Global food exports have increased ninefold in the past generation and the Netherlands is the second biggest exporter after the U.S. But global food trade has become more than “just” moving goods from A to B. Although the Dutch agrofood sector faces challenges, it has the potential to keep its leading position in the future – if it rises to these challenges.
- The total Dutch agricultural exports exceeded one hundred billion for the first time in 2017. In the recently published Wageningen University and Research (WUR) report “From trader to forerunner – Rethinking the international positioning of the Dutch agrofood sector”, the authors claim that production and trade volume are no longer measures of Dutch export performances. They offer an alternative position of the Dutch agrofood sector in the world with the idea of broadening the trade agenda to include services, knowledge and investments.
- One of the proposals in the WUR report is the transition to sustainable food production. There are already signs that this shift to more sustainable food is promising. For instance, Dutch company Vivera’s first delivery of 40,000 plant-based steaks to the U.K. nearly sold out within a short amount of time and expects high demand in other European countries too.
- Food security is not exclusively an issue of food supply, but located on the nexus of water, energy, and climate. The Netherlands could offer valuable insights and expertise in those domains. For example, the United Arab Emirates will soon start reaping the benefits of an agreement made last year with the Netherlands on food, water and energy security.
- Although shipping is a major way to get food from A to B, these strategic pathways are increasingly vulnerable and could become chokepoints in the global food supply and threaten food security. Many routes where trade is concentrated are problematic, such as the Strait of Malacca – China’s lifeline – climate change and political tensions pose risk to traffic on this route. Similar problems can be identified in the Turkish straits. The Panama Canal region faces infrastructural problems. Furthermore, geopolitical and weather uncertainties lead to food price spikes, with an increasing number of potential disruptions to trade flows expected.
- Dutch food philosopher Michiel Korthals argues against the notion that the Netherlands should “feed the world” and pleads for food sovereignty of countries. First, because he sees a crisis looming for Dutch export, as he thinks that countries such as China and India will be able to produce food much more cheaply in a few years. And second, he warns that one country’s dependence on another country for food creates a power relation on a very fundamental matter and keeps countries from maintaining their own skills to produce food and produce locally.
Connecting the dots
Global food trade is vivid like never before. In terms of value, it has grown almost threefold over the past decade, and rates of growth are projected to continue to rise. At the same time, the international playing field surrounding the international agrofood trade is subject to large changes. Trade agreements are under pressure, protectionism is on the rise, political tensions threaten trade routes. Furthermore, new players will challenge current players. For the Netherlands, agrofood sector exports are a major contribution to its economy. Building a future-proof agrofood sector is of vital importance to the strategic position as a leading food nation. The following three points are all part of this process.
First, volume should not be the golden standard anymore. After the Second World War, the Netherlands made major improvements in modernizing agriculture and with the help of the government, it became very efficient at producing food on a large scale, creating the opportunity to manifest itself as a big exporter. At the recent presentation of the FAO’s 2018 Global Food Policy Report, Director-General José Graziano da Silva said facilitating the export of commodities to feed the world was a postwar imperative, but has become a synonym of industrialized processed food leading to malnourishment. Furthermore, increasing attention to sustainability and climate change has taught us that trade has become more than moving goods from A to B, considering the negative externalities. The need arises to reduce the use of energy and commodities in the agrofood sector. Also, other countries are now equally capable of creating bulk. A future-proof agrofood sector is thus not international and export-oriented but puts quality above quantity. Instead of being the second exporter in the world after the U.S., the Netherlands could become a world leader in sustainable and healthy food production.
This leads to the second point: the Netherlands as a transition expert. The country has been praised as a large and efficient producer of agricultural products, referring to the innovative strength of its agrofood sector, that is constantly capable of producing more with fewer inputs. Creating more with less is called “total factor productivity” and the Netherlands could valorize its knowledge and skills in this domain. As stated in the WUR report, Dutch diverse innovative solutions are useful in other parts of the globe and give the Netherlands the comparative advantage it needs to remain a leading food nation. A knowledge-intensive agrofood sector could export a combination of hardware (products), software (knowledge and employee training) and “orgware” (strengthening the local organization and agrologistic processes).
Third, a focus on local production and short food chains. The Dutch are well-known for their greenhouses and their knowledge on indoor food production. Considering that food consists of more than 60% of African foreign trade, local food production is a better option for the future. Currently, the Dutch agrofood sector only plays a small role in serving the growing markets of emerging countries, but could increase its contribution by exporting expertise on local production. Another option is for Dutch agrofood companies to produce food abroad, locally sourced and consumed. A case in point is the food company DSM, which produces food in a factory in Rwanda, thereby boosting the economic independence of the country.
With the above points, the Dutch agrofood sector has the potential to save its seat in the future as a leading player. In the future, its earning model could contain the production of sustainable, healthy food, food innovation and technology, and expertise in local food production.
- By becoming world leader in food innovation and scaling these ideas to other countries, the Netherlands might unlock the next Green Revolution, thus contributing to solving the problem of how to feed the next 10 billion in 2050.
- The Netherlands is one of the largest donors in the field of food security (World Bank, World Food Program, and International Fund for Agricultural Development). There is a growing awareness that direct investments in preventing hunger by developing local agricultural production are an effective tool in contributing to the region and halting migration.