Loss of derogation costs pig farmer money

If the Netherlands loses the derogation in 2018, pig farmers will see their income fall by an average of more than 5.000 euros per year. Wageningen Economic Research (WUR) has calculated this.

The loss of the derogation costs farmers a lot of money. Wageningen Economic Research calculated that for pig farmers in 2018 this will be an average of more than 5.000 euros per year. In the following years, they will see their income fall by an average of EUR 4.200 per year. LTO Nederland commissioned this calculation. In addition to the effect on income, WUR also investigated the effect on fertilizer disposal costs. 

Sow farmers more vulnerable
The sow farmers will suffer more from the loss of the derogation than the fattening pig farms. This is because the sow farms are on average larger than the fattening pig farms and will therefore have to sell more manure. The phosphate levels in the manure and the application or not of manure separation and processing also play an important role. 

Benefit in the long run
In the medium term, pig farms may have an advantage if the Netherlands is not allowed to spread more manure (derogation) than the standard Brussels guideline. Manure disposal costs may fall, WUR expects. This is because the manure separation and manure processing capacity increase and the introduction of phosphate rights in the event of derogation means that the phosphate production decreases. However, the phosphate rights will not be introduced if Brussels does not grant the Netherlands a derogation.

The extra supply of 8 million tons of cattle slurry, when the derogation expires, means that 5 million tons more pig slurry has to be processed. This also means that there is a shift from the use of pig slurry to that of cattle slurry. De Koeijer (2016a) has already calculated with gate rates for manure processing of 16-18 euros (Twence, 2016; Ecoson, 2015; Verkerk, 2016). With the transport costs, this equates to an ex-farm price of 20 euros per tonne. 

Dairy farmer contributes via VVO 
With derogation, the average price for the sale of pig slurry for 2015 is estimated at 18 euros per tonne and without derogation at 19 euros per tonne. That is an average price increase of 1 euro per tonne of pig slurry. The price increase is paid by the dairy farmer who concludes a VVO (Replacement Processing Agreement) with the pig farmer. These extra costs for pig farming will be minimal if the derogation is abolished. 

less grassland
If the derogation is lost, dairy farmers are expected to include less grassland in their cropping plan. The fertilization of nitrogen from animal manure on grassland to arable land will shift more drastically in a situation without derogation. This shift can in turn have consequences for water quality. 

WUR has disregarded possible consequences for company structure, for prices of pig rights or for the size of the sector.

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