(€/Farm) on Dairy Farms by Economic Size in Finland 90 000 80 000

10th-12th Dec. 2012, 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 ESAELY, M.Puurunen 10.-12.12.2012 Ciechocinek ESAELY, M.Puurunen 10.-12.12.2012 Ciechocinek Province of Etelä-Savo

Area 18 768 km2 including  forests 88% of the area  internal waters 4 785 km2  over 4 700 lakes  14 000 islands  Lake Saimaa 3 800 km2  shoreline 30 102 km  Saimaa Ringed Seals 310

Population 153 738  over 300 000 tourists/year  over 46 000 summer cottages  three towns  14 municipalities  11,1 residents/land km2  3 000 farms  10 500 enterprises  unemploym. rate 10,7 %

ESAELY, M.Puurunen 10.-12.12.2012 Ciechocinek No. of enterprises in South Savo in 2010 (total 10 500) Others Health and social services Research adn development Manufacturin, industry Transportation, storage Building and construction Retail and wholesale trade Agric., forestry, fishing

0 500 1000 1500 2000 2500 3000

Turnover of the South Savo region in 2010 (million €) (Total 4,65 billion €)

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. Source: Statistics Finland, Register Building and construction of Enterprises and Establishments Manufacturin, industry Standard industrial classification Retail and wholesale trade TOL 2008 ESAELY, M.Puurunen 10.-12.12.2012 Ciechocinek 0 500 1000 1500 Average size of farms in South Savo 120

100

80 Other land

60 Forest

Field ha/farm 40

0 2000 1 2 3 4 2005 6 7 8 9 2010 11 2012e

ESAELY, M.Puurunen 10.-12.12.2012 Ciechocinek TilojenGrowth keskikoko of the average nousee size Etelä of farms-Savossa in South hitaasti Savo; is slow: vainfrom 33 26 hehtaariin hectares invuonna 2012 to 2020 33 hectares in 2020 2012 2020 Varsinais-Suomi 47 18 64,6 Häme 44 16 60,2 Uusimaa 48 11 59,2 Pohjois-Pohjanmaa 44 15 58,8 Kaakkois-Suomi 37 16 52,9 Pohjois-Karjala 35 16 51,1 KOKO MAA 39 12 51,0 Ahvenanmaa 38 13 50,3 Satakunta 38 12 50,0 Etelä-Pohjanmaa 37 11 48,6 Pirkanmaa 37 11 48,1 Pohjanmaa 36 9 45,6 Pohjois-Savo 36 10 45,4 Keski-Suomi 31 11 41,5 Kainuu 33 8 40,8 Lappi 26 10 36,2 Etelä-Savo 26 7 32,9

hehtaaria 0 10 20 30 40 50 60 70

Maatilojen kehitysnäkymät 2020 Etelä-Savossa: 221100079

©TNS 2012 Tämän tutkimuksen tulokset on tarkoitettu vain tilaajan omaan käyttöön. Niitä ei saa lainata, 18 luovuttaa, jälleenmyydä tai julkaista ilman tutkimusyrityksen lupaa.

ESAELY, M.Puurunen 10.-12.12.2012 Ciechocinek Number of farms according to productionlines in South Savo 1400 2003 1200 2004 1000 2005 2006 800 2007 600 2008 2009 400 2010 200 2011 0 2012e

ESAELY, M.Puurunen 10.-12.12.2012 Ciechocinek MIKLPRODUCTION in South Savo in 2010/11 and estimated for MAIDONTUOTANTO,2014, 2016 and 2020 accordingEtelä-Savo to the farmers’ plans tuottajien suunnitelmien mukaan

Lypsylehmien Maidontuotanto No Maitotilatof dairy DairyKeskilehmäluku cows/ Dairy cows Milk production lukumäärä meijeriin farmstiloja,kpl farmlypsylehmiä, kpl/tila totalkpl millionmilj.litraa litres

665 15100

14700 14600 615 39

13500 117 113 115 12700 107 103 510 32 29 415 24 23 330 Quantity of milk 2011-2016/ -5 % 2011-2020/ -9%

Maatilojen kehitysnäkymät 2020 Etelä-Savossa: 221100079

©TNS 2012 Tämän tutkimuksen tulokset on tarkoitettu vain tilaajan omaan käyttöön. Niitä ei saa lainata, 52 luovuttaa, jälleenmyydä tai julkaista ilman tutkimusyrityksen lupaa.

