Performance of dairy farms in Finland and Norway from 1991 to 2008

Agriculture and agricultural policy in Finland and Norway have shared many common features in the past, except that Finland joined the European Union in 1995. In this article, we examine profitability and productivity dynamics in Finnish and Norwegian farms during the period 1991 to 2008. Our analysis draws on a decomposition of profitability change into various sources. The results provide evidence that the stronger liberalisation of agricultural policy in Finland has provided greater flexibility for farmers to change and thus has created better scope for productivity and profitability improvements compared with Norway.