02.05.23 1

Finnish agriculture- history and current

challengesEIARD 21st European Coordination Group Meeting

Sanna-Helena Fallenius26 November 2015

02.05.23 2

Finland• Surface area 338 419 km2

– forestry land 262 700 km2 (78%)– agricultural land 22 500 km2 (6,7%)

• Population 5 489 211 (23rd October 2015 of which– In rural regions 41 %– In intermediate regions 30,6 %– In urban regions 28,4 %

• Population density 17,9 persons/km2

– (EU-27 114,7 persons/km2)

• GDP 2013 – 195 billion EUR (€) (nominal)– 35 988 €/capita– 28 948 Purchasing power– share of agriculture, hunting and fishing 2,9 %– Agriculture of total employment 4,6 %

Finland – World’s northernmost agricultural country

• Geographical location the greatest handicap

• Growing season (in the picture)180 - 120 days

• Temperature sum 1 300 - 1 400 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

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History

• Agriculture was first introduced in the form of slash-and-burn cultivation 4,000 years ago and developed into permanent agriculture 3,500 years ago.

• Finland's isolation required that most farmers concentrate on producing grains to meet the country's basic food needs.

• The total area under cultivation was still small. • Finland engaged in very limited agricultural trade.

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Slash-and-burn agriculture

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History - production pattern shift

• This traditional production pattern shifted sharply during the late nineteenth century -- inexpensive imported grain from Russia and the United States competed effectively with local grain.

• Rising domestic and foreign demand for dairy products and the availability of low-cost imported cattle feed made dairy and meat production much more profitable.

• Finland's farmers switched from growing staple grains to producing meat and dairy products

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War - food shortages• Winter war and II wordl war - food shortages• Finland cedes Karelian to the Soviet Union (about one-tenth of

farmland)• The experiences the war years -- to secure independent food

supplies to prevent shortages in future conflicts.

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Resettling people and displaced farmers

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After war• As a result of the resettlement and land-clearing programs, the

area under cultivation expanded by about 450,000 hectares, reaching about 2.4 million hectares by the early 1960s.

• Finland thus came to farm more land than ever before, an unusual development in a country that was simultaneously experiencing rapid industrial growth.

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After war

• During this period of expansion, farmers introduced modern production practices. The widespread use of modern inputs (fertilizers, agricultural machinery, improved seed varieties) sharply improved crop yields.

• All farms didn’t keep up with the pace of development• Structural change, urbanisation, migration wave to

the towns.

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Number of farms receiving agricultural support in 1995 and 2014

Finnish Agriculture and Rural Industries

2015

11

Southern Finland

Eastern Finland

CentralFinland

NorthernFinland

Main regions of Uusimaa and Åland according to NUTS II have been included in Southern Finland. Source: Finnish Agency for Rural Affairs.

43,104

25,119

010,00020,00030,00040,00050,000

1995 2014

17,70810,027

010,00020,00030,00040,00050,000

1995 2014

9,956 6,4600

10,00020,00030,00040,00050,000

1995 2014

24,79414,410

010,00020,00030,00040,00050,000

1995 2014

Whole country95,562

56,016

020,00040,00060,00080,000

100,000

1995 2014

Number of farms and average size (ha)

Source: Luke, Statistical services

Finnish Agriculture and Rural Industries 2015

12

Farms, ha Active farms, haFarmsActive farms

Agricultural andhorticultural enterprises

0

9

18

27

36

45

0

50

100

150

200

250Average size, haFarms, 1,000

Structure of agricultural holdings

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Source: European Commission

Importance of rural areas

02.05.23 14Source: European Commission

Distribution of farms receiving agricultural support according to production line in 2014

Finnish Agriculture and Rural Industries

2015

Dairyhusbandry15.6%

Pig husbandry 2.6%Beef production 6.2%

Poultry production 1.0% Otehr 5.5%

Cropproduction69.1%

Whole country

Main regions of Uusimaa and Åland according to NUTS II have been included in Southern Finland. Source: Finnish Agency for Rural Affairs.

Dairy16.2.%

Pig 4.0%Beef 6.6%Poultry 1.2% Other 4.5%

Cropproduction67.6%

Dairy 25.6%

Pig 0.9%Beef 9.9%Poultry 0.3% Other 6.8%

Crop production56.5%

Beef 7.4%

Dairy26.6%

Pig 0.9%

Poultry 0.1% Other 6.6%

Crop production58.4%

SouthernFinland

EasternFinlandCentral

Finland

Northern Finland

Dairy8.4%

Pig 3.0%Beef 4.2%

Poultry 1.4%Other 5.2%

Cropproduction77.8%

15

Structural development in Finnish Agriculture

Number of farms in different production lines 1995-2012

Change

1995 2000 2005 2012 1995-2012Milk production 32 715 23 079 16 495 9 800 -70%Beef production 9 394 6 077 4 508 3 630 -61%Pig production 6 249 4 380 3 165 1 770 -72%Poultry production 2 329 1 349 976 590 -75%Crop production 42 287 42 530 41 960 39 600 -3%All farms 95 562 79 783 69 517 58 898 -38%

02.05.23 16Source: MTT

Number of Farms in 2020

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Forecast Change2012 2020 2012-2020

Milk production 9 800 5 500 -43%Beef production 3 630 2 200 -39%Pigmeat production 1 770 900 -49%Poultry production 590 250 -58%Grain production 26 560 24 000 -10%All farms 58 898 48 000 -19%

Source: MTT

Number of farmers by age categoriesin 2004–2014

Source: Luke, Statistical services

Finnish Agriculture and Rural Industries

2015

18

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2004 2006 2008 2010 2012 2014

65–

55–64

45–54

35–44

–34

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Production of milk, meat and eggsin Finland from 2002 to 2012

million litres

2100

2200

2300

2400

2500

2002 2004 2006 2008 2010 2012

Milk production

Delivered to dairies

0

50

100

150

200

250

2002 2004 2006 2008 2010 2012

million kg

Pigmeat

Beef Poultry meat

Eggs

Harvested areas in 2000–2012

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1,000 ha

0

100

200

300

400

500

600

700

2000 2002 2004 2006 2008 2010 2012Oilseed crops

WheatDry hay

Silage

OatsBarley

Source: MTT

Result and profitability development of agriculture and horticulture

• Entrepreneurial profit

Interest claim on equity

1,000 €/enterprise

Costs

Wage claim

Gross return

Net result

Entrepreneurial profit / loss

Entrepreneurialincome

–50

0

50

100

150

200

2000 2002 2004 2006 2008 2010 2012 2014e21 Finnish Agriculture and Rural Industries

2015

Exports and imports of agricultural and food products (CN 01–24) in 2004–2014

22 Finnish Agriculture and Rural Industries

2015

Source: Finnish Customs, ULJAS database

million €

0

1,000

2,000

3,000

4,000

5,000

6,000

2004 2006 2008 2010 2012 2014

Import

Export

Finnish Agriculture and Rural Industries 2015

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