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Het Comité Chairman warns against protectionism in agri-food trade

07 September 202013 min reading

Matthé Vermeulen
Chairman Royal Dutch Grain and Feed Trade Association (Het Comité)

“Protectionist measures are not the answer for our world-wide challenges on food and feed distribution. On the contrary, it will hinder enormously the efficient distribution opportunities of feed and food in bulk both in cost and sustainability. The only solution for many trade problems is free trade and a level playing field for all trade partners involved. I believe in strong international cooperation to secure a stable grain market. International trade without restrictions can help improve this international cooperation.”

The Netherlands has been an important global player in agribusiness. Thanks to its strategic ports, it holds a leading position in the global trade of grains and pulses. It is the gateway for ingredients for food and feed in Europe. Speaking to Miller Magazine, Matthé Vermeulen, Chairman of Royal Dutch Grain and Feed Trade Association (Het Comité), underlines the Netherlands’ major role in global agri-food trade. “Trade is in our DNA. We are a leading trading nation in food and feed,” he says.

Mr. Vermeulen has years of international experience in the grain trade. Since 2012, he has been chairman of Het Comité, a trade association for companies in grains, seeds and pulses for almost 150 years. Mr. Vermeulen answered our questions on the Netherlands’ importance in the agri-food trade, changing grain market dynamics, and the impacts of the coronavirus.

Mr. Vermeulen, could you please give some information about The Royal Dutch Grain and Feed Trade Association (‘Het Comité’)? What is the mission and objectives of your Association?
The Royal Dutch Grain and Feed Trade Association (‘Het Comité’) is a trade organization representing the interests of its approximately 120 members in the agri-business in The Netherlands. Its activities also include compiling and managing standard national and international trade contracts, advocacy for the Dutch grain, seed and feed trade to the fullest extent, operating an arbitration institute, organizing an annual course in grain trading and setting day values.

Het Comité is committed maintaining the attractiveness of the Netherlands as a location for the trade, supply, and logistics of agricultural raw materials (grains, seeds and legumes) for food, animal feed and energy.

Our mission and objectives are facilitating unrestricted trade, supply and logistics of agricultural raw materials for food, animal feed and energy and further strengthening the position of the Netherlands as an attractive location for companies in the agricultural raw materials chain. Establishing connections with other partners in the chains of trade, logistics and supply, facilitating the connection between members and the transfer of knowledge and information to the members. We want to promote the level of knowledge of the trade, supply and logistics of agricultural raw materials (grains, seeds and legumes) for food, animal feed and energy in the sector

Source: Fotografie Luchtzinnig

Can you tell us Netherlands’ position in the agribusiness? How do you define the Netherlands’ importance in agri-food trade and why?
The Netherlands has been an important global player in agribusiness for many years. The Netherlands is second largest agricultural exporter; when it comes to (gross) exports we solely have to let the United States take precedence, and as for net exports (export minus import) Brazil and Argentina. Dutch agricultural exports consist of 73% goods of Dutch origin.

The Netherlands provides a wide range of facilities for importing, shipping, storing, processing and exporting agri-food products in bulk. A significant part of the Agri bulk is directly transhipped to other countries. The remaining grains and oilseeds supplied to Dutch ports are directly processed into products such as meal and oil for both human consumption and animal feed. These products are used in the Netherlands and exported to other countries. From our ports approximately 50% of these processed products is transhipped to other countries. Around 7% of the grains, seeds and pulses used in the Netherlands is also grown in the Netherlands.

Trade is in our DNA. We are a leading trading nation in food and feed. Our trade mentality contributes to good relations with trade parties worldwide. Many agri-food companies in the Netherlands and the rest of Europe benefit from our ability to import, export and tranship products at a cost-effective price. As a result, our trade is the indispensable link between supply and demand.

Thanks to the location of the ports of Amsterdam and Rotterdam, the Netherlands is strategically located for world trade. We benefit from our convenient connection to international trading routes, our waterways and good infrastructure for road and rail transport, connects us to other European countries. As a result of these efficient product flows, import and export are central to our economy. Of course, times are changing and we must look ahead. Global challenges like food security and climate change can no longer be ignored. We continually look for new ideas and solutions to address these challenges. We take pride in our leading position in developing innovative solutions to cater for a growing demand for food and feed in a rapidly changing world.

