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View of Self-sufficiency of agriculture in Finland in 1970—1983

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MaataloustieteellinenAikakauskirja Vol. 58: 143—150, 1986

Self-sufficiency

of agriculture

in

Finland in 1970—1983

LAURI KETTUNEN

Agricultural Economics Research Institute, Luutnantintie 13, SF-00410 HELSINKI, Finland

Abstract. This study is aimed at considering self-sufficiency and food securityinFinland.

Self-sufficiencyof final products has beenover 100%foralong period. Only self-sufficiency of fruits and vegetables is below 100%due to the climate. Self-sufficiency ofenergy,protein and fat of the diet is also examinedinthis article.Anew indicator of total self-sufficiency is developed by dividing the total yield measuredinfeed units with the total feed requirement of totalhumanconsumption,measured alsoinfeed units. According to these calculations total self-sufficiencyhas been from 105 % to 130%,dependingon the quantity of total yield.

Itis difficult to make adequate calculations of self-sufficiencyofinputs,sincetheindus- tryproducing agricultural inputsisoperatingunderfreetrade,and tries to benefit from foreign trade. Imports ofenergy,rawmaterials,machines and implements lower self-sufficiency. Some estimates are, however, givenin the text.

The article also discusses theattempts to improvefood security bystorage.Agricultural research aims to clarify how alternative cultivation methods could lessenthedependenceon imports, and thus improve the food security.

Index words: self-sufficiency, food security, self-sufficiency of inputs

1. Introduction

Self-sufficiencyas a conceptis rather clear.

Dictionaries define self-sufficiencyas an econ- omy which is cabable of providing for itsown needs.Earlier, householdswereself-sufficient.

Theywereabletoproduce all thingsathome.

Food, clothing, housing and implements were madeonthe farm orin the home. Onlysome exchange wasnecessary. Self-sufficiencywas high in households and it was even higher when the nation as awholewas examined.

However,times have changed. The level of

consumption has increased considerably but atthe same timea self-sufficiency economy has been changed to an exchange economy.

Few farms areself-sufficient withrespect to food. The making of clothing in high income countriesis small.Thereare nosheep and flax cannotbe cultivated. The self-sufficiency of our economy has declined.

National self-sufficiency has also decreased considerably in small countries. Economists have shown the profitability level in thena- tional division of labour and therefore foreign trade has expanded continuously. It has im-

143

JOURNAL OF AGRICULTURALSCIENCEINFINLAND

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144

proved the economic welfare but atthe same time, self-sufficiency has decreased. For example, foreign trade is about one-third of the national income in Finland. Many impor- tantraw materials and energy are imported.

The situation is not threatening as long as foreign trade continues without interruption, but the stoppage of imports would seriously destroyor disturb our everyday life.

The situation is not as difficult in large countries, because there foreign trade is only asmallpercentage ofGrossNational Product.

They have theirown rawmaterials and energy eventhoughpart of theirrawmaterialsareim- ported. Particularly the high level of technol- ogyraises the requirementsofself-sufficiency.

Poor countries are, in principle, less depen- dent. Their economy will not collapse even though foreign trade wouldstop.The econo- mies of rich countries would suffermost,even though, in times ofcrisis,they may maintain a higher economic level than poor countries because of their technology.

Self-sufficiencyin food is of major impor- tanceformosteconomies. Aman cangive up manythings, butnotfood. There has beena lot of discussionoverfood self-sufficiencyor food security in Finland recently. Particular- ly, the energy crisis and the simultaneous food crisis has led officials, as well as ordinary people,tobegintoquestion whether there will be food in the future. Isourextrasupply only nominal, which may disappear if the time comes when the borders are closed? These questions over self-sufficiency have led to a more thorough consideration than has previ- ously been made.

2. The purpose of the study

The purpose of the study istoexamine self- sufficiency of agriculture in 1970—1983. The studyconcerns the final products, agricultural inputs and the whole of agriculture in general.

The article is basedon the study by the author (Kettunen 1986 b).

