8 min
What explains – from a historical perspective – the innovation and yield per unit push in the Netherlands? Niek Koning, Food Policy Analyst and emeritus assistant professor Wageningen University & Research, identifies two main causes: the development of the heavy horse drawn plough and the Netherland's unique location in a river delta by the sea. Two Dutch experts - Merijn Knibbe, Teacher & Researcher of Economics and Krijn Poppe, Economist & Council Member of the RLI (Council for the Environment and Infrastructure) - respond to Koning's view. They open up a sequel and logic that could help explain the current crisis in Dutch Agriculture from a historical perspective.
Around 1800 a Dutch farmer was able to feed 3 people. German and French farmers didn't get beyond 2 on average. Niek Koning explained why in a previous interview.
“The Netherlands were the most productive agricultural country within Western Europe, together with Denmark and Britain.” Niek Koning sees two important reasons for that achievement. The first one was technology. “Already in the high Middle Ages (around the 11th, 12th and 13th century) the Dutch applied the heavy horse drawn plough." With this heavy metal plough farmers in northern countries could till their fertile, but heavy soils. That allowed an increase in production and thus the growth of cities.
The second reason is the Netherlands’ unique location in a river delta by the sea. Koning: “The best located areas were the areas situated near water. The Netherlands bordered on the North Sea, and were situated in the delta of the Rhine and other major rivers. Before the Industrial Revolution, transport over water was about 10 times cheaper than over land. Water doesn't separate, but connects areas.”
Their western border being on the North Sea and their rivers connecting them to the hinterland, the Dutch were in a position to export butter and cheese and - as their arable land was more suited for other crops and grassland - import wheat in return. Dutch agriculture has been intertwined with trade since the Middle Ages. Koning: “We have always been in livestock. Compared to other European areas we were more specialized in livestock.” The Dutch could export a few percent of their production of for instance milk, butter and cheese, in the beginning to London, later to the industrial Ruhr Area in Germany. “With the money we earned, we could buy cereals from the Baltic states.”
Better understanding the current crisis in the Dutch delta
In this third item on the history of Dutch agriculture Poppe en Knibbe respond to Koning's views. They agree with Koning's presentation of the genesis of Dutch agriculture over time. At the same time they come up with a number of essential new details that will surprise even well informed readers. They result from the very informal discussion and may, I think, help to better understand the current crisis in the Dutch agricultural delta.
On the first of October 2019, Dutch famers protested massively in The Hague against the ever more complex and costly environmental regulations framework government is imposing on them. Dutch government and Dutch farmers have been in a state of permanent head-on collisions for almost a year now. The tractorized protests generating traffic jams, blocking supermarket distribution centers and the Dutch Environmental Agency RIVM haven't stopped since October last year. This spring, negotiations between farmers and governments were suspended and they haven't been renewed since. The current administration is highly unlikely to solve the crisis around environmental and pricing issues. European environmental laws require standards the farmers don't want to comply with anymore. They suffer from poor incomes and cannot cover their costs and repay their investments. Part of their recent investments in buildings and equipment cannot even be exploited, as new laws declared them illegal.
Can a set of historical analyses and a conversation discussing them, shed light on what the real underlying challenges for the present crisis are? The three men think it might.
To Koning's impression of the early history of Dutch Agriculture, Merijn Knibbe adds the importance of the location breeds location principle. Knibbe explains how the Dutch have always excelled at using their geographical advantages. Located on the border of the sea, between rivers and with a network of small cities in their vicinity, they exploited fertile soils and used the peat soils - 'dried out swamps' - to produce energy and low lying grasslands that needed drainage. They turned the need for drainage into the creation of additional waterways. The grasslands created the opportunity for producing milk, butter and cheese. The newly created waterways came in handy as cheap transport arteries.
