'Maintain derogation in favor of organic farmer'

Many organic dairy farmers are protesting against participating in the phosphate reduction plan. Logical from the point of view that they do not participate in the derogation. However, for the balance in their own milk market, maintaining the derogation is in their favor, warns Aris van Ommeren of Farmel.

'The phosphate reduction plan was drawn up because the number of LUs in the Netherlands had to be reduced. The excess is the result of all farmers who have grown in animal numbers, including organic farmers', explains Van Ommeren. 'The more than 10 organic dairy farmers that supply us have grown more on average than our conventional farmers in recent years. And inquiries on my part at a number of other factories teach me that they recognize that image.'

Van Ommeren emphasizes that he understands individual organic dairy farmers very well when they say they do not want to participate in the reduction of LUs. 'Obviously, if you've grown strongly, that's very bad. This applies just as much to organic farms as to conventional ones. And I can also fully agree with the argument not to participate in the derogation. But there are also conventional farmers who have not grown at all. Due to the 4 percent extra discount over the reference date of 2 July 2015, they also have to shrink. You might as well call that unfair and unjustified, but it has to be done anyway.'

Organic milk market under pressure
Van Ommeren warns the organic sector that maintaining the derogation is of great importance to them. 'If the phosphate reduction plan fails, and as a result the derogation is lost, there is a very good chance that many more conventional dairy farmers will want to switch. At the moment, derogation is an important reason for a number of livestock farmers not to switch to organic. If the derogation is not extended, that reason will lapse.'

'A large part of the extensive dairy farmers category does not want to pay for the manure disposal costs and is entering the conversion process,' he expects. The demand for organic milk is increasing every year and Van Ommeren does not see any problems so far. 'But many dairy farmers in the Netherlands and Germany are already in the conversion process. If even more supply comes from the Netherlands at an accelerated pace, there will probably be more milk on the market than it can handle. In any case, the price in the market will be hit hard.'

One ground-based course
René Cruijssen from Dreumel is chairman of Eko-Holland. This is a cooperative of 185 organic dairy farmers, most of whom are farmers in the Netherlands. He does not share Van Ommeren's view. 'The organic dairy farmers who have grown in recent years have done so within the standard of 170 kg N per hectare or through a contract with arable farmers in which grass/clover cultivation and fertilizer disposal are exchanged. This is completely in line with the land-related nature that characterizes our sector. And that is also where we must fully focus on as a whole in the Dutch dairy sector.'

Cruijssen argues that the phosphate reduction plan is doomed to fail and that it is justified. 'If you now see that farmers who are classified as a bottleneck by the court before July 2015, you know that at least 30 percent of the dairy farmers have a bottleneck. If the rest has to reduce the growth of that group, you know that's not possible. So things are going completely wrong.'

Litigation for all members
The chairman of Eko-Holland also says that he does not accept that its members have to bleed to maintain the sector-wide derogation. 'If Van Dam sticks to his position that the exception only applies to those companies that won the procedure last week, we will also start a procedure with our 180 other members.'

According to Cruijssen, the sector should adopt the land-based model with 2,3 or 2,4 LU per hectare for conventional farmers, who can apply for farm-related derogation, and 1,8 LU for the organic sector. 'That is clear, simple and honest. And also easy to explain in Brussels. Even now in 2017. In Brussels they do want to listen to a good solid story, but not to beautiful stories. Our foremen come up with instruments such as Kringloopwijzers, in order to keep more animals and to produce manure. That is what Brussels does not want. And FrieslandCampina makes the strongest case for this, simply because it allows them to limit the supply of milk. If you don't want more milk, you just have to set a factory quota.'

Cruijssen is also not worried about the pressure on the organic milk market. 'We don't accept more milk than we sell. When necessary, we set a stop again for new suppliers and we work with a waiting list. It's not more difficult or complicated.'

© DCA Market Intelligence. This market information is subject to copyright. It is not permitted to reproduce, distribute, disseminate or make the content available to third parties for compensation, in any form, without the express written permission of DCA Market Intelligence.