The Netherlands

• General country description
• A. First pillar: implementation of CAP reforms (2003)
• B. Second pillar: implementation of RDP measures during 2007-2013
• C. Vision for the CAP beyond 2013: a short overview of the debate (at Member State level) on future CAP reform
• D. Literature, sources, references
• The comparative analysis provides a compact overview of CAP implementation across all 27 Member States and their visions of the future of the CAP

General country discription

The Netherlands
Comparison with EU-25

Population, 2005 (*1,000,000): 16.3

3.5% of population in EU-25

Population density, 2003 (inh./km2): 480

118 in EU-25

GDP/capita, 2005 (PPS): 28,900

124% of GDP/capita in EU-25

Share agriculture in total employment, 2002 (%): 3

5% in EU-25

Share Utilized Agricultural Area in total land area, 2003 (%): 57

46% in EU-25 in 1998

Average farm size, 2005 (ha): 24

19 in EU-15

Number of farms, 2005 (*1000): 81.8

1.3% of farms in EU-25

Source: own calculations based on Eurostat

Distribution of farming types, 2005 (% of total)

Source: own calculations based on Eurostat

EU funding for the Single Payment Scheme (SPS)
and the second pillar, 2007-2013

* Funding according to CAP budget including Bulgaria and Romania
Sources: Agra Europe (2007); CEU (2006); EC (2007a)

 

A. First pillar: implementation CAP reform (2003)

A.1 Single Payment Scheme

Model

SPS historical (EC, 2007b)

Coupling measures

Relatively complete decoupling, although several exceptions exist:

Reasons for selection

The main argument for the Dutch government choosing historical reference was that the Minister of Agriculture wanted to avoid drastic reallocations of income support “because this could undermine the economic position of certain farming sectors”. A shift from the historical reference to a regional system appeared to be necessary in the longer term, but this would lead to a larger administrative burden for government agencies. In 2004 the Minister wrote to Parliament stating that he considered it unavoidable that in the long run a system that compensated on the basis of historical production would be questioned. As a result, he expected that a further discussion would start before 2009 on the allocation of farm payments. The Minister added that a gradual shift towards a regional system (based on flat rate payments) would be part of this discussion.

A.2 EU budget for Single Payment Scheme (SPS) per year (National ceiling) 2005-2013

Source: 2005: EC (2006); 2006-2013: CEU (2006) and Agra Europe (2007)

Share of the farms that receive SPS of the total number of farms (% of total)

About 72 % of the enterprises receive the SPS. Those that do not receive SPS are in sectors such as horticulture (both greenhouse and open field) or intensive animal husbandry separated from feed production (mainly pigs and poultry). By comparison with most other EU Member States, these sectors are relatively more important in the Netherlands.

Tradability of SPS

Single payments are is tradable across the whole country and do not have to be attached to land. Where SPS entitlements are sold without land, a minimum of 80% of the rights must have been used. In 2006, the first year of the scheme almost 10% of all rights to farm payments were traded.

A.3 Cross-compliance: Good Agricultural and Environmental Conditions (GAEC)

Source: IEEP, 2005

Soil erosion is an issue within a small part of the Netherlands, but conservation of soil organic matter is a more important issue.

Selected standards of the GAEC

Issue
Standards
Summary of farmers’ obligations

Soil erosion

Minimum soil cover

According to national legislation on soil erosion, recorded in the Regulation, grass on slopes; control depends on slope gradient; cover on bare soil land and set-aside land

 

Minimum land management reflecting site-specific conditions

Countour ploughing

 

Retain terraces

 

Soil organic matter

Standards for crop rotation where applicable

No ploughing on black soil or set-aside land, winter cover obligatory

 

Arable stubble management

Bury crop and weed residues

Minimum level of maintenance

Avoiding the encroachment of unwanted vegetation on agricultural land

Black soil allowed on organic farms to control invasive grass

The Netherlands pays attention to soil erosion (small part of the Netherlands) but mainly to soil organic matter.

