Council of farmers' union deeply disappointed with 141 subsidy decision

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The delegate council of the Central Union of Agricultural Producers and Forest Owners (MTK) expressed disappointment on Wednesday over the result of negotiations between Finland and the European Commission over the terms under which Finland will be allowed to maintain domestic subsidies of farms in the south of Finland.
     While most official speeches held during the meeting in Helsinki were moderate in tone, there was less restraint in comments overheard in in unofficial conversations during breaks.
     
A rebellion is seen to be brewing among the rank-and-file of MTK against the government, of Prime Minister Matti Vanhanen, whose Centre party has its traditional power base in rural Finland and among Finland's farmers.
      Rauli Selinheimo runs a pig farm in Loimaa. He also grows sugar beets, as well as potatoes for starch production. He feels that MTK has done well, but the government has not. "Now we need to take tougher measures and consider organisational actions", he says.
     Selinheimo says that Tuesday's decision came as a shock.
     
A six-year agreement was negotiated for farms in Southern Finland which raise animals. Next year Finland will be authorised to pay EUR 93.9 million in subsidies under Article 141 of its accession treaty to the European Union. The sum is to decrease each year, until 2013, when it will be just EUR 62,0 million. Cuts will be greatest in farms raising pork and poultry, where the subsidy will be separated from production.
     
The initial proposal put forward by both the Ministry of Agriculture and Forestry and MTK, called for the inclusion of national environmental supports in the Article 141 subsidy.
     Minister of Agriculture Sirkka-Liisa Anttila (Centre) emphasised on Tuesday that Finland will seek to include elements that compensate for the Article 141 subsidies into the system of compensatory allowances that arise from hardships caused by conditions of nature.
      "They are trying to inspire hope for the future, even though nothing has been decided yet", Selinheimo complains.
     MTK's second chairman Juha Marttila says that it is possible that part of Finland will be excluded from the compensatory allowance system.
      Hannu Heikkola, a pig farmer from Kokemäki, says that the agreement was reached far too quickly. "The previous government of Paavo Lipponen (SDP) dealt with farmers' issues much better", Heikkola says.
     
Opening the meeting, MTK Council Chairman Juha Saikkonen said that the outcome of the talks on Article 141 was a big disappointment, and fell far short of the goals that had been set.
     Saikkonen noted that the government programme includes the goal of raising support for farmers, and that the government therefore needs to implement a survival package for farms in Southern Finland to compensate for subsidies that were lost on Tuesday. He suggested as one possibility a reduction in energy taxation.
     
Farms must also improve their activities, emphasised Matti Tikkakoski, CEO of the meat packing company Atria.
     Tikkakoski predicted that there will be several increases in retail prices of meat products in 2008, with the first expected at the beginning of the year.
     A situation in which producer prices would not rise when production costs double is an impossible equation in Tikkakoski's view.
     
There were fears that Tuesday's decision would lead to inequality within Finland, as Article 141 subsidies in the south of Finland are reduced, while subsidies in more northerly areas under Article 142 are unchanged. Saikkonen said that everything must now be done to prevent gaps that lead to unhealthy competition among different parts of the country.
     MTK rank-and-file member Hannu Koivisto fears that the Article 142 subsidies for northern areas might also be in jeopardy.
     He feels that the Article 141 talks were unnecessary, because everything had been agreed upon in advance.


Previously in HS International Edition:
  Finland to keep Article 141 agricultural subsidies for six more years (28.11.2007)
  Finnish Minister of Agriculture continues lobbying for future subsidies (27.11.2007)

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