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Finnish agriculture Finland • Surface area 338 419 km2 – forestry land 262 700 km2 (78%) – agricultural land 22 500 km2 (6.7%) • Population 5 300 000 – share of rural population about 30% • Population density 17.4 persons/km2 – (EU-27 114.7 persons/km2) • GDP – 178.8 billion euros (€) – 33 803 €/capita – share of agriculture and forestry 26% Finland – World’s northernmost agricultural country • Geographical location the greatest handicap • Growing season (in the picture) 180 - 120 days • Temperature sum 1 300 - 400 degree days - Germany 2 000 - 1 600 degree days - Spain 2 800 - 2 400 degree days • Natural conditions reflected especially in yield levels → only about half of those in Central Europe Farms receiving support by production sector in 2008 (%) Whole country Poultry 1.3% Beef 6.2% Pigs 3.8% Dairy cattle 19.4% Other 5.8% Plant production 63.6% North Finland Poultry 0.2% Beef 7.4% Pigs 1.2% Dairy cattle 32.2% Poultry 1.4% Beef 6.4 % Pigs 5.1% Dairy cattle 19.9% Other 7.6% Plant production 51.4% Other 4.9% Plant production 62.4% Poultry 1.8% Other 5.2% Beef 4.3% Pigs 4.6% Dairy cattle 10.7% Plant production 73.5% Poultry 0.4% Beef 10.0% Pigs 1.5% West Finland East Finland South Finland Other 7.4% Plant producti 48.0% Dairy cattle 32.6% NUTS II regions Uusimaa and Åland Islands included in southern Finland Source: MTT, Tike, Rural Business Register Number of farms receiving support in 1995 and 2008 WHOLE COUNTRY 100000 80000 60000 40000 20000 0 95562 65292 1995 North Finland 2008 50000 40000 30000 24794 20000 10000 0 1995 50000 40000 30000 20000 10000 0 50000 40000 30000 20000 10000 0 17119 2008 West Finland East Finland 43104 29368 50000 40000 30000 20000 10000 0 9956 7304 1995 2008 17708 1995 11501 2008 South Finland 1995 2008 NUTS II regions Uusimaa and Åland Islands included in southern Finland Source: MTT, Tike, Rural Business Register Number and average size of active farms (ha) in 1990–2007 1000 farms ha 140 40 120 35 30 100 25 80 20 60 15 40 10 20 5 0 0 Farms, 1000 Size, ha Source: MTT, Tike Structural change in agriculture in 1995-2008 Size class distribution of farms 1995 2008 Arable area ha Number % Number % <10 22 850 24 13 120 20 10-20 30 698 32 14 262 22 20-30 19 669 21 10 539 16 30-50 15 414 16 12 762 20 50-100 5 706 6 10 923 17 784 1 3 304 5 >100 • Total number of farms fell by 32% ( 95 121 → 64 910) • Average size of farms grew by 50% (22.8 ha → 34.2 ha) • Number of farms with over 50 ha doubled (6 490 → 14 227) Development of farm numbers and outlook for 2010 Number of farms 35000 30000 25000 20000 15000 10000 5000 0 1995 lypsykarjat (-6,5 %) Dairy (-6.5%) Beef (-7.2%) nautatilat (-7,2 %) Pig (-6.2) sikatilat (-6,2 %) Chicken -9.5% siipikarjatilat (-9,5 %) 2000 2005 2010 Year Source: MTT Changes in the shares of production sectors Number of farms Number of farms 45 000 10 500 40 000 9 000 Crop farms (-1.7%) 35 000 7 500 30 000 6 000 25 000 4 500 20 000 3 000 15 000 Other cattle farms (-49.2%) Dairy farms (-53.2%) 1 500 10 000 Pig farms (-45.6%) Poultry farms (-53.8%) 0 1995 1997 2000 2002 2004 2006 1995 1997 2000 2002 2004 2006 • Share of livestock farms decreased, share of crop farms increased • In 1995 52% of the farms were livestock farms and 39% were crop farms • In 2006 34% of the farms were livestock farms and 61% were crop farms Finland in international context 70 N Arctic circle 150 Average length of the thermal growing season, days 60 N 200 250 300 Source: MTT Productivity: Yields 2004 Finland - France Winter wheat, tonnes / ha 8 7.9 6 4 2 0 Sugar beet, tonnes / ha 80 40 60 30 70 40 3.4 Potatoes, tonnes / ha 20 0 20 37 41 23 10 0 Source: MTT Total Factor Productivity (TFP) growth in agriculture Index 1980=1 2 175 15 125 1 075 05 Denmark Finland Sweden Norway 1985 1990 1995 2000 2004 year Source: MTT Food industry Food industry • • • Agriculture is closely linked to domestic processing industry → 85% of the raw material of food industry is domestic Food industry is the 4th largest industrial sector in Finland Key figures for food industry (2008): – gross value of the production 10.5 billion euros – added value of the production 2.2 billion euros – share of Finnish GDP 1.6% – share of Finnish industrial production 7.6% – number of staff 34 600 – number of places of business 1 900 – research and development expenditure 63 million euros – exports 1.4 billion euros, imports 