Analysis

Dutch Plan for Organic Farming Underwhelms

The money is a drop in the bucket compared to overall farm subsidies.

Bodegraven Netherlands farm
Dutch agriculture minister Piet Adema visits a farm in Bodegraven, October 11 (LNV)

Dutch agriculture minister Piet Adema is spending €26 million in 2023 and 2024 to speed up the transition to organic farming.

The money falls short of the €35 million per year Dutch farm lobby LTO had asked for. It’s a drop in the bucket compared to the €1 billion Dutch farmers receive in national and EU subsidies each year, half of which goes to the production of dairy and meat.

Adema would funnel 6 percent of EU subsidies into organic farming. The share of organic farming is meant to rise from 4 to 15 percent by 2030, when the European Commission’s goal is to have 25 percent organic farming EU-wide.

Farmers can’t switch without help

Increasing the share of organic farming is one of the government’s solutions to the Netherlands’ farm crisis. High emissions of ammonia from intensive livestock farming (in the EU, only Malta has higher emissions per hectare) pollute Dutch soil and groundwater, and are lethal to plant- and wildlife. The Netherlands has lost 70 percent of its insect population since the EU introduced standards for nature conservation in the 1990s. The Netherlands has never met those standards. The current government is compelled to by a supreme court decision.

€32 billion, including €25 billion in new spending, has been budgeted to buy out and downsize farms. Adema’s ministry estimates that one in three Dutch livestock farmers need to quit in order to bring emissions down to an acceptable level — assuming the other two continue to farm as they do now. If more farmers stepped away from intensive animal farming, which is the most productive but also the most polluting form, more farmers could stay in business.

That requires financial support. Many farmers are in debt. Profit margins on dairy and meat are low. Without either subsidies for farmers or higher prices for consumers, reducing livestock by a third to half would simply bankrupt most farms.

“Farmers can and will only switch if they are left with a sustainable business model,” Adema writes in a letter detailing his plan to parliament.

Why organic

Adema’s goal is 15 percent organic farming across the board. I’ll focus on animal farming, since that’s relevant to the ammonia crisis and because that’s where, for the sake of animal welfare, I think a switch to organic farming makes the most sense. For crops and horticulture, a tiny country like the Netherlands may be better off prioritizing intensive farming innovations that close loops and lower emissions without sacrificing yields, like precision and vertical farming. But that’s a discussion for another day.

Organic animal farming is more expensive. Most basically because it is an extensive form of farming: the opposite of intensive. EU regulations for organic dairy, eggs and meat require more space per animal inside stables and access to open air and grazing areas.

By foregoing the use of synthetic feed, fertilizers, hormones and pesticides, organic farming is healthier for the soil and water, which in turn allows microorganisms, plants, insects, birds and other wildlife to flourish.

Emissions of ammonia and greenhouse gasses are lower.

That adds up to a higher price for organic products. But not lower profit margins. Consumers are willing to spend more. According to the Netherlands’ consumer protection agency, profit margins on organic and non-organic products are similar: slightly lower for organic dairy and slightly higher for organic pork.

Adema looks to private sector

Adema argues companies in the supply chain between farmers and consumers need to pitch in.

Regular readers may remember that the Dutch farmers’ protests this summer were funded by the country’s largest animal-feed producers and two dairy and meat processors. “Big Ag” benefits from intensive farming’s economies of scale. The bargaining position of the individual farmer in the Dutch food industry is weak.

There is also a role for the Rabobank, which finances 80 percent of Dutch farming, but which has been slow to invest in organic and other nature-inclusive farming methods.

Some Dutch supermarkets have stopped selling non-organic milk and chicken meat from factory farms. Some also accept lower profit margins on organic products and plant-based substitutes. But not all.

Adema is counting on more agro conglomerates to take “responsibility”, but it’s unclear how he would compel the ones that don’t.

Government could do more

Jeroom Remmers, managing director of the Netherlands’ True Animal Protein Price Coalition — which argues for factoring in the environmental and health costs of livestock farming in the price of dairy and meat — is disappointed Adema looks to the private sector for solutions. The government could do more, he writes:

  • Other EU countries pay farmers €500 to €600 per hectare to become organic. Adema would pay Dutch farmers €200 per hectare.
  • The minister suggests government agencies should spent at least 25 percent of their catering budgets on organic food. Why not half?
  • Money from the €25 billion fund to help farmers reduce ammonia emissions could be diverted to organic farming. But there are no concrete guidelines yet.

Bert van Ruitenbeek, the Dutch director of the biodynamic food label Demeter, shares Remmers’ criticism: “If Adema wants to succeed, he needs to become much more concrete.”

In an interview with Trouw, Van Ruitenbeek suggests:

  • Phasing out synthetic pesticides altogether.
  • Lowering animal-to-hectare ratios.
  • Reducing sales tax on organic, or raising sales tax on non-organic, products.

Such reforms would make organic farming more lucrative without a need for subsidies.

Food prices are already higher

Now would be the time for reforms that raise food prices long-term, since the high costs of feed and fertilizer due to the war in Ukraine have pushed prices up temporarily. (Ukraine is a major exporter of cereals, which are fed to livestock. Natural gas is used to synthesize fertilizer.)

The price of non-organic milk rose 47 percent in the Netherlands this year, the price of organic milk 19 percent.

Chicken farmers saw their costs go up by a third. They were able to pass those costs onto consumers: Dutch shoppers paid 33 percent more for eggs and 34 percent more for chicken meat.

Pig farmers weren’t so lucky. Their costs also rose by a third, but the price of pork increased only 24 percent.

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