Innovation, Agricultural Productivity and Sustainability in Estonia is part of the OECD Food and Agricultural Reviews series. This review was undertaken at the request of the Estonian Ministry of Rural Affairs. We are particularly grateful for the support for this study from the Toomas Kevvai, Deputy Secretary General for Food Safety, Research and Development in the Estonian Ministry of Rural Affairs.

The Estonian agricultural sector has experienced significant growth and structural change during the last 25 years, in particular since the country joined the European Union in 2004. High growth in agricultural production and productivity was achieved with relatively limited environmental pressure, taking advantage of abundant land and water resources. Agricultural production became more diverse in response to market and policy signals, as illustrated by the development of organic production. Most productivity improvements, however, occurred in larger farms, with smaller farms often lagging behind. Moreover, the food processing sector has not invested as much and adjusted as fast as primary agriculture, and is still struggling in terms of capacity and competitiveness, thus impeding the development of new markets and new products from agriculture.

This chapter introduces the framework used to analyse the extent to which Estonian policies foster productivity and sustainability in the food and agriculture sector and presents an overview of findings for a wide range of policies. It also includes specific policy recommendations for each policy area reviewed.

This chapter describes the overall economic, social and environmental context in which the food and agriculture sector in Estonia operates, and the natural resource base upon which it relies. It provides an overview of the general geographical and economic characteristics of Estonia; outlines the share of the agri-food complex in the economy; identifies the main structural characteristics of the food and agriculture sector; provides an overview of the main food and agriculture outputs and markets; and analyses the main trends in agricultural productivity, competitiveness and sustainability.

This chapter gives an overview of the performance of the overall economy, macroeconomic developments and challenges, and the governance and institutions.

This chapter reviews general incentives for firm-level investments, stemming from regulations governing entrepreneurship, access to natural resources and products and processes, and policies related to trade, investment, finance and taxation.

Capacity building, including provision of essential public services, is one of the main channels or incentive areas to support innovation and sustainable development. This chapter concerns three relevant policy areas: infrastructure and rural development policy; labour market policy; and education and skills policy.

This chapter provides an overview of the agricultural policy framework and instruments, focusing on EU Common Agricultural Policy (CAP) measures and their implementation in Estonia. It also reports trends on the level and composition of payments to producers and expenditure on general services to the sector. Finally, it discusses the likely policy impact on structural change, innovation, productivity growth and sustainability performance.

This chapter describes the Estonian Agricultural Innovation System and outlines recent changes. It provides an overview of the general innovation system; describes agricultural innovation actors and their roles in the system. It then describes main trends in public and private investments in R&D, mechanisms of funding and mechanisms to foster knowledge markets and networks. It presents mechanisms to facilitate the transmission of knowledge, outlining developments in farm advisory services. The last section outlines the participation of agricultural R&D actors in regional and international co-operation.