October 28, 2020

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“Large-scale sustainable agriculture not economically feasible” Financially

"Large-scale sustainable agriculture not economically feasible" Financially

This is the opinion of the Dutch Authority for Consumers and Markets (ACM), based on research by Wageningen Economic Research (WER) on the price development of six organic products: milk, onions, tomatoes, cabbage / sauerkraut, pears and pork. Agriculture Minister Carola Schouten would like to know whether the higher production costs in organic farming are covered by the income, said ACM chairman Martijn Snoep. “That seems to be the case with five of the six products examined.”

However, farmers and gardeners see the uncertainty about constantly changing production requirements and the cost of conversion as a major obstacle to organic farming. In addition, a farmer who makes the transition from regular to organic farming is only allowed to market his products as “organic” after two to three years, even though he has higher costs.

Few outlets

Farmers and gardeners also hate the lower yield and limited sales opportunities at home and abroad. “At the moment there is still too little demand, which means that a large-scale switch to more sustainable production is currently not economically feasible,” says Snoep.

The fact that a large-scale switch is not economically feasible is a major setback for the minister. The organic part of the agricultural area has been around 4% for years, which puts the Netherlands at the bottom of Europe. The European Union is aiming for organic farming on a quarter of the agricultural area by 2030.

At Schouten’s request, ACM will carry out annual price monitoring. This covered the 2017-2018 period and addressed the question of whether converted farmers could get their higher production costs back. This should provide a clear picture of whether and how markets are functioning and what barriers exist to more sustainable production.