Self-sufficiency ratio of individual products have been calculated for a long time by the

Marketing Research Institute of Pellervo So- ciety (cf. Anon 1982). It can be done easily for animal products. Self-sufficiency is de- fined simplyas aratio of production andcon- sumption. For example, the self-sufficiencyof

meat can be easily calculated. However, the compilation of statistics has been developed sufficiently only inrecent decadesso, no con- fident long time series can be found. This study has been confined only to the last 10—14 years. This is sufficient for many de- velopment studies since the change from the

1960’sto 1970’smeanta greatchange in agri- culture.

Self-sufficiency studies have been directed mainlyat final products. Energy crises have meant,however, that ouragriculture is threat- ened mainly by the shortage of inputs. Theuse offertilizersand machinery hasincreasedbut since both are imports, self-sufficiency has fallen in themost critical places (Laaksonen

&Kettunen 1981).Thereforeit is also neces- sary to study the self-sufficiency of inputs.

The study is based mainlyonsimple balance sheets, suchasfood balance sheets. However, some modifications have been necessary.

3. Methods

Self-sufficiency(SS) is usually measuredas percentage which is obtained by the division of national production (Q) by consumption (C): SS =

Q/S.

This is the so-called national self-sufficiency ratio. Self-sufficiency could be defined in many ways. A quoted reference is the study by FAO (1975). The difficulty with morecomplex definitions is that the datare- quires quitealot ofmodifications whichmay

not be easily carriedout. On the otherhand, the repetition of the studymaybe difficult and therefore the continuation of the time series may be difficult. Therefore it may be better tousethe simple definition in spite of its de- ficiencies.

Self-sufficiency ratios of individual pro- ductsarethemostcommon way ofmeasuring self-sufficiency. However, people are often concerned about the total self-sufficiency of

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agriculture. These types of calculations are seldom made. It is possible to calculate the self-sufficiency accordingto the energy, pro- tein and fat content of the diet. These calcu- lations are also made in thisstudy.

A special indicator of the self-sufficiency is calculated in this study, which shows how well domesticplant production satisfiesdomestic consumption. Plant production is the basis for the whole of agriculture. Apart of it is directly consumed,but a partis processed into animal products. Food security depends mainly on how plant production is functioning, since animal production is notsosensitivetorisks once the supply of feed is secured.

The self-sufficiency of inputs is more dif- ficulttocalculate. For example, machinesare often made of importedraw materialsor parts (Laaksonen 1985). Therefore the ratio of do- mestic production and domesticusedoes not necessarily indicate the self-sufficiency of machinery. The simple definitionhas, how- ever, been used in this study. On the other hand, it may be noted that some of the im- ports of spareparts or raw materials may be of domestic origin because of the complicated structureof foreign trade. The self-sufficiency of energy is perhaps the most critical, with respect to food security. Some calculationsas to the self-sufficiency of energycanbe made by using the imports of oil and electricity,as has been the case in this study. For most of the inputs the self-sufficiency ratios are only indications.

The self-sufficiency ratios have been calcu- latedon a calendaryear basis. This is some- times apoor indicator. For example, in the case of grains, the production year might be abetter timeperiod. Arithmetic methods also effect the self-sufficiency ratios. Sometimes it is possible to calculate the ratios on a net or gross basis. For example, grain production and consumption canbe calculated in either ofthese ways. Production may include seed and waste. Also, consumption may include both of these items. Alternatively, production may be calculatedinnet termsby subtracting seed and waste. Similarly, thesame canbe

done with consumption. Using net or gross figures gives, however, different results.

Thereforeacarefuluseof self-sufficiencyra- tios requires a clear definition of concepts.

4. Self-sufficiency of final products 4.1. Individualproducts

Thereare various methods availabletocal- culate the self-sufficiency of grains. In this study the production of grains for humancon- sumption (or supply) has been calculated by estimating the grain supply available for human consumption and subtracting the seed value from this. The grain supply for human consumption of the total yield varies from year to year depending on harvesting and other climatic factors. Every year the Board of Agriculture estimates thepercentage which implies the quality of grains for human con- sumption. Therest of the yield is used for ani- mal feeding. When the seed is subtracted from this quantity, we getthe final supply of grain for human consumption. This is then divided by consumption which should be measured in grains (see Table 1).

The self-sufficiency of wheat has varied from 180to 20 %.The year 1981 was par- ticularly bad when almost all of the produc- tion wasof such low quality that itwas only good enough for animal feed. The area for wheat production also fell considerablyatthe

Table 1. Self-sufficiencyof grains in 1970—83, %.

