REPORT FROM THE COMMISSION TO THE COUNCIL 2006-2010 report on the implementation of the long-term national aid scheme for agriculture in the northern regions of Finland and Sweden pursuant to Commission Decisions 2009/3067 and 2010/6050
Date: 2012-06-29
Institutions: European Commission
Subjects: Finland, State aid, Sweden, aid to agriculture, control of State aid

EUROPEAN COMMISSION 

Brussels, 29.6.2012  
COM(2012) 358 final 

REPORT FROM THE COMMISSION TO THE COUNCIL 

2006-2010 report on the implementation of the long-term national aid scheme for 
agriculture in the northern regions of Finland and Sweden pursuant to Commission 
Decisions 2009/3067 and 2010/6050 

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REPORT FROM THE COMMISSION TO THE COUNCIL 

2006-2010 report on the implementation of the long-term national aid scheme for 
agriculture in the northern regions of Finland and Sweden pursuant to Commission 
Decisions 2009/3067 and 2010/6050 

TABLE OF CONTENTS 

INTRODUCTION........................................................................................................ 3 

GENERAL PRINCIPLES OF THE NORDIC AID .................................................... 3 

Objectives of the Aid ................................................................................................... 3 

Commission authorisations .......................................................................................... 3 

Regions covered by aid ................................................................................................ 4 

Relation with the production........................................................................................ 4 

RECENT EVOLUTIONS OF THE NORDIC AID SCHEME ................................... 5 

Evaluation of the Aid scheme ...................................................................................... 5 

Reform of the Aid schemes.......................................................................................... 5 

NORDIC AID IN FINLAND 2006-2010 .................................................................... 6 

Authorisations granted ................................................................................................. 6 

Aid disbursed ............................................................................................................... 7 

Production volumes in the Nordic aid area .................................................................. 7 

Development of the agricultural economy in the Nordic aid region.......................... 10 

NORDIC AID IN SWEDEN 2006-2010 ................................................................... 11 

Authorisations granted ............................................................................................... 11 

Aid disbursed ............................................................................................................. 11 

Production volumes in the Aid area ........................................................................... 12 

Development of the agricultural economy in the Aid region..................................... 13 

CONCLUSIONS........................................................................................................ 13 

Finland........................................................................................................................ 13 

Sweden ....................................................................................................................... 14 

1. 

2. 

2.1. 

2.2. 

2.3. 

2.4. 

3. 

3.1. 

3.2. 

4. 

4.1. 

4.2. 

4.3. 

4.4. 

5. 

5.1. 

5.2. 

5.3. 

5.4. 

6. 

6.1. 

6.2. 

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1. 

INTRODUCTION 

Pursuant  to  Article  142  of  the  Act  of  Accession  to  the  European  Union  of  Austria,  Finland 
and Sweden1, the Commission has authorised Finland and Sweden to grant long-term national 
aid to agriculture in the northern regions, in order to maintain agricultural activity. This aid is 
referred to as the Nordic aid ("the Aid"). 

The present report is submitted to the Council in compliance with the reporting requirement 
of  Article  143  of  the  Act  of  Accession,  where  it  is  laid  down  that  the  Commission  shall 
submit every fifth year a report on the authorisations granted and the results of the aid granted 
under such authorisations. Previous reports were made in 1996, 20022, and 20073.  

2. 

GENERAL PRINCIPLES OF THE NORDIC AID 

2.1. 

Objectives of the Aid 

The  Aid  is  granted  in  particular  to  maintain  traditional  primary  production  and  processing 
naturally suited to the climatic conditions of the regions concerned, to improve structures for 
the production, marketing and processing of agricultural products, to facilitate the disposal of 
such products, and to ensure that the environment is protected and the countryside preserved. 

2.2. 

Commission authorisations 

The  Aid  is  authorised  by  separate  Commission  Decisions  for  Finland  and  Sweden 
respectively.  

The basic conditions are fixed in Article 142 of the Act of Accession; the total amount of the 
aid granted should be sufficient to maintain agricultural activity in the northern areas but may 
not  lead  to  overall  support  exceeding  the  level  of  support  during  a  pre-accession  reference 
period, defined in the authorisations. Also, aid may not be linked to future production or bring 
about an increase in production, in relation to reference levels.  

