Background Agricultural vision
Will scaling up soon be a thing of the past?
The agricultural vision of Minister Carola Schouten (Agriculture, Nature and Food Quality) is largely positive. There is therefore little to be found in it that an entrepreneur can object to, but what does it mean for economies of scale? And is there really a better revenue model for dairy farmers?
Rabobank says in a response that the agricultural vision has a positive image. "Minister Schouten emphasizes the connection with society and the joint search for solutions, whereby the minister indicates that the government thinks along with farmers and horticulturists and will facilitate them on their way to circular agriculture."
Need help from bank
Like the minister, the bank attaches great importance to a valuation and healthy income for every link in the food chain. This while farmers are now sometimes paid too little for a valued product. Schouten emphasizes on the meeting of Trouw (following the study 'The state of the farmer') desperately need the help of banks.
Pierre Berntsen, director of Agricultural Companies at ABN Amro, also reacts positively to Schouten's agricultural vision. "They are beautiful thoughts. Hardly anyone can object to that." However, he states that the discussion has yet to take place.
A critical note is that the chain is missing in the agricultural vision. Berntsen: "The links between the farmer and the consumer should have been named more. That is something that we as a bank pay attention to and demand attention for. The efforts cannot only be made on the farm. That is not sustainable." There are good examples of chains that score highly on both the revenue model and sustainability.
Tackling revenue model
The reactions to Schouten's vision have one common point, which is: "It is good that Schouten wants to do something about the revenue model". Rabobank calls this a healthy income. Berntsen says that sustainability cannot be paid for solely from the farmer's income. "The rack is out." To accelerate sustainability, it is important that the cash flow to farmers and horticulturists is increased. "That is possible with subsidies, but the royal route is through the food chain. After all, sustainability is the responsibility of the entire food chain, including the consumer."
The question is whether this will work. Wil Meulenbroeks, chairman of LTO Dairy Farming, focuses specifically on the dairy sector. "A threat has been overstated, but it is a major concern. How are you going to capitalize on the additional costs on dairy exports? It is a challenge for the processor to market this. The question is whether the foreign consumer appreciates it." In the meantime, dairy farming is on the move, partly as a result of manure legislation and the introduction of the phosphate rights system. The companies are gradually getting bigger, both in numbers of animals and in number of hectares, but in the vision they seem to be working towards a company with fewer animals and more land.
Initiating transition
Meulenbroeks argues that a transition must be initiated. "A renewal is needed in dairy farming. A transition must be initiated, but politicians must also be prepared to create space for this." He cites this specifically for the comments that are posted about stables. "The question that must then be asked is: should every barn be low-emission?" A balance has to be constantly sought, of which grazing is an example.
What will the company of the future look like? "Scaling up will continue," says Meulenbroeks. He uses pig farming as a reference. "Each transition triggered another wave of economies of scale." He expects this to also apply to dairy farming. In that context, he wonders whether it is wise to pay €270 per phosphate right. "You can only spend €1, once. What happens if you have to make adjustments at a later time to meet the environmental conditions?"
Herman van den Pol
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