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Ruud van der Vliet, Rabobank Westland:

"It seems like there was never a crisis"

Of course it's good that horticulture has had two better years, but the profitability of horticulture is still too low. Rudd van der Vliet of Rabobank Westland also sees that fruit and vegetable growers are missing opportunities to do something about it. "There is a 120 million Euro GMO subsidy ready. We're just leaving it." This isn't the only thing the sector can work with. "When we were in the crisis people were much more prepared to work together."

This week the new GMO regulation was published. This means the the producers unions can work on their operational programmes and multiple year plans. Last year they managed to make almost 40 million euro this way. It will be quite a bit less this year: Van Nature, Veiling Zaltbommel and Coforta decided not to use the subsidy this year due to the complicated and unclear regulations.

Even with 40 million Euro subsidies the Netherlands makes little use of the potential of the GMO subsidy, according to Ruud van der Vliet, director of companies at Rabobank Westland. "A pot of 120 million Euro was made available. The margin in fruit and vegetables is only a few percent. You can take in slightly more than 4 percent of your turnover with this money - which is often the margin of a horticultural company. And yet we don't or barely use the GMO money."

Claim and fear
'And you wonder why', a number of growers will be thinking. There is still a claim of millions hanging over the sector. GMO has become a dirty word, and whoever talks about it at parties will soon be alone. There is also a lot of complaining about the rules, which are only becoming more complicated and difficult. "I understand that," says Ruud. "It's difficult. But to get the SDE subsidy you have to meet a lot of demands as well - yet we participate en masse with geothermal projects. It's time to wake up in the real world. Pushing an amount like that aside is a shame. It's financial space that we can use well as a sector. And when you see growers in Spain and Belgium using it, it creates an inequality in the market."

Why does it work in Belgium and Spain? Ruud believes it's the market structure. "In the end we all have to deal with pretty much the same, European regulations. In Belgium and Spain there is one large cooperative structure that acts on behalf of the growers. The organisation is separate from the consumers." But don't growers need to focus more on the consumer, the final customer? They don't have cancel each other out according to Ruud. "If you organise this, you have to stick to the rules. I can imagine management that is related to the production companies and a structure with dedicated marketing and sales people." 

According to Ruud collaboration isn't just required for a GMO subsidy, but also an important part of the future of horticulture. "On average all producers are MKB+- companies. The largest sales organisation in the Netherlands doesn't have a billion Euro turnover. The sales are increasingly moving to retail. Parties with tens of billions in turnover. And look at a the Amazon takeover - due to scale enlargement and clustering these types of parties just get bigger," says Ruud. "Everyone knows that the highest margin in fruit and vegetables is realised in the retail. Horticulture can't do much against these types of parties. We allow ourselves to be cornered and don't realise the margin that we need for the sector. And if you remain small on the producers side, you maintain the unbalanced market position."

In some channels the Netherlands is certainly dominant, believes Ruud. "We are one of the few countries that supply quality coarse vine tomatoes to retail all year round - something others can only do partially. We have companies that do really well. We supply a superior product. But we don't dominate the sector. The greenhouse vegetable market is a European market. The Netherlands doesn't even produce ten percent of Europe. Let's not try to fill shoes we don't fit."

Despite these figures the will for collaboration seems to be lacking. "When we were in the crisis, people were far more willing to work together. The necessity to form Coalition HOT was felt, for instance. Now the pain is felt less and with it the necessity to work together and use GMO. Collaboration isn't happening quickly enough. It's like there was never a crisis. But there is no long term future without working together - especially as a small company in bulk production. This is where the biggest problems will arise," Ruud predicts. "Specialties are for single companies. In bulk you have to work together and realise the best cost price. You need to use aids such as the GMO subsidy for this," Ruud believes. "If you look at the capital investment of horticulture the profitability is still low despite two quite good years. GMO subsidy is money that is there, that we raised as taxes and that we can use well to make the sector more healthy. But it doesn't happen. We're stealing from our own purse."

For more information:
Rabobank Westland


Publication date: 7/19/2017


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