The first Decision concerning Finland was adopted in 1995 (95/196/EC4), recast by Decision 
2002/404/EC5, and by Decision C(2009)3067. The maximum payment authorised is currently 
EUR 358 million/year. 

The  first  Decision  concerning  Sweden  was  adopted  in  1996  (96/228/EC6)  and  recast  by 
Decision  C(2010)6050.  The  maximum  annual  payment  authorised  is  SEK  318.67  million 
(approx. EUR 35.41 million: the exchange rate used in this report is 9.0 SEK/EUR). 

1 
2 
3 
4 
5 
6 

OJ C 241 of 29.08.1994 
Finland COM(2002) 102 of 25.02.2002, Sweden COM(2002) 105 of 01.03.2002 
Finland COM(2007) 459 of 31.7.2007, Sweden COM(2007) 416 of 31.7.2007 
OJ L 126, 9.6.1995, p. 35 
OJ L 139, 29.5.2002, p.38 
OJ L 76, 26.3.1996, p.29 

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2.3. 

Regions covered by aid 

The  regions  covered  by  the  Aid  scheme  are  defined  in  the  respective  Decisions  and  are 
situated north of the 62nd parallel and some adjacent areas south of the parallel affected by 
comparable  climatic  conditions  rendering  agricultural  activity  particularly  difficult.  The 
factors taken into consideration when determining the areas are low population density (max 
10  inhabitants/km2),  Utilised  Agricultural  Area  (UAA)  as  a  proportion  of  the  total  area 
(<10%), agricultural area used for the cultivation of crops intended for human consumption as 
a  proportion  of  UAA  (≤  20%),  and  municipalities  surrounded  by  others  within  before 
mentioned areas (even where they do not satisfy the same requirements).  

In Finland, the current Aid area covers 1 417 140 hectares (ha) of UAA (55.5% of total UAA) 
and in Sweden 335 676 ha of UAA (11 % of total UAA7). 

Figure 1: Finnish (C1-C4) and Swedish (1-3) support areas. 

2.4. 

Relation with the production 

The  Aid  is  limited  to  specific  agricultural  sectors,  as  defined  for  each  Member  State  in  the 
respective Decision. 

The Aid is granted on the basis of production units, either livestock units (LU) or ha, with the 
exception of support to and transport of milk, where the quantities delivered and transported 
are supported. The Finnish aid to reindeer is on a per animal basis. 

As  stated  above,  aid  may  not  be  linked  to  future  production  or  bring  about  an  increase  in 
production in relation to a reference period. Reference periods are stipulated in the respective 
Decision  for  each  Member  State  per  sector.  The  reference  quantity  for  milk  production  in 
Finland  has  several  times  been  aligned  with  CAP  related  developments  in  the  milk  sector. 
However, the 2009-2010 review  of the Finnish and  Swedish  Aid schemes  removed the  link 
between individual CAP milk quotas and the aid payments. Instead, it introduced a restriction 

7 

Due to changes in the definition of UAA this figure has decreased from previous report.  

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not to pay such aid for the quantity of milk in the region subject to surplus levy under the milk 
quota system.  

3. 

RECENT EVOLUTIONS OF THE NORDIC AID SCHEME 

3.1. 

Evaluation of the Aid scheme 

After more than 10 years of application, the Commission launched an evaluation of the Aid 
scheme, which was finalised in 20078. The evaluation analysed to what extent the objectives 
of the schemes had been met, potential side effects, if the instruments were still adequate and 
justified, and the effectiveness, efficiency and relevance of the Aid.  

The results of the evaluation suggest that the Aid schemes:  

• 

• 

• 

have contributed to maintaining the agricultural activities, production and land use in 
the regions concerned;  

are  still  necessary  in  order  to  meet  the  objectives  of  Article  142  of  maintaining 
agricultural activity in the regions concerned and therefore remain relevant;  

could be reformed (simplified).  

Based  on  the  recommendations  of  the  evaluation  and  the  developments  of  production,  both 
Member States proposed to review their respective schemes. 

