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Country report - Finland 2012

by Sampsa Heinonen, The Finnish Food Safety Authority Evira.

Introduction

Finland is the northernmost country in the world to be self-sufficient in basic foodstuffs. Today, 9 % of Finnish farmland is certified organic, representing a total of 200,000 hectares. This area is all arable land and 30 % of it is cereals. This results in a relatively high production of organic cereals in Finland, most notably oats. Finland has the world's largest area of wild collected organic berries.

The development of the organic market has been rapid during the last years but the Finnish market for organic food is still not above the average Western European level; the market share of it is approximately 2 %. Most organic food is sold through mainstream supermarkets.

Currently, the attitude towards the Finnish organic sector is very favourable, which serves the market conditions and the public mindset towards organic production.
 It has been proposed that the emphasis of Finnish agriculture should be increasingly shifted to organic production as part of an ambitious country brand mission. In May 2013, the Finnish Government launched a programme aiming to lead 20 % of the cultivated area into organic farming by the year 2020.

1. Finland – the world’s northernmost agricultural country

As Finland is located between the 60th and 70th parallels of latitude, it is one of the northernmost countries in the world. This geographical location determines the conditions for agriculture.

In southern Finland, the growing season is about 170 days and in northern Finland about 130 days. The grazing period is 120 days at most. Agricultural production is further restricted by annual variations in growing conditions, frost and problematic drainage. But the harsh climate also provides advantages: Cold naturally restricts the incidence of pests and reduces the need for pesticides. The northern latitudes enhance the production of savoury plants that contain a lot of Vitamin C and sugars.

Almost one third of the 5.3 million people in Finland live in rural areas. Most Finns want to keep rural areas inhabited and properly managed, and want to ensure that agriculture can continue on a viable basis.

1.1 General structure of agriculture in Finland

Finnish agriculture is based on family farms, and the farm size is relatively small. The average agricultural area of a farm is about 39 hectares (2012). Forests are an integral part of Finnish farms, with an average forest area of about 50 hectares.

The structure of agriculture has been influenced by many historical and social factors. The origin of the small farm size can be traced back to the period before and after the Second World War. The tenant farmers were given ownership of their holdings at the beginning of the 20th century. After the Second World War, about 140,000 new farms were established for veterans and the population which evacuated from the areas ceded to the Soviet Union. All this split the farms into small units. Finland was largely an agrarian society up to the 1970s. Finnish food production is still based on relatively small family-run farms, although the number of farms has been rapidly decreasing and farm size increasing, respectively, during the last decades.

Today, the share of agriculture in the gross domestic product is 2.1 % (2012), but the share of the labour force employed in agriculture is still as high as 4 %. On average, only about half of the income of farm families comes from agriculture; the other half originates from farm forestry (usually 10 to 15 % of the income) and from income earned outside the farm.

Agricultural production is mainly based on animal husbandry. About 80 % of the agricultural area is used as pasture or for arable fodder cropping. About 17 % of the farms are dairy farms, 6 % beef cattle or other types of cattle farms, 3 % pig farms and 1 % poultry farms. Although milk is produced all over the country, the main production areas are Ostrobothnia, northern Savo and northern Karelia. Cattle production is the main form of production in Central Finland and Ostrobothnia, and pig and poultry production is mainly located in the west and south.

Almost 70 % of farms have crop production as their major production activity. Bread grains (wheat and rye) are cultivated on about 10 % of the arable land, and about 9 % are rape seed, potatoes, sugar beet, and other special crops. Cereal production is mainly located in southern and south-western Finland and to some extent in Ostrobothnia. In average years, the yields in fodder units are around from 3,600 fodder units per hectare in south-western Finland. The horticultural area is about 16,000 hectares. The cultivation of berries is mainly located in central and eastern Finland. Climatic conditions restrict the commercial apple production to the Åland Islands and south-western Finland.

2. History and development of organic agriculture

2.1 Development in the Footsteps of a Nobel Prize Laureate

The first form of organic agriculture (“Natural Agriculture”) of the Life Reform movement in Finland can be traced back to the 1910s. First experiments with bio-dynamic farming were carried out around this time, and the first farm was started in 1927. The Finnish Bio-dynamic Society was founded in 1946.

However, biochemist and Professor A.I. Virtanen can be considered the pioneer of organic farming in Finland. During the 1930s, Virtanen developed the AIV-System, a cultivation method which included crop rotation with intensive red clover leys and pastures and bread grains. Silage was made from clover based leys using a new method, the idea of which was to rapidly decrease the acidity of the clover silage to under pH 4 with mineral acids, in order to preserve the silage properly. Professor Virtanen was awarded the Nobel Prize in Chemistry in 1945 for this pioneering method, which still forms the basis for silage making in northern climatic conditions. In his day, Professor Virtanen was known as one of the world's leading biochemists and especially as a leading researcher in biological nitrogen fixation.