ESAELY, M.Puurunen 10.-12.12.2012 Ciechocinek MAITOTILOJEN TUOTANTORAKENNE Etelä-Savo/ Koko maa tuottajien suunnitelmienDistribution mukaan of number 2016 of farms and milkEtelä production-Savo by size of cattle 100 % tiloja, kpl 580 415 25 32 lypsylehmiä, kpl/tila 15 11 90 % 4 20 5 9 30 29 16 14 80 % 639 41 30 14 1755 lypsylehmiä, 70 % 13 kpl/tila: 22 27 KOKO MAA24 60 % 22 1770- kpl 19 12 29 under 20 50 % 19 25 50-69 kpl tiloja, kpl 9 800 7 150 29 39 lypsylehmiä, kpl/tila 26 5 25 13 16 40 % 19 25 8 17 20-29 19 25 29 12 10 35 lypsylehmiä, 30-49 kpl 20 kpl/tila: 30 % 17 16 27 30-49 70- kpl 16 25 55 20 13 20 % 16 17 10 26 35 25 50-69 kpl 14 20-29 kpl30 50-69 10 % 396 8 28 16 17 22 5 9 13 24 30-49 kpl 0 % 4 5 15 alle 20 kpl 22 70 -over 20-29 kpl 41 14 2012 2016 2012 2016 2012 2016 201230 2016 20 alle 20 kpl 2012 2016 2012 2016 11 ennuste ennuste Sout Savo Whole country South Savo 2012/3Whole2016 country2012/3 2016 % tiloista % tuotannosta ennuste ennuste % tiloista % tuotannosta Per cent of farms Per cent of milk production

Maatilojen kehitysnäkymät 2020 Etelä-Savossa: 221100079

©TNS 2012 Tämän tutkimuksen tulokset on tarkoitettu vain tilaajan omaan käyttöön. Niitä ei saa lainata, 54 luovuttaa, jälleenmyydä tai julkaista ilman tutkimusyrityksen lupaa.

ESAELY, Maija Puurunen 21.11.2012 Automatic milking, milking robots

. the first milking robot in Finland started in 2000

. today about 830 in the whole country (milk farms total 9 800)

. in South Savo 29 milking robots and one roundabout milking system (milk farms total 580)

Kuvaaja: Martina Motzbäuchel ESAELY, M.Puurunen 10.-12.12.2012 Ciechocinek Organic farming per cent of the conventional field area by regions in 1.9. 2012

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 0 5 10 15 20 25 30 %

ESAELY, M.Puurunen 10.-12.12.2012 Ciechocinek Divesified farms per cent of all farms by reagons in 2010

45 40 35 30 25 20 15 10 5 0

Martina Motzbäuchel Kuvaaja: Studio Tomi Aho Kuvaaja: Contum Oy Kuvaaja: Lietso Oy Kuvaaja: Lietso Oy

ESAELY, M.Puurunen 10.-12.12.2012 Ciechocinek Finnish Agriculture and Rural Industries 2012 MTT Economic Research

Publications 112a, 96 p ISBN 978-951-687-164-9 (Printed version) ISBN 978-951-687-165-6 (Electronic version)

ESAELY, M.Puurunen 10.-12.12.2012 Ciechocinek Number of farms receiving agricultural support in 1995 and 2011

100000 95562 -36 % Whole 80000 61153 country 60000 50000 40000 Northern 40000 20000 Finland 30000 -30 % 0 20000 9956 1995 2011 10000 6996 0 50000 1995 2011 40000 -36 % 30000 24794 20000 15771 50000 10000 Central Eastern 40000 0 30000 -39 % 1995 2011 Finland Finland 17708 20000 10808 50000 43104 -36 % 10000 40000 0 30000 27578 Southern 1995 2011 20000 Finland 10000 0 Main regions of Uusimaa and Åland according to NUTS II have been included in Southern Finland. 1995 2011 Source: Finnish Agency for Rural Affairs.

