Focus on the Netherlands
Jan. 8, 2013
Although its fresh flower industry is legendary, the Netherlands is a relatively small agricultural producer. It is, however, of vital importance in grain trading because of the huge significance of its ports, notably Rotterdam, and its traditional focus on trading in all commodities.
“Because of the country’s strategic location on the North Sea and the Rhine, trade, exports and distribution are ingrained in the Dutch character,” the USDA attaché wrote in a report on the country’s agricultural economy and policy published last year. “The Port of Rotterdam is among the most important sea ports in the world. Amsterdam Schiphol Airport occupies a similar position in Europe. Their geographic location and function as international hubs in Europe are major advantages.”
The European grain trade organization, COCERAL, puts total soft wheat production in the Netherlands in 2012 at 1.343 million tonnes on 158,000 hectares. Production the year before was 1.36 million tonnes on 160,000 hectares.
Barley production is put at 229,000 tonnes, up from 208,000 in 2011, with a rise in yield per hectare to 64.5 tonnes from 59.4 on an unchanged area of 35,000 hectares. The Netherlands produced, according to COCERAL, 304,000 tonnes of maize, up from 293,000 in 2011, with yield down at 117 tonnes a hectare from 122, while area rose to 26,000 hectares from 24,000 the year before.
“Mean population density is 487 inhabitants per square kilometer, making the Netherlands one of the most densely populated countries in the world,” the attaché report said.
The country has a topography that is unique. “The Netherlands is a low-lying country, with about 27% of its area and 60% of its population located below sea level,” the report said. “Significant areas have been gained through land reclamation and preserved through an elaborate system of polders and dikes. The majority of the country is very flat, with the exception of foothills of the Ardennes in the far southeast and several low-hill ranges in the central parts created by ice-age glaciers.”
It put the area of the Netherlands at a total of over 3.7 million hectares. Some 52% of the land, or 1.9 million hectares, is farmland,” it said. “This is 1.2% of the total farmland in the E.U.-27. Of the total farmland in the Netherlands, 57% is used for the cultivation of arable and horticulture crops, 40% is permanent grassland and some 2% is used for permanent crops.”
“The rural areas in the Netherlands are under considerable pressure from development,” it said. “Finding a balanced assessment between the different functions of the rural areas, between agriculture, nature, business parks, housing and roads, is a political matter.”
It put the total value of agri-food in the Netherlands at €45 billion, or roughly 10% of national gross added value.
“Over a third of the agricultural complex is based on the import of foreign raw materials that are processed in the Netherlands,” it said. “Knowledgeable traders, Europe’s leading ports, a good distribution system, a competitive processing industry and efficient marketing systems make the Netherlands an attractive market for trading and processing agricultural products.”
The attaché also pointed out that the number of farms in the Netherlands is in decline. “Last year, the Netherlands had just over 73,000 farms, 3% fewer than the previous year,” it said. “The decline is mainly due to the decreasing number of small farms, whereas the number of large farms has increased considerably.”
Dairy farms make up the largest group, totaling 18,900, followed by farms with grazing stock, cows for slaughter, sheep and goats, which amounted to 16,800. The number of arable farms, producing mainly cereals, potatoes and sugar beets, is 11,100, and there are 6,500 intensive livestock farms. Some 13,400 businesses operate in the field vegetable and glasshouse sector. Finally, 6,300 businesses combine a number of branches of production. Over the last two decades, the number of farms has fallen by a third.
The report also comments that Dutch agricultural policy is driven by the E.U.’s Common Agricultural Policy (CAP).
“However, most of the heavily supported crop sectors are of minor importance in the Netherlands, making the country a net payer to the CAP,” it said. “Given the heavy reliance on trade in both directions, it is not surprising that the Dutch are generally in favor of free trade and the reduction in trade-distorting agricultural subsidies. However, in product areas such as dairy, beef, sugar and potatoes, the Dutch are more protectionist.
“A high population density and influential environmental lobbies contribute to a strong bias toward consumer and environmental protection in Dutch food policy development. The Dutch primary production sectors are pressured by the demand for land for housing, recreation, and nature areas, along with strict rules concerning environmental protection and animal welfare.”
CHANGES TO STRATEGY
A new Dutch government has made some changes in how the Netherlands operates agri-food policy.
“On Monday, Nov. 5, 2012, the new Dutch Government was established. The Liberal Party (VVD) and the Labor Party (PvdA) formed a coalition and agreed to a cabinet of thirteen Ministers and seven State Secretaries,” the attaché said in a report on the moves. “While the previous Cabinet merged the AgMinistry with the Ministry of Economic Affairs to the Ministry of Economic Affairs, Agriculture and Innovation, this Cabinet renames the Ministry simply the Ministry of Economic Affairs.
“The removal of ‘Agriculture’ underlines the more business-focused policy for the agricultural sector, and the wish of the Cabinet to treat the Dutch agricultural sector as any other sector in the Netherlands,” it said. “The Cabinet acknowledges, however, the importance of the sector.”
