During the past 50 years, the Netherlands has developed a highly sophisticated, efficient production system based on intensive agriculture, and it is among the world’s leading agricultural exporters. A major emphasis on research, agricultural extension work and education has contributed to the sector’s success, along with ready access to the E.U. internal market.

The Netherlands is a member of the European Union and as such follows E.U. policies and regulations relating to the Common Agriculture Policy, trade and genetically modified organisms.

But the Netherlands is one of the smallest and most densely populated countries in the world, and pressures on its rural areas are considerable. The Dutch government strives continuously to strike a balance among the country’s various and conflicting rural interests, including recreation, conservation, agricultural production and transportation.

The Netherlands’ agricultural sector today faces a number of critical challenges. Some, such as environmental concerns, stem from historically intensive livestock practices; in the late 1990s, the government began working to improve the resulting ecological problems by sharply reducing swine herds.

More recently, consumer concerns regarding food safety and animal welfare have become increasingly vocal. The government has become well aware of these social trends and has developed policy goals reflecting these issues.

For example, the Ministry of Agriculture, Nature Management and Fisheries has promulgated a long-term policy statement to promote a "sustainable, internationally competitive agri-sector, which stands at the centre of society and sets the trend in Europe." That statement encompasses several key goals.

Sustainable production is one that accounts for the health and safety of man and animal, as well as the economic health of producers and processors. At the same time, the policy aims to assure that the sector remains internationally competitive by reinforcing Dutch agriculture’s market position in the European internal market and expanding to new, emerging markets.

The government also wants agriculture to result in "socially responsible products" that are valued by society and respected by consumers. According to the Ministry’s policy statement, the agricultural sector must meet the challenge of developing socially acceptable practices, including altering production methods and assuring the quality of green space. And the government is making concerted efforts to assure specific sectors adjust their practices to fit these goals.

For the key livestock sector, for example, the goal is to assure that livestock systems are adapted to the animal. In practical terms, the government aims to change Dutch animal production so that, within 10 to 20 years, each animal will be able "to express its natural behavior."

The government concedes that the competitiveness of the Dutch livestock sector might be at risk if the Netherlands follows stricter regulations than other countries, E.U. states in particular. Its solution is to position Dutch livestock products to capture "discerning" markets, where consumers choose value-added products based on animal welfare issues.

The government also plans to use Dutch agriculture as an international role model.

"It is not feasible to simply ban the import of products from third world countries that have been produced by methods not conducive to animal welfare," the Ministry says. "The government has therefore opted to take the lead internationally in stimulating animal-friendly, socially acceptable livestock systems."

FLOUR MILLING

The Netherlands has a mature and technologically advanced flour milling industry, with a moderate degree of vertical integration with the baking industry.

Wheat flour production is concentrated in a handful of milling companies operating fewer than 10 mills that account for more than 95% of Dutch milling capacity. Meneba is the leading producer of flour and bakery goods, and, with a wheat flour market share of 54%, the company is the second largest producer in Europe.

Total Dutch wheat flour production and consumption averages about 1 million tonnes a year, and per capita wheat flour use is about 65 kg a year.

Dutch consumers prefer fluffy, well-risen bread, which requires wheat with high gluten elasticity for its production. Because the Dutch climate is too wet to produce the necessary wheat quality, the Netherlands imports most of its milling wheat, primarily from France and Germany.

Starch also is a key grain processing sector, and several multinational starch companies have production plants in the Netherlands. The Dutch starch industry consumes about 1.7 million tonnes of wheat and maize yearly.

Maize is imported from southwest France, and the wheat for starch is produced domestically and imported from France and Germany. In addition, about 2 million tonnes of potatoes are processed annually by the Dutch starch industry.

FEED AND LIVESTOCK

In the past few years, the Netherlands has faced several feed- and livestock-related crises. Cases of bovine spongiform encephalopathy and outbreaks of foot-and-mouth disease and avian flu forced reductions in cattle, swine and poultry inventories and affected feed demand.

In the feed industry itself, specific incidents have involved feed contamination — with prions that can cause bovine spongiform encephalopathy, with PCBs and dioxins and with banned hormones.

In some cases, these incidents have involved fraudulent activities by either companies or individuals, leading to the contamination of raw materials and ultimately finished feed. But the consequences, regardless of cause, have involved not only economic losses and sometimes harm to animals, but a decrease in consumer confidence in the feed industry.

The problems have attracted political attention. For example, Parliament in 2003 investigated the Dutch feed safety situation and earlier this year adopted new legislation tightening feed manufacturing operations.

