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

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

Province of Etelä-Savo Area 18 768 km 2 including forests 88% of the area internal waters 4 785 km 2 over 4 7 lakes 14 islands Lake Saimaa 3 8 km 2 shoreline 3 12 km Saimaa Ringed Seals 31 Population 153 738 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 %

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 5 1 15 2 25 3 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 5 1 15

ha/farm 12 Average size of farms in South Savo 1 8 6 4 Other land Forest Field 2 2 1 2 3 4 25 6 7 8 9 21 11 212e

Tilojen Growth keskikoko of the average nousee size Etelä-Savossa of farms in South hitaasti; Savo is slow: vain from 33 26 hehtaariin hectares in vuonna 212 to 22 33 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 26 212 22 18 16 11 15 16 52,9 16 51,1 12 51, 13 5,3 12 5, 11 48,6 11 48,1 9 45,6 1 45,4 11 41,5 8 4,8 1 36,2 7 32,9 64,6 6,2 59,2 58,8 hehtaaria 1 2 3 4 5 6 7 Maatilojen kehitysnäkymät 22 Etelä-Savossa: 221179 TNS 212 Tämän tutkimuksen tulokset on tarkoitettu vain tilaajan omaan käyttöön. Niitä ei saa lainata, luovuttaa, jälleenmyydä tai julkaista ilman tutkimusyrityksen lupaa. 18

14 12 1 8 6 4 2 Number of farms according to productionlines in South Savo 23 24 25 26 27 28 29 21 211 212e

135 127 151 146 147 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 665 615 39 117 113 115 51 32 17 13 415 33 23 24 29 Quantity of milk 211-216/ -5 % 211-22/ -9% Maatilojen kehitysnäkymät 22 Etelä-Savossa: 221179 TNS 212 Tämän tutkimuksen tulokset on tarkoitettu vain tilaajan omaan käyttöön. Niitä ei saa lainata, luovuttaa, jälleenmyydä tai julkaista ilman tutkimusyrityksen lupaa. 52

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 58 415 25 32 lypsylehmiä, kpl/tila 15 11 9 % 4 2 5 9 3 29 16 8 % 639 41 14 3 14 17 lypsylehmiä, 7 % 55 13 kpl/tila: 22 27 KOKO MAA 6 % 24 22 177- kpl 19 12 29 5 % 19 25 tiloja, kpl 26 5-69 kpl 25 5 4 % 16 19 25 13 8 19 25 29 12 1 3 % 17 3-49 kpl 2 27 2 13 16 25 2 % 55 17 1 14 2-29 kpl 3 26 35 1 % 396 28 22 5 8 4 9 13 16 17 % 5 15 alle 2 kpl 212 216 212 216 212 216 41 2123 2162 212 216 ennuste 212 216 ennuste % tiloista % tuotannosta Maatilojen kehitysnäkymät 22 Etelä-Savossa: 221179 9 8 7 15 29 39 Sout Savo Whole country South Savo Whole country Per cent of farms 212/3 216 ennuste 17 16 25 22 35 16 24 14 11 212/3 216 ennuste % tiloista % tuotannosta Per cent of milk production under 2 lypsylehmiä, kpl/tila 2-29 3-49 5-69 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 21.11.212

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

Organic farming per cent of the conventional field area by regions in 1.9. 212 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 5 1 15 2 25 3 %

Divesified farms per cent of all farms by reagons in 21 45 4 35 3 25 2 15 1 5 Martina Motzbäuchel Kuvaaja: Studio Tomi Aho Kuvaaja: Contum Oy Kuvaaja: Lietso Oy Kuvaaja: Lietso Oy

Finnish Agriculture and Rural Industries 212 MTT Economic Research Publications 112a, 96 p ISBN 978-951-687-164-9 (Printed version) ISBN 978-951-687-165-6 (Electronic version)

