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Introduction

About 42% of all enterprises operating in Finland arelocated in rural areas, and in 2010 about 93% ofenterprises were defined as ‘micro sized’, employingfewer than 10 people.

The forest sector is a major contributor to the ruraleconomy and accounts for 20% of all Finland’s exports.More than three-quarters of the home-grown woodprocessed by the forest industry comes from privatelyowned forests. Traditionally farms have also had forests,which provide important additional income often usedto finance farm investments. Family farms, as well asother private forest owners, also make an importantcontribution to the Finnish economy through forestmanagement, and forests are an important source ofbiomass for energy. It is expected that innovations in thebio economy field will boost sustainable development,employment and competitiveness in the rural areas.inthe rural areas.

Policy Framework and background

Case Study – FINLANDProgramming for the Green Economy

Finland has apopulation of 5.4million, of which 30%live in rural areas, andan area of 390 903km2, of which 86% isforest and only 7.6% isfarmland – Finland hasthe most northerlyagricultural land in theEU.

In April 2016 the Finnish National Commission onSustainable Development published a strategicframework The Finland We Want by 2050 – Society’sCommitment to Sustainable Development whichidentifies eight objectives for sustainable development:

1. Equal prospects for wellbeing2. A participatory society for all3. Work in a sustainable way4. Sustainable society and local communities5. A carbon-neutral society6. A resource-wise economy7. Lifestyles respectful of the carrying capacity of

nature8. Decision-making respectful of nature

Progress will be monitored and reviewed with the use of39 national sustainable development indicatorsidentified in 2014. The idea is that the indicators will berevised and updated as needed for the follow-up toAgenda 2030 and thus will also complement the globalsustainable development indicators .

http://kestavakehitys.fi/documents/2167391/2186383/FINAL+Kestävän+kehityksen+yhteiskuntasitoumus+20+4+2016_eng-GBs_Final+-+kielenhuolto_EN_rev+%282%29.pdf/e057e638-507e-464c-a3dd-d3f0826f8950

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http://www.sd-network.eu/?k=country%20profiles&s=single%20country%20profile&country=Finland

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The Finland RDP 2014-20

Finland does not use forestry measures within itsRDP. The objectives for the agriculture sectorinclude diversification of agriculture-relatedbusinesses, promoting food chain organisation(including processing and marketing of agriculturalproducts), and improving animal welfare. The RDPmeasure supporting farming in areas with naturalconstraints accounts for €3.7 billion or 45% of theRDP planned public expenditure, which will betopped up by additional national financing worthalmost €2 billion. New types of enterprise will bepromoted in sparsely populated areas and morelocal, neighbourhood-oriented action will beencouraged.

The agri-environment-climate measure is allocated19% of the RDP planned public expenditure, withtwo main objectives:

• to maintain and develop valuable open, arablelandscape and natural meadows and pastures,used for food production, renewable energy, orsimply managed to maintain their opencharacter;

• to reduce the harmful environmental impacts ofagricultural activities on the soil, surface andground water and air by promoting the use ofenvironmentally-friendly practices.

The potential for efficient use of naturalresources to provide ecosystem services

A report published in 2015 by the Finnish Ministry ofEnvironment highlights that ecosystem services are anintegral part of several economic sectors relevant to greeneconomy in Finland. These include the forest sector,water, tourism, agriculture and food, game and fisheries,and renewable energy. Ecosystem services are alsoperceived as an integral part of growing green economysectors such as the textile industry, life and health stylebusinesses, cosmetics and pharmaceuticals .

The report points out that policy coherence is needed inorder to provide consistent regulation and guidance, andthat promoting the green economy requires extensivecooperation between different stakeholders and policysectors. It goes on to recommend that systematicecosystem services assessments should become anintegral part of ‘greener’ decision and policy makingwithin different economic sectors in the future.

