EU approves controversial Dutch private equity farm buy-out plan to ‘cut nitrogen emissions’

EU approves controversial Dutch farm buy-out plan to ‘meet climate goals’

Farmers have protested against the government scheme that will offer them 120 per cent of the value of their company if they agree to close


The Netherlands has been given the go-ahead to start buying out thousands of farmers businesses in a bid to meet the European Union mandate on climate goals.

AMSTERDAM, the NETHERLANDS – JULY 23: Demonstrators attend a rally of the Netherland In Resistance group sympathizers to support farmers, fishermen and truckers, on Dam Square in Amsterdam on July 23, 2022. (Photo by Mohamed Farouk Batiche/Anadolu Agency via Getty Images)

Under the 1.47 billion (1.3 billion) plan, entire farms located near nature reserves could be purchased by the government, with hundreds more farmers compensated for voluntarily closing their operations.

It forms part of the Hagues wider strategy for slashing nitrogen emissions in half by 2030 to comply with EU targets.

On Tuesday, the European Commission approved the Dutch governments proposals under the blocs state aid rules.

Brussels ruled that the buy-outs would not give farmers who receive them an unfair leg-up against international competitors on the Single Market and thus violate EU regulations.

Justifying the move earlier this year, Christianne van der Wal, minister of nature and nitrogen policy, said that the Netherlands had to cut nitrogen emissions from farms to build new housing and produce green energy.

There will first have to be nitrogen cuts before there is room for new development such as new houses and sustainable energy investments. It is our economic lockdown, she said. My message is not the message [farmers] want to hear.

She has previously described the scheme as wildly attractive.

Farmers operating near nature conservation areas will be offered 120 per cent of the value of their company if they agree to close their operations and promise not to restart elsewhere in the country or within the EU.

About 3,000 farmers who are considered among the countrys highest polluting have been identified under the scheme.

Dairy, pig and poultry farmers will be offered 100 per cent of their company’s value if they agree to close under a similar programme.

Protests from farmers

Dutch farmers have been on a collision course with the government for more than a year, while it grappled with the consequences of forcing its lucrative agricultural industry to cut emissions.

Protests against the climate-change targets have often turned violent, with manure and blazing hay bales used to block highways and supermarket distribution centres, leading to empty shelves on numerous occasions.

In March, Mark Rutte, the long-serving prime minister, received a major defeat in the regional elections as a farmers protest party scored a victory.

At risk of being undercut

Despite its small size, The Netherlands is one of the worlds agricultural powerhouses, being only second to the United States as a food producer and agricultural exporter.

Its farmers have argued that the new climate change rules placed them at risk of being undercut by cheap foreign imports.

They also complained that agriculture was being unfairly targeted compared with other polluting sectors such as transport.

The Dutch government has earmarked 25 billion (22 billion) to tackle nitrogen emissions, including compulsory buyouts and payments for reducing livestock numbers.

The courts have blocked an increasing number of construction projects designed to ease the countrys housing crisis until nitrogen levels have been reduced.

Improve the environment

Brussels decided the Dutch plan did not amount to a breach of the blocs state aid rules, which have been significantly loosened as a result of the interventions made by European governments during the coronavirus pandemic.

Margrethe Vestager, a vice-president of the European Commission, said the plan would lead to the voluntary closure of those farms most responsible for nitrogen emissions.

The schemes will improve the environment conditions in those areas, and will promote a more sustainable and environmentally friendly production in the livestock sector, without unduly distorting competition, she said.

The EUs approval of the scheme, which runs until February 2028, will last as long as Dutch farmers agree to a definitive closure of their operations.

The exact conditions for the buyout scheme will be published by the end of the month, with the government also exploring targeting other industries amid uproar from farmers.