Traditional construction plan kills arable income

The average income in Dutch arable farming decreased by €2017 in 17.000 to €25.000 per unpaid annual work unit (aje). This is because the yields of crops in the traditional cultivation plan are under considerable pressure.

Of all agricultural sectors, arable farming dangles at the bottom of the income estimate from Wageningen University and Research (WUR). The gap with the average income in the agricultural sector (€71.000 per aje) is quite large. Prices of ware potatoes, sugar beet, onions and grains were disappointing in 2017. For example, the price of ware potatoes fell by 41% compared to 2016.

The cultivation of starch potatoes is more profitable. Companies with starch potatoes, sugar beets and grains have achieved a stable average income of €65.000 per aje in recent years. These companies benefit from Avebe's good payout prices. Direct payments from the Common Agricultural Policy (CAP) are likely to decrease significantly in the coming years, due to the switch to an equal payment per hectare in the Netherlands.

Find an alternative to grains
The WUR expects that in the coming years it will become more interesting to exchange grains for other crops, due to the large end stocks in the world. This does not alter the fact that grains remain important for crop rotation. That is why WUR provides stable grain production in the Netherlands. The rapeseed area will probably remain the same as in previous years.

In the short term, WUR expects continued price pressure in arable farming. In the longer term, prices are likely to pick up somewhat, but at a slower pace than inflation.

Wouter Job

Wouter Baan is editor-in-chief of Boerenbusiness. He also focuses on dairy, pig and meat markets. He also follows (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

© 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.