What explains – from a historical perspective – the innovation and yield per unit push in the Netherlands? Niek Koning, Food Policy Analyst and emeritus assistant professor Wageningen University & Research, identified two main causes: the development of the heavy horse drawn plough and the Netherland's unique location in a river delta by the sea. In a subsequent paneldiscussion, two more experts joined him analyzing the present state of Dutch farming. A profound crisis is unfolding and causes poisonous anger amongst farmers. Why is this happening? The three experts explain the situation and come up with three quintessential questions for policy makers and society.
Around 1800 a Dutch farmer was able to feed 3 people. German and French farmers didn't get beyond 2 on average. Niek Koning explained why in a previous interview. Commenting on that interview, two Dutch experts - Merijn Knibbe, Teacher & Researcher of Economics and Krijn Poppe, Economist & Council Member of the RLI (Council for the Environment and Infrastructure) - concluded in the first panel discussion that the interests of Dutch farmers and the agribusiness they helped create, are on different tracks. Whereas Dutch agribusiness is internationally competitive, the average Dutch farmer isn't so anymore. Agribusiness can source elsewhere; most farmers will find themselves on a dead end road as they lack the agility to catch up and get off the beaten track. What continuities and discontinuities arise from this new phase in Dutch agriculture?
Merijn Knibbe answers the latter question with a reflection on pricing. The subsidies systems by government set prices that was designed by the EU's original Common Agricultural Policy determined 40% of, for example, dairy farmers' incomes. As from the '80's, that system was gradually abandoned. It developed into a system of administrative prices set by big buying companies and farmer owned cooperatives. Farmers quickly adapted the logic of the new system as it corresponded with their farmers management logic: they got a set - not market based - price for protein and could dimension their operations and investments in their farms to the stable factor of a fixed price component.
In the past decade welfare and sustainability standards set by retail operations have gradually been introduced. The average farmer finds it difficult to adapt to these standards popping form the market. They don't correspond with their production logic and the way their farms are organised. Yet they have a profound impact on the costs of their operations.
Farmers find themselves 'enslaved' by the new standards set by retailers. They get underpaid because their up front investments needed to comply with the new standards aren't covered. The standards are set by the free market and driven by NGO's pushing consumers to change demand; retailers respond to the trends and often rapidly changing fads thus created. A telling example is the slow growing 'Kip van Morgen' broiler Dutch supermarkets created in response to NGO Wakker Dier's campaigns. Wakker Dier is now fighting the concept in order to take the next step. Farmers have longer time horizons to recoup their investments and find themselves forced to take blind risks.
As Knibbe says, the past decade has turned farmers into 'employees'. Employees, however, without sufficient income guarantees and help to do their primary production jobs properly. The market risk is left to farmers by consumers, business partners and government.
Knibbe believes that changing demand at the level of agricultural commodities requires government to step in again. Food processing companies can't set administrative prices to meet the new cost burden farmers constantly need to adapt to. The farmers' economy can't adjust to a system of constantly changing free market standards and requirements at the level of primary production. Government seems to think they can.
Niek Koning stresses that the trend Knibbe sees, is not unique to the Netherlands. Driven by consumers and NGO agenda's and campains, retailers and processors organise and command production chains. According to Koning, governments organised primary production; tax paying consumers paid for that service with a direct benefit in their common interest. In the neoliberal era, they gave up that function and left it to the free market, opening the door to overproduction and dumping. Focusing on the Dutch context, Koning states the 'location advantage' Dutch farmers used to have, went bust. That defines the 'Dutch situation' most specifically.
Due to heavy regulation as a consequence of expanding city areas, Dutch farmers have difficulty to catch up with the needs of processing companies and retailers. The levels of production cost lag behind other nationals competing for the same export markets. They need to scale up but cannot as a consequence of limited and intensively used space. Furthermore, as a consequence of urbanisation, Dutch farmers ended up farming in - as a manner of speech - park-like spaces between cities. The function of their old farmers' habitat for over 8 centuries, has changed. In a way, it is no longer theirs to use according to their ideas of good farming although they are still the legal owners.