Year Wheat Rye Barley Oats Sugar

1970 105 87 98 107 27

1971 125 100 105 117 29

1972 117 92 119 103 38

1973 137 102 98 96 35

1974 117 94 98 101 39

1975 181 63 125 120 45

1976 160 155 131 121 40

1977 60 63 123 92 39

1978 18 54 117 101 54

1979 54 62 110 111 45

1980 110 110 94 101 55

1981 23 30 80 84 51

1982 128 26 111 115 53

1983 176 106 136 129 74

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end of the 1970’s which also lowered the sup- ply of wheat. Inrecent years the production has recovered to some extent, but imports have been necessary to satisfy human con- sumption. Wheatisalso used forsomeindus- trial purposes which increases the need for domestic production.

The self-sufficiency for rye has almost always been below 100 °7o. Theareaof rye cul-

tivation has decreased and there seem to be difficulties in keeping the rye area around 50,000or60,000hectares which is required for domestic self-sufficiency.

Self-sufficiencyin

feed

grains has been ap- proximately 100%. Insomebad years pro- duction has fallen below the domesticrequire- mentsand imports have been necessary. The years 1973 and 1981wereparticularly bad and then feeds hadtobe imported. Ofcourse, part of the imports of feedare always needed since, for example, protein is insufficient in the do- mestic grains. Soyabean meals andfish meal are the normal imports. In addition, part of the importsareneededtokeep upexportpro- duction.

Concerning plant production, there are some products whichcannot be cultivatedto a sufficient extent in Finland. The self-suf- ficiency of sugar is 50 to 60 % and particu- larly the self-sufficiency of

fruits

and vegeta-

bles is always far below 100 %. Onlyapples andsome plums arecultivated inFinland, but mostof the citrus products and tropical fruits have to be imported. Also vegetables like tomatoesand cucumbersareimported in the winter time.

However,where animal products are con- cerned (Table 2), the picture is quitedifferent.

Self-sufficiency ofmilk has beenover 120 % and has risen inrecent yearstoabout 130 °7o.

Also the self-sufficiency ofmeat has usually been above 100 *Vo. Especially pork produc- tion can be easily raised and there are pres- sures to do so. With the help of all kinds of supplyrestrictionsthe production of pork has been abletoremainatareasonable level. Beef production has been above the domesticcon- sumption inrecent years, but due to the de-

Table 2. Self-sufficiencyofmilk,beef, pork and eggs in 1970—83.

Year Milk Beef Pork Eggs

1970 125 110 110 136

1971 121 113 127 151

1972 122 105 119 147

1973 122 93 109 156

1974 125 111 109 151

1975 120 98 101 155

1976 124 101 111 165

1977 131 99 108 166

1978 128 101 117 138

1979 125 99 119 137

1980 129 102 120 140

1981 125 113 128 153

1982 122 no 126 159

1983 133 116 118 165

dine of dairyherds,beef supply willnotrise.

It may even fall slightly in the future.

The self-sufficiency of eggs has been the highest. It has been around 150to 160% and recent developments indicate that production will fall.

4.2. Total self-sufficiency

It is slightly difficulttomake any summary ortotal figures of self-sufficiency for agricul- tureas awhole. Ifwelookatthe calorie con- sumption the self-sufficiency (Table 3) ratios fall below 100% inmostyears. This result is due to the imports of sugar which make up about 13 % of total calorie consumption.

Within totalagricultureproduction sugaror sugar beet is a minor product and theareais only about 1.5 %. Therefore, the self-suffi- ciency ratio for energy gives abiased picture of total self-sufficiency for Finnish agricul- ture.

In this study a special summary indicator has been developed to examine the real self- sufficiency. For that purpose, the total requi- rement of plant production for the whole diet is calculated. The majority of plant produc- tion goesto animal production, buta partof it is also consumed directly. Totalproduction, measured in

feed

units divided by thediet, also measured in

feed

units, givesanindication

of

the agriculture neededtosatisfy domesticcon-

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Table 3. Self-sufficiencyofenergy,proteinand fat and total self-sufficiency (see the text) in 1970 83,%.

