Ons land is de op één na grootste exporteur van agrarische producten en wij exporteerden vorig jaar voor een bedrag van 104,7 miljard euro.
Dat betekent ook dat wanneer er iets gebeurt met de Nederlandse export dit verregaande gevolgen zal hebben.
Het volgende artikel is geschreven door Michel van der Kemp en is helaas in het Engels. Wij willen dit toch bij hoge uitzondering publiceren want het geeft een heel goed beeld over de belangrijke rol die de export van Nederlandse agrarische producten speelt in de voedselvoorziening en laat tevens zien hoe kwetsbaar datzelfde systeem op dit moment is door allerlei gebeurtenissen.
With this article we take a look at the vulnerability of European foodchains specifically through the lens of Dutch agrarian export products. The Netherlands is the world's second largest exporter of agrarian products in the world (the USA is number one). The export value of the Dutch agrarian sector in 2021 totalled 104.7 billion euro, crossing the 100 billion mark for the first time in history.1
In this article we will notice that four artificial events are starting to line up for a disaster on the Dutch export in 2022, and as a result on the European foodchain. These events are the corona- pandemic; Brexit; new international policies as part of the Sustainable Development Goals; and finally the Ukrainian crisis, which biggest effect may be an energy crisis. The Dutch rely for a big part on greenhouses to grow food in a very effective manner. Between 35-45% of the greenhouse farmers may be required to go out of business, permanent or temporarily, due to the incredible increase of energy prices.
We need to note here that this article speaks about the “Ukrainian crisis”, while official reports speak about the “war in Ukraine”.2 Through our use of the word crisis we emphasise that there can be a war without economic sanctions, just as there can be economic sanctions without warfare. The use of the word crisis recognises that there are effects as a direct result of a military conflict in the Ukraine, and sanctions being put on specifically Russia and Belarus.
After looking at the four artificial events we take a quick look at the major export partners of The Netherlands, and will come to the conclusion that 69% of the Dutch export stays within the EU. With that in mind the Dutch export is a European topic. If the Dutch export collapses the whole of Europe, will feel its effects. Those effects alone can have a cascading effect, whilst it needs to be recognised that each EU member state by themself is dealing with the four artifical events. The Dutch are particularly vulnerable because of the large-scale use of greenhouses. Since they are the biggest exporters for the European market we focus on them.
During 2020 and 2021 trade in agrarian products was relatively less influenced by the corona crisis. That is because there is a limited crisis sensitivity due to the inherent necessity for food. The result of the virus is that worldwide foodchains have been disrupted and a lot of prices increased. Dutch export levels of fruits have been stable. The export of floriculture, meat, dairy, eggs and vegetables, throughout 2020 was tougher. Twenty-nine percent of the agricultural companies received corona subsidies. The corona pandemic has especially disrupted containertrade to non-EU-countries. The mismatch between a strong growing demand after the first recovery of the pandemic, and the decreased supplycapacity has led to record prices.3
All evidence shows corona is not over. China has gone in a new lockdown for many millions of its citizens, Anthony Fauci warns for more lockdowns, and the WHO is anxious about the rise in cases in Europe. Policies like lockdowns have not just been abolished, they are merely temporarily suspended, and in some countries are still in effect or being reimplemented.
The completely unscientific handling of the pandemic in 2020 and 2021 by governments, makes a prediction for 2022 impossible. Corona could become a relic of the past. Or if cash money could be declared contagious in 2020, what is to stop governments from declaring our food itself contagious.
The possibilities for a malevolent government are limitless.
The UK formally left the EU on January 31st 2020, but a transition period followed in which the UK stuck to the EU trade rules.
In the period 2015-2021 the agrarian trade with the UK shows a clear contraction. The year 2015 served as a reference to a pre-Brexit period. This goes for import, re-export, and export of Dutch produced goods. The year 2021 is responsible for the import and re-export contraction. The export to the UK showed a small growth, compared to 2020.
British customs is only going to enforce specific phytosanitary and veterinary monitoring, and administrative obligations starting in 2022, this is due to the Trade and Cooperation Agreement (TCA) between the EU and UK On top of that new tariffs will be introduced starting january 1st 2021, for products that can not be proven to be produced in the EU or the UK (British re-export).
Finally there can be another future Brexit-effect. One of the motivations for the British to leave the EU was so they could make their own rules, this includes rules in relation to international trade.4
For these reasons the full effects of Brexit on Dutch export will become noticeable in 2022.
Under the umbrella of the UN Sustainable Development Goals the European Commission came in february 2022 with guidelines on sustainable corporate governance. On the basis of these guidelines companies in the EU are forced to do “due diligence in their supply chains”. These guidelines deal with social themes (like child labour, workenvironment, slavery) and environment themes (like climate and biodiversity).
The guidelines are currently still in the proposal phase. The effects of these kind of policy changes may be hard felt in the agrarian sector, where the margins for profit are extremely narrow. Any policy change in the agrarian sector is therefore likely to show an immediate effect on consumer prices.
The European Commission has also decided that in 2023 4% of land assigned for agrarian purpose, will have to remain bare. To achieve this in the fall of 2022 farmers may no longer sow the land assigned marked for reduction. See this article we did on the Dutch confiscation of farmland. The Dutch are hiding behind nitrogen regulations. But it's just an excuse to meet the European demand.
Since the Ukrainian crisis is a recent one, and events are still in motion, it is difficult to paint a picture for the immediate future. But we will look back first and see what the import from Ukraine, Russia, and Belarus looked like before the military conflict.
For Ukraine the EU with a total exportvalue of 5.4 billion euro in 2020 is the most important tradepartner.
