Structural Economics of Local Food in the region of South-Savo

1. Structural Economics of Local Foodin theregion of South-Savo Antto Vihma 6.4.05 University of Helsinki Ruralia

2. Science, economics and local food • Local food is a relatively young concept in the national discourse • Major problem: how to define local food? • Economics and modelling • economics is ”general and not exact” • lack of data and tradition on the regional level • Statistics Finland has a key role • In order to understand Input-output model, one must begin with economic structure of the subject region

3. The share of an industry of the regional total Osuus koko Maa- ja Teollisuus ja Kauppa ja Muut maasta metsä rakentaminen liikenne palvelut Finland 100.0% 3.7 % 34.2% 22.1 % 40.0% 100.0% Uusimaa 35.4% 0.4 % 26.0% 28.8 % 44.9 % 100% Pirkanmaa 8.0% 2.9% 42.2% 18.1 % 36.7 % 100% Satakunta 4.1 % 4.6% 45.1 % 17.5% 32.8% 100% Kymenlaakso 3.7% 3.3 % 43.3 % 24.0% 29.4% 100 % Pohjois-Savo 3.6% 8.7 % 28.8 % 17.8 % 44.7 % 100 % Pohjanmaa 3.2% 7.1 % 40.2% 18.7% 34.0% 100% Lappi 3.1 % 5.3 % 37.4% 18.3 % 39.0 % 100% Pohjois-Karjala 2.5% 9.4% 33.2% 16.9% 40.4% 100% Kanta-Häme 2.4% 5.6% 32.7% 16.6% 45.1% 100% Etelä-Savo 2.2% 13.8 % 23.5 % 16.7 % 46.0% 100% Itä-Uusimaa 1.4% 3.4% 49.8 % 13.9 % 32.9% 100% Kainuu 1.1 % 9.4% 24.3 % 17.7% 48.6% 100% Ahvenanmaa 0.7 % 4.1 % 12.7 % 43.3 % 40.0 % 100 %

4. Tragedy of a rural economy “Peripheral regions are considered specialised because they tend to concentrate on a narrow range of export-oriented natural resource-based raw materials or low-technology goods and services, with limited inter-sector production and consumption linkages.” Siegel ym. (1995, 271)

5. South-Savo: share of the output exported Agriculture 76 % Forestry 76 % Food industry 21 % Hotels, restaurants, catering 5 %

6. Etelä-Savo: tuontipanosten osuus välituotekäytöstä Agriculture 71 % Forestry 49 % Food industry 62 % Hotels, restaurants, catering 53 %

7. Scenario: South-Savo foodstuff demand grows • Volume of the growth is 55,2 mmk • The composition of the demand remains the same • The growth is 5 % of the total foodstuff demand in South-Savo • Public foodstuff demand is c. 214 mmk (year 2000)

8. 1 Crop production 2 Livestock production 3 Garden production 4 Forestry and logging 5 Hunting and fishing 6 Food industry 7 Forest and paper industry 8 Metal, machinery and equipment industry 9 Chemicals and chemical products 10 Other manufacturing 11 Electricity, gas and heat supply 12 Construction 13 Wholesale and retail trade 14 Hotels and restaurants 15 Transport, reservoir and communications 16 Real estate, renting and business activities 17 Private services 18 Public administration and services Industries of the Regional Agro-Economic Model

9. Growth of output by industry

10. Growth of output by industry, %

11. Growth of employment by industry

12. Growth of employment by industry, %

13. Division of growth, output and employment

14. Some remarks • Growth of foodstuff demand in South-Savo doesn’t come across strongly to industries other than food industry and trade • The result is pretty trivial, but has been left out of the debate on local food • Not to be interpreted as a sceptical argument against localising food systems • The image and willingness to pay rest on local food bringing ”viability” to rural regions • Policy recomendation: a more precise instrument than general growth of foodstuff demand is needed

15. Scenario B: growth of output by industry

16. Growth of output by industry, 100%

17. Growth of employment by industry, 100%