On 15 January 2011 the Department of Agriculture and Fisheries presented the 2010 Agriculture Report at Agriflanders in Ghent. Minister-President Kris Peeters received the first copy of this report on this occasion. The LARA (Agriculture Report) maps agriculture, fisheries and the agri-food industry in Flanders. This is the third publication of this biennial report, which is enshrined in a decree.
The 2010 edition comprises two volumes. The first part or book describes the agricultural and horticultural sectors and fisheries in terms of the environment and of sustainability. The second book describes the various sectors and subsectors of Flemish agriculture: the pig industry, the poultry industry, land-based animal husbandry, horticulture and agriculture. The data in the LARA are based on the latest available figures, from data providers in and outside of the administration. The report contains a number of key themes per chapter and is illustrated with several charts, maps and photos. The LARA is not only intended for policy-makers but also wants to be sufficiently accessible for farmers, growers and fishermen, as well as for interested citizens.
In accordance with the SALV (Strategic Advisory Council for Agriculture and Fisheries) decree the Department of Agriculture and Fisheries compiled this report in cooperation with a steering committee. The steering committee is made up of members of the Strategic Advisory Council for Agriculture and Fisheries and other experts who were asked to sit on the committee because of their specific knowledge. A project team, ten authors and more than forty lecturers contributed to the compilation of this report. This broad cooperation not only guarantees a quality control of the data and information in the report but also ensures support for the report.
Developments at international and European level
Demographers expect the world's population to rise to 9.1 billion inhabitants in 2050. Food production will follow this upward trend, but there will be significant regional differences in terms of pace. Moreover, the food patterns in some regions are changing. The consumption of animal products for example has increased significantly. As a result, food production will have to increase by an estimated 70% over the next forty years.
The recent crisis has demonstrated once again that the price fluctuations of food products are strongly linked to those of fossil fuels and commodities. For the next few years, observers believe that food prices will stabilise at a lower level than the peak of 2008 but at a higher level than during the period before 2008.
Although the trade in agricultural products make up less than 9% of world trade, this trade continues to be a very important dossier for the World Trade Organization. In the future the agricultural sector will be confronted with a further liberalisation of world trade and the globalisation of food chains. The greater integration of European farmers in world affairs offers opportunities but also has negative consequences. Volatile prices and the complexity of global pricing will result in considerable uncertainty for farmers, in Europe and beyond.
The Intergovernmental Panel on Climate Change predicts an average global temperature increase of 1.8 to 4°C by 2100. The consequences of climate change on the viability of our planet are difficult to quantify in exact terms, but many industries, including the agricultural sector, have already been asked to adjust their methods accordingly. In addition to reducing the climate impact (mitigation), the agricultural sector, however, faces an equally big challenge in terms of adapting species and techniques to these new climate conditions (adaptation).
A future depletion of fossil fuels and of non-renewable resources may form an obstacle for food production. Agriculture, which is highly mechanised and which is also dependent on fossil fuels for fertilizers, will have to switch to more sustainable alternatives in all likelihood.
The importance of genetically modified organisms (GMOs) is increasing year by year. In 2009, the global acreage amounted to a surface area of 134 million hectares. The GMOs on the market today were primarily designed with farmers' benefit in mind. The GMOs of the future, which are being developed both publicly and privately, also hope to bring about improvements in terms of quality and nutrition and are aimed at industrial applications. Europe is hesitant when it comes to GMOs, which translates into a very limited use of these organisms.
Within Europe policy has been focusing for quite some time on an agricultural production which respects the environment as well as on a range of other aspects. Preparatory green and white papers have paved the way for initiatives.
The recently introduced EU 2020 Strategy and the next multiannual financial framework will create an environment within which the Common Agricultural Policy (CAP) will have to demonstrate its relevance and will have to operate after 2013. By mid-2011 the European Commission will submit a first proposal for the annual European expenditure by policy area. The expenditure for the CAP will certainly not increase. In fact it is expected that they will have to be reduced thus creating budgetary margin for other current challenges such as sustainable growth, climate change and the security of energy supply.
Agriculture in the European Union
39% of the total surface area of the European Union is used for agricultural purposes. The EU has 13.7 million farms, with a total of 1.9 billion farm animals. European agriculture employs 26.7 million people, accounting for 11.7 million full-time equivalents (FTEs).
