1. Innovation and sustainability in the farming sector
Ants-Hannes Viira, PhD
Director of the Institute of Economics and Social Sciences
Estonian University of Life Sciences
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2. Content Sustainability in the farming sector
Which farms are economically viable?
Which farms are environmentally friendly?
Which kind of farms are socially desireable?
How can innovation help us improve the sustainability of farming sector?
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3. Smart solutions for sustainable and inclusive societies.
Policy drivers of innovation, productivity and sustainability in the food and agriculture sector
Source: OECD (2015a), “Analysing policies to improve agricultural productivity growth, sustainably: Revised framework”.
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Tallinn,

4. Structural change – the case of Estonia (1)
Source: Statistics Estonia (2017)
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5. Structural change – the case of Estonia (2)
Source: Statistics Estonia (2017)
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6. On whose account has the structural change occurred?
Source: Statistics Estonia (2017)
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7. Farm structure in Estonia
Source: Statistics Estonia (2017)
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8. What have been the drivers of structural change?
Farm exits – normal structural adjustment
Retirement
Off-farm employment
Lack of successors (often related to farm size and income prospects, and farm type)
Farm expansion – investments
Investment subsidies
Access to credit
Direct and environmental area payments
Higher producer prices
Strive for new technologies
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9. Technology adoption – the case of Estonian dairy farms (1)
Source: Luik and Viira (2016)
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10. Technology adoption – the case of Estonian dairy farms (2)
Technological change in the dairy barns built after 2002 (Luik and Viira, 2016)
New type of barns – non insulated
New feeding systems – total mixed ration feeding
New milking systems – parlours, carousels, automated systems
Cow monitoring systems
Most cows kept indoors throughout the year
Different manure handling (liquid systems with sufficient storage capacity)
Higher milk yields
Less labour needed
Drivers of total factor productivity growth (Kimura and Sauer, 2015)
Exit of inefficient farms
Productivity growth in relatively small number of large farms
Productivity differences between small and large farms are increasing
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11. Technology adoption – the case of Estonian cereal farms
Source: Estonian University of Life Sciences (2013)
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12. Farm viability
Medium sized farms most vulnerable to changes in output prices and direct payments
30% increase in output prices and direct payments insufficient to improve viability of most small farms
Some very resilient size groups, e.g. dairy farms with cows
Source: Estonian University of Life Sciences (2017)
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13. Environmental pressure
Larger farms
Higher stocking density
More fertilizers per ha
More crop protection per ha
Higher yields
Up to date technology helps reduce environmental risks
Farms enrolled in environmentally friendly management scheme and organic farms
Less chemicals
Higher biodiversity
Are these farms vibale on the basis of market prices and without respective subsidies?
Environment’s pressure on farms
Climate change
Water
Pests and diseases
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14. Social pillar of sustainability
Farm family perspective
Successors
Skills
Income
Position in the society and local community
Labour
Society’s perspective
Possibility to enter farming
Comprehension of how food is produced
Apprehension and acceptance of practices in large scale production
Education
Conerns about climate change
Concerns about animal welfare
Back to roots – desire to grow your own (even if questionable in urban environments)
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15. Sustainability Economics Society Environment Farm structure
Productivity
Income
Small and medium-sized farms’ problems
Technology adoption
Risk management
Labour
Environment
Productivity and intensity of production
Productivity vs more traditional and less intensive practices
Biodiversity
Climate change
Pests and diseases
Water
Society
Farm income
Farm successors
Skills
Farmers’ position in society
New entrants in farming
Comprehension and acceptance of practices of modern food production
Concerns about climate change, animal welfare
Back to roots
Sustainability
Smart solutions for sustainable and inclusive societies. Tallinn,

16. Sustainability Economics Society Environment Farm structure
Productivity
Income
Small and medium-sized farms’ problems
Technology adoption
Risk management
Labour
Environment
Productivity and intensity of production
Productivity vs more traditional and less intensive practices
Biodiversity
Climate change
Pests and diseases
Water
Society
Farm income
Farm successors
Skills
Farmers’ position in society
New entrants in farming
Comprehension and acceptance of practices of modern food production
Concerns about climate change, animal welfare
Back to roots
Sustainability
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17. Conclusions (1) Which farms are economically viable?
Need to increase viability of smaller farms
Increase their scale to achieve reasonable income
Change to agricultural activities that generate more revenue per ha and person
Upgrade technologies – labour saving, attractive for successors
Disappearing middle sized farms?
Need higher and more stable prices
Improve their position in the supply chains via cooperation and supply chain regulation?
Which farms are environmentally friendly?
Not directly linked to farm type or size
Large farms perceived environmentally less friendly
Which kind of farms are socially desireable?
Economically vibale and environmentally friendly farms
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18. Conclusions (2) Technologies
Reduce environmental risks of intensive production systems
Improve economic performance of organic and environmentally friendly production systems
Help in coping with the effects of climate change
Attract the next generation into farming
Reduce need for labour
Reduce administrative burden of farmers
R&D and education
Willingness and ability to adopt advanced technologies
Adaptive capacity (to climate change)
Educate next generation, life-long learning, educate public in general
Entrepreneurship
Innovation partnerships and clusters
Knowledge transfer programmes
Cooperation between farmers, researchers, advisors and input producers/providers
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19. Conclusions (3) Policy Coordinated effort of many policy areas
More targeted CAP
Incentives for investments in technologies, R&D, education, and cooperation
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20. Thank you for your attention!
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