Published: 24 March 2011
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|
|Amount of agricultural subsidies EUR per farm||2004||45,704||36,297||56,245||35,244||39,168||30,242|
|Result from agriculture EUR per farm||2004||-4,956||55,201||-5,426||50,396||-2,789||49,033|
|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|
|Agricultural debts EUR per farm||2004||138,532||40,092||229,474||27,402||101,725||61,903|
|Number of farms in the personal tax data||2004||1,014||1,060||115||772||493||74|
|Income subject to state tax EUR per couple||2004||98,649||64,483||37,126||57,997||73,526||65,843|
|Earned income and capital income from agriculture EUR per couple||2004||2,063||53,328||1,778||49,392||1,742||46,269|
|Share of agricultural income in income subject to state tax %||2004||2||83||5||85||2||70|
|Cultivated arable land ha per farm||2004||60.66||37.46||59.86||34.13||65.09||49.02|
Source: Statistics on the finances of agricultural and forestry enterprises, Statistics Finland
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