‘Transition of intensive livestock farming not feasible without support’

Luuk Vissers is lead author of the report ‘Development of farm types for sustainable agriculture – animal and plant sectors’, commissioned by the Dutch Ministry of Agriculture, Fisheries, Food Security and Nature (LVVN). This report calculates which measures farmers can take to meet manure, nitrogen and climate targets, and what these mean for their earning capacity. Here, we outline the main consequences for the pig, poultry and veal sectors. 

‘First, there is the derogation, the phased reduction of application space for animal manure. This reduction results in a greater manure surplus for farmers and higher costs for disposal. These additional costs can rise to more than €55,000 per farm per year in the short term, and €40,000 per farm in the medium term.

These extra costs mainly affect pig farmers and, to a lesser extent, veal farmers. In general: the larger the farm, the higher the extra costs. For poultry farming, the cost increase does not apply, as most poultry manure is not applied to Dutch arable land but exported or incinerated, and these costs hardly rise.

In addition, the government has set nitrogen and climate targets. We have calculated the costs of several possible measures to reduce ammonia and methane emissions. These are not yet established policies. In pig farming, this involves daily manure removal – an automatic system that removes manure daily, combined with off-farm processing. This is effective, but requires a major investment – about half a million euros for an average farm.

Poultry farms can substantially reduce ammonia and fine dust emissions with air scrubbers. These technologies are not yet in place and can deliver strong reductions, but they are costly: about €100,000 for an average farm. Moreover, they do not improve barn climate and raise concerns about fire safety.

For laying hen farms, investing in a drying tunnel is a promising option. Such a tunnel reduces fine dust emissions, involves costs, but also produces drier manure, lowering disposal expenses.

Veal farmers can use air scrubbers or systems that separate manure from urine to meet the targets. Beyond that, they have few alternatives.’ 

‘Pig farming faces extra manure disposal costs due to the end of derogation and when investing in daily manure removal. Together, these lead to an income loss of €50,000 to €270,000 per year. The range is wide. We split pig farming into sow farms, fattening pig farms, and closed-cycle farms (with both sows and fatteners). The income loss for sow farms is €10,000 to €120,000; for fattening farms €30,000 to €150,000; and for closed-cycle farms €50,000 to €270,000. These losses depend on the chosen package of measures.’ 

‘Broadly speaking: the larger the farm, the higher the costs, as larger farms must dispose of more extra manure and invest more in technology. Closed-cycle farms are on average larger than specialised sow or fattening farms, which is why you see losses of up to €270,000 per year there.’

‘In poultry farming, we distinguish between broiler farms, which face income losses of €10,000 to €180,000 per year, and laying hen farms with losses of €20,000 to €100,000. Again: the larger the farm, the higher the costs. In addition, if investing in an air scrubber, costs are higher for broiler farms than for laying hen farms, as broiler houses require more ventilation due to higher stocking density.

In the veal sector, income effects amount to €40,000 to €70,000 per year, due to the end of derogation and when investing in air scrubbers. These are smaller farms, so the income effects are also smaller. Nevertheless, the income loss is almost equal to or even greater than total income.’ 

‘Last year, pig farming made considerable profits after a few lean years; farms also regularly record losses. Income losses in this sector vary widely, but on average amount to 100% when there is no financial support. In other words: due to rising costs they would only break even or make a loss. Without profit, a farm has no future. We see the same pattern in poultry and veal farming.’ 

‘The organic sector performs more favourably. Organic pig farmers can also invest in daily manure removal, but they have straw-rich manure, which is economically more valuable to arable farmers because of its higher organic matter content compared to slurry. As a result, they hardly suffer income effects from derogation, saving about €50,000 per year. Moreover, organic poultry farms are generally smaller than conventional ones, so their income losses are also smaller.

We base this on the Dutch Farm Sustainability Data Network (FSDN), a network of 1,500 arable and livestock farms that report their results. There are relatively few organic farms in this dataset, so we would like more insight into the earning capacity and effects for organic farms.’

‘They have few options: they must dispose of and process manure and pay for emission-reducing technologies. They have already taken steps to reduce emissions, but not enough to meet the targets. Without support, this transition will not succeed.’

‘I see two key measures to support the transition. First, subsidy schemes for non-productive investments; such schemes can reimburse up to about 65% of investments in, for example, daily manure removal and air scrubbers. Second, market premiums are needed: a higher producer price for meat and eggs that meet nitrogen and climate targets. This means that chain parties must establish a premium system for sustainable intensive livestock farming. Other support measures hardly exist. Many eco-schemes are tied to land, but intensive livestock farms have little land and therefore benefit only marginally.’

‘It may sound harsh, but if livestock numbers in intensive farming decrease and farms close down, this contributes to achieving climate and environmental targets and reduces manure surpluses. I believe we can make significant progress in this transition if we now establish a solid support package for farmers.’

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