Student - April 23, 2009

DUTCH FARMER TO BECOME RARE SPECIES

In ten years, one in three agricultural and horticultural concerns in the Netherlands will be gone. Half of the dairy farms will have disappeared. The number of cows will be about the same, but the number of pigs will shrink. These are the predictions of experts at the LEI.

By 2020, half the dairy farms in the Netherlands will have disappeared.
The LEI (agricultural economic research institute) was asked by the Ministry of agriculture and food (LNV) to work out how things will be in the agricultural sector in 2020. The expectation is that the Netherlands will remain a major agricultural producer, but the share of agriculture and horticulture in the Dutch economy will continue to go down. At the moment, one in ten Dutch people still work in the agricultural sector. This figure will be 20 percent lower in 2020.

What is most striking is the continuing upscaling in agriculture. Of the present 75 thousand concerns, less than 50 are expected to survive. The axe will fall heaviest on the dairy industry, where the current number of farms will be halved in ten years’ time to less than 10 thousand. The number of farms in the intensive livestock sector will be halved too.

Farmers usually stop when it’s time to hand over to the next generation and there’s no one to take over. This trend has been going on for years and is still going strong. Every year, three percent of the farms close down. Those who carry on either expand their businesses, start working part-time or choose to diversify. The LEI indicates a split: small companies on the one hand, and mega-companies with most of the production in their hands on the other.

The average company will grow by fifteen hectares to reach about forty hectares. At the same time, production will almost double. And this will be done with a lot fewer people than now. The magic word here is technological innovation. This will make it possible for fewer people to make more profit from a cow, a pig or a hectare of land. Milk production, for example, will go up by sixteen percent, whereas the number of cows will hardly change. For the consumer, this is nothing but good news. The production of agricultural and horticultural goods is expected to grow faster than demand. And that means lower prices.

The question is of course, how much the LEI’s projections are worth. The calculations are based on many assumptions. For example, it is assumed that the Netherlands will continue to be exempted from European regulations on nitrates. If that changes, then less animal manure can be used in the fields. The costs of disposing of the manure will go up and herds will shrink. This would especially affect cattle and pig farmers. Oil prices and stricter environmental regulations could also throw a spanner in the works.

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