Implications of the LFA Review for Finland
Finnish farmers may have a reason to celebrate: on the 14th April, the Commission put forward proposals on reform of the ‘intermediate’ LFAs. The Communication sets out 8 new common biophysical criteria which could be used to reclassify ‘intermediate’ LFAs with the intention of increasing the targeting of LFA payments (to be renamed Natural Handicap Payments, NHP) in such areas. However, the proposed criteria would almost certainly mean that the whole of Finland retains its status as being eligible for LFA support – including the majority of more intensive producers.
Currently, the whole of Finland is designated as LFA with the majority of farmers eligible for payments. Around 21% of agricultural land is designated as ‘intermediate’ LFA and is the subject of the Commission’s proposals. The remaining agricultural land in Finland is classified as ‘mountain’ LFA (53%) - areas north of the 62nd Parallel - and as being subject to ‘specific handicaps’ (26%) - the region along the southern coast.
Biophysical Criteria to Retain the Status Quo?
The biophysical criteria set out in the Technical Annex to the Communication in relation to ‘low temperature’ would enable the whole of Finland to be classified as intermediate LFAs. Specifically climate criteria are defined in relation to the growing season, which must not exceed 180 days per year, or the season's accumulated temperature, which must be below 1,500 degree days per year [a]. The Finnish government has been pressing Brussels for years to add the latter condition to the LFA scheme. While the growing season may exceed the limit in the southern most parts of Finland, no part of the country reaches the figure of 1,500 degree days (for more details see Finland Member State CAP Reform profile).
The Commission’s Communication is intended to result in the exclusion of areas currently defined as being eligible for ‘intermediate’ LFA payments on a socio-economic basis or where natural handicaps have been overcome through human intervention and technological progress. However, the Finnish view is that some of the biophysical criteria outlined in the Communication (and referred to above) are inherently linked to Finland’s geographical situation (principally its northerly latitude) and thus cannot be overcome, unlike, for example, obstacles relating to soil drainage. Thus, in practice it appears that the new designation criteria would have the same result as the previous criteria in terms of the area designated as ‘intermediate’ LFA – assuming that it will only be necessary to meet one of the 8 biophysical criteria.
The Case for Introducing Extensification Eligibility Criteria
What do ‘extensive’ and ‘intensive’ mean in the Finnish context and to what extent could intensive farming systems be excluded from payments?
However, the Finnish government remains concerned about the possibility of having to define farm level eligibility criteria, based on an EU framework [b],which ‘target the support to extensive farming making a positive contribution to sustainable land management by excluding intensive farming systems from the aid’. Such criteria could be based on, for example, maximum livestock density, average yield, or standard gross margin.
Given that up until now, government policy has been to make eligibility criteria open to as many farmers as possible a critical question therefore is: What do ‘extensive’ and ‘intensive’ mean in the Finnish context and to what extent could intensive farming systems be excluded from payments?
The reality is that mainstream farming in Finland is characterised by intensive modern production systems, which are highly mechanised, specialised at the farm and regional level, and rely on high levels of agrochemical inputs. It is practised in a landscape, which, though structurally diverse, retains generally limited environmental value (in relation to the state of biodiversity and water pollution challenges). This makes the Finnish case quite different from most of the ‘intermediate’ LFAs across Europe, which are likely to be characterised by fairly traditional low input farming systems associated with a range of environmental benefits as a result. Therefore any additional eligibility criteria based on environmental factors could be a severe blow to the socio-economic objectives of LFA held high in Finland (House of Lords, 2009).
Regarding production types, those which have arguably overcome, to some degree, biophysical obstacles to production are modern meat and dairy producers, especially those based on confined animal units (pig, chicken, and some cattle), and increasing amounts of imported feed. Such farming systems are therefore not constrained by the number of days in the growing season, and its continued support bears clear socio-economic objectives. The exception is nationally grown fodder, which is not competitive under the current market conditions, or beef and dairy production based on grazing systems.
Grazing is also one of the key practices contributing to the landscape value of farmland
In order to define ‘extensive’, I would like to highlight two problematic aspects related to defining ‘intensive’ in the context of the agricultural sector in Finland. Firstly, despite the fact that agricultural area has been stable for decades in Finland, the declines of key biological taxa associated with farmland has continued, and traditional farming biotopes have recently been confirmed to be the most endangered across the country (Raunio et al, 2008). All these biotopes, and a great portion of associated species, are dependent on continuous, and in most cases, rather extensive, grazing. Grazing is also one of the key practices contributing to the landscape value of farmland - something underlined as having high demand in Finnish society 1, and explicitly supported under LFA for northern regions in Sweden. Introducing an eligibility criterion intended to ‘extensify’ production away from more intensive systems of rearing and finishing cattle to one based on pasturing could therefore be an important factor in reform of LFA support in Finland.
Secondly, the typical production methods used and regional specialisation have created considerable pollution of surface waters. A recent review demonstrated that the amount of phosphorous fertiliser applied to cereals and perennial grasses allowed by the agri-environment scheme is still twice as high as an effective rate for these crops established under experimental conditions in Finland (Valkama et al. 2009). Stricter standards on nutrient balance could also underpin a definition of ‘extensive’. On the other hand, such standards, bearing a clear environmental objective, fit perfectly with a logic of cross-compliance regime (which should be made more stringent), or of the agri-environmental programme (according to an official statement of the Ministry of Agriculture and Forestry, calculation of the farm's nutrient balance will be included as a basic eligibility criterion in the next programming period) (Lehtonen, 2009).
From a socio-economic perspective the development of eligibility criteria limiting the intensity of production might also be important. Otherwise farms within LFA regions will continue to intensify and concentrate production at the expense of others and the environment. This competitive disadvantage within national borders, as well as internationally open markets, is driving many smaller farms out of production; a process which has been demonstrated with, for example, Nordic Aid.
In conclusion, there is one area - grazed livestock and meat production based on domestic fodder - where an additional LFA eligibility criterion is both justified within the biophysical constraints framework, and would have considerable environmental, landscape and animal welfare benefits - the issues in need of continued public support.
[a] Degree-day figures quantify how hot or cold the weather is, and, in this case, are counted as a sum of days above a threshold temperature needed for crop germination.
[b] Under two of the options (Option 3: Eligibility Criteria & Option 4: High Nature Value) outlined by the Commission in its impact assessment, Member States would have to develop eligibility criteria within a Community framework which could potentially reduce the number of farmers eligible for ‘intermediate’ LFA payments. Under the other two options outlined (Option 1: Status Quo+ & Option 2: Common Criteria), Member States would be able to define eligibility criteria for the scheme at national level.
House of Lords European Union Committee 13th Report of Session 2008–09: The Review of the Less Favoured Areas Scheme. Oral evidence submitted by Mr Osmo Ronty, Agriculture Counsellor, Finnish Government on 5 March 2009.
Lehtonen, S. Kasvinravinteiden käyttö tarkentunut huimasti 24 vuodessa. Maaseudun Tulevaisuus 3.06.2009.
Raunio, A., Schulman, A. & Kontula, T. (eds.). 2008. Endangered biotopes in Finland. Finnish Environment Institute, Helsinki. Finnish Environment 8/2008 (in Finnish with English summary)
Valkama E, Uusitalo R, Ylivainio K, Virkajarvi P & Turtola E (2009) Phosphorous fertilisation: a meta-analysis of 80 years of research in Finland. Agriculture, Ecosystems and Environment 130: 75-85.h