Published: 24 March 2011

Farms' finances boosted by income from outside agriculture

Of one subsidy euro paid to agricultural enterprises in 2009, a farmer family received as taxable result EUR 0.56, on average, in the form of wages and interest on own capital. All sales revenues and the remaining EUR 0.44 of subsidies were used to cover expenses. According to the personal tax data, the combined median of income subject to state tax was EUR 43,300 for a farmer couple, of which the median income of agriculture was only around EUR 7,300. Thus, the share of income from outside agriculture in a farmer family's income is significant. Without external income, in many cases it would be impossible to continue farming. In around 15 per cent of the farms the result from agriculture remained zero, or below it, while in nearly ten per cent of the farms the result was over EUR 50,000. These data derive from the 2009 Statistics on the finances of agricultural and forestry enterprises published by Statistics Finland.

In 2009 the pure capital income of forestry received from private forests amounted to EUR 251 million, which means that the income fell by around EUR 1.1 billion from the peak year of 2007. The reduction was due to both fewer sales of wood and the tax relief applied to wood sales profits in 2008 and 2009.

Farms receiving subsidies to the tune of over EUR 20,000 per year were selected to the panel review. The farms were divided to deciles according to their result and subsidy relation in 2004. Farms remaining until 2009 either in the lowest or highest decile were included in the final panel review.

In 2009 around 65 per cent of the farms belonging to the highest decile were engaged in dairy husbandry as their main production sector and almost 30 per cent in cereal production. In the lowest decile the relation was almost reversed, although the share of dairy farms was there only around eight per cent.

In cereal production farms the workload is usually lower than in livestock farms, so it is easier for owners of cereal farms to seek earnings from outside the farm to boost up the poor result of the farm. Due to the labour-intensiveness of livestock farms, increasing farm size and automatisation are often seen as the only alternatives to improve the financial result. As a result of investments, the result may still remain low for long.

Key figures of the farm enterprises selected to the survey panel based on the result and subsidy relation in 2004 and 2009

  Whole panel, total Dairy farms Cereal farms
Lowest decile Highest decile Lowest decile Highest decile Lowest decile Highest decile
Number of farm enterprises 2004 1,101 1,156 124 828 538 80
2009 1,101 1,156 84 744 615 139
Amount of agricultural subsidies EUR per farm 2004 45,704 36,297 56,245 35,244 39,168 30,242
2009 49,569 38,659 88,593 40,029 40,044 26,023
Result from agriculture EUR per farm 2004 -4,956 55,201 -5,426 50,396 -2,789 49,033
2009 -9,106 64,297 -9,617 60,793 -8,019 47,834
Acquisition of fixed assets and expenditure on basic repairs EUR per farm 2004 36,965 18,161 71,301 12,415 29,371 33,958
2009 30,992 20,588 64,973 12,940 26,012 22,073
Agricultural debts EUR per farm 2004 138,532 40,092 229,474 27,402 101,725 61,903
2009 174,999 42,221 415,480 21,812 124,907 40,433
Number of farms in the personal tax data 2004 1,014 1,060 115 772 493 74
2009 1,013 1,054 73 695 572 130
Income subject to state tax EUR per couple 2004 98,649 64,483 37,126 57,997 73,526 65,843
2009 68,470 75,705 30,313 69,639 77,884 69,703
Earned income and capital income from agriculture EUR per couple 2004 2,063 53,328 1,778 49,392 1,742 46,269
2009 1,346 61,805 1,795 59,612 955 45,408
Share of agricultural income in income subject to state tax % 2004 2 83 5 85 2 70
2009 2 82 6 86 1 65
Cultivated arable land ha per farm 2004 60.66 37.46 59.86 34.13 65.09 49.02
2009 66.62 39.21 82.66 36.70 67.06 42.90

Source: Statistics on the finances of agricultural and forestry enterprises, Statistics Finland

Inquiries: Hannu Maliniemi (09) 1734 2796, maataloustilastot@stat.fi

Director in charge: Ari Tyrkkö


Updated 24.3.2011

Referencing instructions:

Official Statistics of Finland (OSF): Statistics on the finances of agricultural and forestry enterprises [e-publication].
ISSN=2489-320X. 2009. Helsinki: Statistics Finland [referred: 17.12.2017].
Access method: http://www.stat.fi/til/mmtal/2009/mmtal_2009_2011-03-24_tie_001_en.html

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