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ACM: without further action, the sustainability goals for the Dutch agricultural sector may be out of reach

Summary

  • ACM has identified that, without further action, the Dutch agricultural sector is unlikely to meet its sustainability goals for 2030.
  • Further progress towards a more sustainable agricultural sector will only succeed if the price difference between conventional products and products with sustainability labels becomes smaller, and if international buyers start paying a premium for products with Dutch sustainability labels.
  • ACM calls on the Dutch Ministry of Agriculture, Fisheries, Food Security and Nature (LVVN) to stimulate both domestic and international demand for products with Dutch sustainability labels.

The Netherlands Authority for Consumers and Markets (ACM) has identified that, without additional efforts, the Dutch agricultural sector is unlikely to meet its sustainability goals for 2030. Further progress towards a more sustainable agricultural sector will only succeed if the price difference between conventional products and products with sustainability labels becomes smaller, and if international buyers start paying a premium for products with Dutch sustainability labels. Outside of the Netherlands, Dutch sustainability labels are often not widely recognized. As a result, these certified products are often exported at the lower price of conventional products. These are some of the conclusions of ACM’s fifth and final Agro-Nutri Monitor.

ACM therefore calls on the Dutch Ministry of Agriculture, Fisheries, Food Security and Nature (LVVN) to implement the following recommendations:

  • Stimulate domestic demand for products with sustainability labels.
  • Stimulate the sale and profitability of products with Dutch sustainability labels outside the Netherlands.

Martijn Snoep, Chair of the Board of ACM, adds: “Without any additional measures, the sustainability goals for the agricultural sector may be further out of reach. Farmers that transition to production methods with reduced environmental impact incur extra costs, but, in many situations, are not sufficiently compensated for that transition. Many consumers are not willing to pay more as long as they have more-economical, conventional options. That is why the price difference must be reduced.”

The extra costs of the sustainability transition are still insufficiently covered

The fifth monitor continues to show that a cost-covering, let alone profitable, premium for sustainability efforts cannot be taken for granted. In 2024, many farmers faced sustainability transition costs that exceeded the premiums they received. This is particularly evident in organic production, where the average premium often falls short of covering the additional costs incurred. The study found this to be the case for organic potatoes, green beans, red cabbage, carrots, milk, cheese, and pork.

A more positive picture emerges for products certified under sustainability schemes such as Better for Nature & Farmer (in Dutch: Beter voor Natuur & Boer), On the Way to PlanetProof, and the one-star rating of the Better Life label (in Dutch: Beter Leven-keurmerk). On average, farmers participating in these schemes receive a premium that covers the additional costs they incur. However, some farmers report in a survey that they consider the compensation insufficient.

ACM’s recommendations for increasing both domestic and international demand

Reduce the price gap

Consumers value sustainability, but are often not willing to pay more for agricultural products with reduced environmental impact as long as more-economical, conventional products are available. A smaller price difference will make products with sustainability labels more attractive for consumers. ACM therefore reiterates its call for policies that permanently narrow the price gap between conventional products and products with sustainability labels, for example by including the products’ environmental costs and societal costs in consumer prices. This would make conventional products relatively more expensive, as these costs are currently not fully reflected in retail prices.

Improve the export position of products with sustainability labels

A large share of Dutch agricultural products is sold abroad. People outside the Netherlands do not always recognize or are not always familiar with Dutch sustainability labels. As a result, products carrying these labels are often exported and sold at the lower price of conventional products. In addition, consumers in other countries often prefer local products with sustainability labels from their own countries. In order to fix this problem, ACM recommends making Dutch sustainability efforts better recognizable and better comparable. Currently, the Dutch market features a wide range of sustainability labels, which can make it difficult for consumers to distinguish between them. Reducing the number of labels and promoting a limited set of clearly recognizable labels would make it easier for consumers to make informed choices. For export markets, similar Dutch labels could be grouped under a single overarching label to strengthen their recognition abroad. Clear and verifiable indicators could also help communicate the benefits and impacts of more sustainable production more effectively. In addition, producers' organizations and trade associations could be supported in applying for existing EU promotion grants for certified sustainable products.

Improve the distribution of costs and revenues

ACM recommends further encouraging cooperation between producers in order to reduce costs and improve economies of scale, particularly for smaller firms. Joint activities such as logistics, processing, knowledge-sharing, and equipment use can lower costs and help reduce consumer prices. In addition, cooperation can strengthen producers’ bargaining position vis-à-vis larger buyers. This can improve the distribution of costs, revenues, and margins across the supply chain, and enable producers to retain more of the value generated by their sustainability efforts.

Final Agro-Nutri Monitor

The Agro-Nutri Monitor was launched in 2020, and provides an overview of the price, cost and margin trends in various agricultural supply chains. This fifth Monitor identifies many of the same issues highlighted in previous editions. Once again, ACM provides recommendations to the Ministry of LVVN on how to make the Dutch food production chain more sustainable. In a letter to the Minister of LVVN, ACM emphasizes the need for a comprehensive policy approach from the Ministry, and notes that the recommendations made in earlier editions of the Monitor remain relevant today. This fifth edition marks the final Agro-Nutri Monitor in the series.

See also