Price and Income Policies for Food and Agricultural Products in the Baltics

The Baltic Republics have undertaken extensive price reforms for food and agricultural products. Higher producer and consumer prices, accompanied by wage increases and income subsidies to offset higher prices, are expected to improve market efficiency. The goal is to move toward private enterprise in the agribusiness sector. The role of pricing in market economies is discussed in the context of other steps that need to be taken in developing a market system for food and agricultural products. Specific attention is given to pricing in harmony with international markets and broader research tasks that can support the policy reform process. Note: This paper is based on conditions and data as of the end of April 1991. Other price changes have occurred since then, and Estonia removed most price controls in July 1991. At the time of publication the three republics had been recognized as independent states, so a major obstacle to implementing reforms has been removed; but the pricing issues remain essentially the same.