News Phosphate rights
Schouten doubles creaming on phosphate rights
The creaming off of the traded phosphate rights will increase from 10% to 20%, Minister Carola Schouten (Agriculture, Nature and Food Quality) reports in a letter to Parliament. This should reduce the number of phosphate rights issued to below the sector ceiling for dairy farming.
Too many phosphate rights were issued in 2018, as a result of which the sector ceiling for the dairy sector was exceeded (84,9 million kilos). This is contrary to the European state aid decision. That is why the European Commission is demanding that the number of rights issued fall below the sector ceiling this year. At present, the number of phosphate rights allocated is approximately 85,3 million kilos. Schouten says that this could increase due to the several thousand objections from dairy farmers that are still pending.
judge pronunciation
Schouten does not take into account the phosphate rights issued to the young stock of beef farmers. In April judged the Trade and Industry Appeals Tribunal (CBb) that young female cattle older than 1 year and slaughtered after the reference date for the granting of phosphate rights may be regarded as dairy cattle.
In the letter to parliament, the minister reports that this ruling means that approximately 300.000 kilos of phosphate must be allocated to beef farmers, bringing the total number of rights issued for young stock in the beef farming sector to 760.000 kilos of phosphate. Schouten maintains that these rights do not fall under the sector ceiling for dairy farming. That is why she urgently wants to amend the Fertilizers Act, so that it becomes clear which young stock is defined as dairy cattle. This has become unclear as a result of the judge's ruling.
Phosphate bank remains closed
In order to reduce the number of phosphate rights allocated, it has also decided not to open the phosphate bank for the time being. In doing so, the minister is responding to the motion of Jaco Geurts (CDA) and Helma Lodders (VVD). The rights that were skimmed off in 2018 (approximately 420.000 kilos of phosphate) will therefore expire.
Schouten indicates that it is difficult to predict how many kilos of phosphate will be skimmed off in 2019, because it is a young market. However, it is likely that the majority of trading will take place at the end of this year. However, according to the minister, it is risky to speculate whether the creaming off is sufficient to get below the sector ceiling. "Then there is no more time to adjust," she writes.
'Increase creaming is a drastic measure'
Schouten therefore wants to temporarily increase the mandatory creaming to 20%. This requires a legislative amendment. The proposal has been sent to the House and Schouten aims to have the amendment take effect as soon as possible. Schouten says he realizes that the increase is a drastic measure, but sees no other options to avoid a generic discount. She emphasizes that she absolutely wants to avoid a second generic discount.
When it appears that the increase in the creaming off has too little effect, Schouten considers increasing the creaming even further. When the number of phosphate rights is reduced to below the sector ceiling, the creaming in the phosphate bank will disappear. She promises that the creaming will then be reduced to 10% again, although that is not before 2020 anyway.
Click here to read the letter to parliament.
Wouter Job
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