The report also explains why it acknowledges that importance. “Since 2004, the Netherlands has been ranked the second biggest exporter of agricultural products in the world after the United States,” it said.
However, the coalition agreement includes a commitment to lobby for a reduced E.U. agriculture budget.
PRAGMATIC APPROACH TO BIOTECH
As in other areas related to food and agriculture, Dutch policy on genetically modified crops is subject to harmonized E.U. rules. The attaché describes the approach of the country’s government as ‘pragmatic.’
“However, crop trials and commercial cultivation of biotech crops are effectively prevented by cumbersome regulations and by the threat of protests from environmental groups,” a report on the subject said. “The Dutch livestock sector depends on feed imports, mainly soybean meal, which for the most part is genetically engineered (GE). The livestock sector does not keep GE animals nor do Dutch agricultural research institutes keep them for research purposes.
“In the Netherlands, there are no commercial plantings of biotech crops. A large share of the Dutch agricultural imports from the United States consists of feed products and requires labeling for biotech content under the European Union’s traceability and labeling legislation. The slow approval process of new GE events by the European Union has significantly affected U.S. exports to the Benelux region, in particular corn gluten feed and Distillers Dried Grains.”
FEED AND FLOUR MILLING
The Netherlands doesn’t produce nearly enough grain to meet domestic demand, Alex Blonk, vice-president of the Royal Dutch Grain and Feed Trade Association, told World Grain.
“We produce approximately 2 million tonnes of cereals and need 10 million tonnes.”
For Dutch farmers, grain is not a money maker, he said.
“To buy one hectare, they pay €70,000,” he said. “With nine tonnes per hectare of wheat, that makes no sense at all. With a price of €110 or €220 per tonne, they don’t make any money on this.”
He pointed out that the Netherlands does have an ideal climate for producing feed wheat.
The country has a large modern feed sector and a small flour milling industry, which has, according to Blonk, only six major players, the biggest with an annual capacity of about 600,000 tonnes and the smallest at 50,000 tonnes.
He put the industry’s annual flour exports at about 200,000 tonnes.
“That used to be much bigger, but they say some competitors get subsidized by their governments outside the E.U.,” he said.
Population: 16,730,632 (July 2012 est.)
Religions: Roman Catholic 30%, Protestant 20% (Dutch Reformed 11%, Calvinist 6%, other Protestant 3%), Muslim 5.8%, other 2.2%, none 42% (2006).
Location: Western Europe, bordering the North Sea, between Belgium and Germany.
Government: Constitutional monarchy. Chief of state: Queen Beatrix (since April 30, 1980); head of government: Prime Minister Mark Rutte (since Oct. 14, 2010).
Economy: The Dutch economy is the fifth largest in the euro-zone and is noted for its stable industrial relations, moderate unemployment and inflation, a sizable trade surplus, and an important role as a European transportation hub. Industrial activity is predominantly in food processing, chemicals, petroleum refining, and electrical machinery. A highly mechanized agricultural sector employs only 2% of the labor force but provides large surpluses for the food processing industry and for exports. The Netherlands, along with 11 of its E.U. partners, began circulating the euro currency on Jan. 1, 2002. After 26 years of uninterrupted economic growth, the Dutch economy, which is highly dependent on an international financial sector and international trade, contracted by 3.5% in 2009 as a result of the global financial crisis. The Dutch financial sector suffered in part because of the high exposure of some Dutch banks to U.S. mortgage-backed securities. In 2008, the government nationalized two banks and injected billions of dollars of capital into other financial institutions, to prevent further deterioration of a crucial sector. The government also sought to boost the domestic economy by accelerating infrastructure programs, offering corporate tax breaks for employers to retain workers, and expanding export credit facilities. The stimulus programs and bank bailouts, however, resulted in a government budget deficit of 5.3% of GDP in 2010 that contrasted sharply with a surplus of 0.7% in 2008. The government of Prime Minister Mark Rutte began implementing fiscal consolidation measures in early 2011, mainly reductions in expenditures, which resulted in an improved budget deficit of 3.8% of GDP.
GDP per capita: $42,000 (2011 est.); inflation: 2.3% (2011 est.); unemployment: 4.4% (2011 est.).
Currency: Euro (EUR): 0.7799 euros equal 1 U.S. dollar (Nov. 21, 2012).
Exports: $550.2 billion (2011 est.): machinery and equipment, chemicals, fuels; foodstuffs.
Imports: $492.1 billion (2011 est.): machinery and transport equipment, chemicals, fuels, foodstuffs, clothing.
Major crops/agricultural products: Grains, potatoes, sugar beets, fruits, vegetables; livestock.
Agriculture: 2.7% of GDP and 2% of the labor force.
Internet: Code: .nl; 13.699 million (2012) hosts and 14.872 million (2009) users.