Without farmers noticing, agricultural soils turned into landscapes city dwellers consider theirs: open 'public' space for their recreative needs and appetite for nature and outdoor wellness. That is the reason they need to comply with heavy environmental regulations and find themselves competing with city dwellers. Applying new technologies can help them out while mitigating their environmental and social impact, but also impacts their cost load negatively. In order to cover their higher costs of production they need to scale up. And that is hat consumers and NGO's don't want.
Poppe is critical on a change in government policy. Before the neoliberal era that started in the '80's, Dutch government actively helped farmers to abandon farming in favour of their more successful colleagues. That policy was dropped and - Poppe seems to imply - has created an extra hurdle: whereas old policy would have facilitated segments of farmers to step out, they now try to stay in the game. As a result, they get in each other's ways causing expensive overproduction. Too little have stepped out of business. Too many adventured unwisely in highly regulated, expensive production facilities. As Dutch farmers are exporting 70-95% of production, too many are hardly profitable and suffer from high market risks.
Pricing the natural commons
Krijn Poppe and Niek Koning both stress the importance of two concomitant trends. City dwellers impose their requirements. At the same time, the industry asks for efficiently produced goods at low cost prices. The two sets of requirements can't be reconciled. That predicament drives farmers crazy and defines the specific situation Dutch farming is in. The interests of farmers, processing companies and cities have grown apart and are even moving in opposite directions.
What's next in the Dutch polders and the competencies the country's farmers bred and spread?
Could agriculture and producing and processing biobased materials provide for new perspectives? Wageningen University, the Dutch center of excellence in agronomy, has already zoomed in on a new future that seems promising. However, the real future is not in the biobased economy, Koning argues. He considers biobased a dangerous, rich man's fad and intellectual phantasy. A full blown biobased economy will require too much space and other natural resources. It will result in a 'slash and burn' policy leaving little space for nature. The Dutch, Koning thinks, should rather continue building on their competencies in the petrochemical and food producing and processing industries in order to protect nature from the use of biomass.
Knibbe thinks price setting for agricultural produce needs to be reconsidered if mankind doesn't want to lose farming in delta areas like ours. Imagine city dwellers in other delta's in the world, the usual place for big cities and the agricultural production that preceded them. Cities attract people; in a few decades 70-80% of world population will concentrate in urban conditions. In case they develop the same kind of attitude Dutch society now expresses, city people risk to push away agriculture from the most fertile soils God and the globe have offered mankind.
That is a serious issue. Thorough and open minded reflection on the current Dutch crisis can help turn this potential food security risk into new perspectives. They can build on Dutch national competencies in agronomy, the (petro)chemical industry, delta water management and engineering. As an economist, Poppe thinks the Dutch need to think about pricing environmental damage and profits produced for society's original or newly created natural commons in order to inspire the market to come up with solutions and deliver practical results. He thinks leading the innovation top down from government, won't produce the effects needed.
1. Social justice:
How to deal politically with farmers being forced out of business by the neoliberal free market's logic?
2. Economy:
How to make money, keep and create jobs using the competitive advantages and business ecosystem the Netherlands have developed over centuries? Although it has become fashionable amongst Dutch progressive thought leaders to minimize agriculture's share in the national economy, the agribusiness cluster is likely to account for 10-15% or even significantly more of the Dutch economy given its co-development with other sectors for many centuries. The Dutch economy should at least consider the potentially detrimental Mikado effect of taking out the historical nucleus that bred Dutch agribusiness and its liaison with many other sectors, ranging from sea logistics (e.g the Rotterdam cluster), road, river and train logistics, via packaging, preservation and cold chain technology development to science and startups.
3. Ecology, cities and food security risk:
Will Dutch agribusiness survive once Dutch farming collapses? As society imposes ecological restrictions on agriculture, shouldn't restrictions - and new incentives such as nature pricing and profiting - be imposed on cities as well in order to help agriculture and nature survive on the most fertile soils in the world?
