Analysis of participation costs in quality schemes for agricultural products and foodstuffs

To improve the functioning of the food supply chain, add value to agricultural products and increase consumer awareness of products produced within quality schemes, participation in food quality schemes is supported through the Estonian 2014-2020 RDP measure 'Quality schemes for agricultural products and foodstuffs' (M03). Support is provided to farmers participating in a single quality scheme for up to five years after joining. It is granted as an annual payment to compensate farmers for the ongoing costs associated with participating in the quality scheme.

The scope of the evaluation was the assessment of the RDP sub-activity of M03. This study aimed to map the ongoing costs of participating in the quality scheme 'Biosphere Program Area for Grass-Fed Beef and Lamb' and analyse additional expenses associated with participation. The analysis results helped identify the standardised unit price for participation support in the quality scheme. The geographical area covered was the West-Estonian Archipelago Biosphere Reserve Program Area.

The methods used were surveys, interviews, and qualitative and quantitative approaches. Data collected through the document analysis regarded the conditions of participation in food quality schemes, the costs associated with mandatory production methods, and their causes. The dataset collected through the survey was supplemented with data from the Agricultural Animal Register of the Agricultural Registers and Information Board (also the Paying Agency).

Determining the costs associated with participating in the food quality scheme was based on identifying the additional expenses a producer needs to incur compared to those who do not participate. The identification of additional costs relied on the results of interviews and surveys, as well as assessments from consulting experts conducting checks. The production specifics characteristics and costs arising from quality requirements were considered during this process.

The study's conclusions indicate that the costs of participating in the food quality scheme are determined based on the regulations and requirements outlined in the scheme, which participants must adhere to. Interviews and survey results carried out for evaluation revealed that the main additional expenses arise from complying with animal welfare requirements. It is required to provide animals with year-round access to an outdoor area. The costs of grazing and forage collection also increase since the food quality scheme stipulates that grazing must occur in semi-natural habitats or permanent grassland. Most winter forage must also be collected from these areas. Depending on the characteristics of the grazing areas, suitable breeds must be chosen for animal husbandry. Therefore, breed-specific costs related to the keeping and care of these animals are also added. In addition, more frequent parasite monitoring must be conducted on the animals to ensure production quality. However, the annual inspection costs were the most significant expense associated with participating in the food quality scheme.

The evaluation demonstrated that it is important to compensate farmers for costs associated with participating in a quality scheme. The RDP's role in supporting participation was generally considered important. The report also noted that this kind of support also encourages local cooperation among livestock farmers. Without support, it is challenging to create and sustain collaborative initiatives.