October 14, 2021

A study by the Netherlands Authority for Consumers and Markets (ACM) has found that the biggest obstacle to sustainable, organic agricultural practices is Dutch consumer’s unwillingness to pay a premium for organically grown, sustainable produce, while cheaper alternatives remain available.

In addition, the Dutch agricultural sector predominantly relies on export, so consumers in those markets would also have to be willing to pay more in order for the region to be able to make the switch to sustainable production methods.

The report into the issue stressed that action is needed if the country is to meet its target of 25% organic farming by 2030.

The Netherlands continues to lag behind other European countries when it comes to organic farming, according to industry organization Bionext.

Only 4.1% of arable land in the Netherlands was certified organic in 2020, slightly more than the previous year when 3.8% was devoted to a more sustainable way of food production.

This is impacting on the Netherlands ability to transition from existing, less eco-friendly practices towards more sustainable ones.

Currently, some 74,000 hectares are currently cultivated organically, an area about three times the size of Amsterdam. Organic horticulture saw the biggest increase while the cultivation of organic flowers and plants jumped 17% from 2019.

The study was carried out in part by Wageningen Economic Research (WR), commissioned by ACM, at the request of the Dutch Minister of Agriculture, Nature and Food Quality (LNV) to look into price-formation process in the food chain for regular and sustainable products, as well as into obstacles to the transition to a more sustainable agricultural sector. The report is a follow-up to the study for the Agro-Nutri Monitor 2020.

Martijn Snoep, chairman of the board of ACM, commented: “In the monitor, WR looked into the costs that farmers have to incur in order to switch to producing organic products. At the moment, farmers are able to recoup the additional costs that they incur, since a group of consumers is willing to pay a higher price for these products. However, if the supply of organic products increases, more consumers must be willing to pay a higher price. And that is currently the main obstacle.”

ACM has presented possible solutions for making the Dutch agricultural sector more sustainable.

Ideas included stimulating demand in the Netherlands by offering subsidies for farmers that use sustainable production methods, or lowering VAT in order to make sustainably produced products cheaper for consumers. Other examples include raising statutory minimal sustainability requirements in the Netherlands and the rest of the European Union, voluntary buyouts of farmers that use regular production methods and are not able to switch, or even land expropriation of farmers.

According to the study, increased cooperation between certification labels regarding sustainability at the EU level may also help to increase the willingness-to-pay of consumers outside the Netherlands, too.

However, it is unlikely that demand-boosting measures alone will be sufficient. Production-restriction measures may also be necessary, the ACM said.

Some organic products are slowly gaining popularity in Dutch supermarkets, however, with sales up almost 13% last year. Milk, yogurt and eggs are the best-selling items, along with products with a longer shelf life, an increase possibly caused by coronavirus-related storage.

Dutch retail expert Paul Moers added: “The emphasis on price has a lot to do with our culture. We Dutch are eternal traders and the emphasis is on paying as little as possible. If we want to stimulate the organic market, we need to discuss other aspects besides the price, and supermarkets should take more responsibility in this regard.”

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