Hannu Törmä

Macroeconomic and welfare effects of the CAP reform and further decoupling of agricultural support in Finland: A CGE modelling approach

Abstract We evaluate the overall economic effects of decoupled agricultural payments in Finland. The EU Common Agricultural Policy reform implemented in 2006 means shifting farm subsidies from production output and capital to farmland. Since decoupling seems to be a prominent trend in agricultural policy, we also simulate a case in which some national subsidies are decoupled from production as well. The decoupled support is tied equally to the hectares of arable land owned by farmers, other entrepreneurs, white and blue collar workers, pensioners and other households. This study takes the ownership structure of farmland between these household groups explicitly into account. We evaluate the overall impact of these changes on agricultural production, income and the welfare of various households. The computable general equilibrium GemRur simulation model of Finland is our working tool. We find that decoupling farm payments from production, especially if extended to national subsidies, will increase agricultural and food prices and decrease agricultural and food production. The decoupling has the greatest impact on the income and welfare of farmers. The impacts on other households and sectors are clearly smaller but not negligible.

The Economic Significance of Hunting Tourism in East Lapland, Finland

ABSTRACT Uses of game resources are under constant debate. One such debate focuses on hunting tourism and its contributions to rural economics. To prioritize future investment and inform policy decisions, it is necessary to identify the full economic consequences of the operation of hunting tourism companies in rural areas. However, the true economic significance of these typically small-scale companies is not apparent when examined on an industrial scale. These companies may nevertheless serve as a sustainable solution to local-scale rural challenges. In this article, the regional economic significance of hunting tourism is estimated for the East Lapland sub-region of northern Finland through the use of Computable General Equilibrium simulation models. Although these models are known to effectively evaluate short- and long-term regional economic effects of industries such as tourism, they have not previously been applied to evaluate hunting tourism.