Liquidity advance on the sale of phosphate rights

The stop scheme for dairy farmers, which will be opened from 20 February, also has consequences for rent. Landlords do not want to be left behind with land and infrastructure without phosphate rights. In addition, stopping dairy farmers can receive a liquidity advance on the sale of phosphate rights.

Landlords want to prevent that, after business termination by the tenant, they are left with land and infrastructure without phosphate rights. The Private Land Ownership Federation (FPG) advises lessees to make proper agreements with lessees about the stopper arrangement. By starting the conversation in advance, according to the GIF unpleasant situations or even legal conflicts are prevented afterwards. There is still a lot that is unclear about the value and distribution of ownership of phosphate rights when they are sold. 

The federation compares the situation with the introduction of the milk quota. Then, after years of jurisprudence building up, a 50/50 division of ownership was finally accepted between tenant and lessor. If the lessee ceased dairy farming, he was obliged to return his share of the milk quota - against payment - to the lessor.

The stopping scheme ensures that stopping dairy farmers are eligible for a premium per animal in 2017. A supplement to this is a liquidity provision by banks. With this, dairy farmers can receive a liquidity advance in 2017 on the sale of phosphate rights as of 2018.

This is an extra incentive to bring forward the moment to stop and thus also contribute to limiting phosphate production in 2017. The planned effective date for the phosphate rights system is 1 January 2018.

The stop scheme is part of the broader phosphate reduction plan of the dairy sector. The subsidy scheme with the exact conditions will be published in the coming days. The premium of the stopper scheme is 1.200 euros per cow in the first tranche. The amount of the liquidity advance is still unknown. Rabobank and State Secretary Van Dam assume that there is a lot of interest in stopping, possibly 5 to even 10 percent of the dairy farmers.

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