Finland to help its agriculture but no long-term consensus

Discussion about the ways of helping Finland's agriculture sector is heating up in the Nordic country, but there is no long-term consensus.

While the plight of Finnish farmers in the wake of a record dry summer has aroused major sympathy throughout the society, there have been also influential voices in Finland this week raising the question whether unprofitable agriculture should be getting public financial support with no end in sight.

Juha Marttila, chairman of the Finnish agricultural producers and forest owners organization, broke the news on Monday that an emergency appeal to the EU had brought no actual crisis assistance -- only payment schedules of normal EU subsidies will be made faster and some regulations eased.

But otherwise the letter from European Commissioner for Agriculture and Rural Development Phil Hogan led to conclusions that the drought problem is too wide for the EU to tackle in terms of assistance.

The Finnish government will review upcoming emergency measures. Marttila gave the 120 million euros that neighbouring Sweden spends on crisis funding as an example.

The political scene is somewhat split, however. The opposition Social Democratic Party leader Antti Rinne on Monday endorsed crisis support, but conservative MP and economist Juhana Vartiainen said there is "nothing wrong if the most unprofitable farms now close down".

"Support must bring structural changes, not conservation," he said.

Touko Aalto, chairman of the Green League, also said there is no sense again and again to patch up losses, but to create profitability. He suggested that commercial harvest loss insurance should be relied on, as happens in forestry. Forest owners can take insurance policies against weather, fire and insects.

Earlier this summer, the government assigned a task force headed by Reijo Karhinen, former director of the OP banking and insurance group, to review the ways of improving the food market and the profitability of agriculture.

Finnish agriproducers have suffered from low price policies of Finnish retail. Marttila said that in Sweden, on the contrary, retail had reduced imports and maintained thus the domestic producer price level.

The problems of Finnish agriculture are by no means only a result of the dry summer. 2018 is the fourth year in a crisis. The biggest reason is the cessation of exports to Russia, due to the mutual sanctions in the wake of the 2014 political crisis.

The number of farms in Finland has been declining at the rate of three percent per year since 2000. The National Institute for Natural Resources reports that in 2000 there were 78,000 active farms applying for EU assistance, while this year some 50,000 applied.