Summary of study on the economic impact of the implementation of the proposed revision of directive 91/414 on thirteen major Dutch crops
December 22, 2008
A team of researchers of the Wageningen University and Research Centre (Agricultural University of the Netherlands) published on 28 October a 150 page report on the economic impact of the proposed revision of the directive 91/414 on thirteen of the most important crops grown in the Netherlands. Below is a summary of the report.
The field crops include seed- and ware potatoes, direct seeded onions, sugar beet, winter wheat, Brussels sprouts and apples, but also two very traditional and high-value Dutch crops, tulip bulbs and ornamental shrubs. The economic impact was also assessed in the following vegetable and floricultural crops grown under glass: cucumber, tomatoes, roses and Chrysanthemum.
Two scenarios were studied:
- Impact of “Cut-off” criteria based on the position of the European Parliament after a plenary vote, which would result in a ban of 85 % of the active substances. In this summary, this scenario will be referred to as EPP cut-off scenario. Please see Table 1.
- Impact of “Cut-off” criteria based on the proposal of the European Commission, in which pesticides would be banned if they are endocrine disruptors, carcinogenic, mutagenic and reprotoxic substances as well as Persistent Organic Pollutants. This scenario will be referred to as EC/CMR/POP scenario. Please see Table 2.
To calculate the impact of banning certain pesticides on the crop margin/Ha, Ir. Spoorenberg and his team looked in a very systematic manner at the following parameters:
- Pesticides currently in use
- Crop yield and crop margin in current situation
- Pesticides allowed when scenario 1 or 2 have been implemented and their impact on the crop margin
- Yield reduction due to the ban of active substances
- Requirement of additional manual labour e.g. manual weeding and how this impacts the variable costs / ha.
- Efficacy of alternative products and effect on crop yield their cost/ha in comparison to the products that would be banned
- Long-term “survival” chances of the crop, e.g. build-up of nematode populations, faster development of resistance of fungi and insecticides and increased weed problems due to the reduced number of products available for treatment of that crop. These long-term effects could not be quantified, but they will undoubtedly have a serious impact in the future.
Implementation of the EPP cut-off scenario will result in yield decreases between 50 to 100% (!) in Brussels sprouts, tulip bulbs, direct seeded onions, ornamental shrubs and with the exception of tomatoes, in all glass house crops evaluated. In all these crops, as well as in tomatoes and sugar beet, the crop margin will decrease > 50%. This implies that growing these crops would not longer be economically viable if EPP cut-off scenario would be implemented. See Table 1.
Also yield reductions ranging between 15 and 32 %, as is the case for seed-and ware potatoes, winter wheat, apple and the earlier mentioned crops tomatoes and sugar beet, will already have a major impact on the returns / ha, which makes it increasingly difficult to pay the fixed costs from the lower crop margins. This could result in these crops also disappearing completely from the Netherlands.
Assuming the EC/CMR/POP scenario could be implemented without further amendments far fewer active substances would be lost from the toolkit of the farmer. The estimate is that between 9 and 25% of the active substances would disappear. This raises the question whether this scenario would improve the situation for the crops endangered when the EPP cut-off scenario would be enforced. The data are summarized in Table 2.
The EC/CMR/POP scenario results in lower crop yield reductions in all crops studied than with the EPP cut-off scenario. However, decreases of the crop margins > 50% will still occur in the following crops: direct seeded onions (56%), tulip bulbs (99%), ornamental shrubs (> 100%) and Chrysanthemum (62%).
This will continue to lead to economic losses or at least to decreased profitability in those crops. Also in this scenario, it is far from certain that in the future growing tulip bulbs, ornamental shrubs, direct seeded onions and Chrysanthemums can survive.
Not only the crops mentioned are in danger of disappearing permanently from the Dutch soil. In the case of flower bulbs, the tulip bulbs have been chosen as example for this study, because nearly 50% of the flower bulb acreage (23,000 Ha) is planted with tulip bulbs. Also the other flower bulb crops will be under pressure.
Implementation of either one of the scenarios would mean that the total number of flower bulbs produced could decrease by as much as 80%. Dutch flower bulbs are a big export article; of the 12 billion bulbs harvested annually more than 75% are exported world wide. The macro-economic consequences when this would disappear do not need to be stressed here.
Another example shows perhaps even better that before decisions are made regarding the revision of Directive 91/414, it is of great importance to get all parties concerned involved in the dialogue. The Netherlands is world’s biggest producer (1.25 million MT/annum) and exporter of seed potatoes; famous for their high quality. This high standard can only be maintained by reliance on pesticides for control of potato virus vectors (aphids), Colorado beetle, wire worms, fungal diseases, and cyst and other nematodes. Irrespective of the economic blow the disappearance or even the partial disappearance of seed potatoes would cause in the Dutch home market, the fact that the major global supplier of seed potatoes can no longer deliver will severely affect ware potato production not only in the EU but globally. This will certainly have a major negative impact on food security as well as on food prices.
In summary, the impact study made by the Wageningen University demonstrates clearly that the implementation of either the EPP cut-off scenario or even the EC/CRM/POP scenario will have enormous economic ramifications in the Netherlands, because entire crops which are major export contributors will disappear because growing them is no longer economically viable. The crop margins / profitability of the “surviving” crops will be under increased pressure, while medium- to long-term the chances of developing resistance to the reduced number of available insecticides and fungicides, weed problems, and higher nematode populations will greatly increase.
It seems reasonable to assume that other EU member states will be confronted with identical issues when they sponsor similar studies in their country.Author : Helen Dunnett