A clampdown on phosphate pollution from the dairy herd in the Netherlands could knock 2% off EU milk production.
Sources in Rabobank, the Dutch-headquartered leading global agri-bank, warn that the Netherlands may lose its nitrates derogation permitted by the EU,
This would force farmers to cut the Dutch dairy herd of 1.6m cows by nearly 30%, likely to knock 26% off the country’s milk production.
Intensive dairy farming in the Netherlands delivers about 8% of the EU’s milk, and quarter of that may be lost, with Rabobank Dairy Analyst Matthew Johnson warning Dutch dairy farming is potentially on the brink of a “seismic change”.
Dutch Agriculture Minister Martijn van Dam has announced his proposal to reduce phosphates has been abandoned due to infringing EU State Aid regulations.
After years of argument and negotiation, the abandonment of a potential agreement on phosphate regulations leaves the Dutch Government risking loss of its special permission derogation, which would take an estimated 3.5m tonnes of milk with it.
Dutch dairy farmers produce 13,000kg per hectare of milk, but phosphate in the manure excreted by their dairy cows exceeds EU limits.
A Dutch plan to tackle this suggested that cow numbers would fall by just over 200,000 head, and that milk production could drop by more than 1bn kg in the next two years.
It involved transferable phosphate permits issued by the Dutch government, which would have a value in farm-to-farm trading — which is why they have been shot down by the EU as an unfair ‘state aid’ which cannot be used for a situation where EU regulations (the farm nitrates and phosphates rules) are breached.
If no solution is found, the Dutch government could lose its derogation covering nitrate usage from the EU Commission.
As in Ireland, this derogation allows annual application from manure of up to 250kg of nitrates per hectare, compared with the norm of 170kg.
The derogation was conditional on meeting requirements, including regular monitoring of groundwater levels, and complying with required phosphate restrictions.
Without the derogation, if 500,000 Dutch cows have to be removed due to a 30% cut in nitrates that can be applied to land, with an average annual yield of 7,000kg (if lower yielding animals are culled first), this would remove 26% of Dutch milk production — a major blow in the country which increased milk production fastest after milk quotas were abolished in 2015, and still the only EU member state where milk production continues to increase.
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