Dutch farmers’ buy-out schemes approved by the European Commission: what now?

Dutch farmers' buy-out schemes approved by the European Commission: what now?

Caroline van der Plas of the BBB before starting a nitrogen discussion with Christian van der Waal, Minister for Nature and Nitrogen.Image by David Van Dam / De Volkskrant

‘Farmers in a pinch because of nitrogen: stoppages for 4 in 10 are negotiable,’ NOS wrote on its website in September 2019. Six months after the state council officially classified nitrogen precipitation as a major environmental problem, many farmers were worried about their future. At the time of the first demonstrations of the big farmers, the NOS questioned more than six thousand ranchers.

The poll made the cabinet optimistic. Carola Schotten, then Minister of Agriculture, hoped, just like her successors, to drastically reduce nitrogen emissions by voluntarily buying out ranchers. Based on the NOS study, there seemed to be enough enthusiasm for this.

About the author

Yvonne Hoffs is a political correspondent for The Washington Post De Volkskrant He writes about finance, economics, agriculture, nature and fisheries.

However, a closer look at the survey results shows that interest in closing businesses is much lower than the headline at the top of the NOS letter would suggest. Only 3 percent said a resounding “yes” to the question of whether there was interest in the purchase. More than 50 percent said “no” completely and 34 percent answered “maybe,” that is: only under certain circumstances. The rest did not answer the question.

wishes

It is precisely in those circumstances that the shoe pinches. Officials and regional officials report that farmers often have additional requirements. Some farmers fear they will have to pay a large portion of the full purchase premium to the tax authorities. They want to clarify that first. Others want to build holiday homes or homes on their plots after demolishing their stables – but building in the countryside often runs counter to a zoning plan. Still others want to continue as arable farmers and have prior assurance that this is permitted.

Many of these additional desires conflict with nature conservation. Peak cranes must be removed in order to create buffer zones around nature reserves. Holiday gardens and traditional arable farming lead to additional recreational pressure and nitrogen emissions. On the one hand, the government is currently unable to provide sound revenue models for farmers that include nature, and also because chain parties such as Rabobank, supermarkets and dairy companies are not cooperating.

Mass purchasing arrangements

The blanket purchase schemes (Lbv and Lbv-plus), which will be inaugurated by Nitrogen Minister van der Waal at the end of this month, target the roughly 11,000 livestock farmers who cause the most nitrogen damage in nature reserves. When they are purchased, they are compensated with 100 to 120 percent of their company value and sometimes compensation for demolition costs. The government expects a lot from the Lbv-plus peak tax scheme in particular. This should guarantee half of the (currently) nitrogen reduction target for the 2030 target year.

Not all 11,000 ranchers need to be involved in order to achieve the intended reduction targets. It might also be a lot less than that, provided some of the biggest peak lifters get their hands on it. A large peak loader may deposit three to five times more nitrogen in a Natura 2000 than in a 11000. It is much better to buy the top ten thirty or fifty bottom drop growers.

But the biggest peak-lifters are often the livestock farms that have invested heavily in scaling up innovative housing systems. They are the most economical in the market that revolves around the lowest cost price per unit of the product. Perhaps the desire to quit is low among this group. The last hadith also refers to this Norwegian Refugee Council– Reconnaissance among 28 peak loader. Only three show any buying interest. The rest see enough perspective to continue cultivating.

Reasons to quit smoking

Brussels prohibits state-aided cattle breeders from starting a new cattle farm elsewhere in Europe. This “professional ban” is unacceptable to many farmers. This will also reduce enthusiasm. Last year, the Netherlands Environmental Assessment Agency included the results of previous procurement schemes. They almost always fail. Usually quite a few farmers show interest at the beginning, but only a few eventually sign a one-stop purchase agreement.

There are several reasons for the high dropout rate. The threshold for engaging in a conversation without commitment is of course low. The purchase is particularly attractive to older growers who do not have a successor. There is enough in itself, but it is with voluntary schemes that ranchers try to make the most of it. So negotiations can take a long time; Many farmers adopt a wait-and-see attitude.

Most young farmers don’t want to stop. They prefer to choose technical innovation or move their company. But in practice, these technical innovations often fail to deliver the nitrogen gains they promise on paper, which means lost permits in administrative courts.

future

Moving on, the question arises of where all these cattle ranches should go. Nowhere in the Netherlands are there thousands of hectares of appalling farmland where livestock do not cause damage to nature. Zeeland, Flevoland and North Groningen are the most obvious destinations, but land there has to be freed up. Also for this, enough cultivators would have to allow them to be purchased first.

The Cabinet is also unlucky because the prices of milk, meat and eggs have skyrocketed in the past year. At the time of the NOS survey, cattle farms were on average much less profitable. Some respondents may have had a dim view of the future at the time and were therefore receptive to the takeover. It’s different now: the ranchers have had their best year. Rabobank also expects prices to rise for the rest of 2023.

The Cabinet threatens to use “compulsory paraphernalia” if too few ranchers allow them to be purchased. Van der Waal wants to set standards for standardization and pricing before the summer, but three of the four coalition parties seem reluctant to use that already big stick. The provinces, which issue nature permits to farmers and have to withdraw them after purchase, do not feel supportive of the coercive measures. With the BBB Farmers’ Party at the helm, county councils can greatly frustrate government policy, for example through a full regional focus on innovation rather than mass procurement.

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