Opinions Jaap Haanstra

The year 2018 is not equal to 1976

3 August 2018 - Jaap Haanstra - 42 comments

I reported 2 weeks ago that there were a number of growers in 1976 who sold 1 bundle of potatoes for a price that would allow them to buy a new Mercedes. This is because 2 weeks ago it was still possible to hope for a reasonable harvest.

I am an optimist by nature and had hopes for it myself. However, after 2 days of scorching temperatures, my hopes for a reasonable harvest have been dashed. I don't know what the yield will be. However, I expect that this will not be high in most cases.

The growers in 1976 were organized in a pool or cultivated freely. Everyone followed the market, so disappointing returns offset by high prices. There were also a large number of traders who gave the market an extra boost and the cultivation areas per farmer were much smaller.

Different situation
Today we know a total different situation. We have far fewer growers, but we do have a larger cultivation area. The growers have also long ceased to grow freely or in a pool. Larger companies and rising costs have contributed to contracting. Not many farmers can afford a bad price. If I take the average grower, then it could be that 30 to perhaps 40 tons are fixed with a price agreement.

This makes it clear that most growers have little or no free potatoes, given the current growth pattern. It means that the potatoes can be more expensive, but that it cannot be profited from. For example, this year may be less than last year for a number of growers and that Mercedes of 1976 may not even be able to become a 'Baby Benz' with 300.000 km on the clock.

For some it will be a disaster

Wat nu? 
So much for an overview of the situation. What now? You can go to the government and ask for support; giving back the excise tax increase on red diesel would be a good support. If farmers abroad are supported, then we must also be supported. Otherwise there is not a level playing field.

We have to work together to get more money from the consumer to the grower. The Vavi sounded the alarm last week, because there would be much fewer potatoes. It would be good for growers (together with Vavi) to go to the minister and point out the exceptional situation. Because, let's face it, for a lot of us it's going to be a disaster.

Fair trade
The minister regularly speaks of 'fair trade'. One could jointly address the retail sector, chips traders and the like, and point out to them the more than exceptional situation. It is a good idea to deposit €0,10 per kilo of chips in a fund to alleviate the consequences of this year.

In my view, it is also the responsibility of retail to ensure that their suppliers are helped; that too is social and sustainable entrepreneurship. And the consumer does not notice anything of that dime, because it is less than € 0,02 per box of chips.

That fund needs to come in the potato sector be distributed so that free growers and contract growers benefit from it. But, chips makers must also be able to identify with it. The fund must also pay attention to the seed potato growers, who supply the Dutch market. The starch growers could follow the same line.

Of course there are many things to notice about my thoughts and it is easy to shoot them. However, let's agree that if you criticize, you'll come up with a better solution. And if we don't want to do anything, that's also possible. But then you have to accept it as it is.

Jaap Haanstra

Jaap Haanstra is an arable farmer in Luttelgeest and chairman of the AgriFacts Foundation. In addition, he has worked for various agricultural organizations over the past 30 years. Haanstra writes his columns in a personal capacity.
Comments
42 comments
Subscriber
fact 3 August 2018
This is a response to this article:
[url=http://www.boerenbusiness.nl/ondernemen/blogs/column/10879517/het-jaar-2018-is-niet-eloos-aan-1976][/url]
Dear Jaap,

