25 September 1998


Now it has joined the

EU, Finland is learning

to live between a rock

and hard place.

The Great Bear, Russia,

although not the force

it used to be, is

ever-present. And then

theres Brussels…

An antique cannon is the first thing you see when you drive into Gustav Rehnbergs Finnish farmyard, about 50 miles west of Helsinki. Its been there since 1917 when Finland finally achieved independence from its neighbour Russia.

For many years the barrel pointed towards Moscow – in case the Russians decided to come back. These days it points towards Brussels – but it would take only a moment to realign the barrel to its original target should the need arise, he assures you.

Mr Rehnberg has an ironic sense of humour. But his irony sums up the situation in which Finnish farmers find themselves three years after their country joined the EU.

Before that the Finnish government, like most others around the word, paid generous subsidies to its farmers. They were higher than in other countries to allow for the fact that farming from about the same latitude as St Petersburg north to the Arctic Circle is more difficult.

Moreover, there was an established system for fixing farm prices to ensure farmers incomes kept pace with the rest of society.

Each year the trade unions would negotiate with the government a standard percentage by which wages should rise. Whatever was decided, farmers prices would be raised by an equivalent amount. It cost a lot in taxes, but was considered necessary to maintain the countryside and the rural economy in a healthy state.

When Finns voted on whether to join the EU most farmers foresaw the dangers of the removal of this system and an estimated 80% voted against. The 20% of farmers who voted for membership were, like the majority of the population, more concerned with national security than farming viability.

They believed membership of the EU would give them that security, so Finland joined and began its transition towards full membership of the EU.

Since then, as the country has gradually come under Common Agricultural Policy rules, farm commodity prices have virtually halved and are set to fall further as the full implications of the EU come closer. Inevitably farmers incomes have followed suit and the dreadful weather this year has made a serious situation potentially catastrophic.

In southern Finland there has been two to three times as much rain as normal and the grain harvest is a month late. When I was there during a rare fine spell, combines were out cutting wheat at up to 30% moisture. Even in a normal season it is not unusual to do it as 25% and Mr Rehnberg is in the habit of budgeting more than £23/t to dry his grain every year.

But he at least had just finished combining when I was there on September 13. In fact, he had already drilled most of his autumn corn several days before and it was emerging from his fertile clay soils.

It is necessary to drill by mid-September in this climate, he said, to get crops well-established before the harsh winter sets in and to avoid yield loss next harvest.

He was either better-equipped or more fortunate than most of his neighbours in southern Finland. Many had a lot more to do and the water-filled ruts made by combines and grain trailers across stubbles full of grass weeds showed how difficult harvesting had already been, let alone would be, as they struggled to bring in the rest of their crops.

Fifty miles east of Helsinki, Karlo Schildt still had half his harvest to do. Virtually all his fields are surrounded by forest and his land runs down to the Baltic Sea, so his crops take longer to dry than in Mr Rehnbergs open valley.

In any case he was relatively philosophical about the late harvest and the low prices. With the confidence that comes with old money, he expressed himself still pleased that Finland had joined the EU. We have to protect ourselves against Russia, he said, explaining that Finland cannot tolerate being ruled by the Great Bear ever again and the EU will give protection.

Even so, in Finnish farmers position, faced with the probability of having to live with near world prices in a few years, I would be concerned about future profit possibilities.

Their costs, as already explained, are likely to be higher than the rest of Europe for geographical reasons. And their yields, because of their shorter growing season, not a lack of skill, are lower. Average out-turn of winter wheat, even on the above-average farms which I visited, were said to be between 6 and 7t/ha (2.42-2.83t/acre). Yields of other crops were said to be similarly lower than those we would expect on the best farms. And although the transitional arrangements negotiated by the Finnish government allow national aid to be paid for the time being, in a year or two it will have to stop.

Perhaps Finnish arable farmers will go back into livestock; perhaps they will be forced to rely even more heavily on timber – most already have more hectares of trees than crops; perhaps environmental payments will rise to replace some of their lost income.

But farming in this beautiful country does not seem set to get any easier.

Even so, in the Finnish farmers position, faced with the probability of having to live with near world prices in a few years, I would be concerned about future profit possibilities

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