Taking a green leaf out of The Netherlands

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THE Netherlands has an agricultural industry to emulate. In spite of it being such a small country, it is the second largest agricultural exporter in the world, after the United States.

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nevanji madanhire
 

THE CENTRE SPREAD

BY NEVANJI MADANHIRE

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The horticulture industry as a whole is responsible for about 20% of the Dutch balance of payments surplus.

When one compares its natural resources, not with those of the US, but with those of Zimbabwe, one cannot help, but feel the relevance of the old Shakespearian adage: “It’s not in our stars, but in ourselves that we are underlings.”

(By the way, many people tend to think Holland is The Netherlands, much as many people here in Zimbabwe tend to equate England to Britain. Holland constitutes just two provinces of the country.)

Indeed, The Netherlands is such a small country, measuring only 41 528 sq km of which only 872 088 ha or 21,96%, is arable.

Zimbabwe, at 390 757 sq km is almost 10 times larger, its arable land constituting 3 580 000 ha.

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The Netherlands is heavily populated at 16,8 million in such a small area; in comparison Zimbabwe is an empty territory at
12,7 million, 4 million less people than The Netherlands.

Zimbabwe’s agricultural potential is vast, but bad policies stymie its growth.

The Netherlands has few natural resources; besides the arable land, it lists petroleum and natural gas as the only others. Zimbabwe, on the other hand boasts a superfluity of minerals including coal, chromium ore, asbestos, gold, nickel, copper, iron ore, vanadium, lithium, tin, platinum group metals and diamonds.

Besides the minerals, Zimbabwe has huge areas on which to grow a variety of cash crops including cotton, tobacco, maize, wheat, coffee, sugarcane and peanuts. Other agricultural products include cattle, sheep, goats and pigs.

The Netherlands has few such crops; only grains, potatoes, sugar beets, fruits, vegetables; and livestock.

But, while The Netherlands’ gross national product (GNP) is €607 billion ($910 billion), Zimbabwe’s is miniscule and no reference book states it. The current Zimbabwean national annual budget is pegged at slightly over $4 billion.

But what explains this success?
According to The Netherlands Ministry of Economic Affairs, at the heart of Dutch success is an ambitious clear, well-spelt out enterprise policy which says the country should be the location where enterprises can grow and innovate; where knowledge flows and where sustainable solutions are developed.

The success of the enterprise policy is pinned on generic policies that involve a sound fiscal policy, less regulation and sustained education.

The policy, very importantly focuses on the country’s strengths; it has identified 10 top sectors to concentrate on, without ignoring the other sectors which are viewed as giving more scope for businesses.

The policy is centred on what is called “The Golden Triangle”; which describes the interaction of production, trade, plant breeding, supply, research, the government and banks in Public Private Partnerships.

In comparison, Zimbabwe’s enterprise policy is murky. In the past 14 years investors have baulked at an ill-spelt-out indigenisation and economic empowerment policy which has seen local investors waiting in the shadows to grab 51% of any foreign investment.

In the aftermath of the July 31 2013 elections which the ruling Zanu PF party supposedly won with a landslide, attempts have been made to temper the policy, but contradictions still abound on its interpretation almost 10 months after that election.

The agriculture policy is skewed towards tobacco and the staple maize. Cash crop farming was adversely affected by the land reform programme that saw established commercial farmers kicked of their land to be replaced by inexperienced people.

But The Netherlands’ greatest success story must be in agriculture, particularly horticulture.

Last year, the country exported €79 billion ($118,5 billion) worth of agricultural products of which 39% was from horticulture, equaling €7,9 billion ($11,85 billion) in 2012.

Of this, the production value of floriculture was €5,3 billion ($7,95 billion) while that of fruits and vegetables was €2,6 billion ($3,9 billion).

Horticulture exports raked in €16,5 billion ($24,75 billion) while imports comprised €8,2 billion ($12,3 billion). This contributed 20% to the Dutch trade surplus. Interestingly much of the products it exported are not grown in the country.

The Dutch flower industry has been described as imposing.
The Dutch flower industry has been described as imposing.

Cacao for example is imported from countries such as Indonesia and the Ivory Coast and is processed into coffee and chocolate for export at much added value. The same applies to flowers which are imported from countries such as Ethiopia and Kenya and then repackaged for export.

Considering Zimbabwe’s huge agricultural potential, it seems the country’s fortunes can be turned around very quickly by this agricultural sector if an enabling environment is created.
The Netherlands’ agricultural hectrage was distributed as follows:
— 10 000 ha horticulture in greenhouses
— 5 000 ha vegetables
— 5 000 ha cut flowers, pot plants and bedding plants
— 83 500 ha horticulture in the open air, of which:
— 23 000 ha flower bulbs
— 17 500 ha ornamental trees and plants
— 19 000 ha fruit
— 24 000 ha vegetables
— 66 ha mushrooms.

It is on this intensive use of land that The Netherlands lays claim to being the world’s second largest agricultural exporter after the United States.

Imagine what Zimbabwe could do with its vast land if the attitudes and policies were right!

An agricultural economist at the University of Wageningen in The Netherlands, Petra Berhout said for a nation to attract investment [both local and foreign] in agriculture there must exist a basic matrix that ensures the investor makes a profit.

In an interview last week at the university office in The Hague, she said without an incentive to invest, organisations simply would keep their money and invest it in countries with the right atmosphere.

