Farmer is not obstinate, but screams for perspective

At the same time as the controversial nitrogen plan, agriculture minister Henk Staghouwer presented his perspective for farmers. The minister's letter is full of LNV terms such as circular agriculture, a good revenue model, critical performance indicators and innovation. The House passed a very harsh judgment on the 49-page document and a majority stated that the minister came up with far too few concrete measures to offer farmers perspective. It was summarized by SGP MP Roelof Bisschop as 'little more than a staple due to all kinds of subsidy schemes'. Staghouwer was therefore sent back with homework with the assignment to come up with concrete plans 'well before Budget Day' about what a future farm should look like.

Old wine
It is of course quite a job to outline for a diverse sector such as the agricultural perspective, but the discussion about perspective and, by extension, the earning model (that term is used 24 times by Staghouwer in the letter) of the farmer is not new. Indeed, 'very low incomes for farmers compared to other sectors' was one of the reasons in 1962 for a European common approach to agricultural policy, writes the European Council in its website.

The original 1962 Common Agricultural Policy set out six clear goals: to increase agricultural productivity, to ensure a fair standard of living for farmers, to secure food supplies, to stabilize markets, to establish a secure supply chain at reasonable prices and to regulate competition among all countries. harmonize.

Crisis of the XNUMXs
Old goals, but still current. The idea of ​​never being hungry again has lingered, but you hardly hear anything about protecting farmers from the vagaries of the market. The generation that designed the CAP also lived through the crisis of the XNUMXs and knew how devastating economic uncertainty can be on agricultural production. That realization seems to have completely disappeared among the current administrators, in view of the unrest that politics regularly causes.

The protection of the farmers against the vagaries of the market eventually led to overproduction. Partly for this reason, the CAP has been thoroughly reformed several times in the last thirty to forty years. In short, a two-track policy has been developed. On the one hand, farmers had to work in a more market-oriented way. Market protection has been phased out and farmers have to start producing at a free (world) market price. On the other hand, an increasing share of the budget has been allocated to rural development in the CAP. That money no longer directly benefited the primary sector (the farmer). A budget has remained available for the agricultural sector, which more or less compensates for extra demands placed on European agriculture, for example in the area of ​​the environment, compared to other parts of the world.

Battle of Directions 
All things considered, the revenue model has not changed in all those reforms. The farmer produces milk, potatoes or meat and must derive the lion's share of his income from this. Some of the agricultural sector has sought refuge in this and improved efficiency and the route of scaling up, others have opted for secondary activities or a source of income outside the farm and some have focused on niche markets where a higher cost price can be justified.

However, European and Dutch policymakers are placing increasing emphasis on the role of the agricultural sector in areas such as the environment and nature. This is almost at odds with the course of recent decades to encourage farmers to produce market-oriented. In discussions about the revenue model, 'a fair price for the farmer' is often discussed. That too is difficult to reconcile with a market-oriented approach. A price in the free market is determined by supply and demand. A price is not fair or unfair, the price is above or below the cost price of the farmer in question. The system of strict market regulation (with prices above the cost price of most farmers) has just been abandoned. A higher cost price can often be justified in niche markets, but a niche is not a solution for the entire sector, as some interest groups sometimes make it seem and they sometimes seem to forget that at the ministry.

Scare for policy makers
Back to the perspective that Staghouwer has to offer the sector. The original goals of the CAP were clear and worked out into a coherent set of measures to achieve those goals. This offered clarity and perspective to the agricultural sector. Solid concrete goals and supported measures are lacking in current European and Dutch policy. Politics is in two minds. On the one hand, farmers are seen as entrepreneurs who have to earn an income from the market. On the other hand, farmers are seen as 'managers' who provide social services in the field of landscape, nature and the environment. Politicians do not dare to make sharp choices about this.

This becomes painfully clear in the Dutch elaboration of the new CAP. In the so-called eco-schemes, farmers have to do more to qualify for money from Brussels, while the level of payments is lower compared to the current hectare premium. A simple calculation for the farmer: what are the yields and what are the costs. If that sum is negative, it is no longer worthwhile to participate in the CAP. The farmer is then forced to make the choice to produce only for the market and to ignore the green goals from the CAP, whether the politicians want it or not. That is a nightmare for policy makers. They then lose an important instrument for giving direction to the agricultural sector.

No island within common market
If Dutch politicians make the choice that the farmer must work in a market-oriented way with food production as the main task, the consequence is that goals in the field of circular agriculture or landscape measures, for example, are subordinate to this. After all, the farmer has to get his income from the market and the Netherlands is not an island within the common European market.

If policymakers consider green goals to be more important than primary production, they should also be willing to do so. If the income that the farmer can get from the market with potatoes or milk is higher than the compensation for the green ambitions, he is foolish to choose the latter. This requires a change in thinking on the part of the government, but also of the farmer. This makes the agricultural sector dependent on subsidies. Due to the fickle government policy of the last decades, farmers are hesitant to become (too) dependent on subsidies. The fact that there is a certain revenue model in this is evidenced by various site management organisations.

If Staghouwer wants to offer farmers perspective, he must first develop a clear vision of the direction he wants to take with the agricultural sector. Clear and realistic goals can then be drawn up for this, accompanied by supporting measures. In the past, the agricultural sector has already proven that it is able and willing to change, provided it is clear where and how. In the end, the bills cannot be paid for well-intentioned empty concepts.