Water quality is one example where a coherent cross-sectoral approach could provide economic benefits andimprove ecosystem services. Pollution from agriculturalfertilizer run-off and effluent from waste water treatmentworks is a significant problem in Finland, for both inlandwaters and the rivers draining into the Baltic. The diagrambelow illustrates how a coherent approach tosustainability across different economic sectors couldimprove water quality in Finland (the contribution ofmussel farming to water quality is that mussels removeexcess nitrogen and phosphates from the nutrient-richwater, and in doing so grow bigger).

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Programming for the Green Economy

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Co-operating for Sustainable Managementat a local level

Finnish agriculture is still based mainly on relatively smallfamily farms, with an average size of 36 hectares.Productivity is limited by the natural constraints of a shortgrowing season, long cold winters and poor soils, andaverage yields of arable farms are low by Europeanstandards.

Livestock have a limited pasturing season and the costs ofwinter housing are high with the need for heating andinsulation, plus storage of winter feed.

Fragmentation of agricultural land parcels by thenumerous lakes and forests causes extra costs and makesit difficult to increase farm size and profitability.

More than 81% of agricultural land is expected tocome under management contracts to improvewater management.

The RDP aims to raise awareness of environmentalissues as well as energy and resource efficiency, andto increase the share of renewable energy, and tomake more efficient and sustainable use of manure.The graphics illustrate the EU priorities, measuresand budget allocations of the Finland RDP 2014-20.

Table 1: Budget allocation per RDP Priority

Source: RDP Summaries, ENRD, 2016

Source: RDP Summaries, ENRD, 2016

Table 2: Budget allocation per RDP Measure

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Jäppinen, J.-P. & Heliölä, J. (eds.) 2015: Towards a sustainable and genuinely green economy. The value and social significance of ecosystem services in Finland (TEEB for Finland). Synthesis and roadmap. The Finnish Environment 1en/2015. The FinnishMinistry of Environment, Helsinki. 144 p. http://www.ieep.eu/assets/1670/Jappinen_Heliola_eds_2015_TEEB_Finland.pdf

Source: Jäppinen, J.-P. & Heliölä, J. (eds.), 2015.

Million EUR

Most family farms are already involved in forestry as wellas farming, and diversified farming is becoming morepopular. More than 30 per cent of farms have othergainful activities in addition to agriculture.

The green economy offers opportunities for farms tocreate new kinds of jobs and businesses in the rural areas.For example, supplying local customers with energyproduced from wood-fuel, and providing tourism servicesin rural areas close to cities or ski resorts. Cooperation istraditionally strong in the rural areas of Finland andnetworks among local entrepreneurs can be of mutualbenefit to different businesses, for example between afood producer and a tourism provider.

The diagram below illustrates how different types of ruralbusinesses and services might interact in a thriving ruralareas, but it shows also the difficulties posed byfragmented land parcels and ownerships (the white lines).

Graphics:KukeOy

Challenges when many landowners andstakeholders:Toolsandcarrots needed forcooperation!

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Programming for the Green Economy

Key Points

The natural constraints of climate and soils in thefar north of Europe shape the rural economy ofFinland, in which forestry plays a major part.Most rural businesses are small, employing lessthan 10 people.

Agricultural land accounts for only 7.6% of theterritory and is almost entirely under arablecrops, with livestock housed for much of theyear. Family farms typically have both agriculturalland and forest, and 30% have other sources ofincome too.

Nearly half the RDP budget (plus additionalnational financing) is used to support farming inareas affected by natural constraints; other RDPmeasures are targeted at local action in sparselypopulated rural areas.

Finland has a vision of how its society will be fullycommitted to sustainable development by 2050,and progress towards achieving the eightsustainable development objectives will bemeasured regularly.

There are opportunities to move towards asustainable green economy through coherent,cross-sectoral polices for the improvement ofecosystem services, for example in water quality

Cooperation is a long-standing tradition in ruralareas and there are opportunities for new linksbetween different types of rural businesseswithin a locality, but also considerablechallenges, not least that of fragmented farmholdings and land ownership.