The total production value of European agriculture is estimated at 319.3 billion euros, down 12% compared with 2008. Almost 54% of the production value is from crop production, while livestock production accounts for 42%. Taking into account inflation, Eurostat estimates that the average real income per European agricultural labour unit fell by 12% in 2009 compared with 2008.
The average economic size of a European farm is nearly 11.3 European Size Units (ESUs). The average farm size in the European Union is 12.6 hectares and nearly half (48%) of all farms is smaller than 2 hectares. Nearly one third of European farms are cropping farms, one third are livestock farms, 20% are horticultural farms and 14% are mixed farms. 10% of the farms have at least one other activity on their farm, in addition to the primary crop and livestock production, at least one other activity in the company, also called broadening. 1% of the farms are organic farms.
The EU’s farm supply sector comprises approximately 5,900 agricultural holdings with an estimated turnover of 83.6 billion euros. These businesses employ 178,000 people. The number of companies in the agricultural processing industry is estimated at 310,000 with a workforce of 4.7 million people. The food industry generates a total turnover estimated at 935 billion euros. There are approximately 2.7 million companies in the food distribution and retail sectors employing 16.2 million people and generating a total turnover of 2.4 billion euros.
In 2008 the European Union was a net importer of agricultural products with a trade deficit of 5.2 billion euros. The EU exported a total of 85 billion euros of agricultural products to countries outside the EU, while imports amounting to 90.2 billion euros were slightly higher. The largest trade deficits relate to fruit and oilseeds and fruits, while the largest trade surpluses are due to beverages, dairy products and cereal preparations. The main export countries are the United States, Russia, Switzerland and Japan, while the EU imports mainly from Brazil, Argentina and the United States. The EU’s largest trade surpluses are with Russia, the United States and Japan.
Flemish agricultural policy
Agricultural policy in Flanders is largely determined by the Common Agricultural Policy (CAP) of the European Union, which comprises two pillars. The traditional market and price support and direct aid form the first pillar. Rural policy makes up the second pillar.
In 2009, 23,487 farmers in Flanders received nearly 269 million euros of direct aid. This amounts to an average of 11,449 euros per farm. The payment entitlements account for 233 million euros of this amount. The suckler cow premium amounts to 29.1 million euros and the slaughter premium for calves for 5.7 million euros. The other coupled crop premiums only amount to 0.8 million euros.
Direct support is unevenly distributed: 20% of the agricultural holdings with the most aid represent 56% of all aid while 20% of the businesses with the least support only receive 1.3% of this aid. Older farmers, especially those aged 65 years or older, receive a smaller percentage of direct aid compared with their share in the farms. Corporations and younger farmers receive a higher share of direct aid compared with their share of the industry.
In 2009, 1,960 businesses transferred 26,203 of payment entitlements to the amount of 12.8 million euros to other farmers. Two hundred and fifty-two farms ceded 553 payment entitlements or a total of 176,125 euros (mandatorily) to the national reserve. In 2009 641 firms ceded 9,364 suckler cow premium rights (either to other farmers or to the Flemish reserve).
The 2007-2013 Flemish Programme Document for Rural Development (PDPO II) received an additional amount of 29.5 million euros in European funds at the end of 2009. This brings the total budget for the entire program period to 713.5 million euros. Flanders is focussing on such priorities as renewable energy, climate, water management, biodiversity and restructuring in the dairy sector. The additional funds have been distributed among axis 1 (11.5 million euros), axis 2 (9 million euros) and axis 3 (9 million euros). The fourth axis (Leader) did not receive any additional resources.
Investments with a positive contribution to the environment amount to 26.6 million euros or 46% of the investment and diversification aid granted by the Flemish Agricultural Investment Fund (VLIF). The total surface area of agri-environmental measures has fallen sharply in 2009 compared with 2008 (-52,803 ha). This is due to the discontinuation of the ‘cover crop’ agri-environmental measure, which is now part of good agricultural practice. The total area of agri-environmental measures for which new contracts can still be concluded, however, has further increased: with 2,680 ha.
Direct aid in 2008 on average has a 5% share of the revenue and a 25% share of operating income in agriculture and horticulture. In terms of rural development aid this amounts to an average of 2% of revenue and 9% of operating income. This share is generally high for livestock farms (dairy and / or beef) and/or crop farms. The share in pig and poultry farming and horticulture is almost nonexistent (0-2%). Pig and poultry farms and greenhouse horticulture do however benefit from significant support in terms of rural development: the share of this aid in farm income is approximately 10%.
