200 extra bottlenecks due to extension of the phosphate law

The emergency provision had already taken into account dairy farmers in a force majeure situation as a result of illness, stable fire or renovation. On the advice of the phosphate rights shortages committee, the emergency regulations are now being expanded via an Administrative Order with two categories: new starters and companies in an extraordinary situation as a result of nature development or infrastructure works.

New starters
The first category concerns newly started companies. It is estimated that there are about 150 dairy farms. If they can demonstrate that on July 2, 2015, they had significantly fewer cows than the available stable capacity, they will be allocated 50 percent of the difference in rights. In concrete terms: a dairy farmer who had a stable with 100 cubicles and had 2 cows in the stable on July 2015, 50, will be allocated phosphate rights for 75 cows.

Criteria
The dairy farmer must be able to demonstrate on the basis of a number of criteria that this is actually a newly started dairy farm. Only rearing young cattle is excluded. For example, a company is only in crisis if on the reference date at least 10 percent fewer kilograms of phosphate were produced with dairy cattle than expected if the capacity was fully utilized. Livestock farmers must also be able to demonstrate that they entered into an irreversible financial obligation before July 2, 2015 and that an environmental permit had already been granted before that date. In addition, the new starter may not have produced milk before January 1, 2014 and milk production on the farm must have started between January 1, 2014 and July 2, 2015.

Companies in extraordinary situation
The second category concerns companies in an extraordinary situation due to the realization of a nature reserve, the construction or maintenance of public infrastructure or because of a general utility. This concerns at most a few dozen dairy farms. The stocking density on July 2, 2015 must therefore be at least 5 percent lower or the company must be temporarily non-land-based. Livestock farmers who want to qualify for this must be able to prove their extraordinary situation with papers.

Increase maximum 1 percent
An important principle of the committee was that the increase in the generic discount in order to be able to honor bottlenecks should be limited to a maximum of 1 percent. Expressed in phosphate rights, this amounts to approximately 600.000 rights, which corresponds to approximately 14.500 dairy cows. The committee did not consider an increase of more than 1 percent to be proportionate compared to the companies that now benefit from the extra generic discount.

The special advisory committee on phosphate rights issues included former LTO chairman Gerard Doornbos, currently dike director in Rijnland, Staatsbosbeheer director Chris Kalden, former LTO director Dirk Siert Schoonman and former top EZ official Hanneke Heukers.

Irreversible investment obligation
On the advice of the said committee, there will be no emergency provision for companies with irreversible investment obligations. The committee is of the opinion that the group of entrepreneurs experiencing a financially pinched situation as a result of the introduction of the phosphate rights system is very diverse and that there are major differences in the underlying causes for the financial pinch experienced. Designating these companies as a problem would make the generic discount much too high. The committee advises the State Secretary to consult with the business community to develop a more effective approach to supporting healthy dairy farms in business economic difficulties.

Organic dairy farms also do not qualify as a problem. The committee believes that land-based organic dairy farmers do not distinguish themselves from land-based conventional dairy farms in the perspective of the Nitrate Directive and the derogation decision. Both types of companies contribute to phosphate production. In the opinion of the committee, companies converting to organic dairy farming are not disproportionately affected by the reference date of July 2, 2015 compared to conventional companies. According to the committee, this also applies to companies with rare cattle breeds.

500 to 1000 crashes
With the two new categories, LTO estimates the total number of bottlenecks that have a real chance of being classified as a bottleneck at between 500 and 1000 companies.