L’Estonia si scalda per la UE e I suoi sussidi agricoli

EstEu, Baltici, UE, agricoltura

L’Estonia si scalda per la UE e I suoi sussidi agricoli

Tiepidi prima dell’entrata nella UE, gli estoni sono ora favorevoli al 72%, grazie all’afflusso di sussidi agricoli, investimenti esteri, e al fatto che non vi è stato il temuto rialzo dei prezzi.

· Tra il 2004 e il 2006 Estonia riceverà 253m euro di sussidi agricoli (PIL = 9,2MD, in crescita del 5,6% nel 2004). Ai 10 nuovi entrati UE distribuirà 9,8MD euro di sussidi agr, rispetto ai 43,2 che riceveranno i vecchi membri.

· Investimenti esteri stimati a 800m euro (Svezia 42,8%, Finlandia 27%), la maggior parte in call centers (disponibile forza lavoro istruita, che conosce inglese, a basso costo) e nell’agricoltura (basso prezzo terreni agricoli, anche perché terreni fattorie collettive sono stati ceduti ai proprietari estoni pre-1940, che non sanno che farsene).

· Ma popolazione russofona, pari a un terzo della popolazione totale (che è 1,4m) ha tasso disoccupazione del 15% e spesso deve andare in Russia per trovare lavoro.

· Citato investimento del finlandese Helenius, che ha costituito un fondo di venture capital da 300m euro, e acquistato i terreni di un’azienda agricola, investendo 2m euro per 2 mila vacche aggiunte alle 100 preesistenti; le gestisce con strutture e metodi americani, alta meccanizzazione: solo 13 dipendenti, diretti da agronoma figlia di colcosiani. Esporterà 5,2 m litri latte per anno in Finlandia (dove prezzi sono i più alti di UE). Riceve 200mila euro di sussidi l’anno, che rimpinguano i già buoni profitti. Intende arrivare al 10% del latte estone ed espandersi in altri paesi Est e Russia, Ucraina.

Estonia Warms to EU And Its Farm Subsidies

Payments Help Encourage

Free-Market Investments;

Mr. Helenius Buys a Dairy



JOHVI, Estonia — The European Union was built for people like Riina Tamme and Joakim Helenius.

Ms. Tamme, a sturdy 30-year-old with a rosy complexion, runs a dairy farm with more than 2,000 cows on this bleak northern prairie 55 kilometers from the Russian border. Her job pays €500 ($667) a month, twice what she made on the strawberry farm where she worked until last year. “It’s all thanks to the EU,” she says.

Mr. Helenius, a 40-year-old Finnish investor, plowed €3 million into the dairy farm. He is starting to see evidence of a lucrative return: €345,000 in EU subsidies during the past year.

Much maligned in Western Europe, where older EU members like France and the U.K. face resistance in getting a skeptical public to approve a new constitution, Brussels is growing more popular in eastern and central Europe, where Estonia and seven other countries joined the bloc earlier this year.

Like many of her countrymen, Ms. Tamme has more warmly embraced the EU only recently. “I thought we’d get inflation, higher taxes and strict quotas that wouldn’t let us sell anything,” she says, voicing fears that most Estonians, especially farmers, say they once had.

A year ago, polls showed that only half of Estonians approved of EU membership. Now that figure is 72%.

A big reason for the changing attitudes is money pouring in as EU agricultural subsidies and fresh capital from investors like Mr. Helenius. Estonia is slated to get about €253 million in agricultural subsidies from 2004 through 2006, a lot for an economy with a gross domestic product of €9.2 billion last year.

Meanwhile, Estonia’s government has slashed taxes — reinvested corporate profits aren’t taxed — to lure foreign investment. So far the pro-growth policies are working. GDP growth is predicted at 5.6% for 2004, compared to about 2% in the euro zone. Foreign investment is forecast to be €800 million this year, up from €200 million for 1996. Many of the biggest investments have been in call centers — attracted by a surplus of relatively highly educated, lower-wage workers who speak English — and in farming. “Agricultural areas need jobs,” Prime Minister Juhan Parts says.

Not everybody is sharing in the prosperity. Uneducated and older workers, who have trouble adapting to the automated systems that investors demand, are suffering. By European standards, Estonia is still poor. Ms. Tamme’s salary of €500 a month — close to Estonia’s average — is one-fifth of the EU average.

Unemployment in the Russian ethnic minority — which makes up a third of Estonia’s 1.4 million population — is 15%, and many have to cross the border into Russia to find work . Even those best positioned to benefit from the EU worry that rising wages and regulation that their membership also brings will prompt investors to bypass Estonia in favor of lower-cost countries farther east.

