Impact of COVID-19

Agricultural sector will continue to need foreign labour in the future

The corona pandemic led to a massive labour crisis in the agricultural sector because closing the borders between countries left the sector without foreign labourers, said the Foresight Centre report “The Impact of the Virus Crisis on the Estonian Economy. Scenarios up to 2030”, which is soon to be completed. Estonia’s labour market will not be able to fill all the vacancies in the sector in the future either.

“Agriculture is an important export sector for Estonia. During the first wave of the virus, it was hit by a labour shortage that paralysed business activities,” said the expert of the Foresight Centre Uku Varblane. “Restrictions on movement stopped foreign labourers from entering Estonia, and businesses struggled to keep going. “Labour shortage could not be covered from the locally available labour force.”

Varblane added that it was unlikely that the agricultural sector would be able to stay competitive without foreign labour in the near future. “Competitors to Estonian farmers in other countries have had better access to foreign labour,” he said. 

The hardest hit were the companies that were geared towards foreign markets or the hospitality and catering sector. “The dairy industry was the hardest hit, particularly because of the drop in export. Demand on export markets has fallen due to the reduced tourism – e.g. Estonian cheese is sold in large quantities to Italy, but now the demand fell because of the lower tourist numbers,” Varblane explained. At the same time, grain producers have suffered little from the crisis, and this year’s crop has also been good. “The crisis has been a boon for spirits producers who benefited from the skyrocketing rise in the demand of disinfectants.”

Uku Varblane explained that the businesses in the sector have started to think more about the automation and digitalisation of the processes and have started to offer their products via online channels. “The rise of e-commerce can provide new opportunities, particularly to small producers who gain better access to the end consumers,” Varblane said.

Varblane foresees the tightening of environmental requirements in the near future having an important impact on the agricultural sector; this will force businesses to make huge and occasionally risky investments. “Entrepreneurs wish to see more cooperation between Estonia and the other Baltic governments in keeping the agricultural products market functioning smoothly in our region,” Varblane said.

Agriculture, forestry and fishing employed 3% of the labour force, or 16,900 people, in 2019; the importance of the sector in the added value of the Estonian economy was 2.9%, or EUR 700 million.

In crop and animal farming, the monthly turnover of businesses from March until October has increased by 7.9% compared to the previous year, in fishing and aquaculture by 9.4%; during the same period, the monthly turnover of forestry companies has dropped by 12.6%.

According to the COVID-19 resilience index compiled by the Foresight Centre, agriculture, forestry and fishing ranked fifth (with 1.66 points) among the 17 industries studied.

COVID-19 resilience index
The COVID-19 resilience index measures the extent to which economic sectors are affected by the coronavirus crisis. The index is based on various economic indicators of companies. The value of the index is between -5 (the largest negative impact) and +5 (the smallest negative impact). The index takes into account the changes in the turnover of companies (total turnover in March–August 2020 compared with the same period the year before) in the economic sector, changes in their number of employees in comparison to 2019, and the dynamics after the emergency situation, changes in labour expenses, and changes in the profit and investments of companies in comparison to the same period last year.

The Foresight Centre will publish the report “The Impact of the Virus Crisis on the Estonian Economy. Scenarios up to 2030” on 8 December.


  • The Foresight Centre started publishing surveys of the impact of the virus crisis on economic sectors on 17 November.
  • The calculations and figures of the surveys use the data of Statistics Estonia. The descriptions of development perspectives are based on interviews with representatives of sectoral associations and the focus group interviews conducted in cooperation with the research group of the Estonian Qualifications Authority OSKA. The Foresight Centre will present the scenarios for exiting the virus crisis at the beginning of December. Read more:
  • The impact of COVID-19 on the changes in the employment and skills in hospitality, catering and travel industry is described in OSKA’s special survey, which will be published in early 2021.

The Foresight Centre is a think tank at the Chancellery of the Riigikogu that analyses long-term developments in society and economy. The Centre conducts research projects to analyse the long-term developments in Estonian society, and to identify new trends and development directions.

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