The European Commission has given the green light for the Dairy Farming Extensification Subsidy Scheme (Sem). The Ministry of Agriculture, Food Security, Fisheries and Nature Management (LVVN) announced this on April 14. The scheme is expected to be published in the Government Gazette shortly and opens on June 1. A total of €627 million is available.
The SEM is intended to reduce emissions of ammonia and greenhouse gases while simultaneously alleviating pressure on the manure market. This is a relevant development for the animal feed sector, as the scheme can have direct consequences for the size of the dairy herd and, consequently, the demand for feed.
Fewer dairy cows, impact on feed demand
The scheme targets dairy farmers who wish to continue producing but are currently facing financial difficulties. Participants reduce their herd by 10 to 20 percent over a period of three years. In return, they receive compensation for loss of income and for the permanent cancellation of phosphate rights.
This temporary reduction in the livestock population can lead to a decrease in the demand for cattle feedAt the same time, room is created for companies to restructure their operations and potentially run more efficiently, for example through ration optimization and a reduction in crude protein content.
Part of broader manure policy
The scheme does not stand alone, but is part of a broader package of measures aimed at relieving the manure market. For example, sector parties are focusing on structural derogation, a protocol for gaseous losses, and the covenant for the reduction of crude protein in dairy cattle rations (Voerspoor). The focus on Renure also plays a role in this.
For compound feed companies and other chain parties, this underscores the increasing focus on emission reduction and efficient nutrient use.
Subsidy and conditions
The subsidy consists of two components:
- €1.606 per dairy cow per year as compensation for loss of income
- €110 per phosphate right for full cancellation
Based on average milk production, the total compensation amounts to approximately €9.757 per dairy cow. Payment is made in annual advances over a period of three years.
After this period, dairy farmers can adjust their farm size again, depending on their strategy and market conditions.
Preparation and support
The Netherlands Enterprise Agency (RVO) publishes further information simultaneously with the regulation, including a calculation tool. In addition, online Q&A sessions are organized and accountants are actively informed.
Banks also play a role by offering tailored financing and investments for participating companies. This can contribute to further sustainability and future-proof business operations.