It would also be an idea to convert the tons of contracts to % contracts. bv grower has delivered 50 tons net in recent years and has 30 tons on contract. grower therefore assumed that this was 60% on contract when he signed. Then have him hand in 5% as a gesture. and so 35% of all the kilos that he supplies are free price. I think that for a lot of misery is over. And then let's agree for the coming years that we will only sign % contracts.
Subscriber
smart ass 3 August 2018
no contracts.
try it for a year
young grower 3 August 2018
Nice story no contract, how can I survive a bad price without security. Financing and costs continue. Are there always growers here who swear at contracts, some have enough in cash. As a young grower not...
hans 3 August 2018
Do not come up with solutions that only the farmer will like (% contracts), "the sector" will never start there anyway. Contracts will always be minimal in money, optimal in quantity demanded (from the point of view of the buying party) and imposed by your financier, who wants to see his shares make a profit.
And if you now depend on only potatoes (e.g., or milk, or meat, or ..) and big, which would be "the future", and with a big loan, and with open borders, nothing unexpected, then yes ...
Thanks farmers, the (few) janvandries will remain. But isn't that what we want, to compete with each other out of the tent with as much foreign money as possible? Alms will only postpone this process.
Berry 3 August 2018
Suppose the growers are helped. What will we do next year when there is too much again? Therefore, attach the obligation to reduce the acreage. Then we may also benefit from it in the coming years. If there is no support, the area will certainly shrink and we will be assured of a healthier market in the coming years.
Einstein 3 August 2018
Next year everything nice on contract know-it-all
Einstein 3 August 2018
And young grower don't let yourself be screwed up by a scumbag as a know-it-all, these kind of bastards won't burp in three years' time than they will have just enough money for a lada after the Boeldag.
peta 3 August 2018
Einstein, you don't live up to your name. And advice to young growers; don't go to machine fairs and shows, don't mirror your environment, go purely for the cultivation yield of your crops and it makes no difference whether your machines shine or not. Don't mess with your ground and make sure that you get a head start on repayments with low costs, then you can get through a bad year unscathed and make full use of a good year by doing a lot freely and making the most of the market opportunities. Farming is simple, just producing a lot at low cost and marketing well and daring to take a calculated risk, that is simply doing business!
Also young 3 August 2018
What did the young farmers do then? When there were no "contracts" yet. In the 50,60,70s, 1500s, XNUMXs... all potatoes were sorted and sold at home. All bullshit and no sign of entrepreneurship, if you can't do without contracts. You need to be less dependent on the industries. Start small with a minimum of resources, share resources, don't start renting land for XNUMX euros.
pete s 3 August 2018
I think this is a very good explanation from Jaap about the difference with now and 1976
I myself am always a free grower and am used to trading myself, but I hope for the contact growers that in the future a percentage of the harvest will be agreed
I also hope that Jaap will make a case for an example contract from LTO with our conditions, we ourselves must offer a contract to the trade under reasonable conditions
I hope jaap will start this
As an example, I know that this year I determine the conditions in all reasonableness and not my customer.
Einstein 3 August 2018
I can do what I want so don't tell me how to do it I've been able to do that for years as one of the best in this country myself, and the whining about free cultivation stop there, there are only a hand full in this country.
Subscriber
yay 3 August 2018
Just nothing, no compensation, that's exactly what the industry hopes for so that the contracts can continue smoothly.
Groningen 3 August 2018
Can't reverse the contract? 30 tons free and the rest on contract?
Skirt 3 August 2018
In fact, for many it is already too late to return to free cultivation. They are already on the drip, it could be a kamikaze action if they hit a bad year. I've said it before, the potato growers are 'compulsory' to unite according to the Canadian model.
Subscriber
smart ass 3 August 2018
einsteintje is a bit bothered by the heat.
have a nice beer first.
and then contract.
again not a quarter between the dimes
Subscriber
juun 3 August 2018
there is only one conclusion our financing costs are far too high even at this low interest rate when will common sense break through again
Skirt 3 August 2018
John, I completely agree with you! And how can you get out of this?jQuery21108763813874377399_1533330431529 Low interest rates will rise again one day, who will pay for that, not the agricultural sector, maybe a hard cold reorganization is the salvation or the end.
Student 4 August 2018
Trade is not for the farmer. They conclude contracts so that they know how many tonnes they can process. So certainty. With percentage contracts, the trade does not have that, so they will never come. What would happen in a good year with such contracts. You have made your own scribble and there are still plenty of farmers who grow potatoes freely. If you want it is possible, you just have to make sure that your fixed costs are low and that you can also have a bad year.
Tybalt 4 August 2018
Why can we all go to study days, license renewal meetings, field meetings. And can't we manage to organize meetings in the autumn/winter to agree on a joint price for which we want to grow? As long as we exhibit frog behaviour, it will continue to be divide and rule and that will not affect the price next year. You can immediately include a calamity clause.
john 4 August 2018
If you grow under contract, you can probably enforce a better contract price this autumn.. If 2019 becomes abundant with potatoes, you'll be fine.

