Approximately 30 per cent of the vegetables consumed in Estonia last year were sourced domestically, according to Statistics Estonia. This marks a decline from 60 per cent a decade ago. In contrast, Finland maintains a competitive edge, facilitated by subsidies and tax policies. Raimond Strastin, CEO of the Estonian Horticultural Association (Eesti aiandusliit), calls for practical approaches to address these disparities.
Strastin noted that a decade ago, an assumption existed that self-sufficiency in vegetable production would remain around two-thirds, but it has now decreased to half that level. Neighboring countries offer supportive measures with few disruptions. "Latvia and Lithuania have implemented various tax breaks. For example, Latvia has a reduced VAT rate for domestically grown fruits and vegetables. That's how the sector is supported there," he told ERR.
He highlighted Finland's strategic support for horticultural producers, specifically leveraging square-meter-based subsidies for greenhouse production. This system has been operational since Finland joined the European Union. The outcome is competitive pricing of Finnish cucumbers, which are less costly and attract retailers in Estonia.
The VAT rate on fruits and vegetables in Estonia stands at 22 per cent, scheduled to rise to 24 per cent in July. By comparison, Latvia and Finland offer reduced rates of 5 per cent and 12 per cent, respectively. Additionally, he pointed out that neighboring countries apply lower excise duties on fuel, crucial for greenhouse operations.
Strastin criticizes current retail pricing models, which inflate the cost of domestic produce. He questions, "Why not apply some common sense or a bit more thoughtful logic in the pricing model itself? For instance, instead of putting a 100 per cent markup on cucumbers and tomatoes, apply a 20 per cent markup." Vegetables, particularly cucumbers, have seen price surges over the past year. April's average price for long and short cucumbers reached €7.31 per kilogram from €4.07 the previous year.
Kristo Eisenberg, CEO of Grüne Fee, emphasized the role of retail practices in price hikes. The price of Luunja long cucumbers increased by about 10 per cent within a year. He suggests addressing energy security and reviewing taxation policies, advocating for immediate action over the next three to five years.
He urges governmental focus on potential tax exemptions or subsidies, with particular emphasis on labor and VAT relief for essential enterprises in the sector.
Source: ERR