3.3 billion euros Sectors of food industry (2008) Fish 14% Oils and fats 2.4% Oils and fats Other 30% Milling22% products and Fish 1.7% starch 3.0 % Alcohol 26% Vegetables and fruit Sugar 30% 4.5% Milling products Feed 6.2% 29% Confectionary 38% Meat 23.8% Meat 267% 1 Vegetables and Bakery and pasta fruit products 49% 10.0% Feed 58% Beverages 11.8% Dairy products and icecream 23.1% Brewery 81% Dairy 215% Other (incl. sugar) 13.5% Bakery 113% Gross value of the production of food industry 10.5 billion euros in 2008 GDP share of agriculture and food industry (%) 30 Agriculture and related services1 25 20 15 Manufacture of food, beverages and tobacco 10 05 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 1 At factor price Source: MTT, National acccounting 1998-2006e, Statistics Finland Agricultural production and productivity Finnish farm Total number of farms 65 300 Finnish agriculture is based on family farms → 88.4% of farms privately owned In 2008 a Finnish farm had the average of: 2.1 persons employed in agriculture (2007) 34.2 hectares of arable land 48 hectares forest 52 bovines/cattle farm 24 dairy cows/dairy farm 586 pigs/pig farm 7 206 birds/poultry farm earnings and capital income from agriculture 14 569 euros (2006) Structure of farm income (2008) Income total 6.9 bill € 4 Other income 1.84 bill. €12 3 Forest income 0.59 bill. €1 27% 9% 8% 2 Support 1.86 bill. € 29% 27% 1 Sales income of agriculture and horticulture 2.61 bill. € 35% 38% Sales income % total 2.61 bill. € Meat 25% Horticulture 16% Arable crops 18% Milk 39% • • • Eggs 2% Total return on agriculture and horticulture 4.60 bill. € Total costs of agriculture and horticulture 3.72 bill. € → agricultural income 869 mill. € = 13 200 €/farm Agricultural support payments are based on the common agricultural policy of the EU Sources: MTT and Gallup Food and Farm Facts 1 Preliminary, Gallup Food and Farm Facts 2 Incl. compensations for crop damages and rent income 98 mill. € Use of agricultural land (2008) Cultivated agricultural land 2.3 mill. ha Cereal area 1.3 mill. ha Other Fallow 4% 9% Wheat 18% Rye Other 2% 1% Oilseeds 3% Barley 49% Grasses 29% Cereals 55% • Because of northern climate maize is not cultivated in Finland Oats 30% Arable crop production (2008) Area 1000 ha Yield kg/ha Total yield mill. kg ¹Domestic use mill. kg ¹Selfsufficiency % Wheat 216.3 3 640 787.5 689.3 114 Rye 23.6 2 580 60.8 88.6 68 Barley 585.5 3 640 2 128.6 1 791.3 119 Oats 354.5 3 420 1 213.4 785.9 154 1 193.8 3 540 4 229.1 3 417.6 124 Pea 3.2 2 250 7.2 9.8 73 Potato 26.2 26 120 684.4 616.7 111 Sugar beet 13.6 34 520 468.0 not available not available Dry hay 102.0 3 610 367.8 not available not available Silage 451.4 17 790 8 032.7 not available not available Turnip rape and oilseed rape 63.7 1 390 88.9 282.0 32 Cereals total 1 preliminary Livestock production (2008) Production mill. kg/l Consumption mill. kg/l Consumption per capita, kg/l Self-sufficency % Milk total 2 243.6 not available not available 101 Liquid milk products1 1 046.3 1 048.8 189.2 100 Butter 46.6 14.7 2.8 317 Cheese 105.4 97.9 18.4 107 Ice-cream 52.2 67.2 12.6 78 Meat total 400.8 387.4 76.7 103 Bovine 81.9 96.6 18.2 85 Pig 217.1 187.4 35.3 116 Poultry 100.9 98.1 18.5 103 Eggs 58.3 51.2 9.6 114 1 Liquid milk, soured milk products and cream (consumption figures for 2008 preliminary) Number of active farms and agricultural income in 1994–2007 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 Number of farms Change from year before% 66800 68766 69088 71100 72000 73386 75384 77896 82142 85690 88370 91281 95562 103000* –29 –05 –28 –13 –19 –27 –32 –52 –41 –30 –32 –45 –72 Change from Agricultural income at 2007 1994, % prices, mill. € –35 –33 –33 –31 –30 –29 –27 –24 –20 –17 –14 –11 –7 988 924 1017 1126 1181 1221 1190 1142 1077 1031 1253 1300 1488 1699 *Estimate of MTT Economic Research Sources: MTT Economic Research, Support register of Ministry of Agriculture and Forestry Index 1992–94 average: 100 63 59 65 72 76 78 76 73 69 66 81 84 96 109 Yields per hectare in 1987–2007 kg/ha 5000 4000 kg/ha 5000 Rye 4000 kg/ha 5000 Spring wheat 4000 3000 3000 3000 2000 2000 2000 1000 1000 1000 0 1987 kg/ha 5000 4000 1992 1997 2002 2007 0 1987 kg/ha 5000 Oats 3000 2000 1992 1997 2002 2007 0 1987 kg/ha 25000 Dry hay Barley 4000 20000 3000 15000 1992 1997 2002 2007 1997 2002 2007 Silage 1000 0 1987 1992 1997 2002 2007 2000 1987 1992 1997 2002 2007 