Our strategic position in the world of trade is based on successful supply chain collaboration. Growers, collectors, transporters, exporters, importers, service providers, all links in the supply chain actively contribute to a smooth product flow all over the world which meets global demand

Although being a small country geographically, the Netherlands is the second-largest exporter of agricultural goods in the world. The Dutch agriculture sector holds a leading position on the global market. How you could manage it? What is the secret?
The Netherlands is a small country in a delta. The great rivers provided the fertile agricultural land that was deposited via water over the past millions of years. Blessed with a mild climate, relatively much and clean fresh water and an excellent infrastructure, the Netherlands is extremely suitable for producing food.

Source: Fotografie Luchtzinnig

North Western European ports play a major role in international Agri bulk trade. Being the largest port in Europe with a #10 ranking worldwide, the Port of Rotterdam handles 30% of Agri bulk traded in North Western Europe in 2018. Amsterdam as runner up covers 25%, which means that the Netherlands (including Vlissingen and Terneuzen) covers more than half of the total North Western European volume. Dutch ports provide unique hinterland connections that cover all transport modes. We may say the Netherlands is the gateway for ingredients for food and feed in Europe. Not only our strategic location, well-organized infrastructure and logistics contribute to this success, but certainly also the people working in the agri-food trade.

The Dutch position in the world-wide agricultural market also finds it basis in the remarkably close and intensive cooperation between government, universities and high schools and the agribusiness. It is named “the golden triangle” of the Dutch agribusiness. This very tight cooperation for many years resulted in extensive research and development programs and an enormous power of innovation of the whole industry leading to numerous patents and inventions

As a result, we can’t just call ourselves the second-largest exporter of agricultural goods in the world, we also export a wide variety of services and knowledge related to agribusiness.

The Netherlands is a leader in efficient and sustainable agriculture. Dutch agriculture is highly intensive and innovative. Does this also apply to grain production? What is the position of the Netherlands in grain production in Europe?
Grain is a modest product in the Netherlands. Grain is mainly used by arable farmers as a rotation crop. Meaning only a small area of the arable land is yearly available for grain production. On the other hand, our hectare yields are one of the highest in Europe. In 2020 The Netherlands has around 120.000 ha with cereals, resulting in an estimated crop of around 1,6 million tons. This is about 0,5 % of the total EU-27 grain production.

What are the effects of the coronavirus outbreak on the Netherlands’ grain and feed trade?
Initially, there was a lot of uncertainty in the market. We had some (minor) hick ups in supply chains in Europe. Thanks to the efforts of EU Commission, by installing so called “green lanes” the largest hick ups at closed border crossings were quickly removed. The EU commission has already asked it Members States in an early stage in order to ensure that supply chains continue to function across the EU, to designate without delay all major internal border crossings in the trans-European transport network (TEN-T) as green lanes. Those green lanes must be open to all freight vehicles, no matter which goods they transport. Including health checks and checks, crossing a border should not take more than 15 minutes. Presently one can say that most of the business is back to usual again.

In the ports crew replacement of vessels was nearly impossible due to the travel restrictions worldwide. This is currently still an issue.

Since a few years the number of animals in the Netherlands is decreasing, mainly the number of pigs. Government measures on climate makes it difficult for pig breeders to compete on the EU- and world market. This decrease is expected to continue the coming years. This may cause a less demand in the Netherlands for feed and feed ingredients.

The COVID-19 pandemic has put enormous strains on food supply chains. Many countries have implemented restrictive measures against the grain and flour exports to safeguard national food security. How do/will these measures affect the grain trade? There are concerns that Covid-19 will have lasting impacts on international grain trade. Do you share these concerns?
In short term, COVID-19 pandemic will have impact until a vaccine is available and, more important, until it is available for the whole world population. Demand will therefore be for the moment on a lower level as before. Less out-of-home consumption is an important cause.

Het Comité does not see any structural long-term impact on international grain- and feed trade because of Covid-19 pandemic. The world -people and animals- need to be fed and trade is crucial for distributing grains around the world, bringing it to the right place at the right time. Where we see more possible issues is with processed consumer products. Countries easy tend to restrict imports or export if they have a slightest fear or doubt that products are in one way or another possibly infected. Even sometimes initiated by political arguments.

