Government measures due to the nitrogen crisis will cause the Dutch livestock population to shrink by 2030% to 15% between now and 18. The Dutch economy could lose up to €1,5 billion in income as a result, and more than 11.900 full-time jobs are at risk. This is the conclusion of ABN Amro in a recent analysis of the expected shrinkage in the animal sectors. According to the bank, the impact on the total economy will remain limited.
In the analysis, the bank shows the effects of a smaller livestock population on other economic sectors. The focus is on the four major animal sectors: dairy, calf, pig and poultry farming. The shrinkage is mainly the result of termination regulations for livestock farms and the skimming of production rights.
Biggest contraction in 2025 and 2026
The largest decrease in livestock numbers is expected in 2025 and 2026, as a result of termination regulations. In 2027 and 2028, there will be a slight decrease, as production rights are skimmed off. After 2028, the number of pigs and chickens is expected to stabilise. The number of dairy cows is expected to continue to decrease slightly, because – according to an earlier report by Wageningen University & Research – further skimming of phosphate rights remains necessary.
Impact on suppliers and processors
Not only farmers are affected by the shrinkage. Suppliers such as contractors, veterinarians, compound feed suppliers, business consultants and suppliers of machines and stables are also faced with a falling demand. At the same time, processors in the food industry will be confronted with a decrease in the supply of dairy, meat and eggs.
According to a quantitative analysis by ABN AMRO, the contraction could lead to a decrease in gross domestic product (GDP) of approximately €1,5 billion. In 2023, the GDP in the Netherlands was €1.068 billion. In addition, 13.300 jobs could possibly disappear, of which 11.900 in full-time equivalents (FTE). The impact on GDP will therefore be limited to around 0,15%. Nevertheless, the damage to individual companies and employees could be considerable.
Redistribution also offers opportunities
The reduction in livestock numbers can also create new opportunities. The bank has not quantified these effects, but does mention them. For example, the freed-up nitrogen space can accelerate the granting of permits in the long term, although that will probably take a few more years.
Also, freed-up workers can be deployed elsewhere in the economy, which limits the economic damage. In addition, space is created on the energy grid and freed-up agricultural land – especially grassland – can be used for extensification of the remaining livestock and arable farms.
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