Finnish farmers say the money being offered by the government to help cover extra costs associated with bad summer weather and poor harvests is not enough.
This week, the government announced a budget amendment that would free up €25 million for farmers.
It might sound like extra money, but in reality it’s an accounting slight of hand.
Farmers won’t be getting new cash, instead they’ll receive an advance on next year’s energy tax refunds.
“Each year we account for how much energy has been used producing our products then the state would pay that back [as tax credit]. Now what is being agreed on, is money being advanced on the energy tax returns based on 2016 expenditure rates” explains Max Schuler from the Central Union of Agriculture Owners MTK.
Energy Costs Explained
Energy costs are high on farms because arable crops that are harvested from the fields still have a high moisture content and need to be dried in industrial-sized dryers at the farms, before going on for processing.
This costs the farmers significant amounts of money in fuel at the end of every summer, and if the crops are wetter than normal due to prolonged rains, then it takes more fuel – and more money – to dry them out.
That’s money which has to be spent on top of the price of lost crops in the fields, up to an estimated 20% of this year’s harvest in Finland was just too sodden to be gathered.
A new field survey for the Ministry of Agriculture and Forestry makes for depressing reading.
“This year cereals, oilseed rape, turnip rape and protein crops, mainly broad beans, have been hit especially hard” says Jukka Virolainen from the Ministry.
“The situation varies between regions and the crop in question. In the areas most affected, Central and Eastern Finland, estimation done last week, is that rougly 50% of crop has been harvested. After that there has been only few days without rain so not much progress expected” says Virolainen.
This year was was one of the coolest, cloudiest, wettest summers on record, according to the Finnish Meteorological Institute FMI.
August rainfall was higher than usual across large parts of the country, but in Kainuu in the north east, and Northern Ostrobothnia the rains fell particularly hard, measuring once-in-a-decade levels of almost 150mm.
The average temperatures for June to August were also unusually cool in the south and centre of the country, with Central Finland not seeing any days at all where the thermometer hit +25°C; while extended cloud cover in Lapland and Ostrobothnia partially explains the cool temperatures.
Farmer Esa’s Story
Esa Similä has been farming the same 350 hectares for 28 years in South Ostrobothnia, and this was the first year he couldn’t harvest all his crops.
He grew barley, rape seed, wheat and peas this season, and estimates about 15% of the rape seed was lost, and all of the pea crop too.
“I have five hectares of peas and there was so bad weather I can’t harvest them, and they are left in the field. Now there is 10cm of snow and it’s over” he says.
The peas never ripened, so they’re rotting in the field. Nobody’s offering Esa any compensation for the loss.
This week he’s been rushing to get the last of his summer crops into the dryers before the snow came. Normally he would begin work with the combine harvester in the middle of August. This year he had to leave it much later, and dodge the weather as well.
“A normal year we have like only few days of combine weather, and if it’s raining little bit in the morning, you don’t go to combine that day or the next day, you wait two days. But this year we had rain in the morning, and we had to go and combine in the evening because we had to take everything from the field. That cost so much money for oil for the dryer” says Similä.
On average he’d use 30,000 litres of fuel for his combine harvester and dryers. But this year it will be 58,000 litres. Similä estimates the cost of extra fuel will add up to €15,000. Money that won’t be covered by an advance in tax returns.
“In normal year we only have summer fuel, but now we have to take winter fuel, it costs more but we had to use it” he states.
Food Security Concern
Officials agree that costs have spiked this year during the bad harvest, and the one simple fix they could make was advancing tax credits. But they haven’t yet worked out any details of how farmers will apply, what evidence will be needed for claims, or if there will be a fixed amount of tax advances based on hectares or actual fuel used.
“The energy use and costs have been highest on farms suffering from difficult harvesting and grain drying conditions” says Veli-Pekka Reskola from the Ministry of Agriculture and Forestry.
But he concedes “the details of the measure are not clear yet”.
And it’s the issues of Finland’s food security that strike a worrying note. A cold spring delayed sowing the seeds, and that was compounded by bad weather to produce an exceptionally late, and sporadic, harvest.
“Inability to harvest grain means that this season’s winter crop of winter wheat and rye haven’t been sowed as usual. Normally it is done end of August up to late September. This causes concerns towards size of next year’s rye crop” explains Jukka Virolainen from the Ministry of Agriculture.
“There is arising a problem that good quality seeds are not enough available for next spring’s sowings. This is because germination potential of seeds is affected due to the difficult harvest and autumn climate. So the full extend of accumulated effects on plant production is actually known [only in] 2018” he says.
The expected losses to farmer this year are huge.
“We have estimated the total losses […] will be between €100 million and €150 million” says MTK President Juha Marttila.
“It’s big money” he adds.
So why would anyone want to get into farming, with its high potential for harvest disaster?
Perhaps surprisingly, Finland has youngest farmers in Europe. While countries in the south have a desperate shortage of farmers, Finland has good retention rates.
It’s thanks in part to the country’s social welfare system, and solid pensions for farmers when they retire, helped by the government.
“Of course the state is supporting this farmer insurance and pension system […] because there are two times more retired farmers earning pensions than active farmers paying into it” explains Marttila.
So while being at the mercy of the elements, and the risk of ruin sounds high, the support system and incentives are there to encourage new generations of farmers to inherit the family business.