Reason for selection of cross compliance standards

GAEC standards are based on current national practices:

Concern exists over levels of soil organic matter and soil structure, but the Dutch are cautious about applying measures where there is insufficient data or systematic monitoring of an issue. As a result just two GAEC measures, both relating to soil management, have been chosen by the Dutch ministry.

A.4 Further reform of market regulations

One important concern at policy level is the total budget available for the first pillar of the CAP up until 2013. The Minister of Agriculture, Nature and Food Quality has recently stressed the importance of ‘trustworthy government’ and believes there is a need to stick to the existing Financial Perspectives until 2013. However, other politicians (sometimes including Cabinet members) have hinted about the need to divert funds from the CAP towards other priorities, including innovation.

Fruit and vegetables

The Minister welcomed the Commission’s proposals, as these strengthen the ongoing reform of the CAP. Further decoupling, abolition of export refunds and strengthening of producer organisations are all in accord with the Dutch model. The proposal is in line with other decisions relating to the development of a more sustainable and market oriented agricultural policy. The Dutch cabinet also agrees with the proposals aimed at strengthening public health, environment, innovation, organic production, employment and a living countryside. (See: Letter from the Minister of Agriculture, Nature and Food Quality to the Dutch Parliament, 27 March 2007.

Dairy

The dairy sector is very important in the Netherlands. The future of the quota system is therefore of particular interest , both in terms of government policy and within farmers’ organisations as well as to some environmental NGO’s. After strongly opposing dairy quotas when they were introduced, Dutch farmers and farmers’ organizations have since supported the quota system for many years. Many people both inside and outside agriculture also regard the dairy quota as supportive of environmental goals and policies since constraints on total dairy production help to reduce production of both manure and ammonia. However, more recently, the majority of dairy farmers and the main farmers organization (both the national farmers organization (LTO) and the young farmers organization (NAJK)) support the idea of introducing more flexibility before finally abolishing the quota after 2015.

Wine

This is not a significant issue in the Netherlands as wine is a very small sector.

 

B. Second pillar: implementation of RDP measures 2007-2013

B.1 Programme level and approval

There is one national RDP as rural problems in the Netherlands show large similarities throughout the country and challenges in different regions in the Netherlands are comparable. The Rural Development Committee (consisting of representatives of the 27 Member States) has approved the RDP for the Netherlands on 20 June 2007. An important concern for the Netherlands during the negotiations on RDP-2 has been the space for integrated rural projects and for less complexity. *

B.2 Distribution of public budget over the axes (%)1)

axis 1: competitiveness

axis 2: environment and land management

axis 3: rural economy

Axis 4: Leader

30

30

30

10

1) Figures excluding Technical Assistance
Source: Own calculations based on Ministry van LNV (2007)

B.3 Integration of Leader in axes 1, 2 and 3

The Leader process can make a particular contribution to the delivery of Axis 3 programmes, as well as to those for Axis 1 and Axis 2. In addition, Leader can contribute to the improvement of new approaches to governance and endogenous development through the mobilization of local resources and actors.
Some 50% of the land area of the Netherlands is covered by Leader projects. The total EU budget for the period 2007-2013 is 84 million euros with additional national public financing of 67 million euro and private financing of 56 million euros.*

B.4 Local Action Groups (LAGs)

It is intended to create a maximum of 30 LAGs under the new RDP (there were 28 in the period 2000-2006). During the period 2007-2013 no further changes are foreseen in the distribution of the LAGs across the country.

B.5 RDP budget 2007-2013 (million euros)

total public budget

% co-financing EAFRD1)

EAFRD budget

Contribution private sector

Total costs

National top-ups

973.0

50

486.5

620.3

1587.5

619.8

Source: Ministerie van LNV (2007)

B.6 Less Favoured Areas

In 2005 about 225,000 ha was designed as Less Favoured Areas (LFA). This represents about 11% of UAA (CEU, 2005). All LFA are so-called article 20 LFA: areas with specific handicaps. The compensatory allowance is a flat rate payment of € 94 per ha, which is well below the maximum permitted by the Rural Development Regulation. In the RDP 2007-2013 it is announced that the Dutch area of LFA will be extended by about 9,000 ha in 2007 (a grassland area of over 2,400 ha in Midden-Delfland near the cities of The Hague and Delft and an area of nearly 6,600 ha in ‘Limburgs Heuvelland’ in the south of Limburg province).

