Background information

The costs in the agriculture sector are still high, and so are the pressures on the increase in input prices. The rise in interest rates increases costs, especially for farms that have recently made investments. At the same time, the decrease in the amount of harvest due to weather conditions and the lower producer prices for crop cultivation will lead to a lower level of profitability in 2023 than in 2022.

Thus, the State Council has confirmed the change in the use of the plan of the Agricultural Development Fund (Makera), which enables the granting of state guarantees that improve farmers' solvency in certain situations. Based on this, the Food Agency has made its own decision on the matter, which enables practical measures.

The enabling of state grants to farmers is laid out in the Act on State Guarantees for Farm Liquidity Loans 232/2019 (Laki valtiontakauksista maatilojen maksuvalmiuslainoille). The Agricultural Development Fund's task of drafting an annual plan is regulated in the Act on the Agricultural Development Fund 657/1966 (Laki maatilatalouden kehittämisrahastosta).

Content of measure

Farmers can apply to their local ELY center for a state guarantee for a bank loan, which improves the farm's solvency. A state guarantee can be granted for a maximum of five years for a loan granted to improve the solvency of agricultural production operations.

The amount of the loan subject to the state guarantee may not exceed €62,500. The state guarantee may not exceed 80 percent of the amount of the loan subject to the guarantee, i.e. a maximum of €50,000.

The condition for granting the guarantee is that the farm has temporary liquidity problems due to changes in the operating environment or exceptional weather conditions. The farm must also have the conditions for continuous profitable operations.

Use of measure

In 2022, there were just over 43,600 agricultural entrepreneurs in Finland, which gives a reference to the number of actors eligible for applying to the measure. However, the condition for being eligible for applying to the measure is that the farm has to have temporary liquidity problems due to changes in the operating environment or exceptional weather conditions. The farm must also have the conditions for continuous profitable operations in the future.

In 2023, the Agricultural Development Fund provided state guarantees to farmers in temporary financial difficulties for € 2.9 million. At the end of 2023, the total amount of loans guaranteed by the State to farmers in temporary financial difficulties amounted to € 16.8 million, which was over €10 million less than a year earlier (Ministry of Agriculture and Forestry of Finland, 2024).

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Sector specific set of companies	Does not apply to citizens

Actors and funding

Actors	Funding
National government Local / regional government	National funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Unknown	Unknown
Form	Not applicable	Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

• Unknown
• Main level of involvement: N/A

Involvement

The involvement of social partners in the adoption and implementation of the measure is not known.

Views and reactions

No available information.

Sectors and occupations

This case is not occupation-specific.

Sources

• 22 February 2019: Finlex (2019) 'Laki valtiontakauksista maatilojen maksuvalmiuslainoille' (finlex.fi)
• 29 December 2022: Finlex (2022) 'Laki maatilatalouden kehittämisrahastosta' (finlex.fi)
• 13 October 2023: Viljelijöille mahdollisuus hakea valtiontakausta poikkeuksellisten sääolojen takia (mmm.fi)
• 06 June 2024: Ministry of Agriculture and Forestry of Finland (2024) 'Maa- ja metsätalousministeriön kannanotto maatilatalouden kehittämisrahaston vuoden 2023 tilinpäätöksestä' (mmm.fi)