3.2. 

Reform of the Aid schemes 

The review of the Decisions aimed at simplifying the schemes, and aligning the authorisations 
with the objectives of the Act of Accession.  

As  regards  simplification,  the  recasts  finalised  in  2009  and  2010  regrouped  different 
production  sectors  and  specified  the  maximum  average  aid  rates  for  the  entire  Finnish  and 
Swedish  aid  areas,  respectively.  Previously,  the  Decisions  differentiated  the  aid  between 
regions  and  per  production  unit.  In  this  context,  the  national  authorities  were  mandated  to 
identify the specific conditions and detailed criteria, based on the degree of natural handicap, 
for differentiating the aid amounts. The objective criteria relating to the severity of the natural 
handicaps have been communicated to the Commission by both countries. 

In relation to aligning the authorisations with the objectives set in the Act of Accession, the 
review  of  production  and  payment  authorisations  revealed  that  in  the  Finnish  Aid  area, 
production had in general been maintained, even though a certain shift southwards within the 
area  had  occurred.  In  some  sectors,  particularly  pigs  and  poultry,  production  had  however 
increased substantially, partly due to the Aid. This, together with developments in the other 
payments to the Aid area led to a reduction of the maximum annual payment authorisation for 
Finland from EUR 448.59 million to 358 million. Also, aid to the pig and poultry sectors was 
decoupled from the type of production.  

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http://ec.europa.eu/agriculture/eval/reports/nordic/index_en.htm 

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The  review  further  revealed  that  in  the  Swedish  Aid  area,  production  levels  had  been 
decreasing - especially in the milk sector, which is the main sector supported. This indicated 
failure to achieve the goals of Article 142 of maintaining agricultural production. Therefore, 
based  on  the  proposal  by  the  Swedish  authorities,  the  revision  of  the  Decision  finalised  in 
2010 allows for concentrating the aid to the remaining production to stop this decline. 

4. 

NORDIC AID IN FINLAND 2006-2010 

4.1. 

Authorisations granted 

At the beginning of the five-year period, Decision C(2002)404 authorised Finland to annually 
pay  total  aid  of  EUR  448.59  million.  The  Decision  specified  aid  and  production  factors 
permitted  per  sub-region  (not  shown).  Decision  C(2009)3067  (amended  by  Decision 
C(2009)9122)  applied  from  1  January  2009  and  authorised  aid  as  shown  in  Table  1.  The 
provision concerning milk applies from 1 April 2009 and its provisions concerning ruminants, 
horticulture, crop production and other aid applies from 1 January 2010. 

Table 1: Annual aid authorised according to Decision C2009/3067/EC 

1. MILK 
2. RUMINANTS 
Bovines 
Ewes, she-goats 
Horses 
3. PIGS AND POULTRY10 
4. HORTICULTURE 
Greenhouses 
Storage of horticultural products 
5. CROP PRODUCTION  
General hectare-based aid 
Aid for certain crops11 
Aid for young farmers 
6. OTHER AID  
Reindeer 
Compensation  for  damages  caused 
by carnivores to reindeer herding12 
Aid for transport of milk and meat 
Safeguarding services for livestock  
Storage of wild berries, mushrooms 
Other aid13 
Total  

Max average 
aid allowed / 
unit  
10.9 

412 
533 
277 
266 

11.3 
18.5 

37 
145 
36 

36 

Unit  

cents/kg 
€/LU 

€/LU 

€/m2 
€/m3 
€/ha 

Max aid 
allowed 
(mEUR)  
193.7 
73.7 

Max number of 
eligible 
production factors 
1 776 765 t9  

179 160 LU  

202.9 ha 

881 825 ha 
62 475 ha 

37.0 
25.4 

58.3 

14.9 

€/animal 

171 100 animals 

0.10–0.42 

€/kg 

358 

9 
10 
11 

12 
13 

In marketing year 
Decoupled aid. Reference quantity ≤ 139 200 LU's 
Cereals (except barley, oats, mixed cereals), oilseed, other oil crops, protein, fibre crops. Sugar beets, 
starch potatoes, apples in regions C1, C2, C2 north. Field vegetables in regions C1–C4. 
Maximum Aid allowed 5 mEUR  
Skolts, natural livelihoods, reindeer husbandry 

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4.2. 

