Phosphate rights: the facts at a glance (part 3)

In the second part In the series we looked at the effect on land-based companies, the emergency scheme and the generic discount. This third part focuses, among other things, on the milk quota, generic skimming and the progress of the derogation.

What is the difference with the milk quota?
Milk production was limited until April 1, 2015 by a milk quota. If the quota was exceeded, a super levy had to be paid. That levy was based on a deduction from the milk price. In contrast to the milk quota, the system of phosphate rights is based on a fine. 

The phosphate rights are difficult to adjust. Only at the end of the year will it be clear exactly how many phosphate rights are needed. At the time of the quota, adjustments could be made better by possibly leasing additionally, focusing on milk production or simply choosing to pay a super levy on the last liters. This makes the phosphate rights system much less flexible than dairy farmers were used to with the quota.

What happens if more is produced than there are phosphate rights?
Every company may produce as much phosphate as there are rights available. So more cows than rights not allowed. If this is exceeded, the Economic Offenses Act comes into play. This corresponds to the scheme for pig and poultry rights. 

One must be careful with this, because it can lead to hefty fines. The amount of the fine will be determined by the judge. This depends, among other things, on whether there is intent. However, it must be taken into account that higher milk production per cow leads to higher milk production fixed excretion standard. This means that dairy farmers need more phosphate rights with higher milk production. 

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What is known about generic skimming?
De generic skimming is set at 8,3%. However, it is not inconceivable that there will be an additional discount on top of this. Van Dam has indicated that it wants to apply an additional discount of 1,5%.

At the insistence of the LTO and NAJK, this extra discount has not yet been applied. However, higher phosphate production may require an additional discount.

Is there a prospect of derogation? 
The bill states that the phosphate rights will be introduced in 2018, provided there is insight into this derogation.' The derogation is part of the sixth Nitrate Directive action program. The duration of this program is 2018 - 2021. Kamp has stated that he aims to have the Dutch proposal in Brussels before 2018.

Kamp presented a package of measures on October 13 and will negotiate with them in Brussels. Brussels' condition for the start of the negotiations is that Dutch livestock farming does not produce more phosphate than agreed, namely 172,9 million kilos of phosphate. Rights can only be introduced per calendar year. 

Also read: 
Phosphate rights: the facts at a glance (part 1)
Phosphate rights: the facts at a glance (part 2)

Will you also come to it on Thursday, November 30? National Economic Agriculture Congress in Bunnik (Utrecht). Lubbert van Dellen will discuss, among other things, phosphate rights. Look here for more information.