Finnish agriculture

Finland Surface area km 2 –forestry land km 2 (78%) –agricultural land km 2 (6.7%) Population –share of rural population about 30% Population density 17.4 persons/km 2 –(EU persons/km 2 ) GDP –178.8 billion euros (€) – €/capita –share of agriculture and forestry 26%

Finland – World’s northernmost agricultural country Geographical location the greatest handicap Growing season (in the picture) days Temperature sum degree days - Germany degree days - Spain 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 (%) South Finland East Finland North Finland West Finland Dairy cattle 10.7% Pigs 4.6% Beef 4.3% Poultry 1.8% Other 5.2% Plant production 73.5% Dairy cattle 19.9% Pigs 5.1% Beef 6.4 % Poultry 1.4% Other 4.9% Plant production 62.4% Dairy cattle 32.2% Pigs 1.2% Beef 7.4% Poultry 0.2% Other 7.6% Plant production 51.4% Dairy cattle 19.4% Pigs 3.8% Beef 6.2% Poultry 1.3% Other 5.8% Plant production 63.6% Whole country Dairy cattle 32.6% Pigs 1.5% Beef 10.0% Poultry 0.4% Other 7.4% Plant production 48.0% 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 South Finland East Finland North Finland West Finland NUTS II regions Uusimaa and Åland Islands included in southern Finland Source: MTT, Tike, Rural Business Register WHOLE COUNTRY

Number and average size of active farms (ha) in 1990– farmsha Source: MTT, Tike

Structural change in agriculture in Size class distribution of farms Arable area ha Number% % < > Total number of farms fell by 32% ( → ) Average size of farms grew by 50% (22.8 ha → 34.2 ha) Number of farms with over 50 ha doubled (6 490 → )

Development of farm numbers and outlook for 2010 Dairy (-6.5%) Beef (-7.2%) Pig (-6.2) Chicken -9.5% Number of farms Year Source: MTT

Changes in the shares of production sectors Crop farms (-1.7%) Dairy farms (-53.2%) Number of farms Other cattle farms (-49.2%) Pig farms (-45.6%) Poultry farms (-53.8%) Share of livestock farms decreased, share of crop farms increased In % of the farms were livestock farms and 39% were crop farms In % of the farms were livestock farms and 61% were crop farms

Finland in international context

Average length of the thermal growing season, days N 70 N Arctic circle Source: MTT

Productivity: Yields 2004 Finland - France Source: MTT Winter wheat, tonnes / ha Sugar beet, tonnes / ha Potatoes, tonnes / ha

year Index 1980=1 Denmark Finland Sweden Norway Total Factor Productivity (TFP) growth in agriculture Source: MTT

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 –number of places of business –research and development expenditure 63 million euros –exports 1.4 billion euros, imports 3.3 billion euros

Sectors of food industry (2008) Dairy 215% Brewery 81% Feed 58% Confectionary 38% Bakery 113% Milling products 29% Sugar 30% Alcohol 26% Oils and fats 22% Fish 14% Other 30% Vegetables and fruit 49% Meat 267% 1

GDP share of agriculture and food industry (%) 1 At factor price Source: MTT, National acccounting e, Statistics Finland Agriculture and related services 1 Manufacture of food, beverages and tobacco

Agricultural production and productivity

Finnish farm Total number of farms 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 birds/poultry farm earnings and capital income from agriculture euros (2006)

Structure of farm income (2008) Total return on agriculture and horticulture 4.60 bill. € Total costs of agriculture and horticulture 3.72 bill. € → agricultural income 869 mill. € = €/farm Agricultural support payments are based on the common agricultural policy of the EU 1 Preliminary, Gallup Food and Farm Facts Sources: MTT and Gallup Food and Farm Facts2 Incl. compensations for crop damages and rent income 98 mill. € Income total 6.9 bill € 1 Sales income of agriculture and horticulture 2.61 bill. € 2 Support 1.86 bill. € 3 Forest income 0.59 bill. € 1 4 Other income 1.84 bill. € 12 35% 29% 27% 9% Sales income % total 2.61 bill. € Meat 25% Milk 39% Eggs 2% Arable crops 18% Horticulture 16% 38% 27% 8%

