The plan, identical to one enacted by the Lithuanian government earlier this month, was proposed by the Viru Juust dairy, Estonia's largest cheese maker. The company offered 20 million kroons ($1.4 million) worth of cheese to cover a shortage in working assets. Other companies in Tartu and Tallinn who face similar problems are urging a similar solution. Dairies and meat companies in the Baltics, many of whom send half their total exports to Russia, have been hit hard by the Russian crisis that began in August.
"The government hasn't officially discussed the problem yet, but it is possible we could allocate additional funds to purchase some of these products," said Estonian Finance Minister Maart Opmann.
Ardo Hagel, Voru Juust's chairman, says this proposal is the only workable alternative left. He pointed out that many of these companies have already been suffering from higher Russian duties that were slapped on their exports back in April.
"The money is needed to pay the milk producers, who require 20 million kroons until the end of the year," Hagel told the Estonian business daily Aripaev. "Currently, we can give them compensation of 10 percent only, which puts farmers under extreme difficulty as well."
According to Opmann, the government's reserve fund, which can be dipped into in an emergency, holds 10 million kroons.
In addition, Hagel said a bank loan for his company is out of the question.
"The interest rates offered by banks are given at 15 to 16 percent, which the company cannot afford," he said.
For Voru Juust and other companies alike, aid of whatever kind is welcome, as long as it comes quickly. The dairy has oriented its exports toward Russia, which accounts for 40 percent of total production.
Other producers are designing crisis programs that allow for quick restructuring of their processing branches. Some that haven't been able to adjust have shut down instead. For example, Estonia's number one dairy, Uhinenud Meiereid, closed its Parnu factory, leaving more than 300 employees out of work.
Along with the processors, farmers, who are already suffering from a bad crop after a rainy summer, have suddenly lost their means of income. Complaints are being hurled at the government and more and more farmers are echoing this often heard, grim refrain: "Maintaining cattle has become more of an action of good will than an economic operation."
The government initiative parses with earlier signals from Tallinn that suggested offering Russia some kind of humanitarian aid. At the beginning of September, former Prime Minister Maart Laar was appointed to head a delegation to the Russian government to help it clean up the financial mess and suggest ways to reform its economic policies.
But Aare Jarvan, the economic adviser to Prime Minister Maart Simmann, told the Baltic News Service that the best way for Estonia to help ailing businesses is to speed up the country's integration into the European Union (EU), thus opening up Western markets to take the place of the closed Russian one.
Earlier this year, the EU banned Estonian food exports because they did not meet the proper health and safety measures.