The AIV-System was a normal practice on dairy farms until the early 1960s, when the use of nitrogen fertilisers was not yet widespread. The average use of nitrogen fertilisers in Finland was only 19 kilograms per hectare in 1959, but reached its highest level of 112 kilograms in 1989! Thanks to the effective Agro-Environment Programme, the use of nitrogen fertilisers has decreased to 70 kilograms per hectare today (2012).

2.2 Pioneer phase before the 1990s

The first organic farms still in existence today were converted in the 1960s, but the number of organic farms amounted to only a couple of dozen until the 1980s. In 1989, the year before the state programme of financial support for conversion to organic farming was launched; there were 373 certified organic farms. Mainly due to financial support made available for conversion, the number of organic farms increased to 671 by 1990 and to 1,818 by 1994.

In 1989, certified organic land represented 0.1 % of the agricultural land of Finland. Five years later, in 1994, organic farmland constituted 1.1 % of agricultural land. In 1990, the average amount of organic land (including conversion land) per farm was 10.1 hectares.

2.3 Development from 1995 to 2005

When Finland joined the EU in 1995, a new wave of farms converted to organic farming resulting in an increase to 5,225 in 2000. During the Agenda 2000 period, the payment rates favoured less intensive regions and types of organic production. This resulted in a major decrease in southern and western regions, while the number of organic farms in eastern parts increased. The unit size in organic animal production grew rapidly, but until 2005 the number of organic units remained at the level of the late 1990s. In 2005, a new payment scheme for organic animal farms was introduced and led to a clear increase.

3. Organic production today

Since 2010 there has been a new nationwide increase in the number of organic farms. There were 4,211 organic farms at the end of 2012. Organically managed land constituted almost 200,000 hectares of which 161,000 hectares were certified organic. The average farm size was 46.4 hectares. The average size of organic farms is thus 20 % larger than the average size of all farms in Finland (Table 1).

Special payments to organic farming in the form of conversion payments and organic production payments are part of the Finnish Agri-Environmental Programme (FAEP) and its Supplementary Protection Scheme (SPS), implemented first in 1995. Since 2007 the support has been 141 €/ha/year. The support is the same for the conversion and certified organic area. In addition, the support for organic animal production is 126 €/ha/year. The contracts are made on a five year basis.

3.1 Regional distribution of organic farms

South Savo and Ostrobothnia can be regarded as the main pioneering regions for organic farming in Finland. Organic farming was one of the core ideas of the ‘eco province’ of south Savo in the 1980s. That is the main reason, why many organic organisations are located in this region (Table 2). At the moment, the main areas of organic farming can be found in the southern, south-western, and western parts of Finland, but the fastest development is taking place in eastern Finland.

3.2 Plant production

The total organic grain harvest in 2012 was about 83 million kilograms, 5 million kilograms of which were rye, 15 million kilograms wheat, 39 million kilograms oats, 7 million kilograms barley and 17 million kilograms mixed grain. Table 3 shows land use by organic farmers in 2011 and Table 4 certified organic area and most important crops in 1995-2010.

3.3 Collected wild products

Finland has the world's largest non-agricultural organic area. There is a specialised certification system for organic wild products in Finland. In 2011, the most popular products were blueberries (870 tonnes) and lingonberries (501 tonnes). The collection area, mostly in the northern part of Finland, is about 7 million hectares. The share of certified organic wild berries is about 20 % of all collected wild berries in Finland. 

3.4 Livestock production

About 40 % of the organic farms practice animal production, but less than half of the animal farms have certified organic animal production. This is mostly due to two facts: Converting conventional to organic production is not a prerequisite for receiving financial. The other reason is the underdeveloped market for organic animal products. Therefore, a significant number of organic farms do not bring any organic products into the market. The organic grain and fodder produced on those farms is fed to animals on the farm and the animal products – typically meat and milk – are sold as conventional products.

In 2012, there were 759 certified animal farms, 21 % of which had dairy cows, 51 % beef cattle, 17 % sheep or goats, 5 % poultry and 1 % pigs (Table 5). The unit sizes are increasing rapidly.
The organic milk production volume in 2012 was 38 million litres, which is about 2 % of the total milk production in Finland. The organic egg production volume was about 2.2 million kg (3.5 % of total production). Organic meat markets are developing rapidly, although the volume is still less than 1 % of the total meat production of Finland.  The production volume of beef in 2012 was about 1.7 million kg., pork was 0.5 million kg and sheep meat 0.1 million kg.