Wat do you think? Are the three questions Koning, Poppe and Knibbe came up with, the quintessential ones for Dutch society and its role in the global community? Please share your thoughts and ideas in the comments below.
Niek Koning is an associate at the Centre for Sustainable Development and Food Security, and emeritus assistant professor of the Agricultural and Rural Policy Group, Wageningen University, the Netherlands. He is the author of Food Security, Agricultural Policies and Economic Growth: Long-Term Dynamics in the Past, Present and Future (Routledge 2017). He gives lectures and does short-term assignments related to international farm policy issues.
Krijn Poppe just retired from Wageningen Economic Research, he is the leading agro economist and government policy advisor in the Netherlands. He helps decision makers in policy and business to understand and act upon trends in agri & food, based in science. Until recently, he worked for nearly 40 years as Research Manager and Senior Economist at Wageningen Economic Research. Currently Poppe is a Council Member of the RLI - Council for the Environment and Infrastructure and advisory councils in South Holland and Flevoland.
Merijn Knibbe teaches economics at Hogeschool Van Hall Larenstein in Leeuwarden. He is a researcher in economic history and the relation between economic theory and economic measurement. In a small and dedicated circle of agro economists, he is well known for putting grass on the map as a crop in Dutch agriculture.
1. How to deal politically with farmers being forced out of business by the neoliberal free market's logic?’Enslaved’ by free market standards
Merijn Knibbe answers the latter question with a reflection on pricing. The subsidies systems by government set prices that was designed by the EU's original Common Agricultural Policy determined 40% of, for example, dairy farmers' incomes. As from the '80's, that system was gradually abandoned. It developed into a system of administrative prices set by big buying companies and farmer owned cooperatives. Farmers quickly adapted the logic of the new system as it corresponded with their farmers management logic: they got a set - not market based - price for protein and could dimension their operations and investments in their farms to the stable factor of a fixed price component.
In the past decade welfare and sustainability standards set by retail operations have gradually been introduced. The average farmer finds it difficult to adapt to these standards popping form the market. They don't correspond with their production logic and the way their farms are organised. Yet they have a profound impact on the costs of their operations.
Farmers find themselves 'enslaved' by the new standards set by retailers. They get underpaid because their up front investments needed to comply with the new standards aren't covered. The standards are set by the free market and driven by NGO's pushing consumers to change demand; retailers respond to the trends and often rapidly changing fads thus created. A telling example is the slow growing 'Kip van Morgen' broiler Dutch supermarkets created in response to NGO Wakker Dier's campaigns. Wakker Dier is now fighting the concept in order to take the next step. Farmers have longer time horizons to recoup their investments and find themselves forced to take blind risks.
As Knibbe says, the past decade has turned farmers into 'employees'. Employees, however, without sufficient income guarantees and help to do their primary production jobs properly. The market risk is left to farmers by consumers, business partners and government.
Knibbe believes that changing demand at the level of agricultural commodities requires government to step in again. Food processing companies can't set administrative prices to meet the new cost burden farmers constantly need to adapt to. The farmers' economy can't adjust to a system of constantly changing free market standards and requirements at the level of primary production. Government seems to think they can.
2. How to make money and create jobs using the competitive advantages and business ecosystem the Netherlands have developed over centuries? Although it has become fashionable amongst Dutch progressive thought leaders to minimize agriculture's share in the national economy, the agribusiness cluster is likely to account for 10-15% or even significantly more of the Dutch economyUnique to the Netherlands: two irreconcilable sets of requirements
Niek Koning stresses that the trend Knibbe sees, is not unique to the Netherlands. Driven by consumers and NGO agenda's and campains, retailers and processors organise and command production chains. According to Koning, governments organised primary production; tax paying consumers paid for that service with a direct benefit in their common interest. In the neoliberal era, they gave up that function and left it to the free market, opening the door to overproduction and dumping. Focusing on the Dutch context, Koning states the 'location advantage' Dutch farmers used to have, went bust. That defines the 'Dutch situation' most specifically.
