Netherlands: CAP Strategic Plan 2023-27
To be noted that on top of the implementation of the CAP, the Dutch government plans to implement a national program providing each year twice the Dutch CAP budget, financed by national budget, to incentivise the transition of the agricultural sectors to more sustainable ones. National financings will support innovation and investments, some will be devoted to extensification.
Dutch CAP Strategic priorities
For decades, Dutch agriculture and horticulture have been highly innovative, creating prosperity and improving the quality of life in rural areas. However, agricultural production for years has focused primarily on reducing costs and increasing production at the expense of biodiversity, drinking water quality, and landscape diversity.
A transition in agriculture is therefore necessary. In the Netherlands, farmers are already working on this. The new CAP focuses on supporting farmers who actively contribute to the desired transition in agriculture. If farmers are rewarded for their efforts and are supported in their developments and investments, they will be able to provide solutions. This can be done by helping farmers make changes on their farms, but also by allowing farmers to work together in their area, chain, or sub-sector to find solutions.
The new CAP supports farmers by rewarding their public services to the climate and environment with subsidies for public goods. Through the eco-scheme, a farmer can choose from a list of about 25 eco-activities that fit their business and interests and the climate and environmental goals. The more effort a farmer is willing to put in, the higher the compensation.
The green architecture
The green architecture -or the “Green-blue architecture” (GBA) as the Dutch Government prefers to call it- plays a major role in the Dutch NSP. A better network of green and blue interweaving in the landscape will help Netherlands to achieve climate and environmental goals. With the basic premium and cross-compliance in which the majority of farmers participate, there is an improvement in the living environment, biodiversity, climate change, and broader water quality. Through the eco-scheme, each farmer can make extra efforts. Interventions under the second pillar, complement this. Measures can be agreed upon over several years and targeted in an area-specific approach to the most pressing challenges. But other interventions such as investments, sector programs, knowledge and innovation also contribute directly or indirectly.
In some areas of the Netherlands, the environmental challenges are particularly severe. Through the CAP, the Netherlands is investing in business support in these areas. There will be subsidies for integrated area plans, innovations and area processes where the water level is raised and farms are extended. The same goes for farms near Natura 2000 areas, which emit nitrogen near sensitive wildlife. Urgent challenges in areas such as climate, nitrogen, and biodiversity require specific interventions, particularly in the second pillar. To meet these new needs, funds are being transferred from Pillar I to Pillar II. The transfer to EAFRD will be 15% in 2023 and will gradually increase to 30% in 2027.
In 2023, the 25% of the Pillar I budget that remains after the transfer is dedicated to eco-scheme. The amount available is maintained at this level throughout the CAP period. Since the percentage is calculated after the transfer, this means that the percentage after the transfer increases to about 30% (after the transfer) in 2027. This means that for basic income support, an amount of € 447 millions is available in 2023 after the transfer of 15% to the second pillar (and the budget for the eco-scheme is € 152 million). This amount drops to € 339 million in 2027 (with always about 152 million for eco-scheme).
Land-based eco-scheme for climate and environment
The eco-scheme includes the following eco-activities :
Main crop :
1 Permanent crops as main crop at least 1 in 3 (parcel)
2 Early variety of uprooted crop (harvest < 1 September)
3 Early variety of grub (harvest < 1 November)
4 Protein crops as main crop
5 Arable crops, crop from list of permanent crops is on field for more than 18 months
6 Long standing grassland (> 5 years)
7 Buffer strip with herbs
8 Grass/clover
9 Grassland with herbs
10 Strip cultivation, at least 10 strips in a combination of at least 3 crops in strips of at least 3 and maximum 24 m wide
11 Wet cultivation
12 Mange cultivation
13 Small-scale plot (< 2 ha) more than 60% enclosed
Bottom crop :
14 Underseeding catch crop
15 Keeping plots covered (including non-productive rest crop) until 1 March.
16 Under-working sward (without using glyphosate herbicides).
17 Permanent green cover (direct sowing in green manure, covered until harvest of main crop)
Cultivation measures :
18 Biological control (sterile males, nematodes)
Livestock measures :
19 Maximum 1.5 LU per farm (grassland)
20 Extended pasture grazing 1500 hours
21 Extended pasture time 3000 hours
Non-productive agricultural land :
22 Wooded element (hedge, hedgerow, thicket) is maintained
23 Woody element is present (other woody elements)
24 Water element ecologically cleaned. The element has been cleaned 25% to 75% after June 15
25 Non-productive field (edge) minimum 12 months (edge minimum 3 m)
Sustainable farm :
26 Organic farm
The list of activities can be modified after testing and practical experience later, optimization can occur based on annual monitoring and mid-term evaluation in 2025.