Mink industry as a result of 'location breeds location'
As the cities could afford the food they produced, farmers could afford to pay for labor and attracted an agricultural working class plus migrant waged labor for seasonal peaks. As a consequence, farmers had to manage larger risks. They needed to make a profit and thus to intensify production. According to Krijn Poppe, this capitalist type of farming goes back as far as the 13th century in the South West of the country. Ultimately, in the 19th century, the geographical position by the sea permitted the Dutch to import feed and scale up the animal husbandry systems they had intensified historically over 6 centuries. The location breeds location principle even resulted in the Dutch mink industry (6 million fur producing animals in 2015; production will be stopped by law in 2021), as it could put the offal from slaughterhouses to very profitable use. Before the invention of chemical fertilizer, organic fertiliser produced by intensified animal husbandry systems helped to increase the output of arable land and improve production on poorer soils. Over time. Knibbe says, location breeds location and scale advantages thereof in a myriad of ways.
Krijn Poppe is fascinated by the economic interaction of cities and the land surrounding them. The cumulation of capital earned elsewhere in cities because of the North Sea ports - e.g. in the Dutch colonies - could be invested in farming, scaling it up. The typical Dutch low interest rates - a sign of the Netherlands solid economy - strengthened the opportunity to do so. The price of land going up induced agronomical intensification in order to cover the risks and costs of this capitalist agricultural system. Furthermore it created the need for building up and sharing knowledge and skills to improve productivity. That created a solid cluster built on Knibbe's concepts of dynamic locational and scale advantages.
Niek Koning points out these effects didn't happen in the Netherlands exclusively or in all parts of the current kingdom; the regions with poorer sandy soils didn't meet the right conditions. However, the region around Paris did and so did Northern Germany and Eastern Germany.
Processing factories took over the command of the Dutch agricultural intensive advantages. These were gradually developed and built up over a span of about 6 centuries in the West of the country and about 4 in the North Eastern part. The industrial processing needed more production. Waged labor gradually proved too expensive. Dutch farmers had to mechanise in order to stay in business and do the hard work themselves. That is why family farming was 'reinvented'; former capitalist farmers came out of that process as a commercial risk taking working class category on its own.
Agribusiness has outlived Dutch agriculture
What is the relevance of these analyses for the current tense situation between the government and the Dutch farmers? Koning, Knibbe and Poppe discuss how to pursue the analysis of the Dutch food cluster towards present times from the neatly defined core of the historical logic that pops up.
Knibbe states that Taylorism has entered agribusiness as well. Every business in the food chain has to comply with well defined standards and data technology. This kind of Taylorism in the food chain, has shifted the advantage of scale to large operations, putting farmers in a largely dependent position.
Poppe proposes to work out the environmental issues that have grown out of the Dutch comparative advantages for scaling up and creating a remarkably intertwined and efficiently organised agribusiness ecosystem in a nonetheless small and densely populated country; animal husbandry is under fire, while crop farming and horticulture have developed into something ecologically even bigger. At the same time, the trade and processing functions in the Dutch food cluster have achieved worldwide positions and don't need Dutch farmers for sourcing anymore.
Koning agrees with them and proposes one extra track down the road from here on, while wrapping them all up. Why are the Dutch (especially in horticulture and slaughterhouses but also on a number of farms) so dependent again on (cheap) migrant labor - as Covid-19 has shown recently - whereas the Dutch model had shifted towards a family farming model? Can the Dutch agribusiness model that - as Knibbe says - has shifted the balance of power to the large scale trade and processing functions in the food system find a - albeit only partial - way back towards short food circuits as in the old capitalist days? In case the answer is negative, how to go about the representation of farmers in the international and even global processing and trading companies the farmers' cooperatives have turned into? In case environmental and other cost issues jeopardise the position of Dutch farmers as producers of commodities for their former cooperatives, what does that imply for future of the 7 centuries old Dutch agribusiness system as a whole? Location breeds location seems to have moved past its comparative advantage for the founding capitalist farmers turned into commodity producing family farmers. They seem to have created a food system that ended up by swallowing them. However, the system lives on. Dutch agribusiness is as innovative as ever and doesn't depend on Dutch sourcing of primary food stuffs anymore. But how to continue without resolving the painful relationship between the new and old capitalists? And how to restore the relationship between farmers and government that had helped agribusiness by its famous and early Mazzucato-style triple helix model created by the famous agricultural committee in 1886?