B.7 Drivers of RDP strategy

The new Dutch RDP for 2007-2013 does not involve a new approach to rural development policy. It includes a number of existing rural development policy measures drawn from the ‘Agenda for a Living Countryside’, the National Spatial Strategy and the provincial Multi-Annual Programmes established under the previous RDP. Choices relating to the implementation of second pillar policies have always involved an element of discussion and negotiation between national and provincial authorities. At national level the emphasis has always been primarily on trying to argue for European policies that will fit with national policies. An example from the previous RDP involved buying up farmland for conversion into nature areas. On the other hand, Dutch provinces have long been focused on implementing EU rural priorities and on the delivery of Axis 3 type measures.*

 

C. Vision on the CAP beyond 2013*

C.1 Stages in the development of the CAP debate

Is there a debate about the role of the CAP beyond 2013?

Yes, the debate involves conferences, discussions in the media, vision documents (see for example, Veerman, 2006 and LTO Nederland, 2007) and academic studies (for example, Bruins et al., 2006 and Bont et al., 2007). Participants in the debate include Government, the Dutch farmers’ organization LTO, environmental groups , scientists, development NGOs (such as Oxfam Novib and EVS- a foundation related to the social democratic party) and animal welfare organisations.
The Council for the Rural Area (RLG) adviced the Dutch Minister of Agriculture, Nature and Food Quality early 2007 to stimulate a broad debate as to the future of CAP. This debate has taken place and been reported on. RLG will launch an advice on the future CAP on 15 November 2007.

During recent years, the budget issue has to a large extent dominated the political discussions on the future of CAP. The main reason for this focus is that the Netherlands is now a large net contributor to the European Union budget. Only after fierce negotiations at national level, was the Dutch Minister of Agriculture able to adopt a policy stating that there would be no discussion on the CAP budget until 2013.

Related to the budget issue, it is worth noting that during the referendum in 2006, the draft European constitution was rejected by some 61% of the Dutch population. This further fed sentiments opposed to ’a Brussels superpower’ and increased demands for more flexibility at national level.

C.2 Key issues in the debate

Contents of the CAP

Key issues for the Dutch government are:
• direct payments should not be granted to primary agricultural producers but should be converted into ‘targeted payments’ for the delivery of public goods (related to non-trade concerns and societal values such as food safety, landscape conservation, environmental and animal welfare concerns);
• abolition of milk quota in 2015;
• focussing the second pillar on specific regional needs based on local and regional knowledge and systems of governance (Agrarisch Dagblad, 2007).

Key issues for Dutch farmers are: (see LTO Nederland, 2007):
• The CAP should focus on four objectives: strengthening competitiveness, rewarding landscape management, rewarding for ‘green and blue services’ ** and rewarding farming practice in those areas where society wants agriculture to continue;
• modulation funds should be devoted to the needs of agriculture;
• whether the  SPS entitlements continue to be based on historic receipts - there have been hints that a flat rate might be acceptable after 2013.

Organization of the CAP (first and second pillar)

• As the Netherlands gets most of its CAP budget through the first pillar, debate is focused on how to make  SPS more acceptable to society as a whole;
• Within the Netherlands the RDP is seen as a less important issue, as the programme is not heavily dependent on EU funding. The main issue is that rural and regional development ought to be dealt with at national not EU level.

Financing of the CAP

• The Dutch Cabinet – especially the Minister of Finance – is concerned about the rising net contribution to the EU budget;
• The Government is investigating whether it would be possible for Member States to co-finance the 1st Pillar;
• The Dutch farmers organisation LTO is seeking a stable CAP budget after 2013.

* Information provided by Gert van der Bijl, Council for the Rural Area (RLG), the Netherlands.
** Blue services are services connected to water management

D. Literature, sources, references

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