Unexpected director in dairy cattle stop scheme

Participants in the stopper scheme can start milking again next year without any problems. However, they must then repay the guarantee from the bank of 1.200 euros per phosphate right. However, most quitters will stop permanently. Who they are and when they stop is partly coordinated by Rabobank.

The stopper scheme is a voluntary scheme. Nevertheless, various signals indicate that banks are exerting influence on this. Members at LTO, among others, complain about the attitude of banks. These complaints show that dairy farmers feel pressured to stop. There are also voices from the field that beacon gives urgent advice about when the company should be sold.    

The bank does this to prevent the price of land in a certain region from coming under too much pressure too quickly and thus decreasing in value. This can indeed be the case if several dairy farmers stop close to each other at the same time. This is disadvantageous for the stopping dairy farmer, but also for the value of the collateral of the financier. 

This does not happen at ABN Amro, emphasizes Pierre Berntsen of that bank. "It's not in our nature to control who stops and when." The top management of Rabobank, through Ruud Huinre, Rabobank's Director of Agro, clearly expressed a different opinion last September. He then stated in various media that the bank should serve the interests of the stopper when selling, and that sometimes means that waiting a while before selling can be a useful instrument. It increases the chance of success of the stopper arrangement.

Added up 2.400 euros per cow
The 20st round of the stopper arrangement will start on 1 February. The premium that the State makes available in this round is 1.200 euros per dairy cow. This registration round will in principle remain open until March 3. Unless the money available for the 1st round, 12 million euros, is transferred earlier. 'In that case, a second round will open quickly', explains Wiebren van Stralen of LTO when asked. 'But for a slightly lower amount. It's like a concert. First come, can get the tickets in the front row.'

12 million euros and 1.200 euros per cow means financing for 10.000 cows. That is 100 farmers with 100 cows or 200 farmers with 50 cows. All estimates are that a total of at least 500 dairy farmers want to make use of the stopper scheme. It is therefore certainly not inconceivable that the scheme will be overwritten in the 1st round. A total of EUR 50 million is available. If more is needed because of overwriting, LTO and NZO will do everything they can to expand the pot, says Van Stralen. 

For a stopper, in addition to the 1.200 euros per cow in premium from the State, there is another amount ready from the banks. They guarantee 1.200 euros per phosphate right. These 1.200 euros will be paid out to the registered stoppers quickly after the start of the scheme.

If the phosphate rights are a fact in 2018, this amount must be repaid. If the phosphate rights yield more, the difference will be for the stopper. If the yield per phosphate right is lower than 1.200 euros, the banks are faced with this difference. The banks are Rabobank, ABN Amro and ING. These three banks signed for the guarantee. Almost all dairy farmers have financing from one of these banks. An individual who has a loan with ASR or Triodos Bank can theoretically fall out of the way.

It is not yet clear whether the banks will reclaim their 'loan' per phosphate right before a certain date in 2018. Details about and formalization of the stopper arrangement are expected in the week of February 13.

Starting again in 2018

Dairy farmers who participate in the stopper scheme can simply start milking cows again next year. Legally there is nothing that can stop them from doing so. According to Wiebren van Stralen, however, this is no problem at all within phosphate legislation. 'The reduction plan applies to 2017. Every stopper contributes to reducing phosphate production. In 2018, the phosphate rights will ensure the limitation. If a stopper does not want to cash in on his or her rights, he or she will simply milk cows again, although new animals will have to be purchased.'

A few may want to continue the business with some of the best cows. In any case, it gives a lot of emotion to many stoppers that the best animals now disappear for slaughter, when they participate in the stopper scheme. Van Stralen has another tip for avoiding this: 'Swap your best animals with the neighbor's bottom end of his herd. The stopper regulation applies per cow. Good or bad, it doesn't matter. Even if you stop permanently, that might be an opportunity to not really have to get rid of the good animals.'

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