The antecedents of Finnish accession to the EU and the agricultural issue

Finland had a two decade long history of integration with the European Union, the European Community and the European Economic Community. The prices of major agricultural products declined by 40 to 50 and even 60 per cent from 1990 to 1995. There was a need to introduce a new and relevant subsidy system. The total volume of subsidies provided for Finnish agriculture is in excess of the volume of the income actually realised in Finnish agriculture. For Finland, it is also a painful compromise that only 85 percent of the country’s total agricultural area was acknowledged as a less favoured area eligible for LFA support. In the new system, another type of support became available with the intention to help farmers in extraordinary difficulties; this is stipulated in Article 141 of the Accession Treaty. A further characteristic feature of the Finnish agricultural system of subsidies is that it embraces significant regional differences. Finnish accession brought the issue of agricultural efficiency into the limelight. Within the complex problem of efficiency, economies of scale play a central role. Finnish analyses openly admit that Finland is still behind the countries of the European Union in this respect