What if the supermarket also becomes a landowner?

The Belgian supermarket chain Colruyt Group is on thin ice. The organization wants to acquire even more agricultural land and that leads to a lot of discussion, both within agricultural organizations and within Flemish politics. It is feared that the position of the farmer in the chain will come under further pressure.

The Colruyt Group recently announced the establishment of Agripartners. With this new operating company, the supermarket chain wants to acquire more agricultural land in the coming years. The intention is to grow crops in collaboration with local farmers, which are sold as much as possible through their own shops. In the first instance, this concerns conventional arable crops, writes de Colruyt in a statement.

Pressure on farmland
That idea is not entirely new. More than 2 years ago, the Colruyt Group already bought a organic farm in West Flanders with 25 hectares of agricultural land. This made it the first supermarket chain in Belgium to be active on the production side of agriculture. The next step with Agripartners is causing quite a stir in Flanders. Not least because the pressure on agricultural land has increased in recent years.

The price of Belgian agricultural land has decreased between 2015 and 2019 increased by more than 28%† In Flanders, the average price for 1 hectare of land is almost €54.000. The price of land has risen sharply in the past year, especially in Flemish Brabant and East Flanders. These are precisely the 2 provinces where Colruyt can further increase the pressure from Halle. It led to a lot of discussion in the Flemish agricultural committee last week.

Vertical integration
Agriculture minister Hilde Crevits was asked to explain Colruyt's plans and the purchase of agricultural land by the retail sector. The minister emphasized that it is not new that 'non-agricultural companies are entering the land market'. Nor is it new that 'vertical integration in the food chain is pursued in order to achieve efficiency gains or reduce costs'. "I must assume that the implementation of the cooperation with local farmers is done with mutual respect."

Nevertheless, agricultural organizations ABS and Boerenbond fear that farmers will relinquish their freedom and that the current imbalance in the chain will continue to grow, as can be read on felt.be† The intentions may be good, but the consequences are by no means, according to Boerenbond. The increasing power of retail threatens the position of farmers and entrepreneurship in the chain. 'In the long run (almost) no one will benefit from this.'

Reinforcing farmer's position
Crevits agrees that Colruyt's plans are new in conventional agriculture, but not in organic agriculture. "There is, for example, a land cooperative that acquires agricultural land and then makes it available to the members to grow food on it. That in itself is an interesting model." However, an agricultural cooperative is different from a retailer that fulfills a role, politicians rightly observe.

And so the question arises again how the chain position of agricultural entrepreneurs and thus their income can be strengthened. According to Crevits, there is only one effective way: "Cooperation between farmers. This is one of the biggest challenges we face: trying to influence prices in the right way." The government is working on the necessary instruments, according to the minister.

Jeanette Pennings

Jeannet has her roots in the flower bulb sector and she grew up on an agricultural company in the northern part of North Holland. As a generalist she reports for Boerenbusiness across all sectors. She is also exploring the possibilities of sponsored advertising.

j.pennings@boerenbusiness. Nl

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