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Phosphate ceiling limits skimming-free lease

29 October 2021 - Klaas van der Horst

The skimming-free lease of a maximum of 100 kilos of phosphate per year per company, proposed by outgoing minister Carola Schouten, is possible without any problems as long as the total phosphate production remains below the Dutch ceiling. The minister writes this in response to an advice from the Council of State.

Schouten proposes the creaming-free lease as of 2022 an amendment proposal on the Fertilizer Act. A number of parties in the House of Representatives, including the VVD and SGP, support such an adjustment.

The reason for the proposed amendment to the rules is that the minister wants to give dairy farmers more flexibility in the event that milk production unexpectedly turns out slightly higher than originally planned. In practice, there also seems to be room for this extra bit of flexibility, because the actual phosphate production is just below the ceiling of 84,9 million kilos of phosphate.

If the phosphate production decreases further, the skimming percentage when transferring or leasing larger quantities of phosphate could be lowered from 20% to 10% as standard. It's not that far yet.

Risk due to lawsuits and rights to beef cattle
It is also still possible that phosphate production will increase again, for example as a result of lawsuits or the sale of phosphate rights by beef farmers. If the phosphate ceiling is then exceeded again, the minister must return to the European Commission to assess whether there are no threats of problems with the state aid rules. As long as the ceiling is properly respected, there is nothing to worry about.

No skimming movers Natura 2000
The amendment also creates the option of giving companies in the vicinity of Natura 2000 areas the opportunity to modernize and (temporarily) relocate, without skimming taking place. Special conditions will then be set for this, which will be laid down in a General Administrative Order (yet to be published).

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Klaas van der Horst

He is a dairy market specialist at DCA Market Intelligence. He researches market news and trends and interprets developments.

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