Agricultural policy supporting the structural development of farms and other rural enterprises in Finland

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1 1 th -12 th Dec. 212, Ciechocinek Agricultural policy supporting the structural development of farms and other rural enterprises in Finland Dr. Maija Puurunen Centre for Economic Development, Transport and the Environment South Savo

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4 Province of Etelä-Savo Area km 2 including forests 88% of the area internal waters km 2 over 4 7 lakes 14 islands Lake Saimaa 3 8 km 2 shoreline 3 12 km Saimaa Ringed Seals 31 Population over 3 tourists/year over 46 summer cottages three towns 14 municipalities 11,1 residents/land km 2 3 farms 1 5 enterprises unemploym. rate 1,7 %

5 Research adn development No. of enterprises in South Savo in 21 (total 1 5) Others Health and social services Manufacturin, industry Transportation, storage Building and construction Retail and wholesale trade Agric., forestry, fishing Turnover of the South Savo region in 21 (million ) (Total 4,65 billion ) Source: Statistics Finland, Register of Enterprises and Establishments Standard industrial classification TOL 28 Other activities Adminstrative services Helth and social services Informat.&communic. Agric., forestry and fishing Accomodation, food services Research adn development Transportation, storage Electricity, gas, steam, aircond. Building and construction Manufacturin, industry Retail and wholesale trade

6 ha/farm 12 Average size of farms in South Savo Other land Forest Field e

7 Tilojen Growth keskikoko of the average nousee size Etelä-Savossa of farms in South hitaasti; Savo is slow: vain from hehtaariin hectares in vuonna 212 to hectares in 22 Varsinais-Suomi 47 Häme 44 Uusimaa 48 Pohjois-Pohjanmaa 44 Kaakkois-Suomi 37 Pohjois-Karjala 35 KOKO MAA 39 Ahvenanmaa 38 Satakunta 38 Etelä-Pohjanmaa 37 Pirkanmaa 37 Pohjanmaa 36 Pohjois-Savo 36 Keski-Suomi 31 Kainuu 33 Lappi 26 Etelä-Savo , , , 13 5,3 12 5, 11 48, ,1 9 45,6 1 45, ,5 8 4,8 1 36,2 7 32,9 64,6 6,2 59,2 58,8 hehtaaria Maatilojen kehitysnäkymät 22 Etelä-Savossa: TNS 212 Tämän tutkimuksen tulokset on tarkoitettu vain tilaajan omaan käyttöön. Niitä ei saa lainata, luovuttaa, jälleenmyydä tai julkaista ilman tutkimusyrityksen lupaa. 18

8 Number of farms according to productionlines in South Savo e

9 MIKLPRODUCTION in South Savo in 21/11 and estimated for MAIDONTUOTANTO, 214, 216 and 22 according Etelä-Savoto the farmers plans tuottajien suunnitelmien mukaan No Maitotilat of dairy farms tiloja,kpl Dairy Keskilehmäluku cows/ farm lypsylehmiä, kpl/tila Dairy cows total Lypsylehmien lukumäärä kpl Milk Maidontuotanto production meijeriin million milj.litraa litres Quantity of milk / -5 % / -9% Maatilojen kehitysnäkymät 22 Etelä-Savossa: TNS 212 Tämän tutkimuksen tulokset on tarkoitettu vain tilaajan omaan käyttöön. Niitä ei saa lainata, luovuttaa, jälleenmyydä tai julkaista ilman tutkimusyrityksen lupaa. 52

10 MAITOTILOJEN TUOTANTORAKENNE Etelä-Savo/ Koko maa Distribution of number of farms and tuottajien suunnitelmien mukaan 216 milk Etelä-Savo production by size of cattle 1 % tiloja, kpl lypsylehmiä, kpl/tila % % lypsylehmiä, 7 % kpl/tila: KOKO MAA 6 % kpl % tiloja, kpl kpl % % kpl % kpl % % 5 15 alle 2 kpl ennuste ennuste % tiloista % tuotannosta Maatilojen kehitysnäkymät 22 Etelä-Savossa: Sout Savo Whole country South Savo Whole country Per cent of farms 212/3 216 ennuste /3 216 ennuste % tiloista % tuotannosta Per cent of milk production under 2 lypsylehmiä, kpl/tila lypsylehmiä, kpl/tila: 7- kpl 5-69 kpl 7 -over 3-49 kpl 2-29 kpl alle 2 kpl TNS 212 Tämän tutkimuksen tulokset on tarkoitettu vain tilaajan omaan käyttöön. Niitä ei saa lainata, luovuttaa, jälleenmyydä tai julkaista ilman tutkimusyrityksen lupaa. 54 ESAELY, Maija Puurunen

11 Automatic milking, milking robots the first milking robot in Finland started in 2 today about 83 in the whole country (milk farms total 9 8) in South Savo 29 milking robots and one roundabout milking system (milk farms total 58) Kuvaaja: Martina Motzbäuchel

12 Organic farming per cent of the conventional field area by regions in Häme Satakunta Central F. Varsinais-S. South Ostrob. Lapland Southeast-F. Whole country North-Savo Ostrobothnia Uusimaa North Ostrob. Pirkanmaa South Savo North Karelia Kainuu Åland %

13 Divesified farms per cent of all farms by reagons in Martina Motzbäuchel Kuvaaja: Studio Tomi Aho Kuvaaja: Contum Oy Kuvaaja: Lietso Oy Kuvaaja: Lietso Oy

14 Finnish Agriculture and Rural Industries 212 MTT Economic Research Publications 112a, 96 p ISBN (Printed version) ISBN (Electronic version)

