Estonia to give EUR 9 mln to agriculture, lower excise duty on fiscally marked diesel

TALLINN – The Estonian Cabinet decided on Tuesday to allocate approximately 9.1 million euros of emergency support to the agricultural sector under the supplementary budget as a measure to ensure food security.

In addition, it was decided to reduce the excise duty rate on fiscally marked diesel to the lowest possible level.

"The Russian invasion of Ukraine affects both food production and supply chains, including farmers here. The surge in input prices is affecting the production possibilities and incomes of businesses," Minister of Rural Affairs Urmas Kruuse said in a press release.

In order to ensure the security of supply of food, the European Union has decided to pay extraordinary support to farmers, as part of which 2.57 million euros has been earmarked for Estonia. The government will allocate 9.1 million euros to support the agricultural sector. The terms and conditions of the distribution of the support will be set out in the near future, the minister said.

The Cabinet also decided to lower the rate of excise duty on fiscally marked diesel used in agriculture and fisheries to the EU minimum level 21 euros per 1,000 liters. 

"Reducing the excise duty on so-called blue diesel to the lowest level in the Baltics would help control the rise in fuel prices," Kruuse noted. "With this measure, we could support businesses in agriculture and fisheries with up to 6.5 million euros a year, which should also help reduce the pressure on food prices," he said.

At the proposal of the Ministry of Rural Affairs, 450,000 euros was allocated to store some 45,000 tons of grain as delegated stocks in Estonia and thereby increase the country's food security.

"Broadly speaking, 45,000 tons means a six-month stockpile for human consumption and a one-month stockpile for total consumption," the minister added.