07/07/2003 
Dutch pig keepers receiving income support - An analysis made by Bernhard Bonekamp
For many years, the Dutch pig keepers were presented to the German farmers as the model entrepreneurs in European pig production. And so it's even more astonishing these days that, in order to be able to earn their keep, ever more Dutch pig keepers fall back upon the Dutch social welfare system due to their bleak financial standing. So, why then is the situation of the former
For finding an answer to this question, one has to look back a bit farther into the past. In the 1980s and '90s, the Dutch farmers had been generously supported by the government. On the one hand, borrowing was made very easy due to state-run development programmes even if the farmers had only little own capital available. On the other hand, the building of very large stables was allowed even if the farmers did not own any land. Hoping that industrial slurry treatment would be a medium-term solution to the problem of surplus slurry, production was severely increased. By newly developed methods, slurry was thought to be treated in a way making profitable selling of the end products possible. However, it came to light that those systems were quite uneconomical ones. So this way the problem could not be solved. As a consequence, slurry had to be transported over long distances, away to regions where less livestock was held, which caused high costs. The problem was made even worse by the government's how-to-deal-with-fertilizers policy. At present, an amount of about 8 Euros per cubic metre of slurry must be paid for the
1997 due to classical swine fever,
2001 (March) due to foot-and-mouth,
2002 due to the MPA scandal.
From the listing one can see that in 1997 and 2001 -- when high prices were achieved and the German farmers could create reserve funds -- the Dutch farmers were subject to export bans. And in mid-2002, when the pig prices still were acceptable, another ban was laid on Dutch export due to the scandal caused by feed contaminated with MPA.
On top of that, the Dutch farmers suffer from the disadvantage of the process of concentration which already took place in the meat industry there. The Dumeco and Hendrix meat producers together have a share of about 80 % in the Dutch carcass pig market. So there is no more talk of competition between the abattoirs. From the price development for payments to Dutch pig keepers, one can see that the price difference between the Dutch prices and the so-called Nordwest-Preis (north western German prices) has considerably increased. Compared to Germany, a 5 Euro disadvantage in returns per pig results from this price difference.
Another disadvantage is caused by the tightening-up of the Dutch Pig Keeping Act. In this, the space to be guaranteed for a fattener of a live weight between 85 and 110 kg must be 1 square metre per pig. This involves a drastic increase of the overhead expenses.
In the face of these facts and developments, one may not be surprised that the Dutch farmers, with their little own capital, have got into trouble.
The following conclusion may be drawn:
During the past years, the pig sector in our -- formerly lauded -- neighbouring country has come into a dead end. The farms are deep in debt. The legal framework has become ever worse for them, and as a result to it, production has become uneconomical. Many problems are caused by being dependent on export. The Dutch government must take a large part of the responsibility for all this misery, because they set the false signs at the wrong time. Even if, at first sight, the Dutch agricultural structures look better than they do here in this country, the German farmer should ask himself whether or not he wishes that they were the same here in Germany. Regardless of all difficulties we are facing here (such as Pig Keeping Act, Animal Drug Law, Building Code, etc.), Germany as an agrarian site -- and despite the smaller structures -- offers quite some advantages which allow the German pig keepers to hold their own stand in European competition.
model farmersof European pig production this bad?
For finding an answer to this question, one has to look back a bit farther into the past. In the 1980s and '90s, the Dutch farmers had been generously supported by the government. On the one hand, borrowing was made very easy due to state-run development programmes even if the farmers had only little own capital available. On the other hand, the building of very large stables was allowed even if the farmers did not own any land. Hoping that industrial slurry treatment would be a medium-term solution to the problem of surplus slurry, production was severely increased. By newly developed methods, slurry was thought to be treated in a way making profitable selling of the end products possible. However, it came to light that those systems were quite uneconomical ones. So this way the problem could not be solved. As a consequence, slurry had to be transported over long distances, away to regions where less livestock was held, which caused high costs. The problem was made even worse by the government's how-to-deal-with-fertilizers policy. At present, an amount of about 8 Euros per cubic metre of slurry must be paid for the
disposalof slurry in the Netherlands. A 247 % rate of self-sufficiency proves to be another Dutch problem, because due to it the Netherlands strongly depended on export in 2001. This is particularly devastating if export is disturbed due to animal plagues or other scandals. An export ban was laid on Dutch pigs in:
1997 due to classical swine fever,
2001 (March) due to foot-and-mouth,
2002 due to the MPA scandal.
From the listing one can see that in 1997 and 2001 -- when high prices were achieved and the German farmers could create reserve funds -- the Dutch farmers were subject to export bans. And in mid-2002, when the pig prices still were acceptable, another ban was laid on Dutch export due to the scandal caused by feed contaminated with MPA.
On top of that, the Dutch farmers suffer from the disadvantage of the process of concentration which already took place in the meat industry there. The Dumeco and Hendrix meat producers together have a share of about 80 % in the Dutch carcass pig market. So there is no more talk of competition between the abattoirs. From the price development for payments to Dutch pig keepers, one can see that the price difference between the Dutch prices and the so-called Nordwest-Preis (north western German prices) has considerably increased. Compared to Germany, a 5 Euro disadvantage in returns per pig results from this price difference.
Another disadvantage is caused by the tightening-up of the Dutch Pig Keeping Act. In this, the space to be guaranteed for a fattener of a live weight between 85 and 110 kg must be 1 square metre per pig. This involves a drastic increase of the overhead expenses.
In the face of these facts and developments, one may not be surprised that the Dutch farmers, with their little own capital, have got into trouble.
The following conclusion may be drawn:
During the past years, the pig sector in our -- formerly lauded -- neighbouring country has come into a dead end. The farms are deep in debt. The legal framework has become ever worse for them, and as a result to it, production has become uneconomical. Many problems are caused by being dependent on export. The Dutch government must take a large part of the responsibility for all this misery, because they set the false signs at the wrong time. Even if, at first sight, the Dutch agricultural structures look better than they do here in this country, the German farmer should ask himself whether or not he wishes that they were the same here in Germany. Regardless of all difficulties we are facing here (such as Pig Keeping Act, Animal Drug Law, Building Code, etc.), Germany as an agrarian site -- and despite the smaller structures -- offers quite some advantages which allow the German pig keepers to hold their own stand in European competition.
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