Production or landscape turns land market upside down

The Council for the Environment and Infrastructure recently presented an advisory report that could significantly change the Dutch land market. Ground for improvement This Council concludes that the government itself is driving up land prices with subsidies and buyout schemes and that this must change. Consideration should be given to distinguishing between production agriculture and social agriculture, with a new category of "landscape land." This is important information for farmers, landowners, and investors. It directly impacts land value, business development, and the future of rural areas.

The national government channels significant funds into rural areas: for example, for area development, clean energy generation plans, nature development, and farmer buyouts. This drives up land prices.

The money spent on land purchases will soon no longer be available for new barns, sustainability improvements, or business development. This affects farmers who want to grow and young entrepreneurs who can no longer keep up with land prices.

There are therefore three recommendations:

1. Remove incentives from tax rules and subsidies that artificially inflate land prices.
2. Intervene more actively in the land market. Not just as a buyer at market price, but also with instruments such as the Municipal Preferential Rights Act, legal land exchanges, and, if necessary, expropriation.
3. Distinguish between areas for production agriculture and areas for social agriculture.

Production agriculture versus social agriculture
The aim is to divide rural areas into production agricultural areas – where efficient food production is central – and areas for social agriculture. Within this second category, the concept of landscaped grounds introduced: lands that are located between agriculture and nature, where water storage, recreation and/or extensive agriculture are combined.

Subsidies might be available for these landscaped areas. Moreover, they are designated locations for new housing developments, defense sites, and energy generation. Generally speaking, this isn't the best agricultural land, so from that perspective, it's also a logical choice.

The comparison with different types of industrial estates can be made. This could also apply to rural areas.

Consequences for land value
If this division is implemented, it will have direct consequences for the value of land.

Production land is expected to retain its value and may increase further due to increasing scarcity. However, land designated as landscape land will face restrictions on its use and thus a lower market value.

It's therefore crucial for landowners to know how their plots will fit into a new zoning plan. If the land is located in a region with nature or water challenges, or near existing nature reserves, it's more likely to fall under social agriculture.

This doesn't necessarily have to be bad news, as subsidies or other uses may be available in return, but the revenue model may change.

What does this mean for farmers and investors?
For agricultural entrepreneurs looking to expand or transfer their businesses, this creates both opportunities and uncertainty. In production agricultural areas, there remains room for scaling up, but there is a possibility of increased scarcity, further driving up prices. In social zones, the perspective is shifting toward extensification and multifunctional use.

Young farmers are faced with an added dimension: not only the question of whether the company is financially viable, but also whether the future purpose of the land allows for their ambitions.

The playing field is also changing for investors. Land currently considered a safe, stable investment can acquire a different risk profile through reclassification. At the same time, new opportunities arise: subsidies, nature development, and other factors such as energy generation on rural land and lucrative uses like housing can create new return models.

Those who have timely insight into where these developments are occurring can position themselves better. Keeping up with the dynamics of the land market is no longer a luxury, but a necessity.

Who will take up the challenge?
The province is the logical level of government to make these choices. This should be done in consultation with municipalities and water boards. But it must be a comprehensive package: implementing fiscal measures alone without active land policy and zoning has little effect, and vice versa.

Whether provinces will take up this challenge is far from certain. The Eastern Netherlands Court of Audit concluded at the end of 2025 that actively intervening in the land market is easier said than done for provincial governments. Nevertheless, the province of Utrecht recently initiated a plan (Utrecht Rural Area Program). It's clear that this has caused quite a stir. 1.700 responses were received. It's clear that this discussion is alive and well...

Paul and Joost Bakker are owners of LandEignaar.nl, the platform that provides insight into the agricultural land market. Their contributions highlight developments in the land market, leasing, and regulations.

Paul & Joost Bakker

Paul and Joost Bakker are owners of LandEignaar.nl, the platform that provides insight into the agricultural land market. Their contributions highlight developments in the land market, leasing, and regulations.

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