Almost all policy measures aimed at reducing the environmental impact of the agricultural sector lead to a reduction in livestock numbers. This costs money and jobs, but the economic impact on the Netherlands is small, as shown by a comparative study carried out by agricultural economists Petra Berkhout and Linda de Puister of Wageningen Economic Research. “We need to change production and consumption if we are to genuinely meet the environmental challenges,” Berkhout says.
Agricultural policy and its consequences
The agricultural sector is one of the focal points of policies to combat climate change and biodiversity loss. For example, the political party D66 wants to halve the number of chickens and pigs kept, and many other parties are also calling for agricultural reform in the run-up to the elections.
Small impact on the economy...
The researchers were commissioned by the Netherlands Environmental Assessment Agency to compare interventions such as an upper limit on nitrogen and phosphate production, interventions in the manure market and technical measures. For example, a climate-neutral ceiling on nitrogen and phosphate production could lead to 12% fewer dairy cows, 30% fewer breeding pigs and 35% fewer fattening pigs. This will cost the sector (livestock farms, but also increases and decreases in industrial and service activities) 32,000 jobs in a single year.
Analyses of the impact of shrinkage on added value and employment suggest that this could have a considerable impact on the sector and the businesses involved. However, compared to the added value of the entire agriculture industry, the consequences will be manageable, and the decline in the sector will amount to between 1 and 9 per cent, the researchers report. Compared to the total added value of the Netherlands, the impact will be even more limited, because the agricultural sector in the Netherlands is of relatively low economic importance.
...but beware of the waterbed effect
If the next cabinet wants to make a big splash with environmental targets in agriculture, then reducing livestock herds is only one side of the coin. “If policymakers only look at production in the Netherlands, the result will be a waterbed effect: the Netherlands will produce less, but elsewhere the supply will certainly increase if demand does not fall too. This is simply moving the problem elsewhere,” says Berkhout.
So don’t forget about consumption
If we keep fewer beef cattle in the Netherlands but continue to consume the same amount of beef, the supply from abroad will increase in response. The Netherlands exports roughly 75% of its agricultural production and imports about 75% of its food. Berkhout calls on policymakers to look further than only production and start influencing consumption. One way to do this is with a tax on animal protein: a meat tax.
But Berkhout and De Puister’s study is only one piece of the puzzle concerning the big question of the direction our food system should head towards and what that means. “This study alone is not enough to draw conclusions about the direction that policy should go in,” agrees Berkhout. “For example, it does not take the use of space into account, while this is an extremely important part of the discussion about agriculture and biodiversity.”
The Netherlands Environmental Assessment Agency, which commissioned the research, has used the results to analyse the various parties’ election plans. This means that D66 and the other parties considering this policy direction will soon know exactly what halving the livestock numbers will mean in socio-economic terms.