Koning, Knibbe and Poppe will discuss those questions in the next edition on the history of Dutch agriculture: the present and its future.
Niek Koning is an associate at the Centre for Sustainable Development and Food Security, and emeritus assistant professor of the Agricultural and Rural Policy Group, Wageningen University, the Netherlands. He is the author of Food Security, Agricultural Policies and Economic Growth: Long-Term Dynamics in the Past, Present and Future (Routledge 2017). He gives lectures and does short-term assignments related to international farm policy issues.
Krijn Poppe just retired from Wageningen Economic Research, he is the leading agro economist and government policy advisor in the Netherlands. He helps decision makers in policy and business to understand and act upon trends in agri & food, based in science. Until recently, he worked for nearly 40 years as Research Manager and Senior Economist at Wageningen Economic Research. Currently Poppe is a Council Member of the RLI - Council for the Environment and Infrastructure and advisory councils in South Holland and Flevoland.
Merijn Knibbe teaches economics at Hogeschool Van Hall Larenstein in Leeuwarden. He is a researcher in economic history and the relation between economic theory and economic measurement. In a small and dedicated circle of agro economists, he is well known for putting grass on the map as a crop in Dutch agriculture.
“The Netherlands were the most productive agricultural country within Western Europe, together with Denmark and Britain.” Niek Koning sees two important reasons for that achievement. The first one was technology. “Already in the high Middle Ages (around the 11th, 12th and 13th century) the Dutch applied the heavy horse drawn plough." With this heavy metal plough farmers in northern countries could till their fertile, but heavy soils. That allowed an increase in production and thus the growth of cities.
The second reason is the Netherlands’ unique location in a river delta by the sea. Koning: “The best located areas were the areas situated near water. The Netherlands bordered on the North Sea, and were situated in the delta of the Rhine and other major rivers. Before the Industrial Revolution, transport over water was about 10 times cheaper than over land. Water doesn't separate, but connects areas.”
Their western border being on the North Sea and their rivers connecting them to the hinterland, the Dutch were in a position to export butter and cheese and - as their arable land was more suited for other crops and grassland - import wheat in return. Dutch agriculture has been intertwined with trade since the Middle Ages. Koning: “We have always been in livestock. Compared to other European areas we were more specialized in livestock.” The Dutch could export a few percent of their production of for instance milk, butter and cheese, in the beginning to London, later to the industrial Ruhr Area in Germany. “With the money we earned, we could buy cereals from the Baltic states.”
Better understanding the current crisis in the Dutch delta
In this third item on the history of Dutch agriculture Poppe en Knibbe respond to Koning's views. They agree with Koning's presentation of the genesis of Dutch agriculture over time. At the same time they come up with a number of essential new details that will surprise even well informed readers. They result from the very informal discussion and may, I think, help to better understand the current crisis in the Dutch agricultural delta.
On the first of October 2019, Dutch famers protested massively in The Hague against the ever more complex and costly environmental regulations framework government is imposing on them. Dutch government and Dutch farmers have been in a state of permanent head-on collisions for almost a year now. The tractorized protests generating traffic jams, blocking supermarket distribution centers and the Dutch Environmental Agency RIVM haven't stopped since October last year. This spring, negotiations between farmers and governments were suspended and they haven't been renewed since. The current administration is highly unlikely to solve the crisis around environmental and pricing issues. European environmental laws require standards the farmers don't want to comply with anymore. They suffer from poor incomes and cannot cover their costs and repay their investments. Part of their recent investments in buildings and equipment cannot even be exploited, as new laws declared them illegal.
'Location breeds location' seems to have moved past its comparative advantage for the founding capitalist farmers turned into commodity producing family farmers. They simply seem to have created a food system that ended up by swallowing them. However, the systems lives on. Dutch agribusiness is as innovative as ever and doesn't depend on Dutch sourcing of primary food stuffs anymoreHistory can help to understand the present
Can a set of historical analyses and a conversation discussing them, shed light on what the real underlying challenges for the present crisis are? The three men think it might.