Stable Prices, Low Taxes

Still, in Tallinn’s bars and cafes, many Estonians say they like the EU simply because of what it hasn’t done: Prices have been stable and taxes have stayed low. Inflation is forecast at 3.3% in 2004, which puts Estonia on a track to adopt the euro in 2007. Silver Petersen, 26, opened the Euro Bar&Cafe in October, hoping to cash in even before the common currency replaces Estonia’s kroon.

But among those who feel the EU’s influence most directly are investors like Mr. Helenius and workers well equipped to work in their enterprises, like Ms. Tamme.

Estonia’s free-market message is music to Mr. Helenius, who chairs Trigon Capital, the Baltics’ biggest venture-capital fund, with some €300 million in assets. He has a folder of plans for using Tallinn as a base to do business in Finland and Sweden. For example, he wants to run a landscaping operation out of Estonia for the Helsinki market, which is 85 kilometers from Tallinn. Finland is the source of 27% of foreign investment into Estonia, second only to Sweden’s 42.8%.

A former executive with U.S. investment firms Goldman Sachs Group Inc. and Merrill Lynch & Co., Mr. Helenius has been based in Tallinn since 1997. He spent long hours before Estonia’s EU entry studying what opportunities membership would create. In the end, he says, he decided the biggest payoff was in dairy farming, because land is cheap, farms aren’t heavily regulated, as in France, exporting to Finland is easy and there are plenty of subsidies available from Brussels. From 2004 through 2006, the EU is due to dole out nearly €9.8 billion in agricultural subsidies to the 10 members that joined May 1, including Cyprus and Malta. The older 15 members received a combined €43.2 billion last year.
Land Regained
After Estonia was freed from the Soviet Union in 1991, it returned land to families who had been Estonian in 1940 , before occupation by the Soviet Union.

“A lot of these people have sold because they don’t know what to do with the land,” Mr. Helenius says.

In 2003, he bought the dairy farm, called Revino after an 18th century manor house, from the owner who ran it as a Soviet collective. He won’t say how much he paid, only that land in Estonia, at €600 a hectare, is one-tenth the price of property in Finland. Determined to turn it into “a U.S.-style dairy farm,” he invested in the latest milking technology, which can predict which cows are likely to be more productive each day by meas
uring their movements and temperature

He spent €2 million on 2,000 cows to add to the 100 that were there before. His plan is to export much of the farm’s annual 5.2 million liters of milk to Finland, where prices are the highest on the continent.

Mr. Helenius expects his revenue to grow to €2.5 million next year from €2 million this year. Brussels chipped in €200,000 in agricultural subsidies in 2004, plus a one-time €145,000 subsidy for his investment. “We’d be doing OK without subsidies,” Mr. Helenius says, breaking into grin. “With subsidies, we’ll be making good money.”

After breaking even this year, Mr. Helenius expects €320,000 in profit next year. In three years, he hopes to produce 10% of Estonia’s milk and get investors to help him expand into Russia, Ukraine, Latvia and Lithuania.

Dairy-Farming Degree

That is good news for Ms. Tamme, the barn manager Mr. Helenius hired last year because of her reputation as the best animal handler in the region. She grew up in Valaste Kula, a tiny town near the Baltic Sea. Her parents worked on a Soviet cooperative farm that produced cucumbers, tomatoes, cauliflowers and dairy products. Her mother milked cows and her father worked with wood. She earned a degree in dairy farming from Estonian Agricultural University in Tartu and worked at several jobs, including a fish-processing plant, until Mr. Helenius called her last summer.

On a recent morning at Revino, Ms. Tamme watches Einar Pauman, a worker for the local processor, pump the morning milk into his 12,000-liter truck. The farm is located near the highway between Tallinn and Narva. EU money has rebuilt most of the road, though one bumpy section remains that was laid by German World War II prisoners. The road crosses stark landscapes of empty fields, metal factories and villages of Stalin-era cottages. Because of its poor soil, Estonia’s northern plains are best suited to industry or animal farming.

Coming in from the minus-10-degrees Celsius cold, Ms. Tamme checks daily output on her office computer.

Everything is mechanical now,” she says, explaining how she manages her extensive herd with only 13 people. “We don’t want too many people working here; we want low costs and efficiency.” With opportunity, she adds, has come a realization “that only the strong will survive.”
Ms. Tamme is determined to be one of the strong. In five years, she reckons she might be working somewhere else. “I’m gaining a lot of experience and I think I could be valuable,” she says.

Leave a Reply