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Rabobank:

"Structural changes necessary for healthy sector"

The sentiment towards greenhouse cultivation is positive at the moment. Yields have recovered in the past two years and investments are being made again in modernizing, extension, and innovation. However, the recovery is mainly due to external factors (weather, geopolitics, currencies) and not because of structural strengthening. Competitive pressure remains present, particularly out of Spain and Morocco. Expansions mainly happens in Eastern Europe. This is observed by Rabobank in a sector update.
 
"Long term perspective for the Dutch horticulture is neutral. The sector will at least need some years before the strengthening of their own supply and marketing structure will become effective.

The Dutch sector lacks chain direction. To make the sector healthy, structural changes are required. From inside the growers associations the first steps are now being taken by participating with the Federatie Vruchtgroente Organisatie (FVO)."

Dutch production greenhouse cultivation

The Dutch production of greenhouse cultivation is highly dependent on export, and Germany and the United Kingdom are the most important markets.

Dutch products do well in:
  • supply reliability
  • food safety
  • sustainability
  • high quality and complete assortment (during the entire year)
To keep on excelling in these areas the focus will have to shift even more to:
  • direction function
  • chain cooperation
  • marketing concepts
Economy
Expansion plans and modernization of greenhouse cultivation companies are volatile and dependent on yields realised. At this moment we see a pick-up in the willingness to invest. The Rabobank expects an increase in the volume of certain product groups, disrupting the market balance.

The demand for local and sustainable grown products, such as organic, is increasing. We expect the growth in organic to continue, but it will not become mainstream. The market is appealing however.

Technological innovations in the areas of energy, cultivation, automation and processing are increasing.

Durability
Consumers, retailers, NGOs, but also the government have raised their requirements of the manner of production of greenhouse vegetables in the fields of:
  • crop herbicides
  • use of fossil fuels
  • water usage
Sustainable production is more and more becoming a prerequisite (licence to produce). To the sector this is a chance to distinguish itself from manufacturers from abroad.

The all year round cultivation of high quality products is still increasing (mostly tomatoes) by use of lightning (SON-T, but also led and/or hybrid). This makes the sector capable of delivering the added value and to meet the retailers wishes.

Use of cogeneration and/or boiler is often still necessary to fill the entire energy demand, including use of CO2, in an efficient and economical way.

Innovation
Technological innovations in the areas of energy, cultivation, automation, and processing are increasing.

Examples are:
  • robotisation
  • use of cameras
  • use of big data
The innovations in market concepts and marketing of the product are becoming increasingly important. Entrepreneurs are working on this together in growers associations.

Society
Scale enlargement causes social pressure because of:
  • rural integration
  • light pollution
  • transport
  • employment and housing of foreign employees
Detachment agencies need to be certified.

Legislation
Since January 1 2017 a new Activity Decree (flowing from the earlier BEMS) applies which deals with emission standards of gas-fired installations (gas boilers and cogeneration gas engines) with more than  MW nominal output.

Since January 1 the installations have to meet a number of new emission standards to keep the installation running within legislation. The owners (in bank financing or financial lease) or operators (in operational lease) of the installations are the parties required to meet the new rules. 


Purification obligation
As of January 2018 a water purification obligation for horticultural businesses applies.

This applies to:
  • drain water of substrate cultivation
  • drain water of earthbound cultivation
  • rinse water used for filtering (if drain water of fertilized irrigation water is used)

As of January 1 2018 horticultural companies have to treat these water sources for crop herbicides to a clearing percentage of 95% before draining the water. The water purification obligation applies to both draining to the sewer and draining to surface water.

Read about the possible consequences of Brexit for food and agricultural companies

Restructuring

At the end of 2015 the coalition Restructuring and Development Horticulture started. The goal of this joint operation is to ensure a future proof and leading position of the Dutch greenhouse horticulture. Satellites with each their own area of attention are there to achieve that goal.

The Rabobank is responsible for the 'satellite' restructuring with physical and mental restructuring as subparts, and has set up an internal project group for this purpose.

Source: Rabobank

Publication date: 3/7/2018

 


 

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