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The Dutch agricultural sector in an international context, version 2021
22/01/2021

Despite the corona crisis, the value of agricultural exports grew by an estimated 1 percent in 2020 compared to 2019. Total goods exports fell by approximately 7 percent in 2020. Statistics Netherlands and Wageningen Economic Research (WUR) report this on the basis of a joint study commissioned by the Ministry of Agriculture, Nature and Food Quality (LNV).

Download the full publication here.

This article on Agrimatie.nl contains a selection from the publication to be downloaded above; "The Dutch agricultural sector in an international context, edition 2021". The different chapters and four specific trade groups are shown separately and can be clicked on via the box on the right side of this screen. All these chapters, sections or product groups are also from this edition. For a correct interpretation of the figures, reading the downloadable version of the report is preferred. For the literature references you can also consult the downloadable report.

In this article you can read the introduction and the summary. 


Introduction
Every year, the Minister of Agriculture, Nature and Food Quality (LNV) looks back at the international trade performance of the Dutch agricultural sector in the previous year. Traditionally, this takes place in January during the Grüne Woche, the largest agricultural consumer fair in Europe and beyond. In the run-up to the Grüne Woche, Wageningen Economic Research and Statistics Netherlands are making an estimate of international performance for the Ministry of Agriculture, Nature and Food Quality. That is also the case this year, although the Grüne Woche will have a different character as a result of the corona pandemic and will take place digitally this year.

In addition to insight into the export and import figures, for both agricultural and agricultural-related goods, this year&39;s publication contains three sections highlighting a trade topic. The topics for this edition are the consequences of Brexit for Dutch agricultural trade, an analysis of agrologistics and the regional function of the Netherlands in the EU.

This publication has been made possible thanks to the work of many authors. The draft publication has been read and commented on by various people within and outside the organizations involved. We would like to thank everyone for their efforts. 

Summary

Key Points in the Trade of Agricultural Goods
• The trade of agricultural goods was not hit as badly by the coronavirus pandemic as the general goods trade. This applies at the global, European, and Dutch level. See Section 2.5

• The Dutch export of agricultural goods (primary, unprocessed goods and secondary, processed goods) is estimated at 95.6 billion euros for 2020, which is 1.0% higher than in 2019 (94.6 billion euros). (Figure S.1). This is a new record and can be attributed to price increases; the trade volume of both import and export has decreased slightly. See Section 3.1

• The estimated 95.6 billion euros export of agricultural goods consists of 68.3 billion euros of exported goods of Dutch origin and 27.3 billion euros of re-export of foreign agricultural goods. Compared to 2019, this is a reduction of 0.6% of the export of goods of Dutch origin and a re-export increase of 5.1%. Goods of Dutch origin also include prepared products (like chocolate) based on imported raw materials (like cocoa beans). See Section 3.2

• These are estimates for all of 2020 on the basis of 10 months of observations (import and export statistics). If the second wave of the coronavirus pandemic strongly impacts the world trade in November and December 2020, then the 1% increase of exports might still become a decrease.

• It is expected that the import of agricultural goods will also set a new record. The import value for 2020 is estimated at 67.1 billion euros, a growth of 4.5% compared to 2019 (64.1 billion euros). Agricultural import has increased by 61% in the period 2008-2020. This is more than the agricultural export, which increased by 47% in the same period. See Section 3.1

• The trade surplus of the Netherlands with countries in the EU 27 is 27.5 billion euros, 13.2 billion euros of which is with Germany. The trade surplus with the rest of the world (including the UK) is 1 billion euros (figure S.1).




Figure S1: Import and export of agricultural goods by region in 2020. Source: Statistics Netherlands: until October 2020, estimate November - December 2020 by WUR and Statistics Netherlands. • As in previous years, most of our agricultural exports went to our neighbouring countries in 2020. 26% of the estimated total export is for Germany (24.6 euros). Belgium is in
second place with 11% (10.6 billion euros). Following them are the United Kingdom (UK) (8.4 billion euros, which is 9%) and France (7.6 billion euros or 8%). These four nearby countries receive 54% of the total Dutch agricultural export, the same percentage as in 2019. See Section 4.1

• The EU — excluding the UK — is by far the largest export market for the Netherlands, with a share of 67% in 2020. However, the percentage has decreased as a result of Brexit. It is the first time that the trade with non-EU countries shows a trade surplus instead of a trade deficit because the UK is now a non-EU country as a result of Brexit. The Netherlands has a sizable agricultural goods trade surplus with the UK. See Section 4.1

• Ornamental cultivation (9.5 billion euros), meat (8.7 billion euros), dairy products and eggs (8.3 billion euros), vegetables (7.1 billion euros), and fruit (7.0 billion euros) are the most important goods categories for export. Like in 2019, the top five is 43% of the total export.

• Just like last year, the most important category for import is fruit (7.4 billion euros), followed by natural oils and fats (6.2 billion euros), oleaginous seeds and fruits (4.6 billion euros), drinks (4.5 billion euros), and cocoa (4.2 billion euros). Together, these product groups are responsible for 40% of the total import of agricultural goods.

• See chapter 5 for the developments by product.