Another impact will have the awareness of consumers on consumption of animal proteins. Specially the awareness of the effect of animal proteins on climate and sustainability. This can ensure that animal proteins will be replaced by vegetable proteins. Worries about food security will strengthen this process.

Also, the frictions between China and the US can cause important shifts in world trade. South America, Eastern European countries and Australia may have a bigger part of the world Agri commodity trade at the expense of the US.

Do you think the pandemic would cause radical reforms in the food supply system?
I cannot judge if the COVID-19 pandemic causes radical reforms in the food supply systems. What I can see is that the call for closing supply chain cycles is growing. One can observe a growing tendency for more local produced food and feed, more home-made food, less out-of-home. In the world of trade, one can observe more protectionism. Countries and continents want to be more self-sufficient and depending less on imports.

Het Comité is averring of protectionism and closing borders for free trade. Protectionist measures are not the answer for our world-wide challenges on food and feed distribution. On the contrary, it will hinder enormously the efficient distribution opportunities of feed and food in bulk both in cost and sustainability. The only solution for many trade problems is free trade and a level playing field for all trade partners involved.

What is the importance of functioning international grain trade and a stable grain market in terms of world food security?
Historically, international trade has helped reduce food insecurity by connecting regions with limited agricultural potential and large populations to regions with comparative advantages in agriculture. It has also provided consumers access to a more diversified and nutritious food basket. However, for trade to improve food security for as much people as possible, free trade and a level playing field for all trade partners involved is necessary. I support and I believe in strong international cooperation to secure a stable grain market and offer the world food security. International trade without restrictions can help improve this international cooperation.

The Royal Dutch Grain and Feed Trade Association also conducts grain trade courses. Could you please give brief information on these courses?
The Grain Trade Course is organized annually by ‘Het Comité’. During this course, tutors with experience in practice discuss the intricacies of the grain trade in a broad sense. The course is specifically designed for people working in the grain and feed trade and related sectors. There are no specific admission requirements for the course, but at least lower general secondary education (‘mavo’) or the equivalent is recommended for successful completion of the course. This course is open to members and non-members. The course is given in the Dutch language.

During the year we offer our members all kind of seminars and courses where we strive to link up with current trade events or actual issues. For example topics like digitalisation of the trade, Maximum residue levels (MRL’s), logistic issues, food- and feed safety are being discussed.

Is there anything you would like to add? Seed and pulses
A significant part of our members trade seed and pulses, both national as international. Historically a wide range of these products are grown in The Netherlands and consequently traders started their business, both import and export. Seed and pulses find its way to all segments of the food industry: processors, industry, (ethnic) wholesalers, food service, retail, reform and animal nutrition, both conventional and organic products.

European Commodity Exchange (ECE)
Het Comite is a member of the European Commodity Exchange. Its primary mission is to organize "Exchange Days". Each year, in one of Europe’s major cities, the European Commodities Exchange asserts the representative activities of the members of the Exchanges through the increasing success of its meetings. In practice, they offer the opportunity for the players in the cereal sector to meet each other face to face, discuss the market’s future, establish contacts and consolidate their relationship of reciprocal trust. Today, the member Exchanges are vying for the honor of hosting more than 3000 participants and over 100 exhibitors every year.

Brochure on Pesticide Management
Het Comité in cooperation with other associations, has recently produced an update of a brochure on Pesticide Management. The previous version dated back from 2014. The update was necessary in view of recent developments in the EU and to bring the attention of farmers/storage organizations to some current specific pesticide issues. Click here ( https://www.graan.com/dynamic/media/1/documents/2020/20200528_Pesticiden_brochure_MVO_Comite_Fediol_Coceral_-2019-EN-v6_FINAL_VERSION__English.pdf ) for the current brochure, in English. MRL changes in the EU can be extremely disruptive and therefore such a communication tool is very important. This brochure is a tool to be used for outreach outside EU, upstream in the chain, when discussing with farmers and storage organizations in third countries to raise awareness on pesticide residues on oilseeds and their potential impact for EU supplies.

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