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'Cabinet must be more realistic about the effect of the purchase'

3 October 2022 - Klaas van der Horst

The expectations regarding a voluntary buy-up of farms to solve the nitrogen crisis should not be set too high. This is stated by the Netherlands Environmental Assessment Agency (PBL). Analysis of previous voluntary termination schemes shows that budgets were never fully spent.

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The PBL states this in the report Ending livestock farms. This study draws lessons from an analysis of 25 years of voluntary and mandatory termination schemes. The difference with previous arrangements is that at the time much lower amounts were reserved for purchases than now. This time the government is setting aside billions of euros to buy out livestock farms for nitrogen, nature, climate and water tasks. These ambitions affect thousands of farms and are not without social controversy.

According to the PBL, the analysis shows that full expenditure of the reserved budgets in the period up to 2030 is 'hardly conceivable'. "Awareness of the realistic scope of this instrument offers opportunities for more effective policy."

The analysis of previous voluntary cessation schemes, mainly aimed at pig farming, shows that the budgets for this were never fully spent. These voluntary schemes achieved a reduction in pig numbers of 2% to 7% per year and in dairy cattle around 1,5% per year.

Expropriation can take years
Mandatory instruments, such as expropriation, have been rarely applied in the past and, according to the PBL, the disadvantage is that their use is subject to strict conditions. This makes the outcome of that effort uncertain, while appeals procedures can take years. Another factor that limits government purchasing schemes is that they must not distort the market. This is a European requirement.

Billions in damage due to nitrogen crisis
The Economic Institute for Construction (EIB) now calculates in the FD that the damage caused by the nitrogen crisis is increasing and is now estimated at €14 to €14,5 billion for construction. According to the newspaper, the total damage now amounts to €28 billion. That is five times as much as in 2019, when the political crisis surrounding nitrogen began. This estimate has not yet been calculated or confirmed by other institutions and organizations. 

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