To Koning's impression of the early history of Dutch Agriculture, Merijn Knibbe adds the importance of the location breeds location principle. Knibbe explains how the Dutch have always excelled at using their geographical advantages. Located on the border of the sea, between rivers and with a network of small cities in their vicinity, they exploited fertile soils and used the peat soils - 'dried out swamps' - to produce energy and low lying grasslands that needed drainage. They turned the need for drainage into the creation of additional waterways. The grasslands created the opportunity for producing milk, butter and cheese. The newly created waterways came in handy as cheap transport arteries.
Mink industry as a result of 'location breeds location'
As the cities could afford the food they produced, farmers could afford to pay for labor and attracted an agricultural working class plus migrant waged labor for seasonal peaks. As a consequence, farmers had to manage larger risks. They needed to make a profit and thus to intensify production. According to Krijn Poppe, this capitalist type of farming goes back as far as the 13th century in the South West of the country. Ultimately, in the 19th century, the geographical position by the sea permitted the Dutch to import feed and scale up the animal husbandry systems they had intensified historically over 6 centuries. The location breeds location principle even resulted in the Dutch mink industry (6 million fur producing animals in 2015; production will be stopped by law in 2021), as it could put the offal from slaughterhouses to very profitable use. Before the invention of chemical fertilizer, organic fertiliser produced by intensified animal husbandry systems helped to increase the output of arable land and improve production on poorer soils. Over time. Knibbe says, location breeds location and scale advantages thereof in a myriad of ways.
Krijn Poppe is fascinated by the economic interaction of cities and the land surrounding them. The cumulation of capital earned elsewhere in cities because of the North Sea ports - e.g. in the Dutch colonies - could be invested in farming, scaling it up. The typical Dutch low interest rates - a sign of the Netherlands solid economy - strengthened the opportunity to do so. The price of land going up induced agronomical intensification in order to cover the risks and costs of this capitalist agricultural system. Furthermore it created the need for building up and sharing knowledge and skills to improve productivity. That created a solid cluster built on Knibbe's concepts of dynamic locational and scale advantages.
Niek Koning points out these effects didn't happen in the Netherlands exclusively or in all parts of the current kingdom; the regions with poorer sandy soils didn't meet the right conditions. However, the region around Paris did and so did Northern Germany and Eastern Germany.
Processing shifted from farms to factories, turning the farmer eventually into a producer of commodities instead of the end products (think of butter, cheese) he was used to make and sellAt that point, the open and informal discussion between the three men takes a surprising and new turn. The rapid fossil revolution in the nineteenth century (industrialisation and mechanization driven by coal and later oil energy and materials) changes the old biobased economy that had worked so well for capitalist farmers and investors. For example, synthetic products replaced madder, a dye and colourant extracted from the Rubia tinctorum crop. At the same time, it speeded up the scale of industrial processing. Transforming beets into sugar and raw milk into cheese and butter shifted from farms to factories, turning the farmer eventually into a producer of commodities instead of the end products he was used to make and sell profitably.
Processing factories took over the command of the Dutch agricultural intensive advantages. These were gradually developed and built up over a span of about 6 centuries in the West of the country and about 4 in the North Eastern part. The industrial processing needed more production. Waged labor gradually proved too expensive. Dutch farmers had to mechanise in order to stay in business and do the hard work themselves. That is why family farming was 'reinvented'; former capitalist farmers came out of that process as a commercial risk taking working class category on its own.
Agribusiness has outlived Dutch agriculture
What is the relevance of these analyses for the current tense situation between the government and the Dutch farmers? Koning, Knibbe and Poppe discuss how to pursue the analysis of the Dutch food cluster towards present times from the neatly defined core of the historical logic that pops up.
Knibbe states that Taylorism has entered agribusiness as well. Every business in the food chain has to comply with well defined standards and data technology. This kind of Taylorism in the food chain, has shifted the advantage of scale to large operations, putting farmers in a largely dependent position.