The most important tradegroup for Ukrainian export is grains (42%). In addition animal and plant oils have an exportvalue totalling 25.9%. Two other important export products are oilseeds and cattle (8 and 7%).
The exportvalue of Russia to the EU was in 2020 2.7 billion. Divided in productgroups we have 33% grains, 16% fish, and 14% animal and plant oils.
For Belarus only Poland and Norway are in the top-10 of export countries, but with a total exportvalue of 5 billion euro, only about 1% goes to Poland and Norway. The most important productgroups are dairy and eggs, meat, and meat and fish products.
For a number of tradegroups import from Ukraine is significant (oils, and grains). For The Netherlands Russia has a total importvalue of 24.1 billion euro. But 23.5 billion euro is non- agrarian products (energy). The Netherlands imports 458 million euro in agrarian products (fish, and fertiliser). Importvalue from Belarus is 62 million in 2021 for agrarian products.
There are signals that through the Ukrainian crisis the availability of biological animal feed puts pressure on the whole chain for biological animal products. Biological products is a strong growing market in the whole EU.
The crisis also has possible effects for the availability of workforce in the agrarian sector, and agrarian logistics.5
Now that the trade picture is complete, we can see that the importvalue into the EU, and The Netherlands is limited. There are a few areas that are problematic (oils, grains, biological animal feed and fertiliser), and a total embargo on trade with Ukraine, Russia, and Belarus can have a cascading effect.
The bigger problem we see, and have reported upon, is energy.
According to numbers on the EU website Russia is the main supplier of crude oil, natural gas and solid fossil fuels. Crude oil from Russia makes up 26.9% of the total import of crude oil; Natural gas from Russia makes up 41.1%; Solid fuel 46.7%.
Why is this important for the agrarian sector, and the Dutch agrarian sector in particular?
Despite being a small, highly populated country, the Dutch achieve their status of second biggest exporter mainly due to the use of greenhouses. Greenhouses are not just glass structures in which crops are grown. Inside high-tech computers monitor the light, the temperature, water levels, and minerals crops need to grow optimally. At exactly the right time computers give plants what they need. This makes it possible to have high yields, in a dense area.
The downside of growing food in greenhouses, is that it costs a lot of energy. Under normal circumstances between 20 and 30 percent of the price of a tomato and cucumber is made up by the cost of energy. The price of transportation is not included in that.
According to Adri Bom-Leenstra chair of the Greenhouse Farmers Netherlands (Glastuinbouw Nederland GNL) gasprices have risen tremendously since 2021. Farmers used to pay between 7 and 20 eurocents per cubic meter. The price has increased to around 180 eurocents during christmas 2021. Bom-Lenstra says “gasprices threaten to bring down this entire top sector.”
Between 35 and 45% of greenhouse farmers is under immediate threat of closure, either forever or temporarily. The crisis touches the whole sector, whether one farms cucumbers or roses.
The main problem is not the price of energy itself, but contracts farmers have. On the one hand they have contracts with their gas suppliers, on the other they have delivery contracts with buyers. If one or the other can not be broken open the farmers go out of business. Farmers who do not have legally binding contracts can calculate the production costs into the end price. Of course then consumers will start paying much higher prices.
The Ukrainian crisis and mainly the economic sanctions will further escalate the rise of energy prices. It will definitely not reduce the incredible danger that is creeping up on our foodchains. Everything seems to be lined up for one hand coming out of the shadow to tip over the first domino.
Finally lets look at the major export partners of The Netherlands so we get a better grasp of which countries will be most effected by Dutch production and export problems.
Most of the agrarian export in 2021 goes to the Dutch neighbours. A quarter goes to Germany (26.3 billion euro). In second place there is Belgium (12.1 billion euro). After that follow France and the UK (both 8.6 billion euro). These 4 countries take a total of the 53% of the total Dutch agrarian export.
The export to China (in fifth place) had especially grown in the period 2015-2020. The period showed a growth of 150% (from 0.75 billion euro in 2015, to almost 1.9 billion euro in 2020). This strong growth is especially due to the export of babymilkpowder and pork. In 2021 the export saw a small decrease of 35 million euro.
The EU – to which we no longer include the UK – is by far the biggest export partner, totalling 69%.6
1. De Nederlandse agrarische sector in internationaal verband – editie 2022. https://www.cbs.nl/-/media/_pdf/2022/03/de-nederlandse-agrarische-sector-2022.pdf(p. 20)
2. Impactanalyse oorlog in Oekraïne. Eerste versie 10 maart 2022. https://www.rijksoverheid.nl/binaries/rijksoverheid/documenten/rapporten/2022/03/10/impactanalyse-oorlog-in- oekraine/impactanalyse-oorlog-in-oekraine.pdf
3. De Nederlandse agrarische sector in internationaal verband – editie 2022 https://www.cbs.nl/-/media/_pdf/2022/03/de-nederlandse-agrarische-sector-2022.pdf (p. 69-73).
4. De Nederlandse agrarische sector in internationaal verband – editie 2022 https://www.cbs.nl/-/media/_pdf/2022/03/de-nederlandse-agrarische-sector-2022.pdf (p. 60-67)
5. Impactanalyse oorlog in Oekraïne. Eerste versie 10 maart 2022. https://www.rijksoverheid.nl/binaries/rijksoverheid/documenten/rapporten/2022/03/10/impactanalyse-oorlog-in- oekraine/impactanalyse-oorlog-in-oekraine.pdf
6. De Nederlandse agrarische sector in internationaal verband – editie 2022.https://www.cbs.nl/-/media/_pdf/2022/03/de-nederlandse-agrarische-sector-2022.pdf (p. 20-24)