We share the most interesting and inspiring stories of the international exchange in the Netherlands under the NEWBIE project, the Horizon 2020, organized by the Wageningen Research Institute in October 2021
HYBRID EXCHANGE: participants from Bulgaria, Ireland, Scotland and the Netherlands were present on the field, and online presence from the United Kingdom, France and Germany.
Main topic: Access to land and capital for new entrants in the Netherlands.
Key points: very innovative and smart business models and structures for the entry of newbies; crowdfunding; cooperatives for the purchase and management of expensive agricultural land; combined financing by different funds, banks, crowdfunding and savings; innovative market access; diversification; entrepreneurship in farming
Brief general information about farming in the Netherlands presented by the newbie advisor and Steering Group member Maria van Boxtel (Land&Co):
- Almost half of the land in the country is used for agriculture (about 1.8 million hectares)
- 2.1% employed in agriculture out of 17.4 million inhabitants
- 53,000 farms; 1,600 of them organic
- Small farms on average (1 to 5 employed)
- Agricultural land is expensive – an average of over 65,000 € /ha
- Production rights are paid in advance (for dairy cows, pigs, chickens)
- Annual farm incomes vary, but average net income is around € 31,000 / year
- Paid advisory services, no public free services last 20 years, about 80 euros / hour.
- 5 -10% new entrants
- Farmers and the self-employed usually take care of a normal pension on their own. Otherwise, every citizen of the country after the age of 67 is entitled to a pension, which is 70% of the minimum wage if single and 50% each for a couple.
The newbies we met are well- educated, highly motivated to farm as efficiently as possible, with a focus on local consumers and environment care. They are very creative to achieve access to land and capital.
Farms visited and meetings with new entrants:
- Pieter Lammerts, De Nieuwe Ronde, self-harvesting and crowdfunding
Pieter was born in Amsterdam, with a degree in organic farming from the University of Wageningen, without his own land, but with a strong willingness to be a market gardener.
His innovative approach: self-harvesting and crowdfunding
- He started by renting land close to Wageningen (a university town with 38,000 inhabitants), he grows about 40-50 different types of vegetables and customers become members for an annual subscription of 210 euros, which gives them access to self-harvesting. They could harvest various vegetables such as cabbage, carrots, potatoes, pumpkins, asparagus, spinach, salads, green spices; there are even strawberries, etc. at a time that is convenient for them and as much as necessary for the household. The tools are provided by the farm.
- There are 300+ members who are happy to get fresh food grown nearby. You can go to the farm on foot, by bike or car, pick up whatever and how much you need and be happy to support local producer of agricultural products. You can even “adopt” a hen.
- This model allows the farmer to reduce the costs for harvesting and delivery close to zero; the members do it by themselves. It also reduces the working hours and Pieter is not permanently busy in the farm.
- Recently Pieter has purchased 1.5 ha land through crowdfunding. Through personal contacts with people who know him and trust him, Pieter raises funding for the land. People buy a certificate that has given ownership in the amount they bought. It is usually 1000 euros. The written contracts are signed with each member. They can choose an annual interest rate from 0 to 2% or a discount on the subscription for harvesting. The certificates are long-term
- Key for such a model: the location is vital and there are should be a community who are aware of the importance of local food production and enjoy self-harvesting. The Dutch mentality to respect the work and achievements of others is also important.
- De Patrijs farm in Vorden (combined funding) and innovative shops in Zutphen
Joanna is an ecologist and researcher. She has taught at the Agricultural High School and the Wageningen University. She wants to put into practice organic farming and a multifunctional farm. Two uncles of her husband Johannes have no heirs. They are third-generation farmers, the farm dates back to the 1920s, with 50 ha land and 160 dairy cows. They were happy that the couple wanted to continue farming and would sell her the farm for 4 mln euros.
- Farm transition and entrepreneurial approach
Joanna and her partner are very innovative and creative. The husbandr sold his previous successful business for 500,000 euros. Several banks initially refused financing, despite a very well thought out and presented business plan. Both of them rented premises and bought a small mobile dairy, with second-hand equipment. They buy milk from the farm twice a week and produce cheese.
- App shops for members
In March 2021, they opened their first innovative shop, and in less than a year they already have 5. The shop we visited is in the very affluent and beautiful city of Zutphen, in a building of an old school. For an annual membership of 5 euros the self-serving shop is open by a phone app. Now they have 800 members. The shop has vegetables and fruits, meat in the freezer, eggs, milk, packaged cheeses, juices, pasta, even beer. There are price lists available. Members have access to the shop at any time of the day. They take what they need, download, calculate their prices and put it in the e-basket of the application. At the end of the month, the members transfer the money for the products they took. The delivery is twice a week, all products are from neighboring farms. And because it is not really a store where you pay immediately, but it is a distribution point, the permit for this type is given very easily, there are no additional taxes; the rent is affordable – about 100 euros/month. This model proves that they are successful entrepreneurs, know business and can be trusted.
The next step is crowdfunding – members of a cooperative to purchase a certificate of land ownership. Through it, they managed to raise 500,000 euros.
A bank liked their business plan and achievements so far and can finance them with 1.7 million euros.
They attract 2 more land funds called Aardpeer/BD grondbeheer , which can provide them with a long-term low-interest loan for a total of 0.75 million euros. The National Public Fund for New entrants can provide them with 0.4 mln. More effort and funding will be needed to raise the amount, to buy the farm and start their plan for transition to a sustainable farm
- Hooilanden multifunctional biofarm with innovative land fun
- The income of the farm is 50% from organic dairy farming, 25% from providing nice premises for training and workshops with catering, 25% from care farming – the municipalities sign a contract with the farm and pay for employment and care for vulnerable groups – people with any disabilities, elderly people before retirement, people with addictions, etc
- Cows are a typical Dutch breed, due to organic grazing their productivity is lowered by half, but they are used for both milk and meat (double purpose cows).
- To provide enough land for an organic farm, they applied an innovative model. They set up a cooperative to buy land, independent of the farm. The cooperative is a legal entity, with members buying a co-ownership certificate of 25,000 euros each. The land they buy is over 200,000 euros. One of the co-owners is the farmer Lodewijk Pool, and because of his personal contacts and prestige, 7 more people have invested in the cooperative. The farm rents all the land from the cooperative and pays rent of max 2% per year. The cooperative at its annual general meeting decides whether to give a dividend or to accumulate the amount to use in the future. This reduces the risk that if the farm goes bankrupt, the cooperative can give the land to another farmer or sell it.
- Lodewijk does not want to work for banks, but for his customers and the community. That is why he is not the owner of the land, but only a co-owner in a cooperative and a tenant.
The participants in the exchange discussed their impressions of what could be used from these innovative approaches.
In Bulgaria the crowdfunding is used for charity and social causes however it Dutch model could be very useful for newbies to allow them easier access to capital. Self-harvesting is also worth to think about, in particular in the depopulated communities with old farmers. The Dutch entrepreneurial thinking and smart acting is so inspiring and could be a nice example for Bulgarian agricultural vocational schools and universities.