3.5 Food processing

In 2012, there were 624 registered food processors, packers and traders covered by the certification systems. Only about a dozen of these operators have an organic turnover in excess of EUR 10 million and almost all are mainstream operators, for which organic methods are a minor part of their overall business. Due to the positive market development, there were 116 new food manufacturers (mostly bakeries) and wholesalers entering the organic market in 2012.

4. Producer organisations

The Finnish Association for Organic Farming Luomuliitto was founded in 1985 to act as an umbrella organisation for producers and organisations promoting organic agriculture. Luomuliitto has 18 member organisations representing about 1,700 members. Most member organisations of Luomuliitto are regional producer organisations, but there are also other national organisations like the Finnish Biodynamic Association and the Finnish Association for Ecological and Agricultural Tourism. The field of operation of Luomuliitto includes promotion of organic farming, standards development, market development and publishing (e.g. magazine Luomulehti) and international work through the EU IFOAM Group.

Pro Luomu association (“Pro Organics”), founded in 2011, has taken a central role in market promotion and development work of the organic sector. Pro Luomu has currently about 40 member companies, including the two biggest supermarket multiples S-Group and Kesko and the Central Union of Agricultural Producers and Forest Owners (MTK).

5. Legislation and certification system

A nationwide inspection system for organic production was first established by Luomuliitto in 1986. In July 1994, the responsibility for organising the inspection of organic plant production was given to the Ministry of Agriculture and Forestry. Currently, the Council Regulation is implemented by Statute No 846/2008. The control system in line with the Council Regulation (EC) No 834/2007 is based entirely on designated public inspection authorities:

5.1 Certification labels and private certifiers

The state label Luomu – Valvottua tuotantoa /Kontrollerad ekoproduktion (Certified Organic Production) is granted by Evira to operators whose production has been controlled by the Finnish public inspection authorities. The word “Luomu” was introduced in 1984 as diminutive for the Finnish word “luonnonmukainen” meaning natural.

Luomuliitto has some additional standards for issuing its own Ladybird labels for Finnish and regional organic produce. The Finnish Biodynamic Association administers the use of the international Demeter label for biodynamic products. The association has its own standards for Finnish biodynamic production based on the international standards for biodynamic agriculture.

6. Advisory service, training and research

The advisory service for organic farming is coordinated and developed by the Association of Rural Advisory Centres. Practical advisory work is carried out by 16 regional advisory centres, which have about 50 advisors specialised in organic farming, usually in plant production. In addition to the Rural Advisory Centres, Luomuliitto and the Finnish Biodynamic Association provide advisory services for organic farming.

Academic courses for students and training for advisors for organic farming are provided by the Ruralia Institute of the University of Helsinki, situated in Mikkeli. A course of at least 5 days is required for farmers who applied for financial support for conversion to organic farming.

Research in organic farming is one of the activities of the Agrifood Research Centre MTT and research projects are carried out in a number of MTT’s research units, but most notably in the research centre of Mikkeli, in south-east Finland. The research on organic production is focused on nutrient economy, production techniques and local food systems.

The Finnish Organic Research Institute started in 2013 is a multidisciplinary research organization founded by University of Helsinki and Agrifood Research Center MTT. The main idea of the institute is to support the whole food chain and promote organic food production in Finland by research, science communication, education and development projects. The fields of research cover the whole food chain.

7. Development of the organic market and marketing channels

45 % of Finnish consumers bought organic food regularly (once or more a month) in 2012. A regular buyer can be described as a well-educated woman in her 30s and living in a big city, but in general, differences between different demographic buyer groups are becoming smaller.

The most common reasons for the consumption of organic products are their good taste, absence of residues and other health related reasons, animal welfare and environmental reasons. The biggest obstacle keeping people from buying organic food is the price. Typical price premiums compared to conventional foods are 100 % on fresh vegetables, fruit and eggs, 30 % on bread and grain products and 20 % on milk and meat products.

The development of the organic market has been rapid during the last years after lagging behind Western Europe. The market grew by 46 % in 2011 and by 24 % in 2012. According to Pro Luomu, the value of the Finnish organic market was EUR 202 million in 2012. Still, the overall market share of organic food in Finland is slightly less than 2 %.

The growth drivers are: more positive attitudes and higher awareness of consumers towards organic food, while at the same time local food is gaining in popularity and consumers are becoming more critical of the industrialized farming and food system. More importantly, both big supermarket retailers, the S-Group and the Kesko-Group, have now jumped on the band-wagon and are developing their organic range and participating in cooperation to develop the Finnish organic sector.

The market share varies greatly between product categories. The highest market shares are in eggs and vegetable oils. Market shares over 3 % have been reached for root vegetables, tea, fresh milk, flour, flakes, ketchup and soy sauce. The most important organic product in retail is fresh milk if calculated based on value.