Number of farms receiving agricultural support in 1995 and 211 Whole country 1 8 6 4 2 95562 5 4 3 2 1 5 4 3 2 1-36 % 61153 1995 211 24794 15771 1995 211 4314-36 % -36 % 27578 1995 211 Central Finland Southern Finland Northern Finland Eastern Finland 5 4 3 2 1 5 4 3 2 1 9956 6996 1995 211 1778-3 % -39 % 188 1995 211 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

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

Profitability Coefficient = Entepr.income./. (Wage claim+ Interest claim) Result and profitability development of agriculture and horticulture enterprises in 2 211e Entrepreneurial profit 1 /enterprise 14 12 1 8 6 4 2 2 Costs Wage claim 4 2 1 2 3 4 5 6 7 8 9 1 211e Interest claim on equity Gross return Entrepreneurial income Net result Entrepreneurial profit / loss Finnish Agriculture and Rural Industries 212 MTT Economic Research, Publications 112a

2,5 Profitability coefficient in selected EU countries 2, 1,5 1,,5, 24 25 26 27 28 29 -,5-1,

,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

,9,8,7,6,5,4,3,2,1 Profitability coefficient by economic size on dairy farms in Finland 21 22 23 24 25 26 27 28 29 21 1 25-5 5-1 1-25 25-5 Average MTT/ Taloustohtori

1,2 1,8,6,4,2 Profitability coefficient by economic size on cattle farms in Finland 1 1-25 5-1 25-5 Average MTT/ Taloustohtori

1,8 1,6 1,4 1,2 1,8,6,4,2 Profitability coefficient by economic size pig farms in Finland 2 21 22 23 24 25 26 27 28 29 21 on 1 25-5 1-25 5-1 Average MTT/ Taloustohtori

Profitability coefficient by economic size on cereal farms in Finland 1,4 1,2 1,8,6,4,2 -,2 -,4 2 21 22 23 24 25 26 27 28 29 21 1 5-1 25-5 15-25 8-15 Average MTT/ Taloustohtori

6 Farm income ( /farm) by production types in Finland 5 4 3 2 1 Dairy farms Cattle farms Pig farms Cereal farms All farms MTT/ Taloustohtori

9 Farm income ( /farm) on dairy farms by economic size in Finland 8 7 6 5 4 3 2 1 2 21 22 23 24 25 26 27 28 29 21 1 25-5 5-1 1-25 25-5 Avrage MTT/ Taloustohtori

12 1 8 Farm income on dairy farms economic size of 1-25 in Finland 6 4 2 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

Financing frame of the Rural Development Program 27-213, M Tech. aid Axis 4 Axis 3 Axis 2 Axis 1 Public Private Total 1 2 3 4 5 6 7 8 9 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 1 2 4 6 8 1 12 14 M

Milj. 4 Investment aids for agriculture (M ) in South Savo 28-212/8months 3,5 3 2,5 2 1,5 1,5 28 29 21 211 212/8 Others Glasshouses Yong farmers Henhouses Cattle houses Total 1,7 M Agric. investment aids (M ) in 29-212/8 Others Glasshouses Yong farmers Henhouses Cattle houses,,5 1, 1,5 2, 2,5 3, 3,5 4, 4,5 5, 5,5 6,

2 5 Aids for the rural enterprises (excl.agriculture) in South Savo Tourism Horses Food Bioenergy 2 1 5 1 5 Bioenergy Food Horses Tourism Other entepren. Enterpren.aids (M ) by line of business in 28-212/7 Other 28 29 21 211 212/7kk Total 13, M, 1, 2, 3, 4, 5, 6, 7,

Gross return, production costs and agricultural income, mrd 211e 21 29 28 27 26 25 24 Supports Returns 1 2 3 4 5 6 211e 21 29 28 27 26 25 24 1 2 3 4 5 6 Agricultura l income Production costs MTT Economic Research

211 21*) 21 29 28 27 26 25 24 Gross return of agriculture in South Savo in 24-211 EU support National supp. Returns (estimated) 5 1 15 2

Production supports in South Savo, M 8 7 6 5 4 3 2 1 National supp. EU support

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.

Thank you!