Aid disbursed  

Nordic aid 

During  the  years  2006-2009  the  total  annual  Aid  paid  out  was  approximately  EUR  326 
million (of EUR 448.59 million authorised), while it increased to EUR 338 million in 2010 
(of EUR 358 million authorised) (Table 2).  

Table 2: Nordic aid disbursed in Finland (mEUR) 

Sector supported 
Milk 
Ruminants 
Pig, poultry 
Horticulture 
Crop production 
Other aid 
Total 

2006 
159 
65 
36 
21 
42 
3.5 
326.7 

2007 
159 
66 
35 
20 
43 
3.7 
326.6 

2008 
159 
66 
35 
21 
42 
4 
326.5 

2009 
159 
68 
33 
20 
41 
4.2 
325.8 

2010 
161 
71 
32 
22 
42 
11 
338.1 

In conclusion, the annual Nordic aid granted in Finland respected the maximum levels set in 
the Decisions. It should be noted, that for those sectors where total production exceeded the 
authorised  number  of  eligible  production  factors,  a  pro-rata  reduction  of  aid  per  unit  of 
production  factor  was  applied  in  order  to  respect  the  financial  ceiling  authorised  by  the 
Decision.  

Total support in the Nordic aid area 

Agriculture in the support areas in the Aid scheme benefits also from instruments financed by 
the  EU,  notably  the  two  pillars  under  the  CAP.  Of  the  second  pillar  measures,  support  for 
less-favoured areas (LFA) and agri-environmental (AE) measures are of particular importance 
for  the  agricultural  sector  in  the  support  areas.  Decision  C  2000/40514  fixed  the  maximum 
ceiling  of  total  annual  support  in  the  Aid  area  at  EUR  1118.9  million  (1993  level).  Table  3 
shows that aid disbursed in the Aid area in the years 2006-2010 according to the legal basis 
used, respected the maximum ceiling set in the Decision.  

Table 3: Summary of the total annual aid disbursed in Finland, including EU aid (mEUR) 

Type of aid disbursed 
Direct aid, fully EU financed  
LFA, including national supplements 
AE- support 
Nordic aid15 
Total 

2006 
350.3 
308.7 
164.9 
326.7 
1 150.616 

2007 
278.9 
309.1 
153.5 
326.6 
1 068.1 

2008 
281.3 
309.5 
162.7 
326.5 
1 080.6 

2009 
283.8 
308.9 
164.6 
325.8 
1 083.1 

2010 
278.5 
308.1 
167.1 
338.1 
1 092.6 

4.3. 

Production volumes in the Nordic aid area 

Milk sector 

Almost 80% of the Finnish milk is produced in the Aid area. The share has been quite stable 
during the five years, with a slight overall increase towards the end of the period. However, 
the production is concentrated in the C2 area.  

14 
15 
16 

OJ L 154, 27.6.2000, p.23 
Reference level 448.59 mEUR until 2008, 358 mEUR from January 1, 2009 
During the 2006 calendar year, direct aid was paid for years 2005 and 2006  

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During the five-year period, the milk production was highest in the 2006/2007 and lowest in 
the 2008/2009 marketing year (1 813 vs. 1 756 thousand tonnes). Production exceeded the set 
reference level in three marketing years; in 2006/2007, 2009/2010 and 2010/2011. The excess 
in 2010/2011 was in the order of 1.5%.  

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1850

1800

1750

1700

1650

1600

Reference level

Production

2006

2007

2008

2009

2010

Year

Figure 2: Development of milk production during the 2006/2007-2010/2011 marketing years in the Finnish 
Nordic aid area 

Ruminants 

The revised Decision of 2009 authorising the aid grouped together the production factors for 
bovines,  ewes,  she-goats,  and  horses.  Within  this  group,  bovine  production  showed  an 
increasing trend, while production of ewes, she-goats, and horses decreased slightly.  

