News Nitrogen
New livestock farming restructuring scheme to open in 2022
The new National Termination Scheme for Livestock Farms (Lbv) will be opened in the spring of 2022. Farms with dairy, poultry or pigs that want to stop can participate voluntarily. A budget of €970 million is available for this scheme.
Carola Schouten, the outgoing minister of agriculture, informed the House of Representatives in a letter today about the preparations for the Lbv. The scheme was announced at the beginning of 2020 and is part of the structural approach to nitrogen.
The structural approach to nitrogen comprises a broad package of investments that should allow nature to recover and reduce nitrogen precipitation in the period up to 2030. The measures are also aimed at relaunching permits, Schouten writes.
According to the ministry, the Lbv scheme should contribute to a structural solution to the nitrogen problem. The measures are voluntary, entrepreneurs who make use of the schemes receive a subsidy to wind up their business. The minister also provided insight into the preparation of the second tranche in the Targeted Purchase Measure Scheme for the end of this year.
Implementation of the National Termination Scheme for Livestock Farms (Lbv)
Dairy, pig and poultry farmers will soon be able to register for the scheme. Exactly which companies can claim subsidy money will be determined later by the ministry on the basis of a cost analysis. According to the ministry, the scheme focuses on reducing nitrogen precipitation as efficiently as possible, whereby applications are ranked according to cost-effectiveness.
In practice, this will mean that companies with the highest reduction in nitrogen deposition per euro subsidy will be awarded first. Companies with 'relatively high costs per mole of nitrogen deposition to be reduced' will come at the bottom of the ranking and will not participate if they oversubscribe from the scheme. The ministry is also introducing a threshold value for nitrogen load on nature reserves. This contributes to a cost-effective arrangement, according to Schouten in the letter.
A total of almost €1 billion is available for the scheme, divided over 2 tranches. The first tranche will open in the second quarter of 2022. The scheme must ensure that the nitrogen deposition in sensitive nature areas decreases by a minimum of 16 to a maximum of 35 mol/ha/year. The range is so large because it is not clear in advance which companies want to participate and which companies are eligible. The minister has announced that he will release the scheme in September.
Agricultural land is not covered by the scheme, production rights disappear
Schouten indicates that, in principle, agricultural land belonging to discontinuing companies does not have to be bought up or taken out of circulation. However, it is investigating whether the government can obtain a right to 'first negotiation' for those lands that may be important for the realization of nature or agricultural purposes. According to Schouten, this could contribute to an extensification of livestock farming and contribute to the Netherlands Nature Network.
Production rights of the participating companies will be withdrawn from the market and will disappear. This should ensure that the livestock population continues to shrink.
Targeted Buying Measure
In the letter, the House was also informed about the progress of the Targeted Purchase Measure. A total of €2000 million is available for this provincial scheme, whose main objective is to reduce nitrogen deposition on congested Natura 483 areas by purchasing peak loaders. The first tranche was already opened last November and the provinces are now conducting discussions and procedures with the companies that have registered. In addition to dairy, pig and poultry farmers, calf and goat farmers can also register for the MGO scheme.
Steve Wissink
© 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.
