Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Decline in Finnish farm profit continued last year

14.12.2006
Latest profitability records available from Taloustohtori

The profitability decline in agriculture and horticulture continued for the fourth consecutive year. Return on assets was negative last year, -4.3 percent on average. The data can be found at the Taloustohtori online service opened for public use by MTT Agrifood Research Finland's Economic Research.

– The profitability of agriculture is poor and the course of development is alarming, says Accounting Manager Arto Latukka from MTT Agrifood Research Finland, who is in charge of the profitability bookkeeping service.

Last year the total return of agricultural and horticultural enterprises grew by 1.4 percent to EUR 97,300. Market returns went down by three percent, but losses were compensated by subsidies, which grew by nearly five percent from last year to EUR 40,000 per farm.

Average farm costs increased by nearly three percent to EUR 78,600. Thus the compensation for the entrepreneurs' labour input and capital invested, i.e. agricultural income, averaged EUR 18,700 in 2005, indicating a decline of 5.5 percent over the previous year. Entrepreneurial profit is resulted when the sum of the wage claim based on annual working hours and an hourly wage of EUR 12.3, and the sum of the interest claim for capital invested based on an interest of 5 percent are deducted from agricultural income. The average profit was a negative EUR -23,600.

Hourly wage less than four euros

When agricultural income is divided by the sum of wage and interest claims we arrive at the profitability coefficient. The profitability coefficient declined to 0.44, which means that entrepreneurs on average reached 44 percent of the objective set for wages and interest. Entrepreneurs hourly wages was € 5.4 and interest on capital invested was 2.2%. If we calculate 5 percent of interest on capital invested, we arrive at hourly wages of average € 3.4. Approximately 10 percent of enterprises reached over five percent of interest on capital invested and over € 12.3 of compensation per working hour.

Latukka says that subsidies alone do not enable profitable production, but that all other factors must be utilised as well. Effort must be made to control costs and better prices need to be secured for products. Productivity also needs to be increased and economies of scale need to be utilised.

– However, agricultural entrepreneurs have limited opportunities to influence external cost pressures, and entrepreneurs cannot transfer rising costs to product prices, he points out.

Large enterprises were more profitable than small ones, and profitability improved from south to north. This is partly the result of differences in production lines. The profitability coefficient of pig farms improved to 0.74, whereas that of cereal farms declined to 0.26. The solvency of enterprises declined, but remained at a healthy level as own capital was 73 percent of total capital.

Cold hard facts from Taloustohtori

The data is based on the profitability bookkeeping records of MTT Agrifood Research Finland's Economic Research, which are now available via MTT's new Taloustohtori online service (www.mtt.fi/kannattavuuskirjanpito and www.mtt.fi/taloustohtori). Records are available from financial year 1998 onwards, and the data available through the service includes the average financial statements of farms of various sizes from different production branches. Users can freely choose the data categories. Records from individual farms are not available.

Calculated from the figures of about 900 enterprises, the results are weighted so that they can be generalised to represent the average results of the largest 44,000 Finnish agricultural and horticultural enterprises. The result calculation and the classification and weighting system have been developed to meet the latest accounting standards. In order to preserve comparability, the results for each year were calculated retroactively from 1998.

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

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: 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....

Im Focus: Chemical reactions in the light of ultrashort X-ray pulses from free-electron lasers

Ultra-short, high-intensity X-ray flashes open the door to the foundations of chemical reactions. Free-electron lasers generate these kinds of pulses, but there is a catch: the pulses vary in duration and energy. An international research team has now presented a solution: Using a ring of 16 detectors and a circularly polarized laser beam, they can determine both factors with attosecond accuracy.

Free-electron lasers (FELs) generate extremely short and intense X-ray flashes. Researchers can use these flashes to resolve structures with diameters on the...

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

Global study of world's beaches shows threat to protected areas

19.07.2018 | Earth Sciences

New creepy, crawly search and rescue robot developed at Ben-Gurion U

19.07.2018 | Power and Electrical Engineering

Metal too 'gummy' to cut? Draw on it with a Sharpie or glue stick, science says

19.07.2018 | Materials Sciences

VideoLinks
Science & Research
Overview of more VideoLinks >>>