Beef production in the Aid region varied during the five-year period. The 2010 level is about 
2% lower than the 2006 level, whereas it fell by 8.8% in the rest of Finland. The number of 
suckler cows increased everywhere in Finland, but the greatest growth has been in region C 
with  55%.  Other  ruminants  have  remained  fairly  stable  during  the  2006-2010  period.  The 
overall  ruminant  production  was  173  774  LU  in  2010,  i.e.  still  3%  below  the  authorised 
maximum level of supported production.  

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U
L

200

180

160

140

2006

2007

2008

Year

2009

2010

Reference level

Livestock (LU)

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Figure 3: Development of ruminant production in 2006-2010 in the Finnish Nordic Aid area 

Pigs and poultry 

Pig  and  poultry  production  had  increased  substantially  already  before  this  five-year  period 
and  exceeded  the  reference  level  by  50-70%  during  several  years.  Pork  meat  production  is 
concentrated  in  cereal  producing  areas  in  the  most  southern  Aid  sub-regions.  In  2006  pork 
production was 90.9 million kg and continued to increase in subsequent years reaching 93.6 
million kg in 2010. Also poultry production is concentrated in the most southern Aid areas. 
The production has grown almost constantly, from 34.6 to 40.4 million kg from 2006- 2010. 
The aid to this group was decoupled from production as of 2009, and the aid level was frozen 
at  that  of  2007.  Additionally,  the  Decision  provides  for  an  upper  limit  of  production  in  the 
farms receiving decoupled aid fixed at the 2007 level (139 200 LU). Production in 2010 was 
135 066 LU, 97% of the fixed 2007 level.  

Horticulture 

Horticulture  production  is  a  small  niche  production  in  Finland,  with  a  limited  number  of 
greenhouse enterprises. It accounts for about 6% of the Aid and 72% of the production takes 
place in region C1. The annual horticulture production area varied between 207 and 211 ha in 
the five year period, slightly exceeding the reference level of 203 ha (by max. 8 ha or 4% of 
the reference level).  

Crop production 

Nordic aid for crop production comprises "general hectare based aid", "young farmers' aid", 
and "aid for certain crops", as defined in the Decision. As regards "general hectare based aid", 
the  UAA  supported  in  the  Aid  region  has  remained  very  stable  during  this  five-year  period 
(630 000-650 000 ha), although the reduction in UAA compared with pre-accession reference 
level  has  been  substantial  (30%).  For  "young  farmers'  aid"  there  is  no  maximum  level  of 
eligible  production  factors  set  in  the  Decision  and  no  comparison  can  be  made.  As  regards 
"aid to certain crops", the area covered exceeded the maximum number of eligible production 
factors in 2010 by 60%. This production peak of "certain crops" was due to a change in the 
market  situation,  which  led  to  increased  interest  for  oil  seed  production  in  2010.  Wheat 
accounts for 35-45% of the production area and remained stable during this five-year period.  

Other aid 

Reindeer production remained fairly stable, varying from 151 589 to 154 971 animals during 
the five-year period which is 10% below the maximum number of eligible production factors 
set in the Decision. The remaining part of the other aids is not directly linked to production. 

Conclusions related to production volumes 

In conclusion, total production of the supported sectors increased in the Aid area during this 
five-year  period,  and  it  exceeded  the  maximum  number  of  eligible  production  factors  for 
milk,  horticulture  and  "certain  crops".  This  production  overrun  was  minor  for  milk  and 
horticulture  (1-4%  over  the  period),  but  substantial  for  "certain  crops"  in  2010  (60%).  The 
reported  production  increase  can  not  be  allocated  to  the  Aid  only,  as  the  aid  levels  per  unit 
were  reduced  pro-rata  in  those  sectors  where  the  maximum  number  of  eligible  production 
factors was exceeded. 

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4.4. 

Development of the agricultural economy in the Nordic aid region 

There were 62 300 farms in Finland in 2010 of which 58% in the Aid area; a drop of 9% from 
2006 both nationwide and in the Aid area. The UAA remained the same, while the number of 
ha/farm  increased,  indicating  a  structural  adjustment.  The  lowest  farm  size  is  in  the 
northernmost  Aid  region.  Preservation  of  production  has  been  achieved  although  it  appears 
more  challenging  in  the  northernmost  areas,  despite  the  higher  aid  levels  both  for  livestock 
and plant production.  