Due to heavy regulation as a consequence of expanding city areas, Dutch farmers have difficulty to catch up with the needs of processing companies and retailers. The levels of production cost lag behind other nationals competing for the same export markets. They need to scale up but cannot as a consequence of limited and intensively used space. Furthermore, as a consequence of urbanisation, Dutch farmers ended up farming in - as a manner of speech - park-like spaces between cities. The function of their old farmers' habitat for over 8 centuries, has changed. In a way, it is no longer theirs to use according to their ideas of good farming although they are still the legal owners.
Without farmers noticing, agricultural soils turned into landscapes city dwellers consider theirs: open 'public' space for their recreative needs and appetite for nature and outdoor wellness. That is the reason they need to comply with heavy environmental regulations and find themselves competing with city dwellers. Applying new technologies can help them out while mitigating their environmental and social impact, but also impacts their cost load negatively. In order to cover their higher costs of production they need to scale up. And that is hat consumers and NGO's don't want.
Poppe is critical on a change in government policy. Before the neoliberal era that started in the '80's, Dutch government actively helped farmers to abandon farming in favour of their more successful colleagues. That policy was dropped and - Poppe seems to imply - has created an extra hurdle: whereas old policy would have facilitated segments of farmers to step out, they now try to stay in the game. As a result, they get in each other's ways causing expensive overproduction. Too little have stepped out of business. Too many adventured unwisely in highly regulated, expensive production facilities. As Dutch farmers are exporting 70-95% of production, too many are hardly profitable and suffer from high market risks.
Pricing the natural commons
Krijn Poppe and Niek Koning both stress the importance of two concomitant trends. City dwellers impose their requirements. At the same time, the industry asks for efficiently produced goods at low cost prices. The two sets of requirements can't be reconciled. That predicament drives farmers crazy and defines the specific situation Dutch farming is in. The interests of farmers, processing companies and cities have grown apart and are even moving in opposite directions.
What's next in the Dutch polders and the competencies the country's farmers bred and spread?
Could agriculture and producing and processing biobased materials provide for new perspectives? Wageningen University, the Dutch center of excellence in agronomy, has already zoomed in on a new future that seems promising. However, the real future is not in the biobased economy, Koning argues. He considers biobased a dangerous, rich man's fad and intellectual phantasy. A full blown biobased economy will require too much space and other natural resources. It will result in a 'slash and burn' policy leaving little space for nature. The Dutch, Koning thinks, should rather continue building on their competencies in the petrochemical and food producing and processing industries in order to protect nature from the use of biomass.
Knibbe thinks price setting for agricultural produce needs to be reconsidered if mankind doesn't want to lose farming in delta areas like ours. Imagine city dwellers in other delta's in the world, the usual place for big cities and the agricultural production that preceded them. Cities attract people; in a few decades 70-80% of world population will concentrate in urban conditions. In case they develop the same kind of attitude Dutch society now expresses, city people risk to push away agriculture from the most fertile soils God and the globe have offered mankind.
That is a serious issue. Thorough and open minded reflection on the current Dutch crisis can help turn this potential food security risk into new perspectives. They can build on Dutch national competencies in agronomy, the (petro)chemical industry, delta water management and engineering. As an economist, Poppe thinks the Dutch need to think about pricing environmental damage and profits produced for society's original or newly created natural commons in order to inspire the market to come up with solutions and deliver practical results. He thinks leading the innovation top down from government, won't produce the effects needed.
3. As society imposes ecological restrictions on agriculture, shouldn't restrictions - and new incentives such as nature pricing and profiting - be imposed on cities as well in order to help agriculture and nature survive on the most fertile soils in the world?For subsequent and separate discussion, the three men propose three topics:
1. Social justice:
How to deal politically with farmers being forced out of business by the neoliberal free market's logic?
