Dutch agriculture: Going circular to stay on track

What farmers need to make the transition

In its new vision on agriculture, the Dutch Cabinet has prioritized the climate and ‘circular agriculture.’ What does this environmentally-conscious ambition mean for the sector, and can farmers make the change?

Agriculture is one of the Netherlands’ top industries with exports of fruit, vegetables, flowers and meat reaching a record €92 billion in 2017. The country is the second largest exporter of agricultural products after the United States. Minister of Agriculture, Nature and Food Quality, Carola Schouten, wants the Netherlands to retain its lead – in sustainable farming. That is what she champions in her vision “Nature, agriculture and food: valuable and linked,” which she presented in September.

In circular agriculture, production is based on the most efficient use of natural raw materials throughout the chain as opposed to increasing production at ever decreasing costs, which is where the emphasis of current agricultural practice lies. The severe pressure that intensive farming practices put on biodiversity, water quality, landscape and the environment makes this shift to circular necessary, says the Minister.

When circular economy principles are applied to agriculture, arable farmers, livestock farmers and growers work more closely together, using the raw materials and waste flows from each other’s chain. Take the food industry, for example. Imported feed can be replaced by local feed and animal manure can take the place of artificial fertilizer. Wherever possible chains are kept short at local, regional and international levels.

Race to the bottom

Industry specialist for dairy farming at Rabobank, Marijn Dekkers, feels that the Cabinet’s vision fits in with calls from the agricultural sector. Continuing to produce more at ever lower costs is a race to the bottom in which there are few winners. “Despite scaling up, farmers still don’t earn enough on what they produce.” Dekkers calls Schouten’s vision “a rather tentative starting point” for circular agriculture.

“She’s not tackling any thorny issues yet. Of course no one is against farmers being paid a fair price, but the question is, how do we achieve that? What’s more, how we will use our own manure and our own feed, because Dutch farmers still export their manure and import artificial fertilizer and concentrates.”

”The Minister is not tackling any thorny issues yet”

- Marijn Dekkers, Rabobank

But Dekkers is optimistic when it comes to the chances for circular agriculture. He believes in the closer partnership it requires. “Arable farmers are starting to see the benefits of using manure from livestock farmers.” For circular agriculture to become a success more coordination is needed, both between farmers themselves and between farmers and the government.

Dekkers continues: “Arable farmers and horticulturalists should produce feed for livestock farmers who, in turn, should ensure that their manure is suitable for arable and horticultural farming. That is only possible by a change in legislation. Current legislation is actually an obstacle for using manure-processing products as a substitute for fertilizer.”

Home-grown cattle feed

There is no doubt that circular agriculture is viable. Take dairy farmer Joris Buijs. His father started circular farming last century to be less dependent on feed prices. Buijs, who took over from his father three years ago, is now continuing that tradition. He has 120 cows which he feeds home-grown food. All the manure is sold in his own community within the cycle. He plants crops and draws up fertilizer plans in consultation with arable and horticultural farmers. Buijs explains: “I prefer to feed my cows a wide variety of plants and derivatives. It’s more work but we have been able to make a profit. Besides, circular agriculture is better for milk quality and soil fertility.”

”Circular agriculture is better for milk and soil”

- Joris Buijs, Dairy farmer

Buijs would like to invest more in circular agriculture. But previous government measures – including being forced to cull his animals – have had a big impact. He now has only limited room for investments, like equipment to process new fertilizers. He hopes the government will put their money where their mouth is and come up with legislation that rewards sustainable farming, by making it easier to sell fertilizer to a neighbor, for example. From Rabobank, he expects that farmers already working sustainably will be in a better position in terms of things like credit facilities.

Dried pig fertilizer pellets are a substitute for artificial fertilizer

Financial consequences

Rabobank wants to contribute to solving the global food security challenge. That is not possible without a transition to a sustainable, circular agriculture where raw materials are used efficiently and food waste is kept to a minimum. The bank aims to bring together partners in the cycle and will increasingly make sustainability a condition for financing.

Dekkers also sees a clear role for the bank in financing innovation. According to the industry specialist, the Netherlands has the knowledge to become a leader in circular agriculture, as the Minister wants. But that won’t happen of its own accord. “Our current success is based on exports, whereas circular agriculture is about short chains with less impact on the environment and biodiversity. The question remains to what extent investments in circular agriculture will increase prices and cost, with repercussions for our competitive position.”

One condition is that farmers should not be the only ones to face the financial consequences, says Dekkers. “Farmers should be able to earn a decent income and have opportunities to innovate. That means consumers and retailers must be willing to pay a fair price and appreciate food more. Circular agriculture can contribute to that because short chains bring farmers and consumers closer together.”