The  Aid  is  important  for  the  generation  of  farm  income  in  the  region;  nearly  two  thirds  of 
farm  holders'  income  derives  from  it.  The  amounts  of  aid/farm  have  been  increasing, 
particularly for livestock production. The reason for this is above all structural development. 
The amount of livestock production grew in the north; it accounted for more than 80% of the 
agricultural sales revenue. 

The  ratio  Nordic  aid/farm  net  value  added  (FNVA)  varied  between  0.41  and  0.52  during 
2006-2010.  The  FNVA  per  annual  work  unit  (FNVA/AWU)  in  the  region  increased  with 
almost 15% from 2006 to 2007, but fell again after 2008 to reach in 2010 a level 3% higher 
than at the start of the period.  

In certain parts of the Aid region, the depopulation has been >4% during the review period, 
and 76% of municipalities has experienced a fall in population compared to 44% in southern 
Finland.  The  proportion  of  jobs  in  agriculture  in  the  north  is  more  than  3  times  that  of  the 
south,  and  has  decreased  less.  Overall  there  has  been  a  positive  change  in  employment  but 
jobs are created in the main towns and not in the more rural areas. 

Continuation  of agricultural  production in the Aid area has maintained many environmental 
services  and  the  open  agricultural  landscape,  which  is  a  scarcity  in  the  region.  The  farmers 
estimate  that  making  their  activities  more  environmentally-friendly  has  been  the  biggest 
change in their activities in recent years. There is a slightly greater emphasis in the Nordic aid 
region than in the rest of Finland on measures affecting pesticides and airborne emissions; in 
the northernmost region, diversity and preservation of the landscape are strongly emphasised. 

5. 

NORDIC AID IN SWEDEN 2006-2010 

5.1. 

Authorisations granted 

In  the  beginning  of  the  five-year  period,  Decision  96/228/EC  (as  amended)  authorised 
Sweden to pay SEK 318.67 million/year (EUR 35.41 million). The Decision also specified aid 
and eligible production factors permitted per sub-region (not shown). From the 1 July 2010, 
Decision C(2010)6050 authorises Sweden to pay aid as shown in Table 4 below. 

Table 4: Aid authorised/year in accordance with Decision C(2010)6050 

1. Milk sector 
–  Cows milk 
–  Goats19 

Max average 
aid/unit17 

Unit 

0.73 
500 

SEK/kg 
SEK/head 

National aid18  
mSEK /year  
295.67 

Max eligible 
production factors 
450 000 t 

17 
18 

Aid/unit may be differentiated by region within the limits of the maximum average 
Max aid allowed: 318.67 mSEK 

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–  Transport aid cows 

milk 

2. Pigs, poultry20  
3. Soft fruit, vegetables  

5.2. 

Aid disbursed 

Nordic aid 

0.039 

1 350 
2 800 

SEK/kg 

SEK/LU 
SEK/ha 

20.97  
2.03  

16 532 LU 
750 ha 

The  total  annual  amounts  paid  as  Aid  varied  between  SEK  263.29  -  289.89  million  (EUR 
29.25-32.21  million)  during  the  period  (Table  5).  The  aid  disbursed  had  reached  its  lowest 
level in 2009, but increased in 2010 after the revision of the Aid scheme. 

Table 5: Nordic aid by sector, mSEK 

Sector supported 
Milk 
Pigs, poultry 
Soft fruit, vegetables 
Total 

2006 
274.22 
14.51 
1.16 
289.89 

2007 
257.46 
14.09 
1.12 
272.67 

2008 
249.66 
12.75 
1.14 
263.55 

2009 
248.27 
13.97 
1.05 
263.29 

2010 
264.36 
14.70 
1.04 
280.10 

In conclusion, the annual Aid granted in Sweden always respected the maximum aid allowed 
by the Decisions. 