The law requires feed companies to operate in accordance with the code of good manufacturing practice, and it limits authorized feed ingredients to those materials for which a risk assessment has been carried out. The risk assessment must be conform to the standards of Hazard Analysis Critical Control Points and must demonstrate that the product in question can safely be used as an ingredient in animal feed.

Approved feed ingredients are stored on a database, and products not included on the database are no longer acceptable for use in the manufacture of or trading in animal feed. Dutch authorities say that approved risk assessments will be periodically evaluated and, if necessary, updated.

The Dutch animal feed industry, like the flour milling industry, is highly efficient and sophisticated. About 14 million tonnes of compound feed are produced annually.

Some 3 million tonnes of grain are used each year in feed manufacturing, with the type of grains used in feed highly dependent on relative price levels. About 50% of grains used for feed goes to poultry rations, 30% to swine and 20% to dairy cows.

The compound feed industry also traditionally has used substantial amounts of imported non-grain feed ingredients such as tapioca and corn gluten feed. The worldwide explosion in the planting of genetically modified maize varieties has complicated Dutch feed makers’ use of the latter ingredient, as public opposition to GMOs is widespread and vehement.

The advent of strict E.U. traceability and labeling rules has increased the uncertainties. (See related article on page 54.) Guidance from the European Commission on implementation had not been issued as of mid-March, but the Netherlands was preparing to enforce these regulations beginning April 18.

Few disputes are expected to arise regarding the proper labeling of Dutch feed products. Of more concern is the likelihood that some percentage of feed products will contain non-approved biotech varieties.

Over the short-term, exemptions and waivers provided in the regulations should enable trade in products such as corn gluten feed to continue uninterrupted. But over the longer term, waivers will not be granted for any new-to-market GM varieties that are not E.U.-approved.

Thus, commercialization of new varieties, unless they receive simultaneous E.U. approval, could cause future complications for trade in these products.

Key Facts

Capital: Amsterdam; the seat of government at The Hague.

Demography: Population 16.2 million (July 2003), 0.5% growth rate (2003 estimate); Dutch language; Roman Catholic (31%), Protestant (21%), unaffiliated (40%) religions.

Geography: Western Europe, bordering North Sea, between Belgium and Germany; mostly coastal lowland; temperate, marine climate.

Government: Constitutional monarchy with parliamentary democracy. Chief of state is Queen Beatrix, head of government is Prime Minister Jan Peter Balkenende.

Official agricultural agencies: The Ministry of Agriculture, Nature Management and Fisheries under Minister Cees Veerman.

Economy: The Netherlands is a wealthy nation, with a mixed market economy in which both private and public bodies play a part. The economy is noted for stable industrial relations, moderate unemployment and inflation, a sizable current account surplus and an important role as a European transportation hub. Industrial activity is predominantly in food processing, chemicals, petroleum refining and electrical machinery. Economic growth slowed considerably during 2001 to 2003, as part of the global economic slowdown, but for the four years before that, annual growth averaged nearly 4%, well above the E.U. average. About 75% of total agricultural products are exported.

Agriculture accounts for 3.1% of gross domestic product and 4% of the labor force.

G.D.P. per capita: U.S.$27,200 (purchasing power parity), 0.2% growth rate, 3.4% inflation, 3% unemployment (2002 estimates).

Currency: Euro. March 11, 2004 exchange rate: 0.808868 EUR = 1 U.S. dollar.

Exports: U.S.$243.3 billion (f.o.b., 2002), machinery and equipment, chemicals, foodstuffs.

Imports: U.S.$201.1 billion (f.o.b., 2001 estimate), machinery and transport equipment, clothing, foodstuffs.

Major crops/agricultural products: Horticultural products, pork, potatoes, sugar beets, grains.

Wheat: Production averages about 1 million tonnes annually, with imports of about 4 million needed to meet consumption. Feed use typically is about 1.4 million to 1.5 million tonnes.

Barley: Production generally averages about 400,000 tonnes, with imports at about 800,000.

Maize: Virtually all of the country’s annual consumption of 2.4 million to 2.5 million tonnes comes from imports, as production typically is fewer than 300,000 tonnes.

Transportation: Highways, 116,500 km, 104,850 paved; railroads, 2,808 km, all 1.435-m gauge; Rotterdam, Amsterdam are major ports.

Internet: Country code, *nl; 52 service providers (2000); 9.73 million users (2002).

Data

Production Consumption Exports Imports

Wheat 1,100 5,000 300 4,200

Barley 400 925 275 800
Maize 230 2,430 200 2,400

2002-03 marketing year

Source: U.S. Department of Agriculture

(To see a chart on Dutch grain consumption for feed, access the April digital edition of World Grain, page 20.)