www.helsinki.fi/ruralia

Regional economic

impacts of food

production and local food

purchases by public

kitchens in FinlandUniversity of Helsinki, Ruralia Institute

Urszula Zimoch

Outi Hakala

Susanna Määttä

10.6.2014Ruralia-instituutti 1

www.helsinki.fi/ruralia

Independent institute of University of Helsinki, Finland

An expert on rural and regional research and

development, with main mission is to foster business and

livelihood of rural areas

The expertise:

natural resources

rural areas and society

rural entrepreneurship

regional CGE modelling and evaluation of regional

economic effects of projects and policy

Our staff is about 70 researchers and developers placed

in two rural towns (Mikkeli and Seinäjoki)

10.6.2014 2Ruralia-instituutti

University of Helsinki, Ruralia

Institute

10.6.2014

RegFin team

Hannu Törmä, prof.Seinäjoki

Jouko Kinnunen (ÅSUB),D.Sc., Maarianhamina

Urszula Zimoch,M.Sc., Seinäjoki

Preparation and

implementation

of EU and other

international

projects

Mainly

domestic

projects

Outi Hakala, M.Sc. Seinäjoki & Helsinki

Model

development

and

programming

Susanna Määttä, M.Sc.Seinäjoki

Juha Laukkonen, M.Sc.Seinäjoki

www.helsinki.fi/ruralia

Past: Since 2012, 5 different reports have been

published on regional economic impacts of food

production and purchasing locally produced food by

public kitchens

Present: Current study estimates the economic

effects of local food consumption in the whole

Finland

Future: Proposals for estimating the regional

economic impacts of organic food, participation in

Horizon2020 proposals

10.6.2014 4Ruralia-instituutti

RegFin team and sustainable

food sector

www.helsinki.fi/ruralia

South-West Finland: primary production – impact on the region’s

GDP by €843 million and employment by 9.159 person-years;

the food industry: €1.451 million and 10.832 person-years;

the foodstuffs trade have an impact of €3.745 million on GDP and of

21.924 person-years on employment.

Central Finland: primary production – impact on the region’s GDP

by €261 million and employment by 3.884 person-years;

the food industry: €438 million and 4.010 person-years;

the foodstuffs trade: €1.991 million and 7.145 person-years

Häme region: primary production – impact on the region’s GDP by

€223 million and employment by 3.044 person-years (Kanta-Häme) /

€143 million and 2.136 person-years (Päijät-Häme);

the food industry: €667 million and 5.210 person-years (Kanta-

Häme) / €825 million and 4.877 person-years (Päijät-Häme);

the foodstuff trade: €1.235 million and 7.145 person-years (Kanta-

Häme) and €1.321 million and 6.041 person-years (Päijät-Häme)

10.6.2014 5Ruralia-instituutt

The regional economic impact

of the food production chain

www.helsinki.fi/ruralia

The regional economic impact of

the food production – Impacts in

future (year 2020)

10.6.2014 6Ruralia-instituutti

The questionnaire (targeted to all businesses in the food industry)

indicated that businesses in the food industry are optimistic about the

future.

These calculations shows that if businesses’ estimates come true food

industry will have even bigger impact on regions’ GDP and employment in

the future than it is now.

Avarage

growth

estimate

Impact on

regional GDP (over current figures)

Impact on

employment (over current figures)

South-West Finland 35 % €344 million 2899 person-years

Central Finland 20 % €65 million 651 person-years

Kanta-Häme Region 20 % €94 million 961 person-years

Päijät-Häme Region 25 % €186 million 1240 person-years

www.helsinki.fi/ruralia 10.6.2014 7Ruralia-instituutti

Regional economic impacts of

purchasing locally produced food

by public kitchens in South Savo

• Approximately 10% of food stuffs are currently purchased from within the region by public kitchens. The most popular products purchased from within the region were fruits, vegetables, berries and bakery ingredients and products. Approximately 70% of foodstuffs are purchased from elsewhere in Finland and 20% from abroad.

• Local food purchasing by public kitchens has an impact of 19 person-years on employment in South Savo

• With the portion of local food 15%: it would have an impact of 28 person-years on the region’s employment.

