Dutch put their faith in dairy market recovery
Farmers in the Netherlands have little appetite for state support, despite low prices
The European Union’s decision to do away with dairy production quotas last year unleashed more product onto world markets at a time when demand was poor.
The result was a prolonged and severe fall in global dairy prices, from which farmers in New Zealand and around the world are only now starting to recover.
In response to low prices, the European Union ( EU) stepped in to support its farmers, but in the Netherlands — a key member of the trading bloc — they would rather go it alone, said the Dutch Dairy Association’s ( NZO) director of international affairs, Jan Maarten Vrij.
The EU is paying farmers 14 euro cents per kg of milk, provided they produce less than they did in their reference period last year. New Zealand farmers have long done without state intervention, and it seems Dutch farmers have come around to the same point of view.
“We did not ask for that package and we don’t really support it,” Vrij said in an interview with the Herald at the NZO’s office in The Hague. “We would rather not have the complication of support systems.”
“Yes, we see increased price volatility over the last decade partly due to the fact that we have no export subsidies,” he said. “Only a minority of Dutch farmers think that the government should be responsible for their income.”
Despite the industry’s current difficulties, Vrij said the Dutch dairy sector was competitive on the world market, but within the EU there were differing opinions on how the dairy industry should be run.
The French believed there should be a reaction from the state when there was a problem in the market, while the Germans tended to be more trade- oriented, he said. Dutch farmers, with their EU counterparts, are for the first time since 1984 free to produce as much milk as they want, following the abolition of production quotas last April.
When the shackles came off, EU production surged just as demand was easing.
The market has since rebounded somewhat, but dairy farmers around the world have a way to go before they can rest easy.
For Vrij, the issues facing the dairy sector cover protectionism, water quality, world overproduction, Brexit and sustainability.
A third of the Netherlands’ income comes from trade. It is world’s fifth largest exporter.
Its land area — 33,800sq km — is only a little bigger than Otago’s, yet it is the world’s second biggest exporter of agricultural products after the US.
Hans de Boer, president of business and employers’ organisation VNO- NCW, i s proud of the Netherlands’ agricultural and environmental track record. “Agriculture 30 or 40 years ago, we thought was going to be a thing of the past,” he said.
“The Rhine was like an open sewer in the last few decades and we have managed to clean the whole delta.”
De Boer brags that salmon have returned to the famous river after a 50- year absence.
Jan Maarten Vrij, Dutch Dairy Association
Like New Zealand, the Dutch dairy industry has an outward focus.
For the Dutch, the most pressing issue on the agenda has been world prices.
Dairy countries worldwide have been under the cosh of low prices — driven largely by higher production from the EU and, within the EU, much of the extra coming from the Netherlands and Ireland.
“The protracted downturn has been quite unusual compared with other dairy downturns — in previous times they were deep but short,”