Agricultural and Rural Development Policies in the Baltic Countries (Emerging Economies Transition)

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Agricultural and Rural Development Policies in the Baltic Countries Low incomes and high unemployment in rural areas are issues of concern to policy makers in all countries. With the ongoing structural adjustment in primary agriculture, employment opportunities are diminishing while off-farm employment in rural areas is growing, albeit gradually. This development has important economic, social and political implications with respect to establishing a vibrant and sustainable environment. These issues are particularly pronounced in the Baltic countries, which have recently emerged from a particularly gruelling transition process and are preparing for their integration into the EU. Low incomes and poverty are important concerns in many rural areas, especially in Latvia and Lithuania. A thorough examination of the underlying economic linkages between incomes, unemployment and economic development in rural areas is essential in order to identify the root causes of the problems and to design appropriate policy responses. Though sector specific policies may have a role in resolving these issues, the key focus of government should be on macroeconomic and structural policies that would allow markets to work, building on the natural endowments in the rural areas.

Agricultural and Rural Development Policies in the Baltic Countries

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Agricultural and Rural Development Policies in the Baltic Countries

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Agricultural and Rural Development Policies in the Baltic Countries

ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT Pursuant to Article 1 of the Convention signed in Paris on 14th December 1960, and which came into force on 30th September 1961, the Organisation for Economic Co-operation and Development (OECD) shall promote policies designed: – to achieve the highest sustainable economic growth and employment and a rising standard of living in member countries, while maintaining financial stability, and thus to contribute to the development of the world economy; – to contribute to sound economic expansion in member as well as non-member countries in the process of economic development; and – to contribute to the expansion of world trade on a multilateral, non-discriminatory basis in accordance with international obligations. The original member countries of the OECD are Austria, Belgium, Canada, Denmark, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The following countries became members subsequently through accession at the dates indicated hereafter: Japan (28th April 1964), Finland (28th January 1969), Australia (7th June 1971), New Zealand (29th May 1973), Mexico (18th May 1994), the Czech Republic (21st December 1995), Hungary (7th May 1996), Poland (22nd November 1996), Korea (12th December 1996) and the Slovak Republic (14th December 2000). The Commission of the European Communities takes part in the work of the OECD (Article 13 of the OECD Convention).

OECD CENTRE FOR CO-OPERATION WITH NON-MEMBERS The OECD Centre for Co-operation with Non-members (CCNM) promotes and co-ordinates OECD’s policy dialogue and co-operation with economies outside the OECD area. The OECD currently maintains policy co-operation with approximately 70 non-member economies. The essence of CCNM co-operative programmes with non-members is to make the rich and varied assets of the OECD available beyond its current membership to interested non-members. For example, the OECD’s unique co-operative working methods that have been developed over many years; a stock of best practices across all areas of public policy experiences among members; on-going policy dialogue among senior representatives from capitals, reinforced by reciprocal peer pressure; and the capacity to address interdisciplinary issues. All of this is supported by a rich historical database and strong analytical capacity within the Secretariat. Likewise, member countries benefit from the exchange of experience with experts and officials from non-member economies. The CCNM’s programmes cover the major policy areas of OECD expertise that are of mutual interest to non-members. These include: economic monitoring, statistics, structural adjustment through sectoral policies, trade policy, international investment, financial sector reform, international taxation, environment, agriculture, labour market, education and social policy, as well as innovation and technological policy development.

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Identifying the optimum policy mix to ensure a vibrant and sustainable rural economy in the Baltic countries was the focus of the OECD’s fifth meeting with the Baltic countries in the area of agro-food policies, held in Tallinn on 10-12 June 2003 and financed through the Baltic Regional Programme, of the OECD’s Centre for Co-operation with Non-Members (CCNM). The Seminar continued the policy dialogue between senior policy makers in Estonia, Latvia and Lithuania and OECD member countries on structural and policy reforms in rural areas. The discussion was set in the context of high rates of unemployment and increasing poverty in many rural areas. Participants included high-level policy makers, parliamentarians, academics, and researchers from the three Baltic countries, OECD member countries, the European Commission and the FAO. Low or volatile farm incomes and rising unemployment in some rural areas are central concerns for policy makers in many countries. With ongoing changes in the sources of farm household incomes, traditional farm policies are increasingly ineffective in addressing farm income problems. Better targeting of policies to address a diversity of rural and farm households needs is crucial. High rural unemployment is at the centre of the current debate in all three Baltic countries and there is increasing focus on developing a more comprehensive policy framework to resolving this pressing issue. Greater emphasis on specific targeting of enterprise development is a direct response to the dual concerns of low incomes and high unemployment in rural areas. A better understanding of the complex processes involved and the implications of greater diversity are crucial for policy makers so that they can respond appropriately to the changing environment. This process involves a complex set of cross sector policies including macroeconomic, labour, social, agricultural, regional and rural policies. The reader will find the essence of the discussion about rural incomes, labour mobility and rural development, trends and challenges for the Baltics in the Executive Summary, with a more detailed summary of Workshop conclusions and implications at the end of this volume. The first set of papers provides an update on the agriculture and rural income situation in OECD countries and the Baltics, with emphasis on the similarities and differences within the context of the transition process and the domestic policy regimes. The second part of the Proceedings deals with developments in the rural labour market and the underlying factors that influence mobility across regions and countries. The third part discusses the rural and regional development strategies in the context of low incomes and high rates of unemployment. The final part of the report outlines the various policy options and policy balances needed in order to resolve these pressing issues in rural areas. These Proceedings are produced by the OECD’s Directorate for Food, Agriculture and Fisheries under the auspices of the Centre for Co-operation with Non-Members (CCNM) and published under the responsibility of the Secretary-General of the OECD.

Stefan Tangermann Director Directorate for Food, Agriculture and Fisheries

Eric Burgeat Director Centre for Co-operation with Non-Members

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This publication brings together the contributions presented at the OECD Seminar on Agriculture and Rural Incomes, Labour Mobility and Rural Development Policies in Estonia, Latvia and Lithuania, held in Tallinn, Estonia on 10-12 June 2003. The Seminar was prepared by OECD in co-operation with the Ministry of Agriculture of Estonia. Michael Ryan was responsible for design and organization of the Seminar in collaboration with Mr. Andres Oopkaup, Deputy Secretary-General for Agro-Food and Trade in the Ministry of Agriculture. Special thanks are extended to Ms. Kai Kasenurm for the Seminar logistics and to all those who provided papers and contributed to the success of the discussions. The papers were edited by Michael Ryan, with the assistance of Carina Lindberg. Thanks are also extended to Anita Lari who formatted the document and prepared it for publication, and to Brigitte de Vogüé and Stefanie Milowski for their assistance on budgetary matters.

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