Horticulture in 2008 only received 1% of total direct aid for all farm types, but it did receive 21% of rural development aid. The pig and poultry farms also receive a higher proportion of rural development aid (14%) compared with direct aid (5%). The share of direct aid in cattle husbandry amounts to 53% (26% for dairy, 15% for beef cattle and 12% for mixed cattle). For mixed farms, with crops and cattle, this amounts to 17% and for crop farms to 12%.
The agribusiness complex (ABC)
Compared with 12 years ago, the number of Flemish agribusiness companies that are subject to VAT fell from 58,000 to 42,600 in 2008. The decline in the number of these agribusiness complexes is largely due to the strong decline in the number of (smaller) farms; but the food industry and trade are also following this downward trend. The agriculture and horticulture sectors account for approximately 72% of the Flemish ABC. The remaining percentage primarily consists of companies in the food industry (13%) and the wholesale trade of agricultural products (8%).
In 2008 the Flemish ABC companies generated 51.7 billion euros in turnover, amounting to an increase of approximately 20% compared with 2000. With this turnover the Flemish ABC accounts for approximately 80% of total ABC turnover in Belgium. By comparison: Flanders represents about two thirds of all ABC companies in Belgium. The food industry within the ABC accounts for half of the total turnover of the Flemish ABC.
The stakeholders in the Flemish ABC chain (excluding the self-employed) in 2008 together generated about 6.3 billion euros of added value. That amounts to approximately 5% of the total added value created by non-financial institutions in Belgium. As with the turnover created, it is clear that an increasingly dwindling number of companies are generating more added value.
According to the statistics of the NSSO the Flemish ABC accounts for approximately 103,622 employees. Sixty-four percent of wage earners (workers and employees) in the ABC sector work in the food industry, 13% in agriculture and horticulture and 8% in the wholesale trade and in the commission trade. In 2008, an agribusiness company on average employed 16 employees.
Structural and economic characteristics of agriculture
The Flemish agriculture and horticulture regularly employs 58,600 people and in the past three years on average generated a final production value of 4.8 billion euros and a net added value of 1.1 billion euros. Within the Flemish agriculture animal husbandry is highly developed. The livestock sector generates 60% of total final production value. Horticulture accounts for 31% and agriculture for 9%.
In 2009, the industry comprised 29,394 businesses. The number of farms is continuously decreasing and the scale is continuously increasing.
In the period between 2005 and 2009, the area used for sugar beets and fodder decreased, while the acreage for potatoes, cereals and horticultural crops remained relatively stable. The number of grazing and non-grazing animals decreased over the same period, except in the case of beef cattle. A total of 588,831 ha of agricultural land was reconfirmed. This amounts to 80% of the proposed 750,000 ha.
Although agriculture is becoming less important as a source of employment, the sector continues to be a cornerstone of rural life. Agriculture and horticulture together cover 46% of the Flemish surface area. Moreover, agricultural and agri-food also account for an important share of Belgian export value. With exports that exceed imports, they provide a significant contribution to the trade surplus.
Agriculture and its natural surroundings
The eco-efficiency of agriculture is continuously increasing. This applies to all selected stressors except for crop erosion sensitivity. Most PPPs are used on potatoes and in orchards. In wet conditions, more PPPs are needed, especially fungicides.
Greenhouse horticulture uses the most water, but collects rainwater through greenhouses and stores it in basins. Many businesses already apply some form of water conservation. By contrast, water purification techniques are relatively complex and expensive to acquire. The monitoring and maintenance of these systems are also obstacles.
Most energy is used for the heating of greenhouses. Petroleum continues to be the main energy source, but there is also a clear shift to natural gas. Energy from CHP is on the rise and increasingly installations are managed by the farmer himself.
In recent years the amount of soil organic matter content in our agricultural soils is decreasing in Flanders. This reduction does not benefit soil quality. This decrease is also associated with CO2 emissions, which in turn negatively affect the greenhouse gas problem. In Flanders 43% of total farmland is used for erosion-prone crops.
Fertilizer use decreased between 2005 and 2008. The use of nitrogen fertilizer declined by 11% and that of phosphorus by 53%. The decline was the highest in the last year. This can be explained by the stricter standards that were applied in 2007 in the margin of MAP-III and high fertilizer prices in 2008. It is not always evident to substitute fertilizer with livestock manure. A further reduction of nitrate losses by the agricultural sector is needed to improve the quality of surface and groundwater even more.
