News Vision ABN Amro
This changes for the farmer after the corona crisis
What will change for farmers in our country after the corona crisis? ABN-Amro has examined this question in the report 'The Netherlands after corona in four scenarios'. In this, the bank outlines the agricultural future in our country and beyond.
Circular agriculture across Europe may be gaining momentum, but according to ABN Amro it is certainly not excluded that many countries want to become self-sufficient in food production, as Russia and China also aspire to. The consequences for farmers vary widely per scenario. An overview.
Cost price and scaling up
In the first scenario - 'Freedom for the strong' - ABN assumes that income inequality will increase as a result of the crisis. A large group of consumers has less to spend and therefore has to 'watch out for the little ones'. Food companies are responding to this with a cost price strategy. The price is also often a determining factor on the export markets.
The larger farms have an advantage and that encourages economies of scale. The Netherlands excels with products that can be produced at a competitive cost, such as potatoes, tomatoes, pork and dairy. The market for sustainable products is very limited. There are citizens who protest against this way of producing, but only to a small extent.
Demand-driven production through chains and quality marks
The second scenario - 'Open high-tech community' - is based on technological advances such as blockchain, Crispr-Cas and precision farming. Quality marks such as Planet Proof, Skal and Beter Leven are growing strongly, because retail and consumers reward this by means of a higher price. Production is concentrated in regional chains, but on a free market. The government does not interfere too much. Agricultural bulk production in our country continues to exist, but is mainly exported. This damages the image of these companies. The Dutch consumer is very critical of the production method and nutritional value.
Countries want to be self-sufficient
Scenario 3 - 'The own state' - may seem the most unlikely on the basis of the current political course of events in our country. Due to the corona crisis, the Netherlands and other countries no longer want to be dependent on third parties, the ABN outlines. Nationalism is growing, countries are taking an example from Russia and China and farmers are getting subsidies to scale up.
For the Netherlands, this strategy has a downside, as exports are running up against trade barriers (such as increased export tariffs). This puts prices under pressure, resulting in the necessary agricultural bankruptcies. Due to the competitive prices, there is no room for those who stay to become more sustainable. Over time, the Dutch agricultural sector loses its technological lead. Livestock companies and seed breeders in our country are facing contraction.
Circular agriculture at its best
In the fourth and final scenario - 'The protective state' - the bank expects that the government will regulate sustainability and health strongly under pressure from society. The result is a shrinking herd. Agricultural lands are purchased for forest planting and energy generation. Circular agriculture is also becoming a theme in other European member states. Soy from (South) America is excluded in order to close cycles. Consumers are encouraged to eat healthy, which reduces health costs. For example, a sugar tax is becoming a reality. Agricultural production is falling and with it the export volume. Suppliers notice the consequences.
Wouter Job
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