Year Energy Protein Fat Total

92 109 112

1970 104

91 108

1971 104 114

1972 95 112 102 111

1973 90 107 98 105

1974 96 114 101 104

1975 93 112 96 108

1976 107 124 103 126

1977 84 104 105 105

82 99

1978 104 109

1979 78 98 103 111

1980 94 UI 110 114

1981 84 100 113 93

1982 93 no 115 114

1983 110 117 121 130

sumption by domestic production. This index shows that the total self-sufficiency of agri- culture has been about 115% on average (Table 3), but the variation is very large. In 1981 the self-sufficiencywasonly 93 %where- as in 1983 the corresponding figure was

130%.This result canbe easily explained by the large variation in total yield.

5. Self-sufficiency of inputs

The trade and industries producing agricul- tural inputsoperatein the free economy under free competition. They buy their raw mate-

rials, inputs and articles with economic grounds. Foreign trade is apart of their ac- tions, as it is in the whole economy. There- fore,it is quitenatural that the self-sufficiency of inputs is clearly under 100 °7o.

it may be necessaryto pointoutin the be- ginning that in 1983 the greatest share of all costs was purchased feed(27.4 %,Kettunen 1986a). The next largest sharewas the ma- chine and implementcosts(23.2 %), after that fertilizers (12.9 %), mending costs (7.7 %)

and general costs (6.7 %) as well as fuel (5.7 %). These account for 83.6 % of total costs which do not include the labour input of the familyorthe interestrate on the own- ers’ capital. As to self-sufficiency, the most important parts ofcosts are fertilizers, pur-

chased feed, fuel, electricity and machine costs.

Even though there is domestic industry in agricultural machines and implements, about half of all machines soldareimported, i.e. the share of domestic machines has been only 40 —44 %.Finnish agricultural machinesare, however, exportedto agrowingextent,which means that the total self-sufficiency withre- spect to machines is about 50 %.

The self-sufficiency of feed is close to 100% eventhough it is slightly below, since part of the protein feed is imported. Also in bad years some feed, such as corn, has been imported.

Fertilizers arethe most critical input with respecttoacrisis. Their self-sufficiency iscon- sidered to be low. The energy and ammonia needed for the nitrogen industry is imported.

Part oftheraw materials of other fertilizers are also imported. Phosphatesareimportant in agriculture. Nowadays Finland is almost self-sufficient in thisrespectafter the opening of a new mine. Thus themost critical input is energy.

Sizeable research is being carried out to improve theuseof biological nitrogen in agri- culture. The problem is that agriculture is specialised, and therefore theuse of plants producing nitrogenisnotpossible everywhere.

However, it would be possibletoimprove self- sufficiency by the biological binding of nitro- gen.

Pesticidesarealso important in agriculture nowadays. Domestic production satisfies the needs,buta partoftheraw materialsareim- ported, whichis, ofcourse, aweak point in our food security.

It is difficult to estimate what the real energyself-sufficiency would be inacrisis. At the moment,agriculture is basedon imported energy such as oil or electricity. In a crisis situation,oil could be substitutedby domestic energy resources such as wood or biomass.

Their adaptation would, however, take alot of time and self-sufficiency would fall during the years after the beginning of the crisis.

Again, research is being carried out to im-

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prove the utilisation of domesticresources for fuel of tractors.

It is difficulttomake any summary estimate of self-sufficiency of inputs. Namely, energy is very important in thisrespect. If there is a lack of energy,tractorswouldstop and agri- cultural production would totally collapse.

Domesticresources canbeasubstitutefor im- ported energy, but there isno clear picture as tohow much time would be neededto adjust to a crisis situation. Other critical inputsare theraw materials for pesticides andfertilizers, eventhough they wouldnot createsuchalarge problem as energy. A rough estimate of the self-sufficiency of inputs can be given: the value of imported inputs is about 15 % of the value of all inputs.

6. Improvement of food security 6.1. Actions by the Government

The increase of grainstores is perhaps the most concrete action by the government to increase food security. The aim of the State Granary is tostabilize grain markets in Fin- land by storage. A few years ago, anAct of Parliamentwas passed which implies thata part of thestores aresecuritystores; i.e. they canonly be used with the permission of par- liament in a time of crisis.

