Reward farmers for sustainability by forcing the food industry and supermarkets to get involved

The Regie op Ruimte think-tank advises the government to investigate compulsory blending in the agriculture and food sector as an opportunity to reward farmers for their efforts in the areas of climate, water, biodiversity and nitrogen. The proposal means that the food industry and supermarkets will be obliged to buy a certain percentage of their raw materials or products at a premium from farmers who meet high requirements for, for example, climate, water, biodiversity and nitrogen. Requirements that correspond to the targets that will apply to this in 2030 or 2035, and which will be determined in the national program for rural areas in the coming six months. Through this measure, farmers who adapt their farms more quickly to these requirements are paid for their sustainable agricultural products. This will accelerate the transition to sustainable and future-proof agriculture. The proposal is reminiscent of practice in the petrol market, where for years there has been an obligation to mix bioethanol.

Food Transition Coalition 5 December 2022

The proposal is part of a report published this summer under the title Future seeks Farmer https://transitiecoalitiefood.nl/toekomstzoektboer/, which is closely linked to the Food Transition Coalition. In that report, the think tank argues that the government should stimulate and correct the market for sustainable and healthy food, because the market itself pays insufficiently and too slowly for sustainable and healthy food.

Krijn Poppe, member of the think tank: “With the proposal for mandatory intervention, we give an impetus to the discussion about the income model for sustainable farmers. The government has earmarked a significant budget for the agricultural restructuring, but the Rutte IV coalition agreement also refers to a non-binding contribution from the chain parties. Making the sector more sustainable can be accelerated by forcing the food industry and supermarkets to buy part of their produce at a higher price from farmers who are prepared to meet the tough future demands. Now the bill always ends up with the farmer. It is important that industry and supermarkets are stimulated to exploit sustainable markets. Either by already taking into account these long-term government requirements in their quality labels or by mixing the sustainable products with the usual flow. We think that a payment from the market to farmers has a more stimulating effect than just government demands without obligations to industry and retail trade. We expect that this will accelerate the market’s transition to the requirements of the future.”

Open questions

The Regie op Ruimte think tank is aware that the proposal raises various questions. Practical questions like: what percentage should be added and how do you want it to increase? How do you determine a price that is profitable for the farmer, and what exactly is the effect on the consumer price? But also other questions, such as the question of the effect on existing consumer brands such as organic and ‘on the way to planet safe’. And: how do you prevent supermarkets and industry from buying more of their products outside the Netherlands as a result of this measure? Could this measure therefore only be introduced at EU level? Also: what is the willingness of foreign customers to pay for the more sustainable Dutch product, and is the higher price for more sustainable farmers at the expense of the price for products from less sustainable farmers (and is that a bad thing)?

Continuation

The think tank has certainly already thought about a number of these questions. Other issues require further investigation. Regie op Ruimte and the Food Transition Coalition lack resources for that. We therefore call on the government to investigate and further develop this proposal as soon as possible. It goes without saying that Regie op Ruimte and the Food Transition Coalition are happy to make their knowledge and experience available for this purpose.

Because the earning capacity of the farmer who wants to become more sustainable is one of the big themes at the moment, we request that the government address this issue urgently.


The Regie op Ruimte think group consists of the following people:


Alex Datema, Cees Veerman, Frans Keurentjes, Jan Willem Erisman, Jos Verstraten, Krijn Poppe and Willem Lageweg

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