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Subsidy claims drop as farmers exit agricultural sector

Applications for agricultural subsidies this year fell by 1,300 compared to last year, according to the Agency for Rural Affairs.

lato peltomaisemassa
Image: Esko Jämsä / AOP

This year some 49,500 farms in Finland sought agricultural support, marking the first time the number of farms applying for financial assistance has fallen below 50,000, according to the Agency for Rural Affairs, Mavi.

The agency, which is responsible for distributing EU agricultural aid and rural development funds, said that there were nearly 1,300 fewer claims this year than last year, and that the decline in applications reflects a long-term trend.

“Applications for subsidies have declined every year,” said Sirpa Lintunen an area manager for the agricultural lobby group MTK.

Farmers reluctant to throw in the towel?

While the overall trend is downward, the picture is quite variable when the focus narrows to individual provinces. For example, advance information suggests that in northern Savo there were 3,500 subsidy claims, which is just a few dozen lower than in 2017.

“We are in the middle of the programme, when we don’t see many changes. It is easier for farmers to continue,” Lintunen speculated.

The MTK manager said that it is also possible that farmers don't want to throw in the towel just yet.

More departures likely in next funding period

New conditions for agricultural aid were introduced by the EU in 2015. Head of Mavi’s farmer support unit Hannele Sankari said that the change is reflected in data on application numbers.

“The decline between 2014 and 2015 is clearly larger than in any other period,” he pointed out.

Lintunen noted that the next major shift will occur when the new funding period begins, when not only the conditions for aid will change, but the amounts paid out will also be altered.

“The current funding period will close at the end of 2020, but we are already discussing that a new period may not begin before 2023,” she stated.

Challenges for lobby groups

A drop in the number of active farmers would not automatically mean a reduction in the amount of land farmed. Lintunen pointed to areas such as northern Savo, where idle farms may be rented or sold to other farmers.

She said that the situation also creates challenges for producers’ lobby groups.

“There will be fewer people with direct farming experience. We need to be able to communicate more effectively about agriculture.”

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