The EU has recently approved plans for the Dutch Government to buy out livestock farmers' businesses to reduce nitrogen pollution. According to Eurostat, the Netherlands has the highest surplus of nitrogen in the soil of any European country and agriculture is one of the primary causes of nitrous oxide and ammonia emissions. 

Under the scheme farmers in certain areas will be eligible to stop production voluntarily in return for up to 120 per cent compensation for the loss in value of their assets and the costs of cutting their production capacity. Participating farmers must agree to close down their dairy, pig or poultry farming operation and commit not to re-establish the same breeding activity elsewhere in the EU.

The buy-out plan has been met with resistance, linked particularly to fears that compulsory buy-outs may prove necessary. Others are viewing it as an opportunity, with some farmers exploring the possibility of using the scheme and re-establishing a dairy farm in the UK. In which case, how does the Netherlands compare to the UK in terms of farmland values and its agricultural business environment?

Farmland values

The Netherlands has some of Europe's highest agricultural land values, ranging from €50,000 to €200,000 per hectare. Prime arable land in a region in high demand with irrigation potential achieves the higher end of this range, while farmland suitable for dairy farming has an average value of €62,800 per hectare. Land values are lowest in the north of the country, but despite regional variations, Eurostat data shows that in 2021 the value of pasture in every region of the Netherlands was higher than all the other national averages in Europe, and far above farmland values in England (Figure 1). 

The scheme will compensate for buildings and assets but not the land and livestock, which would need to be sold separately. Nevertheless, widespread uptake of the scheme could indirectly increase the supply of land and potentially decrease farmland values in the Netherlands.

The business environment

The UK is home to approximately 1.85 million dairy cows, across 7,500 producers. The number of cows in the Netherlands is similar at 1.57 million, although Dutch herd sizes are smaller as there are 14,700 producers. The key difference is livestock density; the UK is over five times the size of the Netherlands, and it is the greater livestock density that contributes to the Netherlands’ nitrogen issues. According to Eurostat data the Netherlands has the highest livestock density in the EU at 3.4 livestock units per hectare.

The UK has an established system of nitrate-vulnerable zones to manage the impact of fertiliser and manure use in catchments, but the overall pressure is clearly much lower. This combined with the fact that since 2019 around 300 UK dairy farmers have left the industry each year, and according to our database an average of 31 dairy farms have been advertised for sale per year, means there are ample opportunities for farmers from the Netherlands to migrate to the UK. Also the UK is one of the least restrictive countries in Europe for overseas ownership of agricultural land, regardless of residency or visa. 

Therefore, the UK could well provide an opportunity for Dutch farmers to continue their dairy farming careers and even expand given that land values are typically lower here.

Further information

Contact Alex Lawson and Andrew Teanby

Spotlight: Global Farmland