INTERVIEW - Dutch Agriculture Faces Tough Challenges
Date: 22-Apr-05
Country: NETHERLANDS
Author: Anna Mudeva
"There are serious worries about the future of the Dutch agricultural sector," Petra Berkhout, an author of the Dutch Agricultural Economic Institute's annual report, told Reuters.
The Netherlands, which is the world's third biggest exporter of agricultural products, has seen the number of its farms and their revenues declining in the past decades, while farms' size increased and the sector became very intensive.
Berkhout said those trends would most likely continue in the coming years mainly due to foreign competition from cheaper products, higher costs to meet environmental and animal welfare targets and European Union's plans to reduce subsidies.
The number of Dutch farms more than halved in the past 20 years to some 85,000, and compared with over 409,000 farms in the middle of last century, the institute's data showed.
The reduction of farms has accelerated in the past five years because of the devastating effect of foot-and-mouth and bird flu disease outbreaks, Berkhout said.
At the same time farms' size and intensification is growing as most animals are being raised in specialised closed farms and vegetables are grown in greenhouses.
"In the Netherlands, the land is scarce, land prices and labour costs are high, so intensive agriculture has been the only way to make sure farmers get some return," Berkhout said.
The tiny Netherlands is one of the most densely populated countries in Europe. It is criss-crossed with canals and rivers and has imposed costly measures on handling manure to preserve its water resources.
Berkhout said pressure will increase on the livestock sector to meet even tougher manure regulations in line with new EU water protection requirements from 2009.
Greenhouses also face higher environmental costs as they need to boost energy efficiency and implement far-reaching energy innovations to reduce carbon dioxide (CO2) emissions, Berkhout's institute has said.
TUMBLING INCOMES
Higher costs, overproduction in the EU in the past years and disease outbreaks have together reduced the average income per farmer in the Netherlands to some 15,000 euros in 2004, the lowest since the early 1990s, the institute has said.
Dutch agriculture, which exports some 80 percent of its products, is also hit by strong competition from cheaper pig meat from Brazil, flowers from Kenya and mushrooms from China and Poland, Berkhout said.
She said the EU's decision to end the link between subsidies that farmers receive and the amount they produce, which comes in force in 2006 in the Netherlands, might lead to further reduction in livestock numbers and dairy production.
In 2003, EU states agreed to sweeping reforms of farm subsidies, mainly to help combat huge overproduction that has led to mountains of unsold farm goods.
Heads of Dutch cattle dropped to 1.5 million in 2003 from 2.3 million in 1980, institute data showed. Pig numbers shrank to 11 million in 2003 from 15 million in 1997.
But Berkhout said she was still optimistic that the Dutch agriculture sector, which boasts centuries of traditions and experience, would overcome the challenges.
"I believe that there is enough potential, knowledge and experience to face these difficulties," she said.