Total support in the Nordic aid area 

Agriculture in the support areas in the Aid scheme also benefits from instruments financed by 
the  EU,  notably  the  two  pillars  under  the  CAP  (Table  6).  Of  the  second  pillar  measures, 
support for less-favoured areas (LFA) and agri-environmental (AE) measures are of particular 
importance.  A  ceiling  of  total  support  to  the  Aid  region  is  not  fixed  in  the  Decision 
C(2010)6050. Follow-up of the level of the EU aid is carried out ex post since 2003.  

Table 6: Summary of aid disbursed in Sweden, including Community aid, mSEK  

Type of aid 
Compensatory payment (LFA) 
Main AE support (open and varied agricultural 
landscape/ley farming) 
Nordic aid21 
Total 

2006 
299 
270 

290 
860 

2007 
314 
282 

273 
869 

2008 
309 
278 

264 
850 

2009 
302 
276 

263 
841 

2010 
313 
298 

280 
891 

The total combined support varies from year to year but does not follow a consistent trend and 
has remained within the same range since 1997. 

5.3. 

Production volumes in the Aid area 

Milk sector 

The  decline  in  milk  production  in  the  Aid  region  during  the  period  was  11  %  (Figure  4), 
compared to 8% for the country as a whole. The steepest decline was in the most southern Aid 
area, with 20%. The production is still decreasing, and it is too early to draw any conclusion 
whether the revised Aid authorisation will have an effect. 

19 
20 
21 

Goats for milk production (~ 800 kg milk/goat/year) 
1 laying hen = 0.01, sow = 0.33, 1 slaughter pig = 0.10 LU 
Reference level: 318.67 mSEK  

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The  data  collected  on  Aid  disbursed  to  transport  milk  from  the  farms  to  the  first  collection 
point is not accurate enough to be reported. 

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s
e
n
n
o
T

480

450

420

390

360

330

Reference level

Production

2006

2007

2009

2010

2008

Year

Figure 4: Milk production (including goat milk) with support during 2006-2010 in the Swedish Aid area. 
The reference level is the maximum number of eligible production factors set in Decision C(2010)6050 

Pig and poultry 

The  production  remains  fairly  stable  but  much  below  the  maximum  number  of  eligible 
production  factors  of  16  532  LU,  and  also  lower  than  the  previous  5-year  period  where  the 
production  was  at  around  13  500  LU.  The  number  of  LU  receiving  support  in  the  pig  and 
poultry sector was close to 11 500, or around 70% of the maximum.  

Soft fruit and vegetables 

The supported number of hectares of soft fruit and vegetables production decreased from 414 
to 376 ha during the period. The production has fluctuated around these levels during the last 
10 years, and is at only around half of the maximum number of eligible production factors.  

Conclusions related to production volumes 

As  regards  milk,  the  production  volumes  have  been  decreasing  during  the  five-year  period. 
The  other  two  sectors  remain  fairly  stable  even  though  the  production  varies  from  year  to 
year. All sectors are far below the maximum number of eligible production factors. 

5.4. 

Development of the agricultural economy in the Aid region 

The  Swedish  Aid  area  has  low  population  density,  limitations  in  the  potential  for  economic 
developments  and  poor  conditions  for  agriculture.  The  farm  structure  is  characterized  by 
smaller, more scattered and irregular fields than the average situation in Sweden. This make 
costs higher, also for transport within farms due to the distances between fields. 

The total agricultural production output decreased with 10% during the five-year period. The 
key agricultural product in the area is milk and the number of producers declined from 1 523 
to 1 056; it more than halved since 2001. The Aid area's share of milk producers in Sweden 
has been around 19% while the share of production was 14% which is reflected in the average 

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number of cows per farm; 45.2 vs. 62.4 in the country as a whole in 2009. The farm income 
development of the milk farmers shows important decreases. 

Slaughter  pig  production  declined  during  the  period  to  67  producers  in  2010,  only  a  few 
remaining in support area 1. The number of farms receiving support for sows decreased from 
74 to 60, although the number of sows increased with 20%, indicating a structural adjustment. 