2. Economy:
How to make money, keep and create jobs using the competitive advantages and business ecosystem the Netherlands have developed over centuries? Although it has become fashionable amongst Dutch progressive thought leaders to minimize agriculture's share in the national economy, the agribusiness cluster is likely to account for 10-15% or even significantly more of the Dutch economy given its co-development with other sectors for many centuries. The Dutch economy should at least consider the potentially detrimental Mikado effect of taking out the historical nucleus that bred Dutch agribusiness and its liaison with many other sectors, ranging from sea logistics (e.g the Rotterdam cluster), road, river and train logistics, via packaging, preservation and cold chain technology development to science and startups.
3. Ecology, cities and food security risk:
Will Dutch agribusiness survive once Dutch farming collapses? As society imposes ecological restrictions on agriculture, shouldn't restrictions - and new incentives such as nature pricing and profiting - be imposed on cities as well in order to help agriculture and nature survive on the most fertile soils in the world?
Wat do you think? Are the three questions Koning, Poppe and Knibbe came up with, the quintessential ones for Dutch society and its role in the global community? Please share your thoughts and ideas in the comments below.
Niek Koning is an associate at the Centre for Sustainable Development and Food Security, and emeritus assistant professor of the Agricultural and Rural Policy Group, Wageningen University, the Netherlands. He is the author of Food Security, Agricultural Policies and Economic Growth: Long-Term Dynamics in the Past, Present and Future (Routledge 2017). He gives lectures and does short-term assignments related to international farm policy issues.
Krijn Poppe just retired from Wageningen Economic Research, he is the leading agro economist and government policy advisor in the Netherlands. He helps decision makers in policy and business to understand and act upon trends in agri & food, based in science. Until recently, he worked for nearly 40 years as Research Manager and Senior Economist at Wageningen Economic Research. Currently Poppe is a Council Member of the RLI - Council for the Environment and Infrastructure and advisory councils in South Holland and Flevoland.
Merijn Knibbe teaches economics at Hogeschool Van Hall Larenstein in Leeuwarden. He is a researcher in economic history and the relation between economic theory and economic measurement. In a small and dedicated circle of agro economists, he is well known for putting grass on the map as a crop in Dutch agriculture.
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In advance: I wrote my comment along the conversation was going on my tv screen.
I started writing by parts that I have questions about:
I think there missed a part in this conversation. The conversation is primarily from an economic perspective. The finding that farmers where around cities and now in cities is understandable. Otherwise for every farmer in the area North or South Holland (provinces in Holland) this has been the case for many many years.** So I don’t know how new that is. I think there is also meant that the inhabitants of a country and also in the Netherlands became more mobile. There is more free time on a Saturday and a Sunday to go out for a day trip with the family (or lease company car). The growing tourism activity from each inhabitant is growing since the ‘50’s. And also there are more and more inhabitants which are doing this.
Secondly it sounded a bit hard to me to say that those inhabitants want a romantic landscape…
The development for using for example pesticides is not a farmer discussion or agriculture knowledge discussion only. Inhabitants are involved in 3 ways:
1) The have to eat it > consumer part
2) Pollution of soil and later on groundwater is also not just only for the farmer. How is using and ‘owning’ the top layer of the soil defined in this conversation. You can only own the top 100cm of soil as a farmer?
3) The total biodiversity does not end in the surrounding of cities. The world health of soil, air and water is everyone’s concern.
It almost sounded that farmers alone are capable to protect the health in the countryside for nature. It also sounded like they were/are responsible enough therefore. From what I know history shows that laws where needed to ensure that farmers comply to good and responsible practices. Just look at all the laws that has been and are still are for fertilizing the land. For animal manure as well as fertilisers in Europe and/or in the Netherlands.
As a child from begin ’80 I saw how the water quality improved in the area, the polder Vijfheerenlanden.
The perspective what missed in this conversation was the “right of agriculture” to do whatever is necessary from a sustainable perspective in the meaning of health for soil, water, and air. The all of nature.
