A better understanding of the domestic food chain’s contribution to the economy

The Natural Resources Institute of Finland (Luke) has published a research report on the overall importance of the food value chain. The report gives stakeholders in the sector the opportunity to describe the importance of the food sector and why it is worth investing in. The study looked at the impact of the food sector on employment, value added and tax revenues at both national and regional level.

Luke's study shows the value-added, employment and tax effects of the food sector in the country as a whole and in the different regions, covering both direct and indirect effects. The analysis also includes corporate and personal income taxes in the food sector at the national and provincial levels. This information is essential for actors in the sector, for example when lobbying.

The study shows that the food sector, i.e. agriculture, food processing, wholesale and retail food trade and catering, has a significant impact on the Finnish economy. Taking into account indirect effects, the sector employs about 320,000 people, which is almost 12% of the total number of employees. The food sector generates more than EUR 19 billion in value added for the national economy. This represents almost 9% of the country's total value added.

"The impact of the food sector is not limited to activities within the sector. According to the study, more than a third of the value added in the food sector consists of indirect effects, which underlines the broad multiplier effects of the sector in the economy," says Jyrki Niemi, Research Professor at Luke, who led the research project. 

These multiplier effects, generated by the industry's input purchases in non-food sectors, generate a total value added of EUR 6.6 billion.

Information on the impact of the food sector on the Finnish economy and regional economies helps companies and other stakeholders to justify the growth potential of the food sector and thus the need to take it into account in public policy making.

"The study illustrates the impact of the food sector at national and regional level. It will help to ensure that the importance of the food sector is taken into account in decisions and communications that are important to the sector," says Niemi.

Luke's report compiles key indicators and statistics on the food sector at national and regional level. It includes data on production value and output, value added, number of employees, investments and taxes. 

Luke is now investigating the possibility of automating the input-output calculation used to estimate the importance of the food sector to the Finnish economy. The aim is to speed up the availability of data in the future. The automation could be used to produce annual data packages for decision-makers and the media, which could increase the visibility of the food sector in the public debate.

The research project was carried out as Public Private Partnership project. The funders include Maa- ja metsätaloustuottajain Keskusliitto MTK ry, Elintarviketeollisuusliitto ry, Päivittäistavarakauppa ry, Matkailu- ja Ravintolapalvelut MaRa ry, Palvelualojen ammattiliitto PAM ry, Suomen Elintarviketyöläisten Liitto SEL ry ja Agronomiliitto ry, Agrologien Liitto ry ja Svenska Lantbruksproducenternas Centralförbund.