In the Aid area, which is dominated by forests, the land in agricultural production contributes 
to keep the landscape open which favours biodiversity and the scenery. However, the area of 
land used for ley farming decreased 12% during the five year period; pastures decreased by 
40%.  The  agricultural  practices  in  the  support  areas  are  characterised  by  less  intensive 
production  as  the  main  cultivation  is  grassland  and  pastures.  These  normally  rely  on  a  low 
level  use  of  pesticides  and  fertilisers.  Therefore  the  environmental  impact  is  less  than  from 
agricultural activities in other parts of the country.  

During  the  period  2000-2009  the  support  region's  population  development  was  weaker  than 
the rest of the county's, with a 5.5% decrease in the most rural areas. The number of people 
employed in agriculture decreased with 15.2% in the support area from 2000-2008, while the 
employment increased in the forestry sector.  

6. 

CONCLUSIONS  

This report gives an account of the Nordic aid authorisations granted to Finland and Sweden 
in  the  period  2006-2010  and  the  results  achieved.  The  report  was  compiled  on  the  basis  of 
data supplied by the Member State authorities in compliance with Article 143(2) of the Act of 
Accession.  

6.1. 

Finland 

As regards the implementation of the Finnish Nordic aid scheme, the Commission notes that: 

1. 

2. 

3. 

Compliance  with  the  maximum  aid  allowed  by  the  Commission  authorisations:  the 
total  amounts  of  Aid  paid  out,  and  total  support  in  the  Nordic  aid  area  during  the 
period  2006-2010,  respected  the  maximum  allowable  aid  authorised  and  the 
reference  levels  defined  in  the  respective  Commission  Decisions  C(2009)3067  and 
2002/404/EC.  

Conformity  with  the  maximum  number  of  eligible  production  factors:  total 
production  in  the  Aid  area  exceeded  the  maximum  number  of  eligible  production 
factors for milk, horticulture and "certain crops". To avoid exceeding the respective 
total  amounts  of  authorised  payments,  Finland  applied  a  pro-rata  reduction  of  the 
payment per unit of production factor. While this system ensured that the obligation 
of  the  country  concerning  the  maximum  total  amounts  of  paid-out  aid  was  always 
respected, it did not prevent extending the aid, even though at a reduced level, to all 
production. 

Achievement  of  the  objectives  of  the  aid  scheme:  generally  speaking,  Nordic  aid  in 
Finland  has  contributed  to  maintaining  production  levels  in  the  area.  However,  as 
total  production  increased  in  some  of  the  supported  sectors,  and  a  shift  southward 
within  the  Nordic  aid  area  was  observed,  implementation  of  the  scheme  and  the 
criteria applied to differentiate the Aid should be closely monitored. 

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6.2. 

Sweden 

As regards the implementation of the Swedish Nordic aid scheme, the Commission notes that: 

1. 

2. 

3. 

Compliance  with  the  maximum  aid  allowed  by  the  Commission  authorisations:  the 
total amounts of Nordic aid paid out during the period 2006-2010 have respected the 
ceiling set for the maximum allowable aid authorised in the Commission Decisions 
96/228/EC and C(2010)6050. 

Conformity with the maximum number of eligible production factors: the maximum 
number  of  eligible  production  factors  receiving  aid  was  generally  respected  in  all 
sectors receiving Nordic aid.  

Achievement of the objectives of the aid scheme: the Aid disbursed in Sweden has not 
maintained production levels. The revised Decision C(2010)6050 could contribute to 
reversing this trend, but it is too early to conclude on the effects. 

For  both  countries,  the  continuation  of  agricultural  production  contributes  to  maintain  an 
open, well-managed agricultural landscape in the forest dominated Nordic aid area. Keeping 
the  landscape  open  is  positive  for  biodiversity  and  the  general  impression  of  the  landscape. 
On  the  basis  of  the  information  provided  by  the  national  authorities,  the  Commission 
considers  that  in  general  the  authorities  have  applied  Decision  2002/404/EC  and  Decision 
C(2009)3067,  concerning  Finland,  and  Decision  96/228/EC  and  C(2010)6050,  concerning 
Sweden, on aid to northern regions in a satisfactory manner. 

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