The target is to provide security stores of 400mill,kg of bread grains and 600 mill,kg of feed grains. Theseamountscoverthecon- sumption of bread grains foroneyear and the commercial sales of feed grains for about half ayear. The store capacity of the State Gra- nary may, ofcourse, be higher. Infact,itwas about 1200mill, kg in 1984. Privatecommer- cial firmsaswell asfarmers also havestores, andsothe totalstoragecapacityismuch larger than that of the State Granary. Themostcriti- cal point in food security is in thesummer, just before thenew crop. Stores have tobe sufficienttocope withatotal crop failure. Of course, suchafailureorthe collapse of farm- ing is quite unlikely. Some forage (hay, silage) is always obtained, as well asfeed grains in

mostcases,and feed grainscan also be used for human consumption.

The government has also planned for the storage of some critical raw materials and spareparts,butnosignificant results haveso far been reached. Oilreserves have been built up constantly, a part of whichare available for agriculture, sofuel fortractorsis secured atleast in the shortrun.Thesameapplies for the energy required for the fertilizer industry.

6.2. Other readiness

for

crisis

Energy is themostcentral input withrespect to crisis management. Agriculture uses both oil and electricity. Apart ofelectricityisdo- mestic (hydroelectric power and electricity produced by other domestic sources such as wood and peat), sothat acomplete lack of energy isunlikelyeventhough shortages may become evidenteven in agriculture.

The fuel for tractors is, of course, most problematic. It can be assumed that during normal conditions oil will notbe substituted by domestic energy sources, and oil will be used foras long as it is available. In thecase of shortage, however, there are substitutes.

Carbon monoxide was used during the last war,and its application has been studied and improved in recent years. Its application in agriculture inacrisis would be acomprehen- sive task, particularly if all car and truck traffic shoulduse thesametechnology. The transfer is, of course, possible, but itwould take many years. During the transfer period, old technology has to be used partly with stored oil, if the borders remain closed. The preparedness to transferto domestic energy has improved inrecent years, but it is stillnot very good. Self-sufficiency in energy will not, however, improve during normal peace con- ditions, and oil will continueto be imported in the future.

6.3. Fertilizerand other chemical industries The Finnish fertilizer industry produces all fertilizers used in thecountrybut the produc- tion is basedonimported energy andraw ma-

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terials. Should the borders beclosed, produc- tion of fertilizers will fall quite quickly. In the longrun, afall in yields will follow. Energy may be substitutedby domestic energy, even though it may take time.

The fertilizer industryusesoilas a raw ma- terial in making nitrogen. Finland could use peatinstead of oil. Inrecent years plans have been madeto return totheuseofpeat sothat self-sufficiency will improve.

Phosphate is another criticalraw material in fertilizer products. Domesticraw materials areavailable and self-sufficiencycaneasily be increasedup to 100 %. Adecrease in theuse of phosphate wouldnotbe critical since itsuse has been toohigh and it stays a long time in the soil. The yield level wouldnotfall dueto the shortage of phosphates.

The situation isworsein thecaseof potash.

So far, noeconomicraw materials have been found in Finland. But in a short crisis the shortage of potassium fertilizer maynot be sufficientlycriticalas tolower the yieldlevel considerably.

The self-sufficiency of other chemicals (pes- ticides, herbicides) used in plant production is low. The effect of plant production is very great, sotheuse of pesticides and herbicides would be profitable, evenin thecaseof higher pricesthroughpossible domestic production.

6.4. Alternative farming methods

The dependence of the fertilizer industryon imported energy and rawmaterials has caused a lot of discussion and research into the de- velopment of natural or alternative farming methods. Nitrogen fertilizers require much energy. Leguminous plants and clover can bind nitrogen in thesoil whichcan then be

usedby other plants.

A comprehensiveuseof these plantsseems

to face many problems. Modern farming has become very specialized, whereas natural farming requires mostly mixed farming. At the moment, thereare no signs that natural farming will increase tothe extentthat it will be of significant importance to self-suffi-

ciency. It requires a long time period to in- troduce alternative farming technology.

However, inacrisissituation goodadvicemay bemorereadily acceptabletofarmers than in normal conditions.

