farms or increase egg production, and forestry investments do not improve Estonia's food self‑sufficiency.
If agricultural money is used for forest‑related environmental obligations, a choice has been made in favor of environmental goals at the expense of agriculture and food production. This cannot later be counted as investment in production capacity.
Of the €245 million planned for food security, €85 million would go toward increasing self‑sufficiency and critical production capacity — pig farming, poultry meat and eggs, horticulture, potatoes, greenhouses, irrigation, storage, and breeding.
€110 million is intended for productivity and competitiveness: technology, resource efficiency, biogas, renewable energy, and value‑adding.
€50 million goes toward crisis resilience. This includes biosecurity and land improvement, but also reserves, logistics, food safety, and the capabilities of the Agriculture and Food Board (PTA) and the state's laboratory and risk assessment center (LABRIS). Not all of this money goes to agricultural enterprise investments.
The food industry would receive €50 million over seven years — down from €78.1 million in the current budget period.
This is how the sector arrives at €295 million. Even that figure includes activities that do not result in new farms, greenhouses, production lines, or processing capacity.
Farmers view the funding plan differently than budget planners. A pig farmer wants to know whether he can build or modernize a farm. A horticulture producer needs greenhouses, irrigation, and storage. A dairy producer needs processing capacity. The food industry needs new lines and technology. More value must be created from grain in Estonia.
Our starting point is not good. In 2024, the value of buildings, machinery, and equipment in Estonian agricultural enterprises was €1,567 per hectare, compared with the EU average of €2,456. Output value was €1,350 per hectare in Estonia and €3,025 in the EU.
Last year, Estonia imported €539 million more in agricultural and food products than it exported. These numbers will not improve through environmental obligations, crisis reserves, or agency capabilities — only through increased production and processing capacity in Estonia.
Since February, I have said that the €546 million opportunity must be used to develop agriculture and food production. Prime Minister Kristen Michal has said the €546 million must go to agriculture and food production.
That promise must be visible in the funding plan. Environmental money must be called environmental money, crisis reserves must be called crisis reserves, and production investment must be called investment.
Seventeen specialists made the first allocation proposal based on the entire country's financial needs. The sector looks at the same proposal through the lens of whether Estonia will have more capacity to produce food domestically in 2034. The government must now decide which need carries more weight when allocating the €546 million.
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Editor: Kaupo Meiel, Argo Ideon











