Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Ten years of strong adjustment for Finnish agriculture

24.05.2005


The accession to the European Union (EU) ten years ago was for the Finnish agriculture and food sector an unprecedented rapid shift from closed and regulated markets to open and more competitive ones. Finnish farmers faced a change in output prices, relative prices and direct support which were of exceptional magnitude compared to that of any other country which had ever joined the EU. Commitment to the Common Agricultural Policy (CAP) lowered the producer price level in Finland by 40-50% right at the beginning of 1995.

On market prices alone, the survival of Finnish agricultural production would have been very difficult. A comprehensive package of compensatory payments was therefore agreed to facilitate the adjustment. Various forms of support payments have played a central role during these first ten years in the EU in ensuring that Finnish agriculture succeeded in common EU markets. In 2004, support payments rose to €1.8 billion, which was 45% of the total return on agriculture and horticulture (€3.97 billion).

Despite the growth in direct payments, agricultural income has been falling in Finland. According to figures from MTT Agrifood Research Finland, agricultural income at fixed prices was almost 34% lower in 2004 than in 1994.



Rapid progress in structural development

Membership of the EU has not lead to any significant changes in the volume of Finnish agricultural production. However, the structural development of agriculture has been very rapid. The number of farms has fallen by more than 3% a year, and those engaged in livestock production even more. For example, the number of farms specialising in milk production has decreased by almost 7% a year. There were over 100,000 farms in Finland in 1994. Now, ten years later, there are but about 71,000 farms left. “There are no indications that the structural change will be slowing down in the long term. On the contrary, trade liberalisation will continue to call for further concentration in the sector. By 2020, there will be less than 40,000 farms left” says Jyrki Niemi, an agricultural economist at MTT.

Even though the structure of Finnish agriculture has changed quite rapidly, the development of agricultural productivity has been relatively slow. In 2004, the same use of production inputs yielded about 12% more than in 1992, showing that productivity grew by a little under 1% a year. The new economic environment has not promoted agricultural productivity development as was expected.

Food prices have risen less than the other prices

The consumer price of food fell, on average, by 11% when Finland joined the EU in 1995. Between 1995 and 2004, food prices rose by 11% in nominal terms, while the general consumer price index rose by 13.4%, which means that food prices are below the level in 1995 in real terms.

Membership of the EU has clearly reinforced the position of the retail trade in the food chain relative to primary production and the food industry. The share of the retail sector in the consumer price of food has increased by a few percentage points in recent years.

Ulla Jauhiainen | alfa
Further information:
http://www.mtt.fi
http://www.mtt.fi/english/

More articles from Agricultural and Forestry Science:

nachricht Researchers discover natural product that could lead to new class of commercial herbicide
16.07.2018 | UCLA Samueli School of Engineering

nachricht Advance warning system via cell phone app: Avoiding extreme weather damage in agriculture
12.07.2018 | Leibniz-Zentrum für Agrarlandschaftsforschung (ZALF) e.V.

All articles from Agricultural and Forestry Science >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Future electronic components to be printed like newspapers

A new manufacturing technique uses a process similar to newspaper printing to form smoother and more flexible metals for making ultrafast electronic devices.

The low-cost process, developed by Purdue University researchers, combines tools already used in industry for manufacturing metals on a large scale, but uses...

Im Focus: First evidence on the source of extragalactic particles

For the first time ever, scientists have determined the cosmic origin of highest-energy neutrinos. A research group led by IceCube scientist Elisa Resconi, spokesperson of the Collaborative Research Center SFB1258 at the Technical University of Munich (TUM), provides an important piece of evidence that the particles detected by the IceCube neutrino telescope at the South Pole originate from a galaxy four billion light-years away from Earth.

To rule out other origins with certainty, the team led by neutrino physicist Elisa Resconi from the Technical University of Munich and multi-wavelength...

Im Focus: Magnetic vortices: Two independent magnetic skyrmion phases discovered in a single material

For the first time a team of researchers have discovered two different phases of magnetic skyrmions in a single material. Physicists of the Technical Universities of Munich and Dresden and the University of Cologne can now better study and understand the properties of these magnetic structures, which are important for both basic research and applications.

Whirlpools are an everyday experience in a bath tub: When the water is drained a circular vortex is formed. Typically, such whirls are rather stable. Similar...

Im Focus: Breaking the bond: To take part or not?

Physicists working with Roland Wester at the University of Innsbruck have investigated if and how chemical reactions can be influenced by targeted vibrational excitation of the reactants. They were able to demonstrate that excitation with a laser beam does not affect the efficiency of a chemical exchange reaction and that the excited molecular group acts only as a spectator in the reaction.

A frequently used reaction in organic chemistry is nucleophilic substitution. It plays, for example, an important role in in the synthesis of new chemical...

Im Focus: New 2D Spectroscopy Methods

Optical spectroscopy allows investigating the energy structure and dynamic properties of complex quantum systems. Researchers from the University of Würzburg present two new approaches of coherent two-dimensional spectroscopy.

"Put an excitation into the system and observe how it evolves." According to physicist Professor Tobias Brixner, this is the credo of optical spectroscopy....

All Focus news of the innovation-report >>>

Anzeige

Anzeige

VideoLinks
Industry & Economy
Event News

Leading experts in Diabetes, Metabolism and Biomedical Engineering discuss Precision Medicine

13.07.2018 | Event News

Conference on Laser Polishing – LaP: Fine Tuning for Surfaces

12.07.2018 | Event News

11th European Wood-based Panel Symposium 2018: Meeting point for the wood-based materials industry

03.07.2018 | Event News

 
Latest News

A smart safe rechargeable zinc ion battery based on sol-gel transition electrolytes

20.07.2018 | Power and Electrical Engineering

Reversing cause and effect is no trouble for quantum computers

20.07.2018 | Information Technology

Princeton-UPenn research team finds physics treasure hidden in a wallpaper pattern

20.07.2018 | Materials Sciences

VideoLinks
Science & Research
Overview of more VideoLinks >>>