Poppe proposes to work out the environmental issues that have grown out of the Dutch comparative advantages for scaling up and creating a remarkably intertwined and efficiently organised agribusiness ecosystem in a nonetheless small and densely populated country; animal husbandry is under fire, while crop farming and horticulture have developed into something ecologically even bigger. At the same time, the trade and processing functions in the Dutch food cluster have achieved worldwide positions and don't need Dutch farmers for sourcing anymore.
Koning agrees with them and proposes one extra track down the road from here on, while wrapping them all up. Why are the Dutch (especially in horticulture and slaughterhouses but also on a number of farms) so dependent again on (cheap) migrant labor - as Covid-19 has shown recently - whereas the Dutch model had shifted towards a family farming model? Can the Dutch agribusiness model that - as Knibbe says - has shifted the balance of power to the large scale trade and processing functions in the food system find a - albeit only partial - way back towards short food circuits as in the old capitalist days? In case the answer is negative, how to go about the representation of farmers in the international and even global processing and trading companies the farmers' cooperatives have turned into? In case environmental and other cost issues jeopardise the position of Dutch farmers as producers of commodities for their former cooperatives, what does that imply for future of the 7 centuries old Dutch agribusiness system as a whole? Location breeds location seems to have moved past its comparative advantage for the founding capitalist farmers turned into commodity producing family farmers. They seem to have created a food system that ended up by swallowing them. However, the system lives on. Dutch agribusiness is as innovative as ever and doesn't depend on Dutch sourcing of primary food stuffs anymore. But how to continue without resolving the painful relationship between the new and old capitalists? And how to restore the relationship between farmers and government that had helped agribusiness by its famous and early Mazzucato-style triple helix model created by the famous agricultural committee in 1886?
Koning, Knibbe and Poppe will discuss those questions in the next edition on the history of Dutch agriculture: the present and its future.
Niek Koning is an associate at the Centre for Sustainable Development and Food Security, and emeritus assistant professor of the Agricultural and Rural Policy Group, Wageningen University, the Netherlands. He is the author of Food Security, Agricultural Policies and Economic Growth: Long-Term Dynamics in the Past, Present and Future (Routledge 2017). He gives lectures and does short-term assignments related to international farm policy issues.
Krijn Poppe just retired from Wageningen Economic Research, he is the leading agro economist and government policy advisor in the Netherlands. He helps decision makers in policy and business to understand and act upon trends in agri & food, based in science. Until recently, he worked for nearly 40 years as Research Manager and Senior Economist at Wageningen Economic Research. Currently Poppe is a Council Member of the RLI - Council for the Environment and Infrastructure and advisory councils in South Holland and Flevoland.
Merijn Knibbe teaches economics at Hogeschool Van Hall Larenstein in Leeuwarden. He is a researcher in economic history and the relation between economic theory and economic measurement. In a small and dedicated circle of agro economists, he is well known for putting grass on the map as a crop in Dutch agriculture.
Related
"Transforming beets into sugar and raw milk into cheese and butter shifted from farms to factories, turning the farmer eventually into a producer of commodities instead of the end products he was used to make and sell profitably."
This is only partially true: it does not hold for those farmers that organised themselves in processing (and marketing) cooperatives, thereby becoming owners of the realisation of end products. And of those farmers there were (and are!) a lot in the Netherlands: farmers who, starting in the 19th century, formed cooperatives precisely to keep a greater share of the added value for themselves by collectively selling processed products. To take the milk example: farmers formed dairy cooperatives, thus taking control (because they are in charge in a cooperative!) of the production and marketing of cheese and butter.
The above is not to deny the problems that Dutch farmers experience in their very large present-day cooperatives, and about which I wrote a few comments in another IFAMA thread. They do not always feel they belong, that the cooperative is still theirs. In this regard, an answer to the question asked in the article (How to go about the representation of farmers in the international and even global processing and trading companies the farmers' cooperatives have turned into?) is of vital importance.
