Economic and financial section > Agricultural crisis > Volume 1

At the end of 1930 the prices of agricultural export products had fallen considerably
below the pre-war level. Taking 100 as the price index number for agricultural exports in
1913, prices had fallen to 83 in December 1930, making a drop of 17 per cent as compared
with 1913. When it is further considered that this extremely low index at the end of 1930
was reached after the very high figure of 152 in 1928, it will be understood how farms
obtaining their earnings from the export of agricultural products were affected.
The decline in agricultural prices has not been accompanied by a proportional decrease
in the cost of production. In the medium and large farms, wages form an essential
element in the cost of production. Until 1929 wages showed a constantly rising tendency,
and it was only in 1930 that a slight decline occurred. We give below the average monthly
wages of workmen engaged by the year (1926 = 100):
Year 1926 1927 1928 1929 1930
Monthly wages. . . . 100 100.4 I04 I08-8 102
Another important factor adversely affecting the agricultural situation is the protec¬
tionist policy of countries importing agricultural products. This policy finds expression
in the increase of Customs duties, the allocation of import quotas and the application of
veterinary administrative regulations. Moreover, some countries endeavour to promote
their exports by direct or indirect bounties.
There is not a single agricultural export product in Estonia which has not suffered
from one of the above causes. In view of the great importance of agricultural products
in Estonian exports, it is evident how much the national economy of the country has
suffered from the changes in the conditions of foreign trade. In 1930 the exports of
agricultural products represented the following percentages of the value of the total
exports: Butter, 32.7 per cent, timber 9.8 per cent, flax 4.1 per cent, live animals, meat
and meat products 2.5 per cent, eggs 2.2 per cent, potatoes 0.6 per cent.
Among the difficulties affecting the external trade should be mentioned, in the first
place, the Customs duties introduced in 1925 and considerably increased in the autumn of
1930 by Germany, the principal market for Estonian butter. Of the other countries
importing Estonian butter France also raised the import duties in 1930. The drop in
butter prices was accentuated by the export bounties introduced in certain countries, in
particular Australia, Latvia, Lithuania and Poland.
Obstacles to the sale of live animals, meat and meat products are constantly being
created by administrative regulations issued for veterinary and sanitary reasons. Some
countries create similar difficulties by means of purely administrative regulations. As an
example, a case may be mentioned of regulations requiring that certain goods intended for
retail sale should be provided with a mark of origin. While Estonia was formerly able
to export meat to the Swedish market, these exports have become practically impossible
since the introduction of Swedish regulations requiring that meat should be stamped with
the name of the country of origin. A similar condition is applied to Estonian eggs on the
English market. Other administrative provisions have also impeded the sale of Estonian
products on various foreign markets.
In addition to the external difficulties the decline in prices on the home market has
tended to increase the agricultural depression. This drop has had a twofold aspect. In
the first place it has affected products imported from abroad to cover part of the needs of
the towns (for instance wheat). The prices of these commodities have dropped in the
same manner as on the world market. In the second place a drop in prices has been
caused by the increased production of articles the export of which has not yet been
satisfactorily organised on account of the uncertainty or insufficiency of the quantities
available for export (meat, potatoes, vegetables).