Growth in investments and size boost profitability of farms

Most profitable farms have highest level of investments

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Investments in agricultural machinery and increasing the size of farms has been found to boost the profitability of Finnish agriculture.
      According to a soon-to-be-released study by Agrifood Research Finland (MTT), farmers who are willing to make investments also tend to have better training in their profession.
      The study finds that 15% of livestock and poultry farms and 20% of arable farms plan to expand production by 2010. Most farms planning to expand are already fairly large. They also tend to have more debt, and the farmers work longer days.
     
The least profitable farms usually make the fewest investments.
      Farmers who are certain that they want to continue in their profession tend to invest in large units. Those who are unsure of their future generally limit their investments to repairs and maintenance of present activities.
      According to the Finnish Union of Agricultural Producers and Forest Owners (MTK), the number of farms has declined by about a quarter in the period from 1995 - 2003. MTT estimates that by 2020 the number of farms will be half of the present 70,000.
     
The reduction in the number of farms is seen to improve the profitability of agriculture. According to Professor Maija Puurunen, head of business and marketing for MTT, profitability of farms and the education level of farmers make it easier to meet upcoming challenges, such as cutbacks in agricultural subsidies.
      MTT reports that according to records kept by farms, there was a 30% increase in agricultural investments in 1998-2002. Investment varies from year to year, depending on conditions of production and agricultural policy decisions.
      The greatest investments were on farms raising pigs, averaging more than EUR 42,000 per farm in 2002. In the same year dairy and grain farms invested an average EUR 20,000 less.
      According to MTK figures, active farms have an average of 31 hectares of arable land. In 1995, when Finland joined the EU, the average size of Finnish farms was 23 hectares. In 1960 it was just five hectares.


Links:
  Agrifood Research Finland (MTT)
  The Central Union of Agricultural Producers and Forest Owners (MTK)

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