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From potato eaters to world leaders in agriculture

2017-11-10 11:58:22
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BY Priti Kumar and Fokke Fennema

Van Gogh’s famous painting of ‘Potato Eaters’ depicts a family of poor peasants seated around a dinner table eating their staple fare. The artist confessed that this work is deeply reflective of the hard work that Dutch peasants have to do to earn a bare meal. Van Gogh frequently painted the harvest and often compared the season to his own art and how he would someday reap all that he had put into it. 


Since those difficult times in the late 1800s, the tiny country of the Netherlands (population: 17 million; about the size of Haryana state in India) has come a long way. Matching sheer ingenuity with technological prowess, the Netherlands today is one of the world’s most agriculturally productive countries, feeding people across the globe from its meagre land area. Indeed, this small nation is now the world’s second-largest exporter of agri-food products including vegetables, fruits, potatoes, meat, milk and eggs; some 6 percent of world trade in fruits and 16 percent in vegetables comes from the Netherlands.


But how exactly did they do this? In October 2017, we went to find out. Our team of World Bank and Indian government officials working on agribusiness, rural transformation and watershed development projects – sought to learn from Dutch experience and identify opportunities for future collaboration. We met farmer cooperatives, private companies, growers’ associations, academia, social enterprises and government agencies and gained fascinating insights.


Primarily, we found that a convenient location, a conducive climate, investments in high-quality infrastructure, high-calibre human capital, an enabling business environment and professionally-run private companies have provided the Netherlands with that unmistakable competitive edge.


Maximizing agricultural output with minimum land and labour 


Located conveniently as a gateway to Europe, the Netherlands acts as a transit hub for agricultural produce, importing Euro 4.6 billion worth of produce from 107 countries, adding value to these products through collection, re(packaging) and processing and exporting almost double that value - Euro 7.9 billion - to more than 150 nations. In 2014, Dutch growers had a turnover of Euro 2.9 billion in fruit and vegetables, produced with a minimum of land and labour - only 55,000 hectares and just 40,000 people - indicating a heavy reliance on automation.


Government fosters entrepreneurship and public-private participation


All along, the government has provided selective and strategic direction to the sector. It has played an important role in providing incentives, such as promoting the use of renewable energy, fostering collaborative research for real-time application and providing the enabling policies for agriculture.


High investment for high intensive production 


The Netherlands’ farming practices are highly technology-intensive. Fruit and vegetables are cultivated in ICT-enabled greenhouses under climate-controlled conditions, as opposed to open farming. Inputs such as water, nutrients, LED lighting and the use of artificial substrates are optimized to maximize outputs. 


Research for knowledge to growers


All this has been made possible through indigenous innovations in materials sciences, seed technology, plant breeding, high-efficiency water circulation, renewable energy systems, environmental sciences, agronomics, big data analytics and artificial intelligence, among others. The Wageningen University and Research Centre is an outstanding example of strategic applications research where research is not done to make mere recommendations but in response to a need expressed by growers. Little wonder then that the per hectare cultivation of vegetables in the Netherlands is about 10 times higher than in India; in fact, for every square meter, the Netherlands produces 70 kilogrammes of the best tomatoes in the world using very little water.


Strong cooperation along value chain


Cooperation is perhaps in the genes of the Dutch, probably due to the need to work together against an invasive sea. Today, too, one of the key reasons for the competitiveness of the Dutch fruits and vegetable (F&V) sector is the number of huge professionally-managed cooperative companies, which enable strong collaboration along the value chain.


Geographically also, fruit and vegetable are grown in three or four clusters. These clusters serve as hubs for strong value chains that bring together seed breeders, growers, suppliers, greenhouse builders, knowledge centres, wholesale, retail and logistics to form powerful and innovative agribusinesses. The model of the ‘Golden Triangle’, where the government, private companies and knowledge centres collaborate closely works very well in the F&V sector.


Efficiency in storage, logistics and post-harvest management 


Perishables are well handled by the Dutch. The cold chain is well organised from farm to fork, with an abundance of cold storages, ripening chambers and refrigerated trucks. We visited agri-logistics ports where several actors along the value chain are co-located, reducing transaction costs and enhancing efficiency. Because of this, the Netherlands’ post-harvest losses are less than 2 percent on average.


Sustainability from farm to fork


As a mighty trading nation, the Netherlands’ fruits and vegetables satisfy the strictest European standards of food safety. Only 2-4 percent of fruit and vegetable products exceed the maximum residue limit. Moreover, all parts of the value chain strive to follow norms of sustainable water and energy consumption, waste prevention, CO2 reduction and so on. A lot of emphasis is also placed on sustainability in transportation and consumer packaging.


It doesn’t happen overnight


Our Dutch hosts told us that developing capacities and business environments has taken decades of investment and hard work.


The dexterity and precision displayed in Van Gogh’s timeless paintings are equally evident in the Dutch agriculture sector. Worldwide, there is great need for Dutch knowledge, technology and organisation skills that others can learn from.


(Priti Kumar and Fokke Fennema were accompanied by World Bank’s Abhishek Gupta, Adarsh Kumar, Raj Ganguly, Ranjan Samantaray and Vinay Kumar and by representatives from the Government of India’s Finance Ministry, as well as from the State Governments of Assam, Andhra Pradesh, Himachal Pradesh, Karnataka and Uttarakhand)


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