On 14 August 2024, the European Commission approved the third round of state aid in two years, in the Netherlands, to support the voluntary and permanent closure of farms.
State aid for a total of 2,175 billion euros, with the declared objective of reducing nitrogen emissions in areas of environmental interest, in line with the European Green Deal (2019).
1) Holland, state aid to close farms in Natura 2000 areas
Holland has notified the European Commission, in 2022, of its intention to adopt two schemes, LBV and LBV plus, to compensate farmers for the voluntary and permanent closure of breeding sites in Natura 2000 areas, as defined in national legislation.
The two programs – approved in Brussels on 2 May 2023 and in force until 27 February 2028 – are open to small and medium-sized farmers in the Netherlands who voluntarily close their farms, provided that their current nitrogen emissions exceed certain minimum levels. (1)
The beneficiaries of the state aid must guarantee that the closure of their production capacity is definitive and irreversible and that they will not start the same breeding activity elsewhere, neither in the Netherlands nor in other EU countries.
1.1) LBV Programme
The LBV program has allocated €500 million of state aid, in the Netherlands, for direct subsidies aimed at compensating up to 100% of the losses (of production capacity and production rights, i.e. CAP aid) suffered by farmers who decide to close their cattle farms dairy, pigs and poultry.
The access condition to such state aid is the exceeding, by individual farms, of the annual nitrogen deposition loads (nitrogen deposition load) established in the individual territories of the country.
1.2) LBV plus program
The LBV scheme plus in turn provides state aid of €975 million for all farms that emit peak loads and high annual levels of nitrogen. As well as farmers who also raise dairy cattle, beef calves, pigs and poultry. May everyone decide to permanently close livestock activities.
Direct susidies under the LBV plus program, serve to compensate:
– up to 100% of the losses incurred, including demolition costs
– up to 120% loss of production capacity.
2) Holland, third round of state aid to close farms in areas of priority environmental interest
The third round of state aid in the Netherlands, worth €700 million, incentivises the voluntary and permanent closure of small and medium-sized farms in areas of priority environmental interest. (2)
The regime applies until 1 October 2029 in areas designated by the Dutch provinces, which include:
– peat bogs, sandy soils, stream valleys
– areas located within or close to Natura 2000 areas.
Also in this case, to access aid, farms must exceed certain minimum thresholds of annual nitrogen emissions. So as to ensure that the closure has a ‘sufficient positive environmental impact’.
2.1) Direct grants and consultancy
State aid, in this case, include:
– direct grants of up to 100% of eligible costs, including compensation for loss of rights and production capacity, costs of dismantling and disposal of materials and other costs directly linked to the closure of the site
– professional consultancy services.
The breeders, obviously, can participate in only one of the three programs.
3) State aid, green light from the European Commission
The European Commission has favorably assessed and approved the three programs proposed by the Netherlands, as they are compatible with EU rules on state aid:
– TFEU (Treaty on the Functioning of the European Union) allows Member States to support the development of certain economic activities, under certain conditions (article 107.3.c)
– the Commission Guidelines (2022) for State aid in the agricultural and forestry sectors and in rural areas include measures for the ‘sustainable and ecological development of livestock farming’, while supporting the objectives of the Green Deal (3)
– the regime appears ‘proportionate, as it is limited to the minimum necessary, and will have a limited impact on competition and trade in the EU’. (4)
4) BBB, the ‘farmers and citizens’ party’
BBB (Peasant Citizen Movement) – the ‘farmers and citizens’ party’ – had achieved a surprising result in the national elections in the Netherlands, in May 2023, with 15 out of 75 seats in the Senate and over 30% of the vote in some provinces. (5) Thanks to an electoral campaign that had leveraged the discontent of farmers, who at the time feared the imposition of taxes on greenhouse gas emissions in homage to the European Green Deal (6,7).
The same party then merged with the European People’s Party (EPP, European People’s Party) – the first supporter of Ursula von der Leyen, whose Commission launched and still supports the Green Deal – and was in fact wrecked in the European elections of June 2024 where it collected a paltry 5,41% of the votes. (8)
Thus the true identity was revealed of the BBB which, in defiance of electoral promises and despite still being the leading party in the Netherlands, has allowed both the state aid in question and that relating to the industrial development of cellular agriculture (including the so-called ‘cultured meat’ or ‘synthetic meats’, in popular jargon), for €252 million. (9) Flemish farmers will at least be able to console themselves with full pockets before changing jobs.
Dario Dongo
Footnotes
(1) State aid: Commission approves €1.47 billion Dutch schemes to reduce nitrogen deposition on nature conservation areas. European Commission, press release 2.5.23 https://tinyurl.com/4x6z6atb
(2) European Commission. Press release 14.8.24 https://tinyurl.com/y794vyzu
(3) Guidelines for State aid in the agricultural and forestry sectors and in rural areas (2022/C 485/01) https://tinyurl.com/2rx8b8c3
(4) The non-confidential version of the decision will be made available under number SA.114339 in the State aid register on the Commission’s competition website. (State aid and register https://tinyurl.com/mwdhrn8p)
(5) Maithe Chini. ‘Indescribable’: New farmer’s party BBB takes major win in Dutch elections. The Brussels Times. 16.3.23 https://tinyurl.com/yxxt2yr9
(6) Anna Holligan, Paul Kirby. Farmers’ protest party win shock Dutch vote victory. BBC News. 11.3.23 https://tinyurl.com/ms4cbzac
(7) Rob Schmitz. In the Netherlands, a farmers party taps into widespread discontent with government. NPR. 21.7.23 https://tinyurl.com/ewyy9eau
(8) European Parliament, 2024-2029. Results by national party. Netherlands https://tinyurl.com/4af7yfxs
(9) See paragraph 4 of the previous article by Dario Dongo. Chicken meat from cellular agriculture, green light in the USA and kosher certification . GIFT (Great Italian Food Trade).
Dario Dongo, lawyer and journalist, PhD in international food law, founder of WIISE (FARE - GIFT - Food Times) and Égalité.
