'Get the feeling that politics sees a solution in innovation'

'Don't halve, but innovate'. That is Lely's credo to get out of the nitrogen impasse. The machine builder may be preaching for his own parish, but according to CEO André van Troost, this is the solution to the nitrogen problem within the agricultural sector. The Lely Sphere can reduce 70% nitrogen on a dairy farm, but such a system costs €170.000. So the company is dependent on government money. "Without subsidies, launching the Lely Sphere and other reduction methods is a lot more difficult."

Halving the livestock does not seem to be an issue, but the cabinet is not interested in innovative solutions either. What do you think is the solution to get out of the nitrogen impasse?
"Compared to a year ago, I have the feeling that politics here is increasingly warming up to innovative solutions. My glass is more than half full. I base this, among other things, on the conversations that have taken place with mediator Johan Remkes. For example, alternatives for the critical deposition value (kdw) are being looked at. The 2030 deadline also appears to be less fixed. Although nitrogen minister Van der Wal still insists on reduction, I believe that the cabinet sees more solutions than just buying out. because there are reports that this may be leaning towards unauthorized state aid. And let's be honest: In the past 30 years, 60% of nitrogen emissions have already been reduced through innovative reduction methods. So it is possible. We must not close our eyes that the demand for dairy worldwide grows 2% to 4% annually If we clean up livestock in the Netherlands, milk production elsewhere will increase From an environmental point of view we book on global s then don't make a profit."

With the Lely Sphere you offer a solution to reduce a 70% nitrogen reduction on a dairy farm. This sounds great, but the price tag of €170.000 is hefty. So is a subsidy necessary?
"With a subsidy, the purchase of the Sphere is made more easily accessible for a farmer. By allowing the fertilizer flows to be applied, we are also developing a revenue model for farmers. This is because they can then save considerably on fertilizer. , then we are talking about small numbers that we are going to sell.With the 96 Sphere's from the pilot that Lely launched as an objective together with FrieslandCampina and Rabobank, we are not going to solve the nitrogen problem. This is a first step from the sector. For large-scale reduction, we are talking about thousands of numbers. I would also like to emphasize that Hanskamp, ​​Vencomatic and JOZ have also developed good solutions. So let's put the €25 billion into innovative solutions. To start with on companies near Natura 2000 areas. After all, we cannot build 16.000 Sphere's in a year, but we can for the next 10 years. I want to give that commitment to the cabinet."

Lely has done a great job with the new Campus in Maassluis. Will the Netherlands remain the home base when the livestock population starts to shrink significantly?
"For the time being, yes. We have invested €100 million and are in the right place here. We serve the 50 countries where we are active from the Netherlands. I cannot guarantee this in the long term, but that seems logical to me. Incidentally, we achieve less than 10% of our turnover from the Netherlands. But due to all the vicissitudes that are now at play, the Dutch market currently requires three quarters of our time. That is sometimes frustrating. It is often said that the problems that are in the Netherlands now will arise elsewhere in a few years. I think that this is indeed the case with nitrogen, but hopefully less violently than is the case here."

The nitrogen crisis is 'just' one of the many crises that are currently going on. For example, to what extent does the energy crisis affect you?
'We are also noticing the energy crisis, just like other companies. However, we feel the shortage of raw materials and chips more strongly. This has been going on for at least two and a half years. As a result, turnover stagnated at approximately €600 million last year, while a growth of 10% was certainly possible. Our order book is healthy, partly due to the increased milk price. But unfortunately we cannot produce at full power. The Russian boycott due to the war in Ukraine is also costing us quite a bit of turnover. We fully support the decision to no longer sell robots there, but this is a loss commercially."

The issues of the day are therefore great, but as the inventor of innovations, Lely must have a distant horizon. What will a Dutch dairy farm look like in about 10 years?
"I think automation will have been embraced by 95% of the companies. Now that is only 20% to 30% and worldwide we are talking about only 2%. The market potential is therefore enormous. The demand for automation is also due to staff shortages in the sector. Traceability is also becoming increasingly important, perhaps even down to the cow. I will not mention products that we develop, but the focus in the sector will be on themes such as methane reduction, soil health, biodiversity and energy management. around the license to produce to protect dairy farming."

Finally, you were a professional cricketer in England before starting your career with Lely. What lessons have you learned from this? 
"In England, cricket is a big sport with a lot of media attention. It is often said that interviews with athletes are boring, but that is for a reason. After a win you have to watch out for euphoria, just like when you lose you don't get in sackcloth and ashes. As an athlete you learn to put things into perspective. Dairy farming is also in the news almost daily, so that is not new to me. As CEO of Lely I receive emails from farmers who deny the nitrogen problem, as well as from environmental activists who accuse us of anything and everything I try not to approach the developments too emotionally, but steady to follow. As Lely, we have a vision that we believe in. You shouldn't let that distract you too much."

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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

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