• With regard to agricultural goods, the Netherlands earns most from the export of ornamental cultivation, such as flowers, plants, flower bulbs and tree nursery products, namely 6.1 billion euros. The figure pertains to the export value minus the value of the import of goods and services that are required to export and produce the goods. There is a substantial gap between floriculture goods and the next-largest categories: meat (4.6 billion euros), dairy products and eggs (4.3 billion), and vegetables (3.9 billion euros). On average, agricultural export yields 43 eurocents per euro of export value. If re-export is excluded, it is 60 cents. See Section 5.2

Key Points in the Trade of Agriculture-Related Goods
• The Dutch export of agriculture-related goods (tertiary agricultural goods, such as agricultural machinery and fertilisers) has been larger than Dutch import for many years, which has resulted in a trade surplus. In 2020, the export value of agriculture-related goods decreased slightly to 9.79 billion euros (-0.6%). The estimated import of agriculture-related goods is expected to reach a new record (4.49 billion euros), 2.1% more than in 2019. As a result of these developments, the trade surplus in agriculture-related goods has decreased slightly, to 5.29 billion euros. See Section 6.1

• As with the agricultural goods, Germany, Belgium, France, and the UK are the top four destinations, with the US in fifth place. These five countries account for 48% of exports in 2020. See Section 6.2

• The export of agricultural machinery (25%), machinery for the feed and food industry (19%), greenhouse materials and fertilisers (both 18%) together account for 81% of the total export value. In an absolute sense, the largest growth was in the export of greenhouse materials (0.3 billion euros). See Section 6.3

• In 2020, the sum of the estimated export of agricultural goods and agriculture-related goods (the “broad” agricultural export) amounts to 105.4 billion euros, this is slightly higher than the 104.5 billion euros of 2019. See Section 6.1

• The average euro export value of agriculture-related goods of Dutch origin yields just as much for the Netherlands as the average euro export value of Dutch agricultural goods: 60 eurocents. However, for the total export, including re-export, the returns are higher for agriculture-related goods (47 vs 43 eurocents). This is because there is less re-export of those goods (for which the yields are significantly lower than for exports of Dutch origin). See Section 6.4

• With regard to agriculture-related goods, the Netherlands earns most from the export of agricultural machines and machinery for the feed and food industry. For each euro of export, machines for the feed and food industry and greenhouse materials are most profitable. Without re-export, greenhouse materials are most profitable at 66 eurocent export returns per euro export value. See Section 6.4


Sections

Brexit
• Since the Brexit referendum in 2016, uncertainty and anticipation of the impending Brexit have had a negative impact on the British economy and on the bilateral trade with EU countries. The Dutch figures about the agricultural trade with the UK align with this pattern. Since 2015, agricultural trade with the UK, at 13% (export) and 20% (import), has developed more slowly than the overall Dutch agricultural trade. See Sections 7.2 and 7.3

• From 2021, customs and border formalities and other non-tariff barriers will hinder the agricultural trade between the Netherlands and the UK. Economic literature mentions that non-tariff measures (NTMs) in particular may hinder trade because companies suddenly have to comply with two standards of legislation and regulations. The impact of NTMs is even greater than the impact of import tariffs (which were not included in the agreement) at the level of the WTO standard. NTMs cause additional customs and border formalities for export to the UK, and this is mainly a problem for time-bound fresh goods (long traffic delays, certificates, inspections, checks, possible rejection). See Sections 7.5 and 7.6

• The UK is an important buyer of Dutch agricultural goods. At the EU level, the Netherlands is the top exporter to the UK, and it is the destination that is most profitable for the Netherlands after Germany and Belgium. Finally, the UK is also a typical agricultural destination: of all major destinations for the Dutch goods export, the UK exports are the most agricultural in nature. See Section 7.4

Agro-logistics and Agro-transport
• The process of transport, storage, distribution, and the management of the agro-flows — food and non-food — in the full agri-chain is called agro-logistics. The Netherlands is a major agro-logistics distribution hub in the world, and has one of the best transport infrastructure networks. The Dutch ports, processors, and transporters know exactly how they can get agricultural goods to the consumer. See Section 8.1

• The bulk of the import is initially meant for the Dutch market; a smaller part is for re-export. 22% of the incoming transport of agricultural goods is in transit, and in contrast with re-export, transit goods remain under foreign ownership. For outgoing transport, the proportion of transit goods is as high as 33%. The proportion of transit goods is even higher for food stuffs. See Section 8.2

• In relation to the combined import of agricultural goods and foodstuffs, about half is sea shipping and about a third road transport. This is exactly reversed for export. Top agricultural products that are imported by sea (by weight) are corn, soy beans, palm oil, oil cakes, and wheat. Top agricultural products that are exported by road are (by weight) tomatoes, onions, house plants, eggs, and processed potatoes. See Section 8.3

The Role of the Netherlands in Intra-EU Trade
• As a result of the ever-increasing EU, the Netherlands now has free access to a sales territory of about 513 million consumers. In the immediate vicinity, there is a growing sales market of about 229 million consumers. About 45% of the agricultural export of the Netherlands in 2020 was destined for its neighbours (the UK, Belgium, Germany). See Section 9.1

• For seven countries in the EU, the Netherlands is the most important country of origin for the import of agricultural goods. See Section 9.3

• The meat industry in Germany is also supplied by Dutch slaughterhouses, and products are also returned as cold meats to clients such as supermarket and food services. See Section 9.4

• The Netherlands is the fishing export hub of Europe: fish caught by its own fleet and farmed products (particularly mussels, oysters, and eel) as well as the previously imported products are exported from the Netherlands to the rest of Europe and beyond. One explanation is the position of the Netherlands on the fish-rich North Sea, with its own fishing ports and the global port of Rotterdam, as well as the good connections to the hinterland of Europe. A second explanation is that the Dutch fishing cluster is large and well equipped. See Section 9.5

• To allow for an optimal integration of the international supply in the Dutch supply, the Dutch trade houses in fruit and vegetables have established a worldwide trade network including Africa and Latin America. This allows a fruit and vegetable trader to provide a total package to its clients all year round. See Section 9.6

• The domestic grain production of the Netherlands is not sufficient to meet the total demand for feed and human consumption. The three most important countries of origin for the Dutch feed and food grain imports are Germany, Ukraine, and France. See Section 9.7




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