"and the Netherland's unique location in a river delta by the sea"
And there we have built houses, offices and highways.
Jur #1, the point - made by Niek Koning and Krijn Poppe in the discussion above - is about the exact cooperatives you say farmers control.
Especially Niek's point is a two sided coin: who is in control and is the kind of control perhaps jeopardising the commercial potential of a multinational dairy company like Friesland Campina? (just to mention an example that'll come first to mind)
The point is, the cooperatives turned into real businesses building on the comparative advantages the Dutch delta has offered over a long period of centuries. In this new chapter - as Niek pointed out in the earlier interview we had - the farmers cannot catch up anymore as the context has now turned against them. His reasoning is very precise. It's because they don't live in the vicinity of a network of affluent cities anymore. Urbanisation toke over (indeed as Jan Peter says) and placed them - without them moving their farmland or farms - in the cities as a kind of landscaped Central Park their homeland customers like to recreate in. And that is exactly the analysis Alex Datema made here on Foodlog (in Dutch) the other day.
Once you analyse it that way, a new, double question comes up: can/must agribusiness go the old way (international markets) and Dutch farmers an new way? The 'doubleness' is in the can/must.
For foreigners: it's interesting to note that the farmers in spring decided to kick their cooperatives out of their negociations with government. Something unheard of in Dutch history.
I just invited Hendrik J. Kaput to join this discussion in a comment on the Dutch section of Foodlog. He made a critical remark. I suspect he'll stress the crucial role of the imports of nutrients (triggered by the very same 'fossil revolution' cited in the main text) from the US in the second half of the 19th century. If so, rightly so!
The cooperative movement is indeed an interesting aspect of this development. Although the first cooperative was in Aardenburg (Zeeland) it is very much associated with the sandy soils more in the east and Friesland in the North - regions that were a bit further away from the cities. And in Brabant it was very much linked with the emancipation of the Catholic part of society, and was the intensification of land use much stronger, which is related to larger and poorer families that were much less capitalist in previous centuries.
Those details aside it is indeed interesting to see how local cooperatives that were very closely controled by farmers merged into national cooperatives (killing the second tier or federated cooperatives like Cebeco), that outperformed the public listed companies (Scholten-Honig, CSM, Menken-van Grieken to name a few) and have now become multinationals that not only trade on a global level but also source inputs in e.g. Germany and have German and Belgian members (or protect Dutch ownership by organising themselves abroad as a limited company owned by the cooperative).
Something to discuss in more detail in a future session, but it seems to me (and this relates to Dick Veerman's last remark) that the agri-business complex is happy with its current business model of a nice standard product (some would say: commodity) that competes in national and international markets on cost price. Like Gouda cheese that is produced worldwide (except in the city of Gouda that hardly has any agricultural land left). The milk prices paid out by those cooperatives iis high enough to intensify (ot a certain extent) land use by importing feed and increase scale (with milking robots etc). But too low to provide an income to many medium-sized farms (the USDA-ERS recently calculated that only US farms larger than 1000 cows are profitable, 500 is at the margin, the average Dutch farm has 100 cows).
In that situation governmental actions to reduce environmental effects of farming make the difference for many farms between staying alive or having no income.
Given this situation it seems logic that the Dutch agribusiness splits into an (inter)national organised sector of cooperatives and other agri-business companies and large, even international farmers (we have already farmers having 2 or 3 operations in the Netherlands and a few in Germany or even in Kenya or Ukraine) that are responsible for 90% of the value added and a local oriented farm sector that not only produces products but also services in short supply chains and eco-system services (water and nature management). The first sector will mainly see governmental regulation to restrict environmental damage, the second sector is very much location based and is supported by public payments for eco-system services.
The farms will co-exist in the same place (like big department stores in malls like to have a small local coffee shop with a local identity next to them), even with some synergies.
The current confusion comes from the fact that organisations and companies have to reorganise themselves along these lines and have to choose an identity, and from the fact that many farms will not easily fit into one of these sectors and are marginalised.