Is FrieslandCampina checkmate?

FrieslandCampina's participation in an undoubtedly well-intentioned nitrogen plan of the Dutch dairy sector has worked like a red rag to a bull for member dairy farmers. Some of them no longer accept the group's 'green' strategy and the retrenchment of the milk price and feel unheard of. The credit of the dairy cooperative with its supporters is under pressure.

These are turbulent times at the largest dairy cooperative in the Netherlands. Intimidating too. At the head office in Amersfoort, they are quite shocked by the tractors that unexpectedly showed up during the farmers' protest on Friday 25 October, following the nitrogen plan of the dairy sector. That same afternoon, the plug was pulled from the plan under heavy pressure.

Unwanted interference
What now? That's the big question. The cooperative dairy group feels it has a duty of care to 'interfere' with the nitrogen problem in the Netherlands. There is something to be said for that. If it had remained quiet, mouths would probably have opened too. However, some of the farmers find the interference undesirable. FrieslandCampina should value the milk and not get involved in politics, says the collective 'Bezorgde Friesland Campina Boeren', which was founded early this week out of dissatisfaction.

By means of a petition they try to find support for 8 demands they have. In addition to political interference, these concern annoyances within the cooperative. The concerned members are demanding major changes. Not only in policy, but also in the cooperative structure. For example, the members should be in charge again and not the Members' Council.

Although it sounds contradictory, FrieslandCampina's top management can in a sense be happy with this collective. Discussion and debate can unite the angry fragmented constituency. Concerns about the cooperative are also basically the main motivation of the collective that drafted the petition and that is a common point of attention. Much depends on the final number of signatures that members have put on the petition. This probably determines whether the cooperative's board will stick to the current consultation procedure through member meetings or formally enter into discussions with concerned members. 

The interesting challenge FrieslandCampina faces is how you can remove dissatisfaction among some of the members as much as possible. The different points of view are great. The demanded dismissal of Hester Maij, the new director of public & quality affairs, will probably not be granted, unless she draws her own conclusions. Stopping the collaboration with Natuurmonumenten, also a collective demand, probably won't either. This is one of the showpieces of CEO Hein Schumacher.

So it probably comes down to poldering. That is also the model that Schumacher has in mind to deal with the nitrogen crisis. The question is whether farmers will accept his invitation. 

New milk money regulation
Then the austerity of the milk money† With all the nitrogen perils, that proposal is a bit inconvenient for the cooperative to say the least. There is no denying that there are duplications in the milk price. On the other hand, it is understandable that farmers do not want to bleed to boost the profitability of the dairy group in this way. Certainly not because a year ago the growth opportunities, more or less, have been restricted. So it's a tricky dilemma. 

It is crucial how many member dairy farmers are really angry. As is often the case, you hardly hear the satisfied members. At the RMV fair in Hardenberg, members made it clear to me that it is appreciated in the country that the milk is collected almost daily. And that the milk money is credited on time. Not everyone is therefore angry with the dairy cooperative, although the dissatisfaction cannot be underestimated.

December will be crucial
December will be a crucial month for the dairy cooperative. The new milk money regulations will be voted on on 17 December. However, concerned farmers are demanding that this district council meeting be postponed. They first want an answer to the requirements and, according to the collective, that is not possible before that date. If the milk money regulations are instinctively 'pressed through', new protest actions cannot be ruled out. 

Before that time, solutions must also be found for the nitrogen problem. FrieslandCampina would like to take steps, but first it faces the challenging task of not being checkmated. After all, without broad support, a cooperative is paralyzed. 

Wouter Job

Wouter Baan is editor-in-chief of Boerenbusiness and Food Business. He also closely follows the raw materials markets and focuses on animal proteins such as dairy and meat. He regularly interviews leaders from the agricultural sector and the food world.

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