Current Issues and Challenges in Agriculture Olav Kreen Estonian Chamber of Agriculture and Commerce

IT IS SPRING! Prices for fertilizers, fuel, labour etc. Suitable Machinery Knowledge about new developments (production technologies, chemicals, markets etc.) Land rent conditions People with knowledge, ability and willingness May 14th, 2008 Estonian Chamber of Agriculture and Commerce 2

Looking back Restructuring of Agricultural sector Before EU market not regulated Number of farms is decreasing Decline in land use and production Increase in productivity In EU direct subsidies increase Prices increased in 2007 Investment subsidies oriented to smaller farms May 14th, 2008 Estonian Chamber of Agriculture and Commerce 3

Developments in Farm structure Oriented towards profitability or Farming as life style, obligation or opportunity Variation have increased May 14th, 2008 Estonian Chamber of Agriculture and Commerce 4

How to survive? Increase income in farm –Increase productivity –Increase size –Additional activities Decrease costs in farm May 14th, 2008 Estonian Chamber of Agriculture and Commerce 5

Challenges for Agriculture: market based Increased demand –Food –Biofuel –Other non-food usage Increased prices NB! Greater fluctuations on prices! –Ecological products New products May 14th, 2008 Estonian Chamber of Agriculture and Commerce 6

Need for market regulation Different climatic, soil etc conditions in regions Different environmental and other restrictions for production Possible market distortion Different national objectives National food security Productivity depends on weather May 14th, 2008 Estonian Chamber of Agriculture and Commerce 7

Challenges for Agriculture: income based Income from agricultural production Income from other activities or Income from subsidies Need for long term stability! Need to reach “break even” level! May 14th, 2008 Estonian Chamber of Agriculture and Commerce 8

Limitation can be a challenge? Cross Compliance GAEC Quality chains Production Quotas May 14th, 2008 Estonian Chamber of Agriculture and Commerce 9

Challenges for Agriculture: cooperation Production Marketing Promotion –Local food –Environment and village landskape Lobbing May 14th, 2008 Estonian Chamber of Agriculture and Commerce 10

How to facilitate challenges? Infrastructure for production –Roads, melioration etc –Knowledge: Research, Advisory service etc –Services: machinery, marketing –Information and Communication Technology Life quality in Rural areas NB! Agricultural policies can not resolve all problems in Rural Areas! May 14th, 2008 Estonian Chamber of Agriculture and Commerce 11

MOST FLEXIBLE THING IN A WORLD IS A FARMER Conclusion May 14th, 2008 Estonian Chamber of Agriculture and Commerce 12