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More farmers going bankrupt

Statistics Finland reports more bankruptcies under the Agriculture, forestry and fishing heading in the first 10 months of 2016 than in the corresponding figures for the previous year. According to the regional paper Savon Sanomat, Finland had about 50,000 farms in late 2015, 10,000 of which held over 2.5 billion euros of debt.

Mies siivoaa navetan lattiaa.
Image: Sakari Partanen / Yle

Eero Vilokki from Kiuruvesi in central Finland lost his family dairy farm after declaring bankruptcy in June when the derivative interest rates his bank suggested on his loans grew impossible to pay. He was kicked off his family farmstead by the new owners in late August.

The locks on the buildings were changed the very same day.

“My workers’ belongings and computers, along with my clothing and possessions, were all left behind. All I had was the work clothes on my back. No one bothered to ask if I had a place to stay or food,” Vilokki told Yle.

Before Vilokki was forced to leave, the farm had been transferred to a company with four equal owners. The value of the farm was estimated at 400,000 euros, with an additional 151,000 euros added on for the property’s office space. The farm’s forest property was valued at 24,000 euros.

“It was highway robbery. The forest land alone was worth 178,000 euros,” Vilokki said.

Penniless after 3 generations

His lawyer Juha Korpi characterised the situation as exceptional, and against good practice. He agrees the property would have fetched a better price if the deal wouldn’t have been carried out so quickly. An anonymous Espoo resident told Yle that he had also been interested in the farm before it was sold. He had held its worth at 650,000 euros.

Korpi has submitted a complaint about the decision of the bankruptcy estate’s handlers on Vilokki’s behalf to the district court. Vilokki also plans to take up the matter of the interest rates on his loans with the bank.

At the beginning of the year, Eero Vilokki was a third-generation farmer whose dairy farm produced millions of litres of milk. Now he is flat, with no income, dependent on the goodwill of his friends.

North Savo has been hit hard

The Central Union of Agricultural Producers and Forest Owners (MTK) is an interest group representing farmers, forest owners and rural entrepreneurs in Finland. It says that the region of North Savo in particular has been hit hard with payment difficulties.

MTK reports that very few farmers that have gone through a bankruptcy return to farming, preferring to find a salaried job.

“Sometimes their physical working capacity is exhausted, sometimes their mental capacity. Many move straight into a work disability pension from the bankruptcy,” says MTK CEO Jari Kauhanen.

Kauhanen says he does know of a few cases where farmers who have been through a bankruptcy come back stronger as business owners.

Eero Vilokki now hopes that he will qualify for personal debt restructuring. He says he would still consider getting back into farming:

“I could probably do it. There’s still a certain appeal, in spite of everything.” 

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