15 Number of farms receiving agricultural support in 1995 and 211 Whole country % % -36 % Central Finland Southern Finland Northern Finland Eastern Finland % -39 % Main regions of Uusimaa and Åland according to NUTS II have been included in Southern Finland. Source: Finnish Agency for Rural Affairs. Finnish Agriculture and Rural Industries 212 MTT Economic Research, Publications 112a

16 Distribution of farms receiving agricultural support according to production line in 211 Dairy husbandry 17.2% Whole country Poultry 1.1% Beef 6.1% Other 5.7% Pig 3.1% Crop production 66.7% Poultry 1.3% Other 4.7% Beef 6.5% Pig 4.5% Dairy husbandry 17.8% Poultry 1.6% Beef 4.1% Other 5.3% Pig 3.7% Dairy husbandry Crop 9.4 % production 75.9% Crop production 65.2% Central Finland Northern Finland Southern Finland Eastern Finland Poultry.1% Other 7.2% Beef 7.3% Pig 1.% Crop Dairy production husbandry 55.5% 28.9% Poultry.3% Other 7.4% Beef 1.1% Pig 1.1% Dairy husbandry 28.7% Crop production 52.4% Main regions of Uusimaa and Åland according to NUTS II have been included in Southern Finland. Source: Finnish Agency for Rural Affairs. Finnish Agriculture and Rural Industries 212 MTT Economic Research, Publications 112a

17 Profitability Coefficient = Entepr.income./. (Wage claim+ Interest claim) Result and profitability development of agriculture and horticulture enterprises in 2 211e Entrepreneurial profit 1 /enterprise Costs Wage claim e Interest claim on equity Gross return Entrepreneurial income Net result Entrepreneurial profit / loss Finnish Agriculture and Rural Industries 212 MTT Economic Research, Publications 112a

18 2,5 Profitability coefficient in selected EU countries 2, 1,5 1,,5, ,5-1,

19 ,9,8,7,6,5,4,3,2,1 Profitability coefficients by production types in Finland Dairy farms Cattle farms Pig farms Cereal farms All farms MTT/Taloustohtori

20 ,9,8,7,6,5,4,3,2,1 Profitability coefficient by economic size on dairy farms in Finland Average MTT/ Taloustohtori

21 1,2 1,8,6,4,2 Profitability coefficient by economic size on cattle farms in Finland Average MTT/ Taloustohtori

22 1,8 1,6 1,4 1,2 1,8,6,4,2 Profitability coefficient by economic size pig farms in Finland on Average MTT/ Taloustohtori

23 Profitability coefficient by economic size on cereal farms in Finland 1,4 1,2 1,8,6,4,2 -,2 -, Average MTT/ Taloustohtori

24 6 Farm income ( /farm) by production types in Finland Dairy farms Cattle farms Pig farms Cereal farms All farms MTT/ Taloustohtori

25 9 Farm income ( /farm) on dairy farms by economic size in Finland Avrage MTT/ Taloustohtori

26 Farm income on dairy farms economic size of 1-25 in Finland Succesful farms Avrage Weak farms MTT/ Taloustohtori 1,4 1,2 1,,8,6,4,2, Profitability on dairy farms of economic size 1-25 Succesful Avrage Weak farms MTT/ Taloustohtori

27 Financing frame of the Rural Development Program , M Tech. aid Axis 4 Axis 3 Axis 2 Axis 1 Public Private Total Financing of investments in agriculture and other rural enterprises in RDP27-13 M. 312 Rural micro-enterpr. M. 311 non-atricult.activities Axis 3 M. 121 farm invest. M. 112 yong farmers Public Private Axis M

28 Milj. 4 Investment aids for agriculture (M ) in South Savo /8months 3,5 3 2,5 2 1,5 1, /8 Others Glasshouses Yong farmers Henhouses Cattle houses Total 1,7 M Agric. investment aids (M ) in /8 Others Glasshouses Yong farmers Henhouses Cattle houses,,5 1, 1,5 2, 2,5 3, 3,5 4, 4,5 5, 5,5 6,

29 2 5 Aids for the rural enterprises (excl.agriculture) in South Savo Tourism Horses Food Bioenergy Bioenergy Food Horses Tourism Other entepren. Enterpren.aids (M ) by line of business in /7 Other /7kk Total 13, M, 1, 2, 3, 4, 5, 6, 7,

30 Gross return, production costs and agricultural income, mrd 211e Supports Returns e Agricultura l income Production costs MTT Economic Research

31 211 21*) Gross return of agriculture in South Savo in EU support National supp. Returns (estimated)

32 Production supports in South Savo, M National supp. EU support

33 Conclusions Domestic agricultural production is very important in Finland for many reasons (e.g. over 6 farms get their livelihood, ab. 3 people employees in food industry, local food, inhabiting remote rural areas, cash flows in local economy) So far the state and EU have invested a lot of taxpayers money for the structural change of Finnish agriculture, so there is a lot of interest to keep at least the biggest farms running on profitable way (still farmers have risk for policy change e.g. milk quotas) Structural development, i.e. enlarging farms and adding productivity have to continue for making possible better profitability and higher income for farm family Another way for reaching higher income is diversifying farm activities; forestry, contract work, farm tourism, services, part time farming and salary work Relatively high support level even the effects of global changes in produce prices and conform possibilities of Finnish farmers to produce, but at the same it makes farmers extremely dependent on national and EU policy as well as consumers and taxpayers Bigger and better managed farms can best resist the effects of failure of corps (two very bad years per 1 years is normal in Finland and the climate change will force the phenomenon) Open field areas between forests and lakes belong to the Finnish cultural landscape, agriculture can promote diversification of nature (environmentally friendly farming) Without agriculture 2,278 million hectares of field in Finland would start to grow forest.

34 Thank you!