Finnish farmers forced to branch out

The reforms planned for European farming subsidies schemes could save the EU billions of euros a year. But in countries with harsh natural conditions like Finland, these changes could endanger farming as a way of life, and threaten entire rural communities.

The fields have been abandoned one by one, and planted with trees to produce timber, or simply left to revert to forest naturally. The old farmhouse is slowly falling down, and the newer cottage built alongside it is only occupied by the descendents of the former farmers during the summer holidays.

The decline of many farms across rural Finland is exemplified by the fate of the Hovi Farm near the village of Hirvensalmi in Eastern Finland. Crops were grown and sheep were raised in several fields around this small family-run farm into the 1960s. A small herd of cattle grazed in nearby woodland pastures. But today only a small part of the once thriving farm is used to grow berry bushes, potatoes and a few other vegetables for the family’s own use.

Many farmers around rural Finland have recently become ever more dependent on other traditional sources of rural income, such as forestry work, selling timber from their own forests, or working to keep local roads clear of snow during the long winter. Especially in the north and east, ageing farmers find it hard to persuade their children to take over the family farm instead of heading off to the bright lights of the cities in search of jobs that are often both better paid, and less physically demanding.

The end of a way of life?

As recently as the middle of the 20th century, Finland remained a largely agrarian country. Some farms produced surpluses or sold milk to local dairies, but most farming families were basically self-sufficient – producing food by raising hardy northern livestock breeds, and growing crops that can thrive in harsh northern conditions, such as rye, oats, potatoes, carrots and other root crops.
But as more jobs became available in industry and services, people gradually moved to the growing towns and cities, which are now home to four-fifths of the Finnish population. Only about one per cent of Finland’s gross national income today comes from agriculture.

Finland has also become more dependent on imported food as the international trade in agricultural products and manufactured foodstuffs has intensified. Imports of foodstuffs are today more than double food exports. Finland was at first unwilling to open up its markets to cheaper foods produced in countries with more favourable climates, but many of these barriers were forced down when Finland joined the common market of the European Union in 1995 – to the delight of shoppers, but the dismay of farmers.

“Today there are fewer than 70,000 farms across the country compared to 100,000 when Finland joined the EU in 1995 – and within another ten years there might only be 40-50,000 farms left,” says Michael Hornborg, President of MTK, the Central Union of Agricultural Producers and Forest Owners. “The remaining farms may be larger and more intensive than earlier farms, but this still means that fewer and fewer people depend on farming for their livelihood.”
Hornborg can understand fears that current trends could lead to the end of farming as a major livelihood in Finland, especially in the north and east. The continuing decline in farming could eventually lead to the death of many rural communities, as people move away, and services like schools and shops gradually disappear.

Depending on handouts

It is inevitably harder and more expensive to grow crops in Finland than in other parts of Europe. The growing season only lasts about 6 months in the agricultural regions of Southern Finland around Helsinki and Turku, and can be as short as three months in the north. Crop yields per hectare are a fraction of those in countries with sunnier climes.

Without generous subsidies, today’s farmers would not be able to sell their produce on the open markets at competitive prices. “Finnish farmers today depend on subsidies for about half of their income on average,” says Hornborg, “Future changes in the subsidies system could put many farmers’ livelihoods at risk.”

More than half of the EU’s total budget is spent on farming subsidies paid out through the Common Agricultural Policy (CAP), so reforms can save Europe’s taxpayers plenty of money. Hornborg points out that EU subsidies paid to compensate farmers for low prices according to crop yields per hectare favour farmers in Central Europe, who consequently receive much higher subsidies than Finnish farmers. “The end of the CAP as it is today would be much worse news for farmers elsewhere in Europe than for Finnish farmers,” he stresses.

Europe’s complex subsidy system also allows the Finnish government to subsidise its own farmers generously, since Finland is classified as a ‘less favoured area’. Subsidy schemes are increasingly leaning towards environmental subsidies, paid to farmers for managing the land regardless of how much they grow. The overuse of fertilisers on Finnish farmland has been a major factor behind pollution problems in the Baltic Sea, but encouraged by environmental subsidies farmers are now changing their ways to protect rivers, lakes and the sea.