The climate and environment eco-scheme has three entry criteria:
1 Farmers or groups of active farmers
2 Eco-activities take place on agricultural land,
3 The farmer or group of farmers has carried out sufficient activities to meet the points system applicable to their area.
Indeed, the eco-scheme is programmed as a point system for all farmland in the Netherlands with area-specific emphases. There is virtually 100% overlap at the farm level between basic income support hectares and eco-scheme hectares. The tasks for the climate, soil/air, water, biodiversity, and landscape objectives are different for each region. The choice of a national point system with regional accents ensures consistency and balance in terms of objectives, actions and their evaluation. The weighting factors for regional accents are landscape type, industry, soil type, specific urgencies in relation to European climate and environmental regulations, spatial location, and coverage.
The eco-scheme is used to promote change toward future-proofing agriculture and to encourage the implementation of agricultural practices that contribute primarily to five sub-goals: climate, soil/air, water, biodiversity, and landscape. Payment rates depend on the use of the scheme. The projected uniform “unit amount” per hectare is 106 euros per year, based on the assumption that 80% of eligible farmers use the scheme. The actual payment is made at the bronze, silver and gold levels with corresponding unit amounts. The payment level is determined based on the eligible value of the assets after meeting the entry criteria, including the point system. Organic farming automatically receives the gold level for farmland that is certified as organic.
Redistributive income support
To support smaller and medium-sized farms the funds available for the Basic Income Support are redistributed from larger to smaller farmers. A higher basic premium is provided for the first 60 hectares, to meet the obligation to redistribute at least 10% of the direct payments. The Netherlands will aim for the minimum compulsory 10% because it does not want to artificially maintain companies that are not viable and therefore have no future prospects. In that respect, Dutch Government thinks that targeted support through investments and knowledge acquisition is better for making small and medium-sized companies stronger and more future-proof than a higher basic premium.
Coupled payment
The Netherlands does not apply coupled income support.
Risk management
Through the Action Programme on Climate Adaptation in Agriculture, the Dutch government is promoting – with national resources – the preparation of the sector to face consequences of climate change. The Netherlands is also working to make the soil and water system more robust (through the National Soil Strategy) and to promote knowledge of risk management and preventive measures. The CAP will also be used to promote knowledge in this sector. Funds from the Investment intervention can be used to take preventive measures. Insurance is seen as the final element in risk management. For the (residual) risks of extreme weather, the Netherlands will use the Broad Weather Insurance (to be co-financed with CAP support) Indeed, without financial support, this insurance is still too expensive and is not taken out enough to keep the weather risks of open crops on the market.
This intervention is a premium subsidy to active farmers who insure any crop damage caused by extreme weather. The annual grant budget is paid on a pro-rata basis at a maximum of 63.7% of the cost of the insurance premium.
Total budget 2023- 2027: € 87,5 million (€17.5 million per year)
Young farmers
Generational renewal is supported in various ways. The supplement to the basic support for young farmers will be a fixed amount. It is expected that around 3,500 young farmers will be entitled to the top-up, which will therefore be more targeted for the new group of young farmers thanks to the link with the setting-up aid. Young farmers will receive a higher subsidy than under Pillar II. This means that only young farmers who receive establishment support in Pillar II will be eligible for additional, so-called “top-up” support. The total budget for this additional support is 10 million per year. The top-up is a fixed amount of 2,800 euros on an annual basis.
Young farmers who have already received a full top-up previously in the previous CAP period, i.e. the entire five-year period, are not eligible again. For young farmers who have not yet fully utilized the five-year period during the previous CAP period, transitional rules will be provided.