ERIAFF Conference 2014 Urszula Zimoch, Project Planner & Outi Hakala, Project Planner University of Helsinki, Ruralia Institute "Regional economic impacts of food production and local food purchases by public kitchens - regional study cases from Finland"

1. www.helsinki.fi/ruralia
Regional economic
impacts of food
production and local food
purchases by public
kitchens in Finland
University of Helsinki, Ruralia Institute
Urszula Zimoch
Outi Hakala
Susanna Määttä
10.6.2014Ruralia-instituutti 1

2. 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

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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)

9. 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

10. 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

11. 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

12. 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

13. 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

14. 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