Inside: Manure Market

Phosphate rights system, one big bottleneck?

17 May 2017 - Herma van den Pol

Will the system of phosphate rights make it or not? The interests are great. For example, no derogation means that another 140.000 dairy cows may disappear from the Dutch streets. At the same time, the sector has to bleed a lot for it. Boerenbusiness List 5 highlights from the debate of the Senate.

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The debate started around 2 o'clock and ended closed at a quarter past 11. The balance at the end was: 3 motions and a number of points that can make or break the system. As Paul Schnabbel (D66) put it: 'If we say no, there is a great risk and if we say yes, you cannot guarantee that it will turn out positively.'

Van Dam has been warned before

1. The emergency regulations 
This issue is the hottest. Outgoing State Secretary Martijn van Dam had already been warned several times by the House of Representatives about the minimum emergency provision, but he did little with it. After the results of the summary proceedings phosphate, the Senate adds its concerns about the minimum emergency provision to the concerns of the House of Representatives. 

Here are especially Joop Atsma (CDA) and René Derksen (PVV) clearly present. Atsma is concerned about the short time that the Chris Kalden committee gets to look into the problems. There is also considerable criticism of the advisory role. Van Dam guarantees that the committee should be able to complete its work by July. However, he previously guaranteed that RVO was able to do its work on time. In the meantime, they have been overtaken by the facts and dairy farmers are still waiting for a first decision in the Phosphate Reduction Regulation 2017.

Dercksen is particularly concerned about the proportionality of the scheme. That is also one of the reasons why the preliminary relief judge ruled in favor of the dairy farmers. He fears even more lawsuits and also refers to the lawyer, who noted with a grin during the catch-up session that they will still have a lot of work without adjustments. 

90 percent are already exempt because they are land-based

2. Organic dairy farmers
It is not yet clear how far the various parties, including GroenLinks, will go to help organic dairy farmers. Of the group of organic dairy farmers, 90 percent are land-based and are therefore automatically exempt from a discount on January 1, 2018. However, the remaining 10 percent is causing quite a bit of discussion. Should organic growers be spared or not? Van Dam states that everyone who grew after July 2, 2015, knew what the consequences were. 

There is quite a stir in this topic, because it is stated that the phosphate rights are necessary to save the derogation. Organic livestock farmers do not use it and also have a lot of goodwill from politicians. 

3. The derogation
How certain is it that the derogation will exist when the legislation comes into effect? There are no hard guarantees, but Van Dam states that without a derogation there will be no phosphate rights. This means that legislation must be postponed until the derogation is actually in place. In 2014 this only came in the spring, but not a word is said about that.

Brussels only wants to talk about a derogation when the Netherlands has phosphate production back under control. A positive point is that it is not the sector ceiling, but the total phosphate ceiling of livestock farming that is leading. In addition, a margin of 2017 percent has been built into the Phosphate Reduction Regulation 25. Which means that discussions about a derogation can at least begin.  

There is a lot of talk about the use of rights

4. The phosphate bank
The question of whether skimming off rights is still legal when the phosphate ceiling has been reached is no longer asked. There is discussion about the use of rights. This is mainly seen by politicians as an asset to gain control over the farm. This is separate from the initiatives that are already in place to further improve animal welfare and the sector's footprint. 

5. Non-tradable rights
Only a few, the SP, see the trading of rights as a negative point. A motion follows to introduce non-tradable allowances. However, Van Dam advises against this, because companies then no longer have the opportunity to recoup investments already made (for example in land and stables) by acquiring additional rights.

GroenLinks, SP and PvdD are certainly against the system

The standings
Below is a brief overview of the proponents and opponents of the phosphate rights system.

  • For: PvdA (importance of the derogation is too great), VVD and CDA. 
  • Doubt: PVV (the stumbling block is the bottlenecks), SGP (makes outcomes depend on Thursday) and ChristenUnie (makes outcomes depend on Thursday).
  • In return for: GroenLinks, SP and Party for the Animals.

In addition to the SP's motion, the Party of the Animals also submitted two motions. In the first motion they want to regulate milk production per cow and in the other motion they want more benefits for grazing.

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