According to the Nielsen Company, 82 % of organic products were sold in mainstream retail channels in 2012. This leaves 18 % to other types of outlets: speciality stores, open markets, direct sales, etc. While this is a small part of the total sales, it is proportionately far bigger than in food sales overall, underlining the importance of the alternative marketing channels in the organic sector.

7.1 Professional kitchens

The importance of organics in the Finnish catering sector is increasing. 16 % of catering operators used some organic products in 2009. The share was 28 % in restaurants and 13 % in the public sector. Catering is not within the scope of the EU organic regulation and Finland has not implemented a certification system for organics in the catering sector. However, Ekocentria has developed and runs the “Steps to Organic” (Portaat Luomuun) training as a voluntary programme aimed at helping professional kitchens increase their use of organic products as part of sustainable development. In 2013, over 2,000 professional kitchens, from nurseries to high quality restaurants, used organic products daily. Professional kitchens can begin using organic products in stages following the training programme - from using few organic raw materials to the preparation of entire organic meals.

7.2 Export and Import

Organic product exports in 2009 were estimated to be EUR 14 million. This represented 1 % of Finnish food exports. 40 companies are exporting organic products from Finland. The most important Finnish export products originate from the grain sector: oats and oat flakes, wheat flour and bread. Finland is especially strong in organic oats, but also Finnish spring wheat and rye are known for their high quality. One of the main players in organic exports is group called Organic Food Finland. It is specialised in organic food from Finland and manages the export of organic goods from seven participating companies.

There are no statistics on organic imports, but it can be estimated that the share of imported products on the Finnish organic market is around 30 %. This includes raw-material imports and products imported as ready retail packed products.

8. Challenges and outlook

Currently, the attitude towards the Finnish organic sector is very favourable, which serves the market conditions and the public mindset towards organic production.
Even the farmers see organic production as a viable option for the new rural development programming period in Europe starting in 2014. Additionally, the rising costs of artificial fertilizers and animal feeds make farmers consider converting to organic production.

Organic agriculture was one of the examples of the sub-tasks assigned by the Country Brand Delegation appointed by the Minister for Foreign Affairs in 2010. The delegation defined three central areas or “missions” for Finland that demonstrate its strengths by solving the world’s most severe problems. One of the three main missions is called “Drink Finland” and it’s aiming at making all the Finnish lakes drinkable and serving organic food. The delegation proposed that the emphasis of Finnish agriculture should increasingly be shifted to organic production. The goal is that by 2030 organic production should account for at least half of the overall production. The Finnish Organic Research Institute, which was started in 2013, is one of the concrete results of the country brand process.

The Organic Production Development Programme, which was launched by the Finnish Government in May 2013, aims at having a minimum of 20 % of the cultivated area farmed organically by the year 2020. The goal has already been exceeded in the provinces of Åland, Kainuu, and North Karelia.

9. Sources and publications

Niemi, J. & Ahlstedt J. 2013. Finnish Agriculture and Rural Industries in 2013. Agrifood Research Finland, Economic Research. Publications 114a. Helsinki 2013. (available at: https://portal.mtt.fi/portal/page/portal/mtt_en/mtt/publications/fari/jul114a_FA2013.pdf)

Strassner, C. Lukas, M. Løes, A-K. 2010. Certification of public organic procurement in Denmark, Finland, Italy and Norway as compared to Germany. Bioforsk report Vol. 5 No. 103/ 2010. iPOPY discussion paper 5/2010. Available at: http://orgprints.org/17158/1/CertRep_final_August2010.pdf

Yearbook of Farm Statistics 2012. Information Centre of the Ministry of Agriculture and Forestry. Helsinki 2012. Available at: http://www.maataloustilastot.fi/sites/default/files/vuosikirja_2012.pdf

From farm to fork 2011/2011. Statistics on food chain and control. Information Centre of the Ministry of
Agriculture and Forestry. Helsinki 2013. (Order the book from http://www.maataloustilastot.fi/en/farm-fork-2011-2012_en– older yearbooks are available for free).

10. Magazines and important websites

Luomulehti (magazine of the Union of Organic Farming), founded in 1981
Demeter (magazine of the Finnish Biodynamic Association), founded in 1964
www.luomu.fi is the website for current affairs regarding organic production in Finland. In Finnish only.
Home page for organic production statistics published by the Information Centre of the Ministry of Agriculture and Forestry.
Organic Food Finland and Food from Finland provide information of Finnish companies exporting organic food.

Finland on Organic-Europe.net

Contact

Sampa Heinonen
Senior Officer, M.Sc. (Agr.)
The Finnish Food Safety Authority Evira
Mustialankatu 3
00790 Helsinki
Finland
Tel. +358 (0)50 575 1481
info@evira.fi
www.evira.fi

 

 

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