According to a report published recently by Agrifood Research Finland, the loss of crop subsidies paid through the CAP can be expected to lead to a rapid reduction of 10-20% in the area under cereal crops. The total area of ‘set aside’ fields, where no crops are grown, is expected to triple over the next decade.

Cheap imports have meanwhile reshaped food consumption patterns in Finland. Cheese imports, for instance, rose by 14% in 2005 alone. A third of all the cheese consumed in Finland is today imported – largely from Germany, Denmark and Poland.

Food security

“Like most other countries, Finland doesn’t want to become too dependent on food imports, so the government is always going to try to ensure that farmers can continue to produce food here,” says Hornborg. “It’s also important to remember that some 300,000 people work in jobs along the food production chain – so the whole industry employs more than 10% of all the workers in Finland.”
Finland’s food marketing co-operatives work hard to encourage consumers to buy domestically produced food, with ‘kotimainen’ produce proudly waving the Finnish flag. But as Hornborg points out, although consumers might well say that they prefer Finnish-grown food if they are asked on the street, in the shops they are more likely to pick up the cheapest produce on offer.

Hornborg believes that the marketing of Finnish food must still be radically improved, especially with a view to the massive potential market for dairy produce and other fresh foodstuffs just over Finland’s eastern border in St Petersburg. “We can also highlight our own food culture more in Finland. This is already happening – at least partly in response to unjustified criticism of our food culture from Silvio Berlusconi and Jacques Chirac!” says Hornborg.

Hornborg remains optimistic that farmers will be able to find new ways to supplement their declining farming income and keep the Finnish countryside alive by exploiting new employment opportunities in tourism and the service sector, for instance. MTK have recently presented a major new rural entrepreneurship programme to the national government, aiming to create 30,000 new jobs, and help former farmers find new livelihoods.

“It could be that fewer farms will produce a much greater proportion of our food, but we’ll still have just as many people working in the countryside as today,” says Hornborg. “Some people have criticised MTK for taking a wider focus instead of concentrating on farming, but we have no other choice than to look at the reality, and support our members who are having to move into other lines.”

Financial carrots

“Distances are not so important today with good roads, telecommunications and the internet,” says Hornborg. “We believe that people will really want to stay in the countryside if the government helps to make this possible.” Hornborg sees the drift to the cities as undesirable, and feels that many townies could be persuaded to move out to the countryside to enjoy more space and a rural way of life.

“After all, many people in the cities are still close to their rural roots, since it’s true that we Finns have only just come down from the trees,” he jokes. “Tax incentives to make companies move to rural areas could help. And continued EU farming subsidies are also justifiable. Finland contributes a lot of money to the EU, and what could be more important to get out of the EU than the chance to go on producing safe, clean food locally?”

Going organic has been seen as another way forward for European farmers. Finnish grown ‘luomu’ vegetables enjoy a good reputation, even though they are considerably more expensive in the shops than crops produced using more intensive methods. The total area of farmland cultivated using certified organic farming methods has increased rapidly from less than 45,000 hectares in 1995 to almost 150,000 hectares in 2005.

Michael Hornborg’s family farm in Lohja went organic 12 years ago, and he envisages a lot more Finnish farms going green over the coming years, as environmental considerations become more important, and the costs of energy and fertilisers rise. “Organic farming produce is very rapidly becoming popular elsewhere in Europe, providing a special niche for Finnish exports, if we can only market our organic produce more effectively.”

Crops to burn

Another way to keep farms working in the future could be to grow crops that can be burnt to produce energy. Interest in energy crops is growing rapidly due to rising oil prices, and the need to find alternative energy sources to help combat global warming. Several energy crops can be grown profitably in Finland if biofuel markets are supported. Rapeseed oil can easily be converted into liquid biofuel for motor vehicles, and trials have also been carried out with reed canary grass – a tall, strong grass that can be made into pellets for burning in heating plants.

“Converting fields to energy crops is absolutely one option for the future, even though farmers’ first priority will always be to grow good, healthy food for the Finnish people, or for farm animals,” says Hornborg. “Growing such crops could also be a good way to preserve traditional open landscapes around villages where fields have been farmed for centuries.”

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