Are subsidies a pleasure or a burden?

Farmers are happy to say that colleagues in Eastern Europe are heavily subsidized with money from Brussels to purchase new tractors and machines. In the Netherlands we can also do something about it. Is that a burden or a joy for agricultural entrepreneurs? I have my doubts.

Two weeks ago I was driving through England. Roughly from Dover to Peterborough (Calais-Alkmaar line) and back again. What struck me, among other things, was the contrast between the Netherlands and our remote 'western neighbours'. A Dutch arable farmer is satisfied when the yard is tidy, the barns are neat and the machines are cleaned and under roof. In 2017, things are also arranged down to the last detail for many livestock farmers. In England, this is not always given the same attention. The urgency is simply not seen. How come, I wondered.

Jealous machine park
There are also differences in the machine parks. When you see what many a Dutch arable farmer has in their shed, material to make a contractor jealous with, you wonder whether arable farming ever has bad years. We all know better. You also see heavy tractors and wide combines in England, but that is not common practice everywhere. A 30-year-old tractor is not there for nostalgia reasons, but pure necessity.

Growing grain is poverty
Naturally, high-yielding crops such as (seed) potatoes, onions (not this year), flower bulbs and carrots (not this year either) can bring in a lot of money. At least that potential is there. Given the number of investments, that potential is really being used, luckily! You often have no other option, given our tax system. Grain is poverty, especially at current market prices. Hard but true. With this in mind I drove through England. So my mind wandered on the issue of subsidies. That also makes us a separate country. Many of those modern and super luxurious machines on an arable farm are made possible in part by subsidy money.

No problems with the EU
Sticking a European flag on a board or machine. The British were vehemently against this. It was a frequently heard point during pre-Brexit talks. Dutch farmers are also not very pro-EU, like a Polish farmer is, for example, but we do want to put up a sign for a generous subsidy. What it says will be a sausage. With the help of such funds, 30-year-old tractors are now driving around with rtk GPS on board, the plow, seed drill, hoe and harvester are equipped with the most modern technology and there is no farmer in Europe that has so many electronics hanging on the sprayer as a Dutchman.

Agriculture and horticulture benefits
At the end of June, RVO announced the figures for the Mia/Vamil and EIA subsidies for 2016. Agriculture and horticulture is by far the largest 'profiter' (in the positive sense of the word) of these subsidy schemes. The EIA received 2016 applications to process in 17.192. Good for €1,35 billion in investments. Mia/Vamil turned out to be good for almost 10.000 applications and an investment sum of €2,6 billion. A big piece of the pie is for agriculture, according to the next numbers out.

Mia/Vamil in numbers
RVO received a total of 323 applications for GPS systems for precision agriculture. Good for €6 million. This is followed by 205 applications for equipment 'for site-specific care of crops'. Total investment: almost €13 million. With 177 registrations (€20 million), sprayers with site-specific application are also participating. It is not just machines that are eager to receive subsidies. The categories sustainable stables, for pigs and poultry, score even higher.

Unfair distribution
These subsidies are partly the catalyst for why arable farming in the Netherlands is so good at mechanization. I see it happening in practice. A few win prizes, while the vast majority look on in awe. That is the case with the POP3 subsidy rounds. Nothing more than price shooting. It usually comes down to the farmer, who already wanted to invest, rakes in a big extra on the gross amount, and that his little colleague continues to drive with outdated technology.

What good is a one-ton syringe?
A farmer once suggested to me the idea of ​​distributing that money fairly. It is compulsory to build up section closures on every field sprayer. Relatively small costs and immediately a large environmental benefit. The dealer has a job, the manufacturers can sell a lot. Win for everyone. Not such a crazy idea. You may wonder what nature and the environment can do with one very expensive syringe weighing more than a ton. Moreover, you only get skewed proportions. Then the subsidy does not become a pleasure but a burden.

Niels van der Boom

Niels van der Boom is a senior market specialist for arable crops at DCA Market Intelligence. He mainly makes analyses and market updates about the potato market. In columns he shares his sharp view on the arable sector and technology.

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