contracts are a choice.. and it will probably take you five years to work the Mercedes together instead of a harvest.
Marius 4 August 2018
Contract cultivation, tons for a fixed price should be prohibited, can't the AFM even look at that? Why ? You don't know how many tons you will harvest and you don't know what the cost will be that year. The chip factory does not know what it will be able to pay for potatoes that year, paying a contract price of 15 ct if the free market is 3 ct or less is also not possible, then they just reject something..... Harvest 2017 has free growers cost a lot of money and most contract growers were reimbursed about the costs with 60% of the harvest and with the other 40% supplied potatoes, which they gave for next to nothing, ruined the little free market that was left. This year they invoke force majeure and, if possible, will deliver up to half of their contract full. It's been like this for years and we're making it happen. Perhaps it will cost the fries factories real money this year because production will come to a standstill for a long time and something will change. Let the AFM determine that a maximum of 30% of the desired quantity of potatoes may be fixed and 70% must be purchased on the free market. One Keynes already realized 100 years ago that a market doesn't work if more than 30% is fixed, some basic laws don't change.
peta 4 August 2018
Yes Marius, well worded and presented.
But the AFM will not look into this.
This is something for the LTO or NEPG to bring this before Mrs. Vestager Commissioner for Competition. Especially now that the European Commission and Parliament are so busy giving agricultural instruments for fair prices, I think this would currently have a chance of success!
All opposing hats must first have the same chance of standing!
Joost 4 August 2018
The question is, of course, whether a consumer can be found who is willing to award a new Mercedes to Jaap haanstra. Because it happens to be dry for a few weeks.
Subscriber
smart ass 4 August 2018
and how many of those contract farmers are members of LTO?
Do the members have to fix it up for the non-members?
First make sure that the whole of the Netherlands becomes a member then you have something to say to the factories
Berry 4 August 2018
@MariusThe difference between growing under contract or growing freely is only the moment of sale. Even if you have the potatoes behind the shelves, you are not sure of the barrels that will come out. From what moment can it be sold?
Subscriber
juun 4 August 2018
should we all now be in a modern sowchoze I didn't think so
peta 5 August 2018
juun wrote:
should we all now be in a modern sowchoze I didn't think so

Juun, we are already in that because there are too many contracts, there is no more market forces and we are in the buyers' sowchoze. Open your eyes!
What Marius says that Keynes, an economics professor, already indicated at the time that if more than 30% of a product has already been determined in advance, there is no longer any market forces, is now fully expressed to the dismay of Mr Haanstra. Therefore it is high time to do something about it for LTO dear know-it-all, then they will get members again, the undersigned will be one of the first if LTO shows balls instead of playing lap dog as a reliable discussion partner of the government! A representative must represent the interests of its members and not of third parties, dear know-it-all! Or do they do nothing structurally because, as the know-it-all suggests, there are no longer any arable farmers? Dear Jaap, where did it go wrong with the officialization of LTO, the hiring of third parties with no primary farmer's heart, and entrepreneurial spirit, but wage earners admittedly of peasant origin, with a 9 to 4 mentality?
Subscriber
peter 5 August 2018
everyone is complaining that there should be a meeting with the factories and the minister. If you have signed a contract, you have done so with your full mind. I see more in broad weather insurance. anyone can shut it down. but it still needs to be adjusted on a number of points. I hope that lto will do something with it. deductible down 20%. then that 300mm down precipitation deficit in several blocks of the growing season. then it is interesting for everyone to insure. And also more attention for the growers who cannot irrigate.
Subscriber
smart ass 5 August 2018
what good is comprehensive weather insurance if your potatoes and onions scorch and only have a mediocre yield because you are not allowed or unable to irrigate.
what will i get from the insurance? minus deductible? then I can't participate in the high prices that some get.
Groningen 5 August 2018
With the broad weather insurance they just have to look at the American model.
peta 5 August 2018
Broad weather insurance simply means an increase in the burden for the Dutch farmer. In the countries around us they just have catastrophe scenarios for affected regions and companies. This is largely financed by the EEC.
Why should we as a sector bear this ourselves when there are funds for it!
I think it arose because there was no Ministry of Agriculture for the implementation of a catastrophe scheme.
Now that the ministry is back, the government should simply let this EEC money flow towards its food suppliers, or is it really the case that this cabinet wants to clean up the farmers cold! Who do they think will still be so crazy to take care of the food in 20 years?!
In short, anyone who lets the farmers suffocate now will soon have nothing to eat. So the government likes to look a little further ahead if reacting incorrectly to the issues of the day and what the media make of it!
Subscriber
ape 5 August 2018
The Belgian disaster fund is fed by the farmers. The Belgians receive 200 euros less subsidy/ha than the Dutch, this money goes into this pot, among other things.
Subscriber
smart ass 5 August 2018
voted for van Martels last year because it is a farmer.
they put it on the trains.
come on man, let's hear it! you belong to agriculture and stand up for your colleagues
and those trains that's more for d 66
south farmer 5 August 2018
petatje wrote:
Broad weather insurance simply means an increase in the burden for the Dutch farmer. In the countries around us they just have catastrophe scenarios for affected regions and companies. This is largely financed by the EEC.
Why should we as a sector bear this ourselves when there are funds for it!
I think it arose because there was no Ministry of Agriculture for the implementation of a catastrophe scheme.
Now that the ministry is back, the government should simply let this EEC money flow towards its food suppliers, or is it really the case that this cabinet wants to clean up the farmers cold! Who do they think will still be so crazy to take care of the food in 20 years?!
In short, anyone who lets the farmers suffocate now will soon have nothing to eat. So the government likes to look a little further ahead if reacting incorrectly to the issues of the day and what the media make of it!


