Sustainable agriculture and environmental cooperatives in the Netherlands
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“Had we known beforehand which ecological risks were involved with agriculture, we probably would never have started it”, Professor Jan de Veer, former Director of the Agricultural Economic Institute [Landbouw Economisch Instituut] used to sigh occasionally. Indeed, agriculture involves large environmental risks, but at the same time we know, of course, that agriculture - as a user of solar energy - is one of the most sustainable economic activities. This follows logically from the well-known ba sic laws of thermodynamics. In addition, I would like to bring up a basic law in economics, which says that economy is concerned with reducing dissatisfaction and reducing non-sustainability. I mention ‘reducing’ to emphasise the direction and the speed of the change. We will have to keep this simple law in mind when dealing with the environment. When applying economic laws to the environment, we often hear ‘the polluter pays’. I think that many politicians particularly should try to u nderstand better the deeper meaning of this statement: the polluter charges or must charge his costs to the consumer, and in the end it is the consumer who pays (extra) for whatever it is that causes the pollution. In this manner, the market mechanism influences the consumer's behaviour of choosing and spending. The problem the (Dutch) farmer is facing is that for a number of reasons he is not able to charge his environmental cost to the consumer. First of all, the agricultural market has many small suppliers of which none are able to impose a price on the consumer - not even locally. It is quite simple for the demanders of food (including industry and store chains) to bring in food from other regions. This aspect is reinforced by the fact that the agricultural market is a surplus market. A second and maybe just as important an issue is that the consumer is hardly or not prepared to pay extra for a more ecologically sound food product. In particular the subtle distinctio n - more ecologically sound - appears not to appeal to them. In practice, only the purely alternative or ecological agriculture successfully insists on higher prices. Until today this is only a very small market sector: even in a ‘food critical’ market such as in Germany the proportion of the biologically grown products was only two percent in 1994. As we said, an intermediate form - a less-sprayed potato, a more extensively bred cow - does not succeed in obtaining a higher market price. The con sumer simply is not interested. In addition, agricultural products are basic products between which the typical consumer has hardly or not been taught to distinguish, which makes it practically impossible for the supplier to introduce a noticeable distinction. An energy-saving dish-washer or a detergent with less phosphates can be advertised and sold as such, and their higher prices will be taken for granted. For a more environmentally sound agricultural product this cannot be claimed or or ganised quite as easily. The market for agricultural products has no premiums. There are only discounts. In short, the above means that for agricultural entrepreneurs, for farmers and market gardeners, ‘the environment’ only manifests itself in additional costs and never in additional proceeds. This has two important consequences, which I wish to discuss here: 1) environmental policy meets with wide resistance among farmers and market gardeners, and 2) is it not the market but the governmen t which will have to show the way to a change for the better.