Nieuws - 12 januari 2012

Extreme weather is bigger threat to agriculture than crisis

The Dutch economy is groaning under the continuing debt crisis. Pessimistic noises are now even being heard from the agricultural and horticultural sectors. LTO head Albert Jan Maat is urging farmers to suspend investments. Kees de Bont, researcher at agricultural economics institute LEI, puts the pessimism in perspective. Of course agriculture and horticulture are suffering from the crisis, but don't forget other factors.

‘Whenever there is a dip in the economy, agricultural prices come under pressure. When something essential such as food is at stake, the amount consumed by the Dutch won't fall by much. But the Netherlands exports 70 to 80 percent of what it produces. That can go down in a crisis if countries close their markets or buyers have trouble paying.
Agribusinesses cannot just change their production levels from one day to the next; that's very different in industry. In agriculture and horticulture, it is therefore the incomes of the farmers and market gardeners themselves that suffer, whereas in industry the main effect of a crisis is unemployment. So it is hard to say which sector is hardest hit. For someone who loses their job, that is terrible, but for a farmer or market gardener to have his income halved is very upsetting too.
There are also big differences in income trends between the various sectors. It's been a difficult year for greenhouse horticulture. That was partly to do with the EHEC affair, which caused consumption of cucumbers, tomatoes and bell peppers to plummet for much of the season. The dairy sector, on the other hand, has had a good year, with flourishing exports. Having said that, the livestock sector was generally affected but the high price of feeds. These were a result of the droughts of 2010, which caused the summer fires in Russia among other things. That led to disappointing grain yields.
If the current crisis goes on, it could have a negative impact on agriculture, but you also have to take other factors into account. The effects of weather and climate conditions, such as the fires in Russia, have a bigger impact on prices than an economic crisis does.'