HS Interview | Finnish food exports could be doubled – Realistic, says the minister

Finnish the agricultural producer must get a fair price for his products, Minister of Agriculture and Forestry Sari Essayah (kd) says.

According to Essayah, last year’s profitability crisis in agriculture showed that the contracts of food companies do not have enough flexibility needed in exceptional situations.

“The supply contracts are long on the food side. The producer continued to sell at the old price, even though the production inputs had increased many times. And who fixed the pot? Trade and the food industry”, states Essayah.

Government intends to intervene in the contractual practices of the food sector by reforming the food market, competition and procurement legislation.

According to Essayah, for example, a case-by-case weighted index basket following the prices of production inputs, such as fertilizers and fuel, could be attached to the contracts. If the index indicated a market failure, the unreasonable contract could be renegotiated mid-term.

“Ultimately, the contracting parties decide at what price they sell and buy, but there would be boundary conditions and security clauses that would clearly improve the position of the primary producer in the chain,” explains Essayah.

In addition Essayah plans to make food pricing more transparent. He emphasizes that the changes are planned in cooperation with producers, trade and the food industry.

“Within the chain, there is no desire to point out who is taking a bigger slice of the profits, but we see that the distribution of income should be made fairer.”

According to Essayah, the bargaining position of agricultural producers is weakened by the concentration of the Finnish grocery trade.

Russian the invasion of Ukraine drastically increased the price of fertilizers and fuel last year, and many farms suffered.

Now the situation in agriculture seems calmer. However, according to Essayah, there are differences in profitability within the industry. Meat producers fare the worst.

“The worry has not completely subsided yet. There have still been price fluctuations, but not quite on the scale where they were in terms of energy or fertilizers a year ago,” says Essayah.

According to the minister, the banks say that about 20 percent of the farms are doing well, 20 percent are doing really badly, and the situation for the rest is something in between.

Fertilizer manufacturer Yara has maintained its fertilizer sales for a long time. On Tuesday, the company opened the fertilizer store for a few hours at approximately 20 percent higher prices than before. The price development of natural gas can also create uncertainty for the fall of agriculture.

In the fall, the government will make a supplementary budget for the EU’s agricultural crisis aid, which Finland will receive just over four million euros. With the help of national funding, the amount can rise to a maximum of 12 million euros.

“Young producers, who do not have a buffer to react to weather conditions and changes in the price of production inputs, have suffered the most. When we direct support to this group of producers, we will be able to influence at least their future”, says Essayah.

Sanna Marini (sd) the government supported agriculture with a supply security package of 300 million euros and a cost subsidy of 95 million euros.

According to Essayah, instead of one-time subsidies, the focus should now be on fixing the market and stabilizing the profitability of primary production more permanently.

“Each producer would basically like to get a fair price from the market,” says Essayah.

Of the 95 million euro cost support for agriculture by the Marin government, 65 million euro is still unused. According to Essayah, the use of the budget item has not been decided yet, but it was not discussed in the government negotiations as a savings item.

“[EU-tuen] a national financial contribution could be one of the uses.”

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“Food-producing agriculture is under special protection.”

Government program about 137 million euros will be cut from agriculture and rural development, i.e. Finland’s national cap plan, in the years 2025–2027.

The Cap plan is part of the EU’s common agricultural policy. As national funding decreases, the EU’s compensation will also decrease, so a total of more than 240 million euros will be removed from the plan.

According to Essayh, the cut will not target food-producing agriculture.

“Food-producing agriculture is under special protection because it is the basis of security of supply. If you think about the situation in the surrounding area and the world, food security has really risen to the heart of discussions,” says Essayah.

According to MTK, the savings will roughly halve the support funding for other rural development projects, such as small businesses operating in rural areas and rural telecommunication projects.

Far in the long term, according to Essayah, the challenges for agriculture are attracting young people to the sector and developing exports.

“This is not only a problem in Finland, but all over Europe we are thinking about how to get young people involved as agricultural producers.”

Petteri Orpon The (kok) government wants to double Finnish food exports, Essayah says.

“I think it’s realistic, but you definitely have to work on it.”

In increasing food exports, small businesses that need help opening international doors must be taken into account, Essayah estimates.

According to the minister, companies can be supported in internationalization with, for example, a structure similar to Business Finland and the Food Agency’s certification services. State visits also have their own meaning, says Essayah.

“There are countries where the minister’s visit still conveys an expression of goodwill.”