National agricultural aid

National agricultural aid refers to fully state-funded forms of support. In 2015, a total of €325.4 million was allocated to this support. The purpose of national aid to agriculture and horticulture is to complement EU support schemes (EU income support, natural constraint payments, environment payments and animal welfare payments) and to help safeguard the operating conditions of agriculture and horticulture and the profitability of production and to maintain the vitality of rural areas.

The EU’s common agricultural policy (CAP) poses certain limitations on the use of national funds for supporting agriculture. As a rule, such support requires approval from the EU.

The most important form of national aid is Nordic aid. The key objective of Nordic aid is to maintain production in the region, to develop the production structures, ensure products’ access to market and to support environmental protection and the preservation of the countryside. The aid is paid on the basis of Article 142 of Finland’s Act of Accession to the EU and the Commission decisions adopted pursuant to the Article. Nordic aid is paid in the support area C covering Central and Northern Finland. In 2015, a total of €290 is allocated to Nordic aid, constituting almost 90% of total national aid.

In milk production, Nordic aid is paid per litre of milk. For beef cattle, ewes, she-goats and horses, the aid is paid based on the number of animals. In the pig and poultry sectors, the aid is decoupled from production. Nordic aid for crop production comprises northern hectare-based aid, general hectare-based aid and young farmers’ aid. The aid is also available to crops grown in greenhouses, based on the area of greenhouses. Nordic aid also comprises certain smaller forms of support (such as aid for reindeer husbandry, aid for transports and aid for the storage of horticultural products).

In the support area AB in Southern Finland, farmers receive national support for farmers in Southern Finland. The aid was previously known as aid under Article 141 of the Act of Accession. The aid is based on Article 214a of the Regulation (EU) No 1308/2013 of the European Parliament and of the Council, pursuant to which the Commission has issued a separate decision regulating the aid in more detail. In 2015, the total amount of the aid is approximately €29 million, constituting almost 10% of the total amount of national aid. The aid is granted as decoupled aid for pig and poultry production and as aid for greenhouse cultivation.

For milk production, beef cattle, sheep farming and goat farming in Southern Finland, aid is granted in the form of EU’s direct payments. In that sense, the aid system is different in the southern and northern parts of the country, even though the amount of aid per unit granted for milk production, beef cattle, ewes and she-goats is roughly the same in the southern parts of the Nordic aid area and the AB support area. 

Of other forms of national aid, national aid for sugar beet is the most significant. The aid has constituted approximately €5 million per year. The aid is granted under Article 214 of Regulation (EU) No 1308/2013 of the European Parliament and of the Council. Other forms of national aid include aid for apiculture and aid for the transport of sugar beet. In both cases, payments amount to less than one million euros per year.