Cabinet has unrealistically high expectations for farmer buy-out scheme: Planning Office

The government’s high expectations of its new buyout scheme of 7.4 billion euros to close farms are “unrealistic.” The Netherlands Environmental Assessment Agency (PBL) came to this conclusion in a report published on Monday.

The government wants this large pot of money to substantially contribute to achieving the nitrogen targets for 2030. Thousands of farms would have to close, resulting in much less livestock. “Based on an analysis of 25 years of termination schemes, the PBL concludes that full spending of the budget in the period up to 2030 is hardly imaginable,” the planning office said. The report is titled: Terminating livestock farming - lessons from 25 years of termination schemes.

According to the PBL, livestock farmers who voluntarily participated in termination schemes in the past together accounted for only a few percent of Dutch livestock at the time. “The high expectation about the cessation of livestock farms do not seem to be based on a systematic understanding of the effects of termination schemes.”

There are also various reasons why farmers do not opt for mass closures at the moment, the PBL said. The market conditions for farmers are currently favorable, and the environmental policy still needs further development. It also costs a lot of money to buy profitable companies because their prospects become even better if some other livestock farms close.

The PBL advised against forced farm buyouts, as the Cabinet wants to do if too few farmers close voluntarily, pointing out that there is hardly any experience with this. The Cabinet will have to state per company why expropriation is necessary. “With nitrogen reduction as the only argument, it seems complicated because there are also alternatives, for example, by making technical adjustments or by terminating other companies,” the PBL said. These are also time-consuming legal proceedings that can take over a decade to challenge.