It is tobe remembered, however, that the energy usedby the fertilizer industry is only a smallpart of the energy needed by agricul- ture.Fertilizer production should be secured to the maximum amount since it is themost effective input in agriculture.

6.5. Adaptation

of

consumption

The diet in industrialized countriesis very energyconsuming. Consumption has moved from plant products to animal products, which means a larger use ofresources than earlier. Thewasteof energy when beef is sub- stituted for wheat isover90 °7o. The national dietcan be changed, without any nutritional loss,to favoura greaterconsumption of plant products; including arather large self-suffi- ciencyreserve whichcanbe utilized inacrisis.

A minimum requirement diet has been planned for crisis periods which fulfills all nutritionalrequirements. Its energycontentis about the same asthat of anormaldiet, but it consists of different food items. There are equal amounts of milk and milk products in itas in thepresent diet, moregrain products and less meat and fat.

It is, of course, difficultto know how to encouragepeopletoadopt the crisis diet plan.

It should be possibletoimplement it by regu- lation, but all kinds of rationing easily brings about a black market, which weakens the effect of rationing. In anycase, it is possible to adjust consumption to the crisis situation without large nutritional problems.

Attempts will be made to maintain milk production during acrisis since it is a major protein source. Pork and egg productioncan be decreased considerably, however, because theirnormalproduction levelcanbe restored rather easily. This isnot thecase in milk pro- ductionsince the raising ofadairy stock isa slow process.

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References

Anon 1982. PSM:n viisi vuosikymmentä. Pellervo- SeuranMarkkinatutkimuslaitos. Kouvola 1982, 80p.

Fao 1975.Self-sufficiencyinFood and Food Commodi- ties. International Agricultural Adjustment, C. 75/

LIM/1, October 1975. 62 s.+4liit.

Kettunen, L. 1986a.Finnish Agriculturein 1986.Agr.

Econ. Res. Inst., Pubi. 50. Helsinki 1986,42p.

Kettunen, L. 1986b. Maatalouden omavaraisuus Suo- messavuosina1970—83.Summary: Self-sufficiencyof Finnish Agriculturein 1970—83.Agr.Econ.Res.Inst.,

Pubi. 49. Helsinki 1986, 75p.

Laaksonen,K. 1985.Maatalouden tuontipanosten kor vaaminen kotimaisilla raaka-aineilla. Pellervon talou dellisen tutkimuslaitoksen julkaisujaNo.5.Espoo1985 Laaksonen, K.jaKettunen, L. 1981.Maatalouden huol-

tokyky.Esitutkimus. Pellervon taloudellisen tutkimus- laitoksen raportteja ja artikkeleita No. 14.Espoo1981, 77 p.

Ms. received August 15, 1986.

SELOSTUS

Maatalouden omavaraisuus Suomessa vuosina 1970—1983

Lauri Kettunen

Maatalouden taloudellinen tutkimuslaitos Luutnantintie 13,00410Helsinki

Artikkelissa tarkastellaan maatalouden omavaraisuutta jahuoltovarmuutta. Lopputuotteiden omavaraisuuson ollut yleensä yli 100% javain hedelmien ja vihannesten omavaraisuusonjäänytselvästi alle100%.Artikkelissa onlaskettu myös ruokavalion energia-, valkuais- jaras- vaomavaraisuus.

Artikkelissa esitellään myös koko maatalouden oma- varaisuutta varten kehitetty indikaattori. Seonlaskettu jakamallakoko sato (rehuyksikköinä mitattuna) elintar- vikkeiden kulutukseen tarvittavalla sadon määrällä (myös rehuyksikköinämitattuna). Sen mukaan kokonaisoma-

varaisuuson vaihdellut 105ja 130%välillä.

Tuotantopanostenomavaraisuudestaonesitettymyös joitainarvioita,joskinon todettava, ettäesitetytluvut ovat hyvin likimääräisiä. Lopuksi artikkelissa tarkastel- laan omavaraisuuden parantamiseen tähtääviä toimenpi- teitä.

Artikkeliperustuutekijänaikaisemmin julkaisemaan tutkimukseen;Maatalouden omavaraisuus Suomessavuo- sina 1970—83,Maatal. tai. tut. lait. julk.no. 49,Hel- sinki 1985.

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