The European Commission has approved the Dairy Farming Extensification Subsidy Scheme (Sem). As a result, a new scheme will become available from 1 June 2026 for dairy farmers who wish to expand their operations. The Ministry of Agriculture, Livestock and Fisheries (LVVN) is making €627 million available for this purpose.
The scheme targets dairy farmers who wish to continue producing but have run into difficulties due to pressure on manure, emissions, and regulations. By voluntarily downsizing, they gain financial leeway to adapt their businesses.
Shrinkage of livestock
The core of the scheme is that participants reduce their dairy herd by 10% to 20% over a period of three years. In return, they receive compensation for loss of income and for phosphate rights that are permanently cancelled.
The compensation consists of €1.606 per dairy cow per year, supplemented by €110 per phosphate right. Incidentally, the current market value of phosphate rights is well above €200 per right, as shown by the DCA benchmark of phosphate rights. Recently, the market has picked up significantly.
In total, the compensation can amount to approximately €9.757 per dairy cow, depending on farm size and production. After the three-year period, herd growth is permitted again.
Relieve pressure on manure market
With this scheme, the cabinet aims to reduce ammonia and greenhouse gas emissions while simultaneously cutting back on manure production. This should also alleviate pressure on the manure market, which remains high during this period due to the discontinuation of derogation.
The SEM scheme is part of a broader package of measures that the sector has been focusing on for some time, including Renure, the reduction of crude protein in rations, and a focus on new forms of derogation.
Aimed at companies with no way out
According to the initiators, seven primary dairy farming organizations, the scheme offers particular prospects for businesses that are in financial and practical straits. By supporting extensification, room is created to structure the business in a future-proof manner.
In addition to the subsidy, banks also provide tailor-made solutions through financing and investment capacity, depending on the individual situation of the company.
The scheme will be published in the Government Gazette shortly. Simultaneously, the Netherlands Enterprise Agency will provide explanatory notes and calculation tools to clarify the financial impact for individual companies.
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