• If 25%, 42 person-years

• By raising the portion to 45%, it would have an impact of 76 person-years

www.helsinki.fi/ruralia

• Objective of the project was to investigate the extent to which Finnish food companies on the one hand, and public-sector professional kitchens on the other, utilise local ingredients.

• In addition, the objective was to create an estimate on the current and future impact of local food on both the regional economy and the employment situation of the provinces.

• The results were intended to offer support for the decision-making of those in charge of public procurement.

• Two surveys in 2013:

• companies refining food (n = 584 new + 194 previous = 778)

• public joint procurement groups and procuring entities (n = 69)

10.6.2014 8

Economic impact of local food and

promoting its use in public-sector

professional kitchens (2014)

www.helsinki.fi/ruralia

• At the national level, of the ingredients for primary production, food companies buy on average

• 23 % from the province where they are based

• 52 % from elsewhere in Finland

• 25 % from abroad.

• The share of the company’s own province in ingredient purchases is highest with companies refining fruit, vegetables and berries.

• Nearly 80 per cent of the respondents reported that in the future, the company will use approximately as much ingredients purchased from their own province as they currently do.

• 20 per cent estimated that the share will increase

10.6.2014 9

Economic impact of local food and

promoting its use in public-sector

professional kitchens

www.helsinki.fi/ruralia

• Finnish joint procurement groups and procuring entities purchase on average

• 15 % of food used in the public-sector kitchens from their own province

• 65 % from elsewhere in Finland

• 20 % from abroad.

• Joint procurement groups that responded to the survey purchase local food for approximately EUR 32 million per year.

• The share of one’s own province is highest with bakery products.

• According to respondents´ estimates, in 2020 the equivalent shares would be

• 20 % from own province

• 55 % from elsewhere in Finland

• 25 % from abroad.

10.6.2014 10

Economic impact of local food and

promoting its use in public-sector

professional kitchens

www.helsinki.fi/ruralia

• The impact of agriculture on the Finnish gross domestic product is approximately 2.8 percentage points, more than EUR 5.2 billion.

• Agriculture employs about 4.1 per cent of the Finnish workforce, making up approximately 100,000 man-years with multiplier effects considered.

• The impact of the food industry on the GDP is about 7.1 percentage points, approximately EUR 13.2 billion.

• The impact of the manufacture of food and beverages on employment is slightly smaller than that of agriculture: approximately 3.8 percentage points, i.e. 95,000 man-years with multiplier effects considered.

10.6.2014 11

Economic impact of local food and

promoting its use in public-sector

professional kitchens

www.helsinki.fi/ruralia

• In Southern Ostrobothnia, joint procurement groups and procuring entities

purchase on average 23 per cent of food used in the public-sector kitchens from

their own province.

• According to respondents´ estimates, in 2020 the equivalent share would be 25 %.

• At the moment, these respondents purchase local food for approximately EUR 1.43

million per year.

• According to the presented estimates, in 2020 the equivalent amount would be EUR

1.59 million per year.

• Thus the change would be EUR 158,000 per year.

• That change would provide four person-years of employment to the region.

• Hence, for every 100,000 spent on local food purchases, the employment effect

would be 2.5 person-years with multiplier effects considered.

• In addition, that change would contribute EUR 254,000 to the region´s GDP.

10.6.2014 12

Economic impact of local food and

promoting its use in public-sector

professional kitchens

www.helsinki.fi/ruralia

• By procuring locally produced and refined ingredients and food,

municipalities will be able to act in a more customer-oriented

manner while increasing the appreciation of local food among

consumers.

• The basis for promoting the use of local food should be created

in municipalities in the level of strategy.

• Favouring local food also means investing in the region’s

economy and employment and supporting sustainable

development in the regions throughout the food production

chain.

10.6.2014 13

Economic impact of local food and

promoting its use in public-sector

professional kitchens

www.helsinki.fi/ruralia 10.6.2014 14Ruralia-instituutti

http://www.helsinki.fi/ruralia/research/regfin.htm

Professor Hannu Törmä, +358 50 5389 680, hannu.torma@helsinki.fi

Urszula Zimoch, +358 50 3183 941, urszula.zimoch@helsinki.fi