European Commission gives green light for dairy cattle phosphate system

The European Commission has agreed to the introduction of phosphate rights in Dutch dairy farming. This system and the legislation in which it is enshrined satisfy the applicable guidelines for state aid, European Commissioner for Competition Margrethe Vestager reported to the Minister of Agriculture, Nature and Food Quality Carola Schouten. The House of Representatives and the Senate previously assented to the phosphate system. This system will ensure that the quantity of phosphate produced by cattle as a constituent of manure is kept below the European maximum. The system is set to come into force on 1 January 2018.

Schouten꞉ “Now that Brussels has confirmed that the legislation does not constitute state aid, we can be certain that the phosphate rights system will go ahead. Moreover, this decision is also key for the purpose of obtaining a new derogation, a special exemption on the basis of which the Netherlands will be entitled to use more animal manure. Dairy farmers are waiting anxiously for this decision. I can now say to the entire sector: ‘We’re not there yet, but this achievement is already significant’”.

From 1 January 2018, dairy farms will be allocated an amount of phosphate rights based on the number of cattle kept as at 2 July 2015 (the date on which the system was announced), less the previously announced generic reduction of 8.3%. Land-based farms with plenty of land in proportion to the number of cattle are exempt from this reduction, which is necessary to keep phosphate production below the European maximum. The phosphate rights are tradable. Farmers wishing to keep more cattle will have to purchase rights to this end from dairy farmers who are reducing their livestock or terminating their company.

The system of phosphate rights follows the Phosphate Reduction Scheme, which saw trade associations and the Government agree to curb phosphate production in 2017. Considerable reductions in livestock have already been made over the past year through this plan. The most recent figures (October 2017) indicate that the Netherlands is on course with its ambition to reduce phosphate production below the national ceiling again by the end of this year.

The Netherlands is striving to secure a decision from the European Commission granting a new derogation for the 2018–2021 period around April 2018. In this regard, it is important for phosphate production to be brought back below the European maximum by the end of 2017 and for the phosphate system to come into force on 1 January 2018. It is also imperative that agreement has been reached on the Sixth Action Programme of the EU Nitrates Directive. In the unfortunate event that the new derogation is not granted, farmers would be forced to incur additional expenses such as for the responsible disposal of manure and for the supply of extra fertiliser.