This sounds quite economic: production area where nearly everything is allowed. And it went to fast to a free market thinking: Well for those who want that there is a niche market wherein they will pay for it. That left a gap of in between, it missed the ‘right’ to pollute.
The squeeze is also developed by agriculture by findings of products as pesticides and the use of pesticides. Did agriculture stop with DDT of did the society say where stopping this in America, Europa, Japan? (in Africa it is perhaps still an issue in case of Malaria).
Niek missed a perspective I guess enhance of energy input. Excluding fossil fuels but including ICT. ICT is a synonym for energy as far as I’m informed. And this are the perspectives for the future:
1) (less) no fossil fuel
2) (less) no pesticides > more whit in biology
3) (less) no pollution > loss of Nitrogen and Phosphorus for example
4) Last but not Least!!: Growing yield production
I think not just Holland is on this problem and/off in the lead op this problem.
For a next discussion please include more than economics…
I understand Krijn on the end.
And also the best part is the end of the conversation.
Totally agree with Niek about this: all kind of perspectives:
But I don’t know if you can sort them out. Line up the discussion agreed. But in the end there is only one option and the all come together. We cannot afford to ignore or forget one.
** The whole discussion that cow’s where not seen outside in the summer became an issue when that development arrived in that area’s. In other area’s of Holland this development happened already some years earlier.
I've read this post and the previous two with great interest. They provide useful background insights to what the title of the Remkes commission's report on the nitrogen crisis sums up so well: "niet alles kan" (you can't have it all).
At the same time I have some critical points which I'd like to bring into this debate. The first is that ecological restrictions are presented here as some kind of social construct, variously conjured up by politicians, society and agribusiness. This is a dangerous road to go down and we mustn't risk conflating real ecological constraints (or planetary boundaries) grounded in decades of science with fads or desires.
The second is that the rural / urban dichotomy presented here is not helpful if we want to address the issue at hand. It perpetuates a way of thinking whereby farmers only have to make concessions to urban voters, and can never benefit from seeking closer ties to those other citizens. It's bad enough that stereotypes of the ignorant city-dweller are trotted out by those that have no interest in solving the many problems our food systems face, so it's a pity to see it presented in the same way by four very respectable and forward-thinking experts. That's not to say however that citizens and politicians making demands on farmers often aren't uninformed and out of touch - so let's not simply see that as a given and see if we can't figure out how to create a more "food and agri literate" and better informed populace.
Third, I miss a recognition of the fact that the ecological limits we're dealing with are a result of comparatively recent trends in consumption patterns, considerable increases in animal protein consumption in particular. This is as much a factor in how the current Dutch agricultural sector has been shaped over the past half century as the other long-term trends you describe so well. I'd love to hear your thoughts on whether you think this is something we simply have to accept and work with, or if there's something we can do about it. Specifically, what risks and opportunities are there for farmers on the one hand and agribusiness on the other?
In light of this, I think the third potential question posed above bears following up on, and I think it may best be framed in terms of a social contract: given the ecological constraints that we face, how can the burdens of meeting multiple objectives through the use of agricultural land be distributed fairly and efficiently?
Hi Niko, thx for your critical comments!
Niek Koning is particularly keen on asking the question: suppose all delta's by the sea would significantly want to reduce agricultural output?
I think it is a relevant question. It's kind of a mother of truths to state we need to respect nature. Sure and no doubt. I think we most certainly need to. But what would your answer to the delta question be?
That’s a good question Dick Veerman, and I guess it depends on the delta, who lives in it, and what demands the inhabitants have of the land besides food production. Again for me it comes down to consumption patterns that are unsustainable. It’s bizarre that in the Netherlands for example we consume so much meat AND produce 3x the domestic pork demand. At some point it doesn’t matter any more where it’s produced and how “efficiently”, it just has to decrease.
Natuur & Milieu actually illustrated what would be healthy for the Netherlands in terms of both human diet and sustainable domestic food production. And yes it implies a significant reduction of some foods, but not necessarily a significant reduction in overall food production.