Food insecure countries, found mostly in Africa and East Europe she said, failed to attract investors because they lacked a viable production chain that includes the availability of basic materials, such as seed, fertilisers, labour and knowledge and the incentive to invest.

“There should always be a close relationship between research, fieldwork and solutions” she said stressing the importance of agricultural extension services and education.

The Ministry of Economic Affairs calls this “The Golden Triangle”.

It describes the tradition of cooperation between government, business and technology institutes. The universities such as Wageningen are constantly researching on how farmers can produce better crops and better yields.

The education of farmers is a constant so that they are nurtured into true entrepreneurs who innovate and grow better.

Running concurrently with the business of growing crops is the production of starting materials. These include seed, fertilisers and other necessary inputs.

The Netherlands is world leader in starting material production with a turnover of €2,1 billion (US3,15 billion) last year while export propagation materials equaled €1,6 billion ($2,4 billion).

The enterprise polices is also tethered on a policy of internationalisation and cooperating value chains. The country has created synergies with other countries strong in horticulture. In Africa, these include South Africa, Tanzania, Kenya and Rwanda, but it cooperates with other countries in South America.

A plane load of flowers, for example, flies into Amsterdam from Kenya every day, while Rwanda provides mainly potatoes. South Africa and Tanzania also provide flowers.

Interestingly these flowers are not only for the Dutch market, but are blended with local ones and repackaged for export.
Zimbabwe also recently exported flowers to The Netherlands, but not at the same grand scale it used before the turn of the millennium.

Internationalisation has also enabled The Netherlands to ward off international competition by the development of new business models with distinctive products.

Klaas Yohan Osinga an expert lobbyist for LTO Nederland (Land- en Tuinbouw Organisatie) the Dutch Federation of Agriculture and Horticulture, an entrepreneurial and employers’ organisation, says The Netherlands has always been a trade oriented country.

It is this market orientation that has made it the hub of agricultural trade. It is, for example, cocoa capital of the world although it doesn’t grow any cacao. It attracts to its shores any farmers who produce and provides them an open market. The Netherlands for example doesn’t grow roses, but has partnered countries that grow them such as Kenya.

The Netherlands supports not only its own farmers, but those abroad as well through an organisation called Agriterra.
“Agriterra’s approach rests on the idea that effective lobby results in a more favourable business climate for farmers.

Improved legislation is a prerequisite for fair prices for agricultural products, formalises land tenure rights, eliminates unfair middle-man trading, and corrects adverse fiscal regimes.
“Those who participate in policy making can exercise influence by steering investments in infrastructure and agricultural education, or by improving the situation of rural women and young farmers. All this ensures that farmers produce sustainably for their families and for a growing population.”

Agriterra runs projects with poor cotton farmers in Zambia and other parts of the world.

Floriculture thrives

Perhaps the pinnacle of the Dutch horticulture industry and its internationalisation is FloraHolland, which at Aalsmeer provides the biggest flower auction floors in the world.

The Dutch flower industry has been described as imposing. It says FloraHolland is a growers’ cooperative of 5 000 members around the globe which enables its members to receive the highest possible price for their flowers and plants.

It directs its services to all its suppliers and buyers nationally and internationally.

It says annually 12 billion flowers and plants are purchased by about 3000 customers. Ornamental flowers have a production value of €4,9 billion ($7,35 billion) and an export value of €5,9 billion ($8,85 billion). Ornamental plants are imported to the amount of €1,2 billion ($1,8 billion).

About 75% of the turnover in cut flowers is produced on Dutch soil while the remaining 25% is produced elsewhere and imported from about 60 other countries.

The Dutch floriculture industry, because of its internationalisation and global trade concentration, determines the global standards regarding products, quality and the environment. Product innovation and strict quality policies lead to high-quality and sustainably produced flowers and plants.

Zimbabwe should emulate the Dutch horticulture perspective. It should internationalise rather than indigenise; create a cooperating value chain, ensure sustainability in the whole chain and pursue market renewal and new business models.

But all this will work if it works together with farmers with minimal regulation, but a lot of investment in infrastructure.

5 COMMENTS

  1. The north including Netherlands are sustained by African natural resources, how? The aftermath of imperialism destroyed our system, technology and sustainance. Our growth is be inversely proportional to northern growth because they depend on what we are not doing to ourselves. Its like a nanny paid only to carry the baby, when the baby starts walking thats the end of her job.

  2. Zim wil only be able to start reconstruction when ZPF chefs say “”enough loot; lets stop and retire””

  3. Policy and will go 2gether…we have so much to learn. Only if we can lean to differentuate between policy and politics…

  4. Nevanji Madanhire, well well, nice breakdown, please go further and tabulate the composition of ownership, Out of those billion Euroz how much is then paid out as foreign dividends or is all the processes locally owned, spell that out. I quote your statement here and want you to compare to what our government has been saying Quote:

    “Cacao for example is imported from countries such as Indonesia and the Ivory Coast and is processed into coffee and chocolate for export at much added value. The same applies to flowers which are imported from countries such as Ethiopia and Kenya and then repackaged for export.”

    Beneficiatian is the catch word in Zim. that’s what they do to products they steal from Indonesia, Ivory Coast, Ethopia, Kenya etc. Imagine the lost REVENUE to those countries because of their fear of empowerment and development. Imagine the lost employment opportunities which is then created in a foreign country to none indigenous owners of the products/resources.

    Thank you for showing us that we nedd to support our govt efforts to empower the locals, thank you Nevanji, for unintentionally giving us light the exploitative tendencies of the west. God bless you son

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