Finnish Agriculture and Rural Industries 2012 MTT Economic Research, Publications 112a

ESAELY, M.Puurunen 10.-12.12.2012 Ciechocinek Distribution of farms receiving agricultural support according to production line in 2011 Whole country Poultry 1.1% Beef 6.1% Other 5.7% Pig 3.1% Poultry 0.1% Other 7.2% Crop Beef 7.3% Dairy production Northern Pig 1.0% Crop husbandry 66.7% Finland production 17.2% Dairy husbandry 55.5% Poultry 1.3% Other 4.7% 28.9% Beef 6.5% Pig 4.5% Crop Poultry 0.3% Other 7.4% Dairy production husbandry Beef 10.1% 65.2% Central Eastern Pig 1.1% 17.8% Finland Finland Crop Poultry 1.6% Dairy production Other 5.3% Beef 4.1% husbandry 52.4% Pig 3.7% Crop 28.7% Dairy husbandry Southern Finland 9.4 % production Main regions of Uusimaa and Åland according to 75.9% NUTS II have been included in Southern Finland. Source: Finnish Agency for Rural Affairs.

Finnish Agriculture and Rural Industries 2012 MTT Economic Research, Publications 112a

ESAELY, M.Puurunen 10.-12.12.2012 Ciechocinek Result and profitability development of agriculture and horticulture enterprises in 2000–2011e • Entrepreneurial profit 1000 €/enterprise 140 Gross return 120 Profitability 100 Coefficient 80 Costs = 60 Entepr.income 40 ./. 20 Entrepreneurial income Wage claim (Wage claim+ 0 Interest claim) Net result –20 Entrepreneurial profit / loss –40 2000 01 02 03 04 05 06 07 08 09 10 2011e Interest claim on equity

Finnish Agriculture and Rural Industries 2012 MTT Economic Research, Publications 112a

ESAELY, M.Puurunen 10.-12.12.2012 Ciechocinek Profitability coefficient in selected EU countries 2,50

2,00

1,50 2004 2005 1,00 2006 2007 0,50 2008 2009 0,00

-0,50

-1,00

ESAELY, M.Puurunen 10.-12.12.2012 Ciechocinek Profitability coefficients by production types in Finland 0,9 0,8 0,7 0,6 0,5 Dairy farms 0,4 Cattle farms 0,3 Pig farms 0,2 Cereal farms 0,1 All farms 0

MTT/Taloustohtori

ESAELY, M.Puurunen 10.-12.12.2012 Ciechocinek Profitability coefficient by economic size on dairy farms in Finland 0,9 0,8 1000 € 0,7 0,6 25-50 0,5 50-100 0,4 100-250 0,3 250-500 0,2 0,1 Average 0 MTT/ 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Taloustohtori

ESAELY, M.Puurunen 10.-12.12.2012 Ciechocinek Profitability coefficient by economic size on cattle farms in Finland 1,2 1 1000 € 0,8 100-250 0,6 50-100 0,4 25-50 0,2 Average 0 MTT/ Taloustohtori

ESAELY, M.Puurunen 10.-12.12.2012 Ciechocinek Profitability coefficient by economic size on pig farms in Finland 1,8 1,6 1,4 1000 € 1,2 250-500 1 0,8 100-250 0,6 50-100 0,4 Average 0,2 0 MTT/ 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Taloustohtori

ESAELY, M.Puurunen 10.-12.12.2012 Ciechocinek Profitability coefficient by economic size on cereal farms in Finland 1,4 1,2 1000 € 1 50-100 0,8 0,6 25-50 0,4 15-25 0,2 8-15 0 Average -0,2 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 MTT/ -0,4 Taloustohtori

