Finnish Forest Research Institute  Metla
Press release 12.01.2007


Inari embraces harmonious coexistence of nature-based livelihoods

Tourism is the most important means of livelihood in Inari. However, forestry and reindeer husbandry diversify the community’s economic life, maintain the employment level, and bring millions of euros into the local economy. Therefore, their harmonious coexistence is considered desirable. A study conducted by the Finnish Forest Research Institute (Metla) was focused on forest- and nature-based sources of livelihood and assessed their impacts on income and employment.

The study included the following business spheres: reindeer husbandry, Metsähallitus forestry, private forestry, recreational services provided by Metsähallitus, processing of wood products, and tourism. The interdependences and multiplicative effects between the main sources of livelihoods and households were analyzed through a regionally adapted input-output method. First, an accounting matrix, depicting the income flow earned in production between the different units of regional economy, was created as the starting point for the analysis.

The outputs of the sources of livelihoods depend on each others’ production units. The results showed that processing of wood products has the biggest relative gross impacts on the regional economy in Inari. Its total impacts on the income yield were almost 2.3-fold.

Nature-based business spheres are central for the local economy of Inari municipality. In total, the business spheres based on local nature utilization, including tourism, comprised 27.4% of the total income flow. The direct impact of tourism on the income of the Inari region is approximately 56 million euros (19.8%) and on employment 526 person years (20.0%). The income share produced by the forest sector totalled 5.0% and that of employment 5.3%. The corresponding figures in reindeer husbandry were 1.4% and 8.3%, and those in the services of Metsähallitus, 1.1% and 1.4%.

he study assessed how a production change made in one business sphere would affect the economy of Inari. If Metsähallitus were to reduce its fellings by half from the current level, the local economy of Inari would be diminished by approximately 9 million euros and employment by 84 person years. Cutting the production of reindeer husbandry by half would reduce the income by 3.8 million euros and employment by 119 person years. Changes of the same magnitude would be incurred if demand for tourism were to shrink by 3.5–8.5 %.

Publication: Vatanen, E., Pirkonen, J., Ahonen, A., Hyppönen, M. & Mäenpää, I. 2006. Luonnon käyttöön perustuvien elinkeinojen paikallistaloudelliset vaikutukset Inarissa. Metsätieteen aikakauskirja 4/2006: 435–451.

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