Transition in ownership of land

The agricultural sector faces immense challenges and considerable pressure. The margins are under pressure and there are high demands in relation to the climate and environment. A keen pursuit of solutions has yielded potential initiatives but has not yet led to the breaking of the paradox in the system (pressure on returns and increasing costs because of societal demands). This is where it seems to get problematic in agriculture, because a production-driven approach to agriculture is still the most lucrative, being deeply rooted in the culture of this sector. This, however, leads to conflict with societal wishes. From a societal standpoint, humanity is now understanding that its consumption patterns have repercussions on the earth’s sustainability. That makes it a social problem. Such problems are being projected onto the agricultural sector because keys to the solution to these challenges lie within the agricultural sector. A situation arises where society sets targets and goals for agriculture in the form of a political agenda; however, the agricultural sector views this as top-down restrictions that affect its business revenue.

An important piece in solving the puzzle is to develop a business model that does not stimulate maximum food production but, rather, brings a natural balance between ecology and economy. The system currently only focuses on the output of agriculture and on making the production process as efficient as possible. In a more balanced system where input and output are more compatible, much of the challenges faced will disappear. To create such a system, there is a need for a fundamental redefinition of agriculture.

The following two important principles govern the necessary interventions in the current system:

1. Ownership; operating and thereby taking full responsibility and           
2. Learning capacity; agriculture that forms a conscious policy to expand continuous learning at all levels to optimize efficiency.

Ownership of the long-term strategy of development is currently instituted in the wrong location on the value chain, namely, on the periphery of agriculture. This is the source of many of the current problems. The Dutch agricultural sector is a highly robust and organized one. This has its benefits, but also deters the necessary transition. Corporations, which are mostly owned by farmers, are growing into large, influential organizations, both financially and politically. With the growth in their size and influence as well as in their willingness to aid the primary agricultural sector, they have solved many problems and challenges in time. This has, of course, also been in their own best interest. For farmers, it felt like a warm blanket. They did not need to worry about the challenges encountered. But they also, simultaneously, had to sacrifice their long-term strategic development. This has led to increased influence at the political and financial levels. At a more social level, this has manifested in the current behavior of farmers, who believe it is not their problem and, so, cannot find a solution for a problem that is not theirs.

Governmental policy has also contributed to the failure of the system. Due to the privatization of research and its sole basis of funding being co-financing, research has become unattainable for farmers. The cost of research is simply too high for individuals. To fund research, it is necessary to cooperate with corporations. However, corporations only invest in research that has a positive outcome for their business; they will not fund their own opposition.

The above situation almost logically ends in a failure to develop a disruptive business model. To develop such a model, the independence of perennial routes must be guaranteed to the farmer, in addition to maximization of social benefits. Ownership and the independence of learning ability is crucial to develop a social position for the farmer and to restore the plan, do, check, act cycle. Dutch agriculture is being praised for its innovating ability. This is strongly linked to learning ability. Transitions accelerate through knowledge and the skill to do things differently.

Reestablishing the plan, do, check, act cycle is crucial for innovation. A firm connection between entrepreneurs, research, and education can only be established by programmatic strategic agenda. Farmers need to be the product owners of this strategic program. This way primary agriculture leads development based on social challenges/benefits. This results in acceptance and the will to change processes in daily practices. This must be magnified by showing tangible results at the business level. Institutionalized innovation shows farmers opportunities that they can use in their own enterprises. Learning ability is, therefore, of crucial importance for transition. A clear structure with a programmatic approach is needed to organize learning ability.

In the transition, each stakeholder has its own role. Under the conditions outlined in this thesis, everyone has their own contribution and has to take ownership for the role and position they occupy in the agrocluster. This genuinely asks a lot of organizations because they are strongly connected. Returning ownership to the right level (i.e., farmers) brings them in their rightful position of financial and political influence. Primary agriculture will have to reorganize itself in this way.

The development of the business model has to be linked to an integral dialogue with the rest of society. Here, again, the consideration is whether this can be developed with or without the existing structure. Only with this consideration and approach can an independent development of agriculture and the revenue model be achieved.

Practical translation of the report

Using the guiding principles of this report, two projects have been started. These projects form the practical translation of the report. The solutions for the challenges are from a integral point of view combined in these projects. It brings an independent value chain, starts a whole new learning framework, and is focused on ownership by farmers. Both projects result in social benefits and connect agriculture to society. This connection is broader than communication or food supply: It forms a bridge between the challenges faced as a society.

“Pijpkaneel”; Value allocation to ecology through shared ownership

Fifty percent of the land is owned by the farmer and the other fifty percent is owned by institutional investors (through a land cooperative). Together they determine the layout and use of land financed in undivided ownership. The criteria for the layout and use are based on the ecological goals and agricultural use for a specific area. The farmer leases back the part financed by the institutional investor, resulting in net savings of 2,200 euros/hectare for the farmer. Technically, the ecological potential of land is represented at 50% of the value. By linking ecosystem services to this co-financing based on a design plan, the ecological profit objective can be specifically increased for each project. This makes it applicable to every ecological issue and region. The aim is, therefore, to roll out the instrument nationwide. To make it accessible to multiple projects, it is necessary to formulate agreements and rules. Through a land cooperative with a national structure and working groups per region (provincial), the mission, interests, and transactions are safeguarded. This makes the setup scalable. It is possible to quickly attract institutional investors and connect with farmers who want to bring added value to the ecological potential of the land. Partners in the development of the land cooperative are Rabobank nl, LTO NL, NAJK, and Boer en Natuur[1].

Cooperative Agricycling: Recycling nutrients by composting regional waste streams

A group of farmers in Sudwest Fryslan collects residual flows and composts the products on local farms to use them as fertilizers. This closes a part of the regional nutrient cycle. More importantly, a start is made in organizing and setting up a logistics network where future potential nutrients from residual flows can be distributed to agricultural soils. The processing (recycling) of residual flows is offered as a social service. A cooperative organization aims to organize a chain position in the processing (recycling) of residual flows. In an excellent collective execution of the processing and distribution of residual flows, the residual flows are optimally used. Based on soil type and function, an optimal portion from residual flows is sought out for each soil. The result is that these residual flows collectively contribute to the social challenges often related to the soil. By offering this collective to the market, a better negotiating position is enforced.

The cooperative form of implementation guarantees a chain position that doubles a revenue model of agriculture: on the one hand is a collective processing of residual flows (recycling of nutrients) and, on the other, is the value of the results achieved with the proper application of residual flows. This includes CO2 capture (collective), water storage, and water purification, among other things. The seven Frisian collectives form the communication and facilitating platform.