10000 1987 1992 Source: MTT, Tike Production of milk, meat and eggs in 1997–2007 mill. litres 2500 Milk production 2450 2400 Pigmeat 200 150 2350 100 2300 To dairies 2250 2200 1997 mill. kg 250 1999 2001 2003 2005 Beef Poultry meat 50 2007 0 1997 Eggs 1999 2001 2003 2005 2007 Source: MTT Trend in agricultural income in 1994–2008 Ratio 110 100 90 80 Nominal 70 60 50 Real 40 1994 1996 1998 2000 2002 2004 2006 2008e Source: MTT Trend in the result and profitability of agriculture by sector in 1998–2007e Profitability coefficient 120 100 Pig farms 080 060 040 020 0 All farms Dairy farms Cereal farms 98 99 00 01 02 03 04 05 06 07e Source: MTT C4 Agricultural support areas C3 C2 C2north C1 B A Source: MTT Typology of Finnish municipalities 2006 Urban (58) Urban-adjacent rural (89) Rural heartland (142) Sparsely populated rural (143) Source: MTT, Kajaani University Consortium of the University of Oulu and Finnish Regional Research FAR Fertiliser use levels in Finland (kg/ha) kg/ha 250 200 150 100 50 Potassium Phosphorus Nitrogen 0 88 90 92 94 96 98 00 02 04 06 08 Source: MTT, Tike Food chain National Quality Strategy for the Finnish Food Economy • Programme launched jointly by actors in the Finnish food sector in1997 → aims to construct a quality chain for food from farm to table Trade Primary production Food industry Consumer Transport Food services Input industry • Purpose of the quality chain is to ensure safe, high-quality foodstuffs (traceability of origin) and efficient operations all through the chain National Quality Strategy for the Finnish Food Economy • Quality can be verified through e.g. – certified systems (e.g. ISO 9000, ISO 14000) – product certification – verifiable quality contracts – verification by official authorities • Fundamental aim of the quality strategy is to – improve the competitiveness of the Finnish food chain – reinforce socially responsible action in the food chain – improve the competitive advantages of Finnish food chains – improve consumer awareness of the work done in the food chain • • Programme is administered by the Ministry of Agriculture and Forestry Budget for 2009 is 1.37 million euros Trend in the manufacturer and consumer price for food and in the general consumer price index in 1995–2008 Ratio 130 125 120 115 Consumer prices Consumer price index 110 105 100 95 Manufacturer prices 95 96 97 98 99 00 01 02 03 04 05 06 07 08 Source: MTT Productivity ratios of labour and capital in 1992–2008 according to the total calculation of agriculture 2,5 Productivity ratio of labour 2,0 1,5 1,0 Productivity ratio of capital 0,5 0 92 94 96 98 00 02 04 06 08e The year 1992 is indicated by 1 (2008e=forecast) Source: MTT World market prices for cereals in 2004–2008 €/tonne 250 200 €/tonne 250 Wheat 150 100 50 200 Rye 150 Barley 2004 2005 2006 2007 2008 100 50 Oats 2004 2005 2006 2007 2008 Source: MTT Finnish food exports by target country in 2008 (%) EU-15 – 38.5% Sweden 15.3 Germany 6.1 Denmark 3.8 Great Britain 3.4 France 2.4 Netherlands 2.2 Belgium 1.8 Other 3.5 Member States as from 2004 and 2007 – 17.5% Estonia Poland Lithuania Latvia Czech Republic Other 9.7 3.5 1.6 1.1 0.6 1.0 Other countries – 19.9% Russia – 24.1% Norway USA Switzerland Japan Other 4.2 4.0 1.6 1.5 8.6 Total value: 1 401 million euros Source: MTT, Board of Customs, ULJAS database Finnish food imports by country in 2008 (%) EU-15 – 64.2% Germany Sweden Netherlands Denmark France Spain Belgium Italy Other 14.1 10.9 10.4 6.5 5.9 4.4 3.4 3.4 5.2 Member States as from 2004 and 2007 – 10.0% Estonia Poland Czech Republic Lithuania Latvia Other 2.7 2.5 2.0 1.1 0.9 0.8 Other countries – 25.8% Brazil Norway Indonesia USA Colombia Chile Other Total value: 3 585 million euros 5.1 3.3 1.9 1.2 1.1 1.1 12.1 Source: MTT, Board of Customs, ULJAS database WTO negotiations on agriculture - - - Doha round of trade negotiations on the liberalisation of agricultural trade since 2001 Agreement and schedule still open In the negotiations on agriculture the European Commission has approached the extreme limits of its mandate The solution is all but finalised; now disputes not related to the EU as the obstacle Main questions at the final stage of agriculture negotiations: - sustainable solution on market access - legal certainty of the rules for green support The decisions lead to growth in price competition in Finland and the EU due to easier imports and abolition of export subsidies