CAP money can offer Dutch farmers all kinds of opportunities

The European Union has missed an opportunity to use the money from the Common Agricultural Policy (CAP) for sustainability. In its national policy, however, the Netherlands can do great things with the Brussels agricultural money. Initiatives that are also good for the farmer.

The CAP grants the farmer income payments based on his amount of land. In many European countries, this way of calculating has led to land price increases† This makes it more difficult for young farmers to take over their parents' business or to buy a business.

Many EU Member States are very concerned about this. In order to ensure that there are enough young people who want to start a farm, extra money is now being made available in the new policy for young farmers. Income supplements also lead to an increase in rents. In Eastern Europe, in this way, sometimes half of these allowances benefit the landowners who lease their land.

More power in soil
In fact, land and rent increases in the value of land and rent lead to higher cost prices and thus put pressure on incomes in the longer term. of the companies. Many companies invest in land, which means that more and more equity is being invested in land. As a result, strong capital growth is taking place, partly due to the rise in land prices. Like this pale the shareholders' equity of dairy farmers has grown by €2011 annually in the period 2018 to 70.000.

Anyone who sees his wealth grow in this way every year has little reason to complain. The adage 'farmers live poor, but die rich' still holds true. That has to change. The financing structure in agriculture is too focused on ownership. This does not justify the fact that €700 million is paid out annually in income allowances in the Netherlands.

The carrot and the stick
In the Volkskrant of October 23 from Bas Eickhout, member of the European Parliament of the Groen Links, his frustration about the limited greening of the decisions that have now been taken about the CAP funds. The necessary sustainability of the sector will therefore be a tough battle. Eickhout refers to the stick (legislation) and the carrot (subsidy) and concludes that the carrot is given away too early.

Then only the stick remains as a means of shaping the desired sustainability. This in turn means that legislation will only become stricter in the coming years. Meanwhile, the Dutch farmers are fed up with new legislation that is being poured out on them.

Dutch farmers have had experience with stricter legislation for some time. In 2003, the Netherlands was convicted by the European Court of failure to comply with the obligations of the Nitrates Directive. During the derogation negotiations in 2006, agreements were already made for a phosphate ceiling in 2015. And that phosphate ceiling has caused a great deal of regulatory pain, partly due to the abandonment of the superlevy at the request of the Netherlands. After the phosphate problems, the nitrogen problems arose.

Higher regulatory pressure on the way
More regulatory pressure can be expected in the coming years. Sooner or later, you will also have to pay for the emissions of greenhouse gases, from which agriculture is still exempt. The increasing desiccation of sandy soils also requires rules and levies to reduce the use of groundwater. The water quality of the surface water is still deplorable. Compared to other European countries, the Netherlands scores the worst on the Water Framework Directive. That requires additional measures.

European Commissioner Frans Timmermans' Farm to Fork strategy aims to reduce the use of crop protection products, antibiotics and fertilizers. Nor is this possible without additional measures. It is therefore good to use the root of the CAP funds to ease the pain of legislation and support the sustainability of companies. Over the past decade, Dutch politicians have had little interest in this. The House of Representatives still does not want a link of the CAP funds with European directives.

Banal income support
The European opportunity to use the CAP money amply for sustainability has passed us by. The money is not used as an investment in agriculture, but as banal income support to keep our farmers as long as possible in the rat race. That has a downside. There will be no adjustment in this case, because the European guidelines are no nonsense. A government that opens the subsidy tap uncontrollably without directing investment will sooner or later have to impose mandatory rules on agriculture.

This means that the pain of Dutch farmers with an intensive use of space and with an agriculture that exceeds ecological limits is becoming more and more distressing. Both the phosphate and nitrogen dossiers are clear examples of this. In both files, aided by Dutch politics, farmers pushed their 'going business' to the limit in the race to remain in the market. In the end, they had to deal with rules that they can no longer comply with. This is not in the interests of the farmers.

There is still hope
European farmers' politicians probably haven't realized that allocating more money to biodiversity and government-paid extensification can reduce overproduction. Without arguing with the competition authorities. It would undoubtedly have been in the interest of better prices for agricultural products.

Consumers do want sustainable food, but are not prepared to pay all the additional costs. The market is therefore only able to a limited extent to finance the costs of sustainability. This applies in particular to Dutch agriculture, because three quarters of production is exported as agricultural raw material. A large part of this goes to Germany, where consumers are not always convinced of the Dutch efforts for animal welfare, which according to our policy makers should provide added value.

A German once asked me 'Was machen die Holländer mit diesen Tierfabrike?' The tendency of farmer managers to blame the consumer for not paying for everything farmers do for sustainability seems unworldly. BMW and Volkswagen do not blame the consumer if their cars are sold less. The advantage is that more responsibility for the spending of CAP funds has been placed with the Member States

Dutch farmer remains imprisoned
Dutch farmers in particular remain trapped in the dominant (Dutch) model, which is aimed at increasing scale, efficiency and cost reduction, but not at agriculture that convinces in an expensive region because of its added value. Like me yesterday As argued, farmers are therefore not the winners of the new income support and non-sustainability-based decision-making on the latest CAP.

Fortunately, it is now up to the Member States to give substance to the expenditure of CAP funds via a National Strategic Plan. The advantage is that more responsibility for spending CAP funds has been placed with the Member States. In view of the ambitious statements that Minister Schouten still maintains, the Netherlands can focus the spending of the funds here more on climate and biodiversity recovery. That offers all kinds of opportunities.

Combine CAP funds
Like last year in the advice of the Council of the Environment and Infrastructure on the CAP, it is useful to combine sustainability efforts from the chain with surcharges from the CAP. An example of this is the initiative that FrieslandCampina has started based on a points system. Connection to the Delta Plan for Biodiversity Recovery offers further perspective. There are also opportunities in arable areas to increase biodiversity with field margins, reduce disease pressure and ensure less pollution of surface water.

Arable farmer Piet Hermus has been reminding us at Foodlog for years that farmers are not only victims of climate change, but can also contribute to the storage of CO2 in the soil. Improving soil quality and climate measures in conjunction can be given a place in the National Strategic Plan to be drawn up.

The same applies to measures to reduce desiccation. This applies to both the peat meadow areas and the high sandy soils. This is not only good for the climate and biodiversity, but also good for agriculture. After three dry summers, many farmers are realizing that it is time to improve water retention. This requires that as much CAP funds as possible be used for rural policy, because there are more opportunities there to use those funds for public purposes.

If the cabinet and the House do not use this control, then the social support for the CAP funds - which comes from taxes - will diminish further. Agriculture is not served by this. It is even conceivable that more farmers than necessary will disappear because they are left with high taxes.

This article is part of the content collaboration between Boerenbusiness en foodlog† In two parts, Joost de Jong, former policy official of the Dutch Ministry of Agriculture, gives his vision on the new framework for the Common Agricultural Policy of the EU. Part 1 was published yesterday: 'Farmers are also losers from these CAP decisions'.

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