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 APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200090018-7

production for expanded markets. Most of the major Swedish companies have subsidiaries elsewhere in Europe. Seeking to avoid the full impact of the European Economic Community's Common External Tariff, Swedish firms have engaged heavily in direct investments in the community since the early 1960's. Approximately US$70 million, or one-third of Sweden's direct investments abroad in 1970, was in these countries.

2. Agriculture, forestry, and fishing (U/OU)

a. Agriculture

Although subject to adverse climatic conditions, Sweden is on the whole self-sufficient in most of the agricultural commodities that can be produced in northern latitudes. The comparatively short growing season, cold winters, an often unpredictable distribution of rainfall, and poor soils hinder crop production, with the result that Sweden's most important agricultural products come from dairying (Figure 4) and livestock raising. Only a small percentage of the total land area is agricultural land (Figure 5), and most of this lies outside the broad belt of relatively fertile land between Stockholm and Goteborg in central and southern Sweden that provides about 80% of Sweden's total crop income.

Agriculture's role in the economy has declined steadily during the last two decades. With its share of gross output stagnating while purchased inputs expanded, agriculture's contribution to the GNP has declined to 2%, compared with 8% in 1950. Moreover, the number of persons employed on farms declined 60% between 1955 and 1968, the exodus from the farms being especially pronounced among the young. By 1969, 60% of the farmers were over 50 years of age. Owners of small farms frequently do not have successors who continue operating them, therefore, a substantial reduction in the total number of farms is likely to occur during the next 10 to 15 years. The total area of land farmed is already decreasing by some 40,000 to 50,000 hectares per year.

Although small by U.S. standards, Swedish farms are generally larger than those of most other European countries, Swedish official sources reported a total of 155,364 farm units in excess of 2 hectares each in 1970, having a total of 3,032,393 hectares of arable area; by the end of 1971, the number of farms in excess of 2 hectares each had reportedly declined to 145,000. Approximately 50% of the farms reported in 1971 had 2 to 10 hectares of arable area each, but these small units accounted for only 11% of the total reported arable area. (Farms of less than 2 hectares each are not reported in official statistics.) About 6% of the farms had over 50 hectares each and accounted for 33% of the total arable area. Family owned and operated farms predominate in Swedish agriculture, and most farms are operated without hired labor.

The average net cash agricultural income per farm in excess of 2 hectares of arable land each in 1969 was nearly $1,700, including returns from forestry. Nearly three-fourths of the cash income came from the sale of animal products. Many farmers supplement their incomes by working part-time in forestry or related industries. Nationwide, farms with 20 hectares of agricultural land average 35 to 40 hectares of forest land, while in the north the average is 60 to 70 hectares of forest. Farmers' holdings of forest area comprise about 35% of Sweden's total forest area.

The existing age structure among farmers, in combination with a partly obsolete farm structure, has created two distinct subsectors in Swedish agriculture; a stagnating or contracting sector composed of small, family holdings and an expanding, dynamic sector composed of large-scale, specialized enterprises. The former is dominated by farmers in the poorer agricultural regions of northern and central Sweden and interior areas of the south. Investments here are small, and animal products, particularly milk, provide the major source of income. By contrast, the dynamic subsector is characterized by farm units averaging 30 to 40 hectares, located in the rich agricultural region of the southern and central plains. These farms, operated primarily by younger farmers, raise cereal and industrial crops and specialize in pork, poultry, and eggs. Intensive cultivation produces high yields, and investment and the debt-to-asset ratios are high.

Swedish agricultural policies aim at facilitating the transfer of resources from agriculture to other sectors of the economy and at accelerating the consolidation of existing small or uneconomic farm units into fewer, larger units of over 25 hectares. The National Board of Agriculture directs all official rationalization efforts and supervises and coordinates the activities of the 24 provincial agricultural boards. These boards are empowered to buy and sell agricultural and forest land for the purpose of consolidation. Rationalization support is given to farms of any size through state guarantees for loans and, to a much lesser extent, through grants. In 1970 loans with state guarantees totaled US$27.1 million, while grants amounted to $6.4 million. The largest recipients were farmers seeking assistance for technological and structural improvements. Certain income subsidy schemes for

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APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200090018-7