IENICA REPORT: NETHERLANDS

Executive summary

At present, Dutch arable farming is mainly focussed on growing high input - high output crops like sugar beet and potato, both for food and non-food use.

In the Netherlands, the costs of arable production are high, among the highest in the EU.

Prices for the main agricultural commodities decrease continuously due to (inter-)national policies related to WTO and the extension of the EU. For the individual farmer, these developments lead to a decrease in the net added values of his products, and thus to a lower income.

A possible solution to this problem is to lower the costs per unit land by making production more extensive. However, given the extreme high pressure on land-use in the Netherlands, this option is not realistic.

A scenario that is more plausible for the average Dutch farmer is one in which the added value of the primary products is increased by specific quality characteristics tailored to specific end-uses. In this scenario, also opportunities for non-food crops exist. However, to make this scenario viable, integrative and multi-disciplinary research, extension, education and processing should be supported.

The non-food industry in the Netherlands, is important in terms of financial turnover, but it uses a very limited number of industrial non-food crops as raw material only.

The main oil crops cultivated for use in the non-food industry are rape seed and flax. Although Dutch vegetable oil production is negligible, an important processing industry exists, generating a food and non-food production value of near Dfl 5,200 million (? 2,342 million).

Arable crops that are cultivated for fibre are hemp and flax. The former has much higher yield potentials than the latter, but its production and quality is seriously hindered by legislatory aspects.

For natural fibre three main potential markets exist: paper, textile and materials for construction, either for buildings or automotive purposes. As a whole, the natural fibre industry in the Netherlands is insignificant.

The main carbohydrate crops for industrially applied raw material are starch potato and sugar beet. To some extent, also chicory can be considered as important for the Dutch industrial carbohydrate market.

The main consumer of non-food starch-related products within the EU is the paper and carton industry, while other industrial uses of starch are: textiles, metallurgy, mining and construction. Sugar as industrial product is mainly used in the fermentation industry and the alcohol industry.

Other industrial crops of some importance in the Netherlands are: caraway, dill, herbs (for the food and non-food markets), and some grasses.

An overview of the relative production of primary metabolites of some arable species grown in the Netherlands is used to calculate actual average productions of given plant parts. Also their primary metabolites per unit land and the maximum attainable productions per ha are assessed. Most progress in terms of production can be made with hemp for which stem yield can be increased by 150%. Actual production levels of this crop are far below their potential, which most likely can be explained by the lack of recent research on this crop. It may be expected that similar progress in production can be made with minor crops for which only a limited research experience exists.

Main barriers to application of non-food agricultural primary products are the following: i) a lack of knowledge in several areas (tissue-culture, GMO’s, plant metabolisms, production systems tailored to the specific given environment), ii) a heavily subsidised European agriculture provoking artificial competition between crops, iii) a shortage of intermediate industry transforming primary products into basic material for industry, and iv) a limited amount of incentives for industry to invest in alternative (non-petrochemical) product development.

Based on these conclusions recommendations are formulated to promote the non food industrial use of agricultural raw material. These recommendations are subsequently elaborated for each of the main groups of industrial crops (oil, fibre, carbohydrates and others, respectively).

For the Netherlands, it is concluded that the comparative advantage for non-food production lays in the historically grown co-operation between primary production, industry and retail trade. By combining the available competence in the latter three sectors of the agricultural industry, a strong international market position can be acquired. Potential markets can be explored by offering end-products that are distinct from those of other producers and by ensuring a competitive production of raw material. Hence, a market approach based on offering tailor-made products of high performance, seems most suitable for the Netherlands.