How do you explain this to SMEs and all kinds of other sectors that have also been coldly cleaned up due to all kinds of changes? The time when we were the only ones unabashedly able to hold up our hands in extreme situations seems outdated to me. The fact that other countries set different priorities does not alter this. Then you should go farming there...
pete s 5 August 2018
If the farmers themselves and lto do not come up with a contract with their own conditions, the providers of the broad weather insurance policies may be able to do so.
The knife then cuts from 2 sides
ideas 5 August 2018
Berry wrote:
@MariusThe difference between growing under contract or growing freely is only the moment of sale. Even if you have the potatoes behind the shelves, you are not sure of the barrels that will come out. From what moment can it be sold?
Can someone calculate for me the difference over the last 10 years. Everything free or 100% on contract. So don't talk about potatoes supplied with the delivery, but everything on contract!
Jan 5 August 2018
I don't really understand why farmers and livestock breeders should be helped. if there is a bad summer, companies that depend on good weather are not helped either, are they? Who explains this to me?
Agri 5 August 2018
Absolutely right, and you can insure against it. Let's just hope that the surrounding countries don't help either, otherwise it's unfair competition, plus if the government does help, I want my premium back.
Subscriber
Free Agria 5 August 2018
idea wrote:
Berry wrote:
@MariusThe difference between growing under contract or growing freely is only the moment of sale. Even if you have the potatoes behind the shelves, you are not sure of the barrels that will come out. From what moment can it be sold?
Can someone calculate for me the difference over the last 10 years. Everything free or 100% on contract. So don't talk about potatoes supplied with the delivery, but everything on contract!


An accountancy firm (I think Countus) from Flevoland has done a study on this and everything free gave the highest average result, followed by pool supply and contract was the lowest.

But free cultivation does mean that you have to have a feeling for trading and there is also quite a difference in mentality between traders. Traders who restart under a different name after a bankruptcy that they have filed for themselves avoid is my experience.
Subscriber
crow 5 August 2018
I have just signed a contract, selling price €28 per 100 kg delivery over 3 weeks. Hopefully you stay off the contracts. Because there's nothing so stupid as to cry afterwards. Who knows, maybe I'll also sell too early and it will be €3 bad luck next year in 45 weeks.
Subscriber
Telerx 5 August 2018
Einstein wrote:
I can do what I want so don't tell me how to do it I've been able to do that for years as one of the best in this country myself, and the whining about free cultivation stop there, there are only a hand full in this country.

how do you want to grow. if your neighbor is a free counter, he can pay much more rent .. And smart guy .. do you think factories conclude contracts to buy more expensive?
Genie 6 August 2018
Einstein think of the semicolon, capital letters in short punctuation marks.
West Brabant 6 August 2018
I hope that LTO will not talk to customers because that will of course be of no use. And especially don't ask for support because then you will be 1-0 behind in upcoming price negotiations (because you will still receive support in case of calamities, they say). As long as 80.000 euros are paid for a hectare and growers drive each other down the road to rent land that is completely unsuitable for potato cultivation, we better leave it that way. You wouldn't have had to sign contracts, you wouldn't have had to grow potatoes anyway, and you could have taken out insurance.
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