null Rapid payment of the security of supply package for agriculture is important

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Rapid payment of the security of supply package for agriculture is important

7.4.2022

Security of supply package for agriculture is an exceptional measure that comes at times of extreme urgency and need. In the short term, the package will help to alleviate part of the economic hardship in agriculture and safeguard domestic food production. Payment must be accelerated by all possible means. The long-term viability of agriculture can only be safeguarded by conducting measures to improve the functioning of the food market. Farmers urgently call for such measures from the grocery shops, the food industry and authorities responsible for public procurements.

The Finnish government has decided to allocate a total of around €330 million to support food production, to support farm liquidity and boost energy self-sufficiency. This comes against the background of unprecedented increases in input costs, the long-standing crisis in farm profitability and the challenging conditions of the last growing season, as well as Russia's war of aggression in Ukraine. Together, these factors are already threatening national food security.

MTK believes that the primary objective of the security of supply package is to strengthen the liquidity of farms. Increases to the existing agricultural subsidies combined with a refund of the energy tax are the key elements of the solution. The liquidity situation of farms has become very worrying since last summer due to the unprecedented rise in costs, and many farms are seriously considering whether they can afford to continue production. Especially in a deteriorating security situation, society must do all it can to safeguard food production in Finland for the coming harvest season and the following year.
As part of the national security of supply package for 2022, the following measures have been decided:

  • 120 million euros for Support to areas facing natural or other specific constraints (ANC).
  • Additional national aid for pig and poultry sectors, greenhouse production, storage of horticultural products, reindeer husbandry and fisheries for 27 million euros.
  • 20.6 million euros for EU crisis support and its complement with national funding.
  • Increasing the 2021 energy tax rebate as a one-off measure by 45 million euros.

In addition, it has been decided to implement measures between 2022 and 2026 to accelerate the transition from fossil fuels to renewable energy sources:

  • Investment support of 28 million euros for alternative energy sources and other investments and changes related to security of supply.
  • Investment support for advanced technologies, including biogas digestion technologies, 14.5 million euros.
  • Improving nutrient and energy self-sufficiency through nutrient recycling 9 million euros.
  • Investment support for advanced technologies for nutrient recovery and related investments in machinery, equipment, construction and facilities 25 million euros.
  • Increase in State guarantees for liquidity loans (recapitalisation of Makera for 7 million euros).
  • 30 million euros for wetland cultivation.
  • 3.5 million euros for the Finnish Food Authority's information systems for 2022-2023.

The security of supply package covers part of the sharp rise in input prices in the middle of last year. However, the war in Ukraine has further aggravated the economic concerns of farms and solutions will have to be found on the market. Since last summer, the MTK has stressed the importance of market functioning and producer price increases, but unfortunately the results have been modest. With the security of supply package, the state has shown that it is up to date with the plight of primary production and must now turn its attention more strongly to the processing industry and the retail trade. All parties in the food chain must be prepared to take responsibility for the food supply of Finns. In the EU internal market, producer prices have risen considerably faster than the Finnish market.

MTK is disappointed with the EU's handling of the food crisis. The EU's financial contribution is completely marginal and the framework conditions for the various security of supply measures were set so tight that it would have been impossible to target aid more precisely. The government's contribution to security of supply is quite exceptional in the EU and shows that Finland's understanding of the importance of food production is much better than in any other Member State.

MTK also urges the previously promised exemption from property tax for farm and forestry buildings. This tax is targeted at farms that have invested and are now in the greatest difficulties as costs rise. In Sweden, farm buildings are exempt from property tax.

The security of supply package also includes big investments in future investments and climate measures. Improving nutrient recycling and reducing dependence on imported nutrients is an important means to improve national security of supply. The same applies to climate change measures. However, these will not improve the conditions for primary production in the coming years.

 

More information: 

Johan Åberg, Director of Agriculture

johan.aberg@mtk.fi, +358 204132427

topics: maatalous, talous