The task of the Ministry of Culture is by both legislative and financial means to create favourable conditions for the preservation and development of folk culture. The Folk Culture Act is currently being drafted. Its aim is to define legislative, organisational and economical foundations for folk culture-related activity as an ongoing process. It also defines the relations between the state, local authorities, folk culture institutions and folk culture organisations and the main tasks of preserving folk culture and creating conditions for this development. It also highlights the financing sources and principles of folk culture. 

The Estonian Folk Culture Development and Training Centre is a state authority that works as the development and support centre for its specific field, aiming to keep traditional and creative folk culture prosperous. For this purpose a regional network, co-operation with national folk culture central unions, continuous and systematic training of folk culture leaders and the leaders of amateur groups has been established, all in line with the rapid changes and needs of society.

The Ministry of Culture allocates support to national central unions that, as umbrella organisations, engage in the essential development of their particular field. The folk culture central unions are: the Estonian Choral Society; the Estonian Folk Dance and Folk Music Association; the Estonian Amateur Theatre Association; the Estonian National Folklore Council; and The Estonian Folk Art and Craft Union.

In 2003 the Estonian, Latvian and Lithuanian song and dance festival traditions and the cultural space of the island of Kihnu were added to the UNESCO list of oral and intangible heritage.

The biggest and best-known festivals in Estonia are Tallinn´s Choral Music Festival, the Folklore festival "Baltica", the Vőru Folklore Festival and the Viljandi Folk Music Festival.  In the field of handicraft, the biggest initiatives include the Medieval Craft Market in the Old Town of Tallinn and the handicraft fair "Mardilaat" at the Tallinn Song Festival Grounds.

Public finances allocated to folk culture by the Ministry of Culture