Blog: Lourens van der Lelij
What to do in times of uncertainty?
It is currently no easy task to be a dairy farmer. When all the regulations have been poured out on you, things get quiet. The reduction plan causes pain, because animals have to be cleared. The dairy farmers have filed a lawsuit and in principle it was won. What do you do if your situation is similar to theirs?
Are you going to wait and see what comes of it? Or are you joining the new lawsuit, allegedly being brought by more than 500 ranchers? Or wait for the decision of the appeal, which has been brought by the State Secretary?
In the meantime, what do you do with the animals that, on the basis of the phosphate reduction plan, are present too much on your farm? Clean up or keep? Holding involves incalculable financial risks. And the years 2015 and 2016 with an average negative reservation capacity are just over.
In addition, a livestock farmer also has to make a choice for the future of his company: expand, consolidate or continue with fewer animals. Growing means: buying phosphate rights and in many cases investing in land. Not every livestock farmer has that financial space, and the banks are also not eager to finance the purchase of phosphate rights in difficult situations.
Clarity about derogation
And then there's that other challenge: the derogation. This is currently being discussed with 'Brussels'. All kinds of test balloons are released in the corridors about farm-specific derogation or crop-dependent derogation. However, if I have understood correctly today's posts, mid-July 2017, in all areas where animals are kept, nitrate levels have fallen so much that the conditions for nitrate levels are met everywhere.
So it doesn't have to be that hard at all. Bring on the clarity about the derogation! We all work hard to control manure production, and that should be rewarded with certainty. It is a shame that livestock farmers are being led on.
cast in concrete
A number of companies were split because the dairy farming branch was sold. The buyer of that industry has also been faced with a high degree of uncertainty for months. According to the latest reports, "a solution to these cases is now on the way". So far there is no real clarity, because for the time being the policy makers are sticking to a principle cast in concrete.
This means that after the cattle farm has been transferred, the phosphate rights are allocated to the original owner, who has continued as a sheep farmer or arable farmer, for example. However, the buyer has an interest in those rights. Due to incorrect registration, he will be faced with fine decisions. That problem can also be easily solved by deleting the Standard Dairy Cattle Business Classification at the Chamber of Commerce. Here too, diligence is required!
Fortunately, the dairy farmer currently receives a good price for his milk. The outlook is positive, as are the export opportunities. As a result, milk prices will probably rise even further. The livestock farmers desperately need that extra finance to meet their obligations. A buffer for bad times is not a luxury either; this has become apparent in recent times. All in all it is quite a challenge to be a dairy farmer.
Lourens van der Lely
Member of the General Board and Agricultural Real Estate Section
