News Agro Nutri Monitor 2021
ACM: 'Expropriated farmer who cannot produce sustainably'
To promote sustainable agriculture, production must be limited and demand stimulated. This is stated by the Netherlands Authority for Consumers & Markets (ACM). The suggestions for achieving this range from increasing sustainability requirements to expropriating farmers who are unable to switch.
The ACM, which included the former cartel watchdog NMa, writes this in a letter to the Ministry of Agriculture when presenting the so-called Agro-Nutri Monitor 2021. According to the authority, the higher price of sustainable products is the biggest obstacle to making agriculture more sustainable. Many consumers are currently unwilling to pay more for this if there is a cheaper, conventionally produced alternative. Because Dutch agriculture is largely dependent on exports, according to the ACM, consumers abroad should also be willing to pay more.
According to the ACM, subsidies for farmers who produce sustainably and a VAT reduction can be considered to promote domestic sustainable demand. For exports, the authority sees benefits in "more cooperation between sustainability labels at European level. This can increase the willingness of consumers to pay abroad." According to the ACM, however, it is 'implausible that only demand-stimulating measures are enough'.
Voluntary buyout or expropriation
As an example of production-limiting measures, ACM gives: agreements between farmers and within production chains to meet higher sustainability standards, raising legal minimum sustainability requirements within the European Union or in the Netherlands, voluntary buy-out of farmers who produce regularly and cannot switch or, in the extreme case, expropriation of farmers.
In practice, this will involve a combination of measures that fall within these solution directions, ACM indicates. "These measures obviously have profound implications for the sector that need further investigation," the letter said. ACM does not specify anywhere what the minimum requirements for sustainability are and under what circumstances an agricultural company cannot 'switch' to sustainable business operations.
More insight into price development
The Ministry of Agriculture wanted more insight into the price development of regular and sustainable agricultural products. The ministry also wanted to get an idea of the obstacles for primary producers when switching to sustainable agriculture. The results of the Agro Nutri Monitor 2021, conducted by Wageningen Economic Research, confirm the results from the first monitor of 2020. This is that the higher costs of organic production for most products are compensated by the additional price they receive for these producers. Wageningen UR investigated seven products: onions, Brussels sprouts, pears, tomatoes, milk, pork and table potatoes.
Enforce unfair agricultural trade practices law
To further stimulate sustainability, also in the agricultural sector, ACM has drawn up guidelines for sustainability agreements. ACM has also written the sustainability claims guideline with the aim of protecting consumers against misleading claims in the field of sustainability and to stimulate fair competition in this area. From 1 November, farmers, horticulturists, fishermen and many food processors can report unfair trade practices to ACM. From that moment on, ACM will enforce the Unfair Commercial Practices Agricultural and Food Supply Chain Act.
Linda van Eekeres
© DCA Market Intelligence. This market information is subject to copyright. It is not permitted to reproduce, distribute, disseminate or make the content available to third parties for compensation, in any form, without the express written permission of DCA Market Intelligence.