The total emission of potentially acidifying substances by agriculture decreased by 56% compared with 1990, and fell by 3% compared with 2006. Agriculture, and livestock in particular, is the main source of acidifying emission in Flanders (36% in 2008). This is largely due to ammonia emission. 93% of Flemish ammonia emission comes from agriculture. The gradual decline since 2000 is a result of the decline in livestock numbers.
In 2008, the total emissions of the greenhouse gases methane, nitrous oxide and carbon dioxide from agriculture amounted to 8,385 ktons of CO2 equivalents, or a reduction of 18% compared with 1990. The decrease is primarily due to a decline in livestock numbers and a more rational use of energy in greenhouse horticulture. The share of agriculture in the total amount of Flemish GHG emissions was 11% in 2007.
In 2008 agriculture produced a total of 17,340 tons of particulate matter; 62% of this amount is a result of soil cultivation. Total emission of particulate matter decreased by 4% compared with 1995.
In the period between 2004 and 2008 Flemish agriculture and horticulture on average accounted for 199,000 tons of industrial waste per year. The fraction of waste of vegetable and/or animal origin constitutes the majority of industrial waste from agriculture, followed by the fraction of construction and demolition waste.
There is still potential for improving and expanding the package of agri-environmental measures in Flanders. The optimisation of agri-environment is related to the increased acceptance and participation of farmers and to the increase of the positive effects of agri-biodiversity measures.
Social aspects of agriculture and horticulture
The average age of the managers of professional farms has risen from 46.2 years in 1999 to 49.5 years in 2009. Only 14% of all Flemish farmers older than 50 years has a successor. This is a problem for smaller farms in particular.
The number of farms has declined and the number of regularly employed persons in Flemish agriculture and horticulture also dropped by 2.6% per year between 1999 and 2009. The agricultural and horticultural sectors employ high numbers of migrant workers. Four percent of employees of foreign origin work in the primary sector.
The educational level of Flemish farmers has steadily increased. In 1959, 95% of farm managers only had practical experience, in 2005 less than 55%.
Farmers have the highest administrative burden, more than their colleagues in the service providing, industrial and construction sectors of society. Farmers consider the continuously changing legislation to be the most important bottleneck.
On average every day five accidents occur in the Flemish agricultural and horticultural sectors. The agricultural and horticultural sectors are ranked fourth in accident statistics, after the construction, steel and wood industries.
Poverty is also a reality in rural areas. The number of farmers in need who request support from the non-profit association, Boeren op een Kruispunt, has steadily increased since the association’s establishment in 2007. In 2009 254 farmers filed for assistance.
In 2009 an average of 52% of the Flemish agricultural and horticultural businesses used a computer for business purposes. PCs are mainly used by young farmers. Eighty-one percent of managers younger than 35 years used a computer for business compared with only 13% of managers aged over 65 years.
Farmers and horticulturers can receive grants for green care. In May 2010 there were 443 certified care farms and 883 care farm contracts had been concluded. The Province of West-Flanders has taken the lead in this.
The Belgian sea fisheries fleet currently comprises 89 vessels with a global capacity of 51,590 kW. The total landing value of the fleet in 2009 amounted to 68.4 million euros; sole landings accounted for 51% of this. Plaice (9%), turbot and shrimp (each 5%) are far behind. Employment that is directly related to the fisheries fleet is estimated at 2,500 people; 800 to 900 of these workers are employed in the fleet itself.
The number of certified deep-sea fishermen is decreasing every year. The fleet is also ageing. Fewer young people are interested in working in fisheries. Their preference goes to alternative employment, for example for dredging companies, in tourism, etc.
The Common Fisheries Policy is about to be thoroughly reformed. By 2020, European fisheries once again have to be effective and sustainable, in economic, social and environmental terms.
The European Union and the Flemish Government wish to increase the structural sustainability of fisheries with investment aid and a national strategic plan. These structural changes have to refocus the fleet’s activities on less fuel-intensive and more sustainable fishing methods. The most drastic measure is the Fleet Adaptation Scheme of May 2009, aimed at further reducing overcapacity.
After 2008, which was a disastrous year, profitability continues to be under pressure in 2009. There are two reasons for this: low fish prices and an excessive dependence on the diesel price.
There is a difficult balance between fisheries and environment. The creation of Natura 2000 areas and the promotion of sustainable alternatives aim to better protect vulnerable marine ecosystems.