ESAELY, M.Puurunen 10.-12.12.2012 Ciechocinek Farm income (€/farm) by production types in Finland 60 000

50 000

40 000 Dairy farms 30 000 Cattle farms

20 000 Pig farms Cereal farms 10 000 All farms

MTT/ Taloustohtori

ESAELY, M.Puurunen 10.-12.12.2012 Ciechocinek Farm income (€/farm) on dairy farms by economic size in Finland 90 000 80 000

70 000 1000 €

60 000 25-50 50 000 50-100 40 000 100-250 30 000 250-500 20 000 Avrage 10 000 0 MTT/ 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Taloustohtori

ESAELY, M.Puurunen 10.-12.12.2012 Ciechocinek Farm income on dairy farms economic size

€ of 100-250 000 € in Finland 120 000

100 000

80 000

60 000 Succesful farms Avrage 40 000 Weak farms 20 000

0 MTT/ Taloustohtori

Profitability on dairy farms of economic size 100-250 000 € 1,40 1,20 1,00 0,80 Succesful 0,60 Avrage 0,40 0,20 Weak farms 0,00 MTT/ Taloustohtori

ESAELY, M.Puurunen 10.-12.12.2012 Ciechocinek Financing frame of the Rural Development Program 2007-2013, M€

Tech. aid

Axis 4

Axis 3 Public Axis 2 Private Axis 1

Total

0 1000 2000 3000 4000 5000 6000 7000 8000 9000 Financing of investments in agriculture and other rural enterprises in RDP2007-13

M. 312 Rural micro-enterpr.

M. 311 non-atricult.activities

Axis 3 Public M. 121 farm invest. Private M. 112 yong farmers

Axis 1

0 200 400 600 800 1000 1200 1400 M€

ESAELY, M.Puurunen 10.-12.12.2012 Ciechocinek Investment aids for agriculture (M €) Milj. € in South Savo 2008-2012/8months 4 3,5 3 Others 2,5 Glasshouses 2 Yong farmers 1,5 Henhouses 1 0,5 Cattle houses 0 Total 2008 2009 2010 2011 2012/8 10,7 M € Agric. investment aids (M €) in 2009-2012/8 Others Glasshouses Yong farmers Henhouses Cattle houses

0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5 5,0 5,5 6,0 ESAELY, M.Puurunen 10.-12.12.2012 Ciechocinek Aids for the rural enterprises (excl.agriculture) in South Savo 2 500

2 000 2008 1 500 2009 1 000 2010 2011 500 2012/7kk 0 Bioenergy Food Horses Tourism Other Total entepren. 13,0 M€ Enterpren.aids (M €) by line of business in 2008-2012/7 Other … Tourism Horses Food Bioenergy

0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0

ESAELY, M.Puurunen 10.-12.12.2012 Ciechocinek Gross return, production costs and agricultural income, mrd €

2011e 2010 2009 2008 Supports 2007 Returns 2006 2005 2004

0 1 2 3 4 5 6

2011e 2010 Agricultura 2009 l income 2008 Production 2007 costs 2006 2005 2004 MTT Economic Research 0 1 2 3 4 5 6 ESAELY, M.Puurunen 10.-12.12.2012 Ciechocinek Gross return of agriculture in South Savo in 2004-2011 2011 2010*) 2010 2009 EU support 2008 2007 National supp. 2006 Returns (estimated) 2005 2004

0 50 100 150 200

ESAELY, M.Puurunen 10.-12.12.2012 Ciechocinek Production supports in South Savo, M€

80 70 60 50

40 National supp. 30 EU support 20 10 0

ESAELY, M.Puurunen 10.-12.12.2012 Ciechocinek Conclusions  Domestic agricultural production is very important in Finland for many reasons (e.g. over 60 000 farms get their livelihood, ab. 300 000 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 10 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. ESAELY, M.Puurunen 10.-12.12.2012 Ciechocinek

Thank you!

ESAELY, M.Puurunen 10.-12.12.2012 Ciechocinek