Use of agricultural land (2008) Because of northern climate maize is not cultivated in Finland Use of agricultural land (2008) Because of northern climate maize is not cultivated in Finland

Arable crop production (2008) Area 1000 ha Yield kg/ha Total yield mill. kg ¹Domestic use mill. kg ¹Self- sufficiency % Wheat Rye Barley Oats Cereals total Pea Potato Sugar beet not available Dry hay not available Silage not available Turnip rape and oilseed rape preliminary

Livestock production (2008) 1 Liquid milk, soured milk products and cream (consumption figures for 2008 preliminary) Production mill. kg/l Consumption mill. kg/l Consumption per capita, kg/l Self-sufficency % Milk total not available 101 Liquid milk products Butter Cheese Ice-cream Meat total Bovine Pig Poultry Eggs

Number of active farms and agricultural income in 1994–2007 Number of farms Change from year before% Change from 1994, % Agricultural income at 2007 prices, mill. € Index 1992–94 average: –29– –05– –28– –13– –19– –27– –32– –52– –41– –30– –32– –45– –72– * *Estimate of MTT Economic Research Sources: MTT Economic Research, Support register of Ministry of Agriculture and Forestry

Yields per hectare in 1987–2007 Source: MTT, Tike kg/ha Rye kg/ha Spring wheat kg/ha Barley kg/ha Oats kg/ha Dry hay kg/ha Silage

Production of milk, meat and eggs in 1997–2007 mill. litres Milk production To dairies mill. kg Pigmeat Beef Eggs Poultry meat Source: MTT

Trend in agricultural income in 1994–2008 Source: MTT Nominal Real e Ratio

Trend in the result and profitability of agriculture by sector in 1998–2007e Source: MTT Dairy farms All farms e Pig farms Cereal farms Profitability coefficient

Agricultural support areas C1 A C2 C3 C4 B C2north Source: MTT

Typology of Finnish municipalities 2006 Source: MTT, Kajaani University Consortium of the University of Oulu and Finnish Regional Research FAR Urban (58) Urban-adjacent rural (89) Rural heartland (142) Sparsely populated rural (143)

Fertiliser use levels in Finland (kg/ha) Source: MTT, Tike Nitrogen Phosphorus Potassium kg/ha

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 Purpose of the quality chain is to ensure safe, high-quality foodstuffs (traceability of origin) and efficient operations all through the chain Input industry Primary production Food industry Transport TradeConsumer Food services

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 National Quality Strategy for the Finnish Food Economy

Trend in the manufacturer and consumer price for food and in the general consumer price index in 1995–2008 Source: MTT

Productivity ratios of labour and capital in 1992–2008 according to the total calculation of agriculture The year 1992 is indicated by 1 (2008e=forecast) Source: MTT

World market prices for cereals in 2004–2008 €/tonne Rye Oats Source: MTT

Finnish food exports by target country in 2008 (%) Total value: million euros EU-15 – 38.5% Sweden15.3 Germany6.1 Denmark3.8 Great Britain3.4 France2.4 Netherlands2.2 Belgium1.8 Other3.5 Member States as from 2004 and 2007 – 17.5% Estonia Poland Latvia Lithuania Czech Republic Other 1.0 Other countries – 19.9% Russia – 24.1% Norway 4.2 USA 4.0 Other 8.6 Switzerland 1.6 Japan 1.5 Source: MTT, Board of Customs, ULJAS database

Finnish food imports by country in 2008 (%) Source: MTT, Board of Customs, ULJAS database Total value: million euros EU-15 – 64.2% Other countries – 25.8% Member States as from 2004 and 2007 – 10.0% Estonia2.7 Poland2.5 Czech Republic2.0 Lithuania1.1 Other0.8 Latvia0.9 Germany14.1 Sweden10.9 Netherlands10.4 Denmark6.5 France5.9 Spain4.4 Belgium3.4 Italy3.4 Other5.2 Brazil5.1 Norway3.3 USA1.2 Colombia1.1 Other 12.1 Indonesia1.9 Chile1.1

WTO negotiations on agriculture -Doha round of trade negotiations on the liberalisation of agricultural trade since 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