The Netherlands

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The Dutch market for organic products is lagging behind in comparison to most other European countries. It has been suggested that the main reasons for this include the late introduction of organic products by the major supermarket chains, and consumer attitudes (see Comber 1998; Kortbech-Olesen 1998). Dutch people have the reputation of not spending too much money on food. EU statistics indeed show that Dutch consumers spend a smaller percentage of their income on food than most EU citizens.

Nature food stores have long been the most important retail outlet for organic products. In 1997, they still accounted for 75% of total sales (Comber 1998). Nevertheless, in 1998, the balance began to turn with an increase of the market share of supermarkets: they now account for 35-40% of sales (Rabobank, press release 28 October 1998). From the three largest Dutch supermarket chains, Albert Heijn (owned by Ahold) is in the forefront in the development of an organic product offer.

Albert Heijn is the largest food retailer in The Netherlands with an estimated market share of 28% realised through its 670 shops. The company positions itself as a high-quality supermarket, attracting a relatively large share of the better educated, middle- and higher-income groups of the Dutch population. Up to 1997, Albert Heijn offered a selection of just twenty organic products. However, in February 1998, the company announced the launch of a new own-brand label ('AH Biologisch') which is to cover an extensive range of lines, including fresh produce, meat, dairy products and groceries. Reportedly, the company decided to extend the organic product range only after consumers expressed demand through a petition (HP/De Tijd, 17 July 1998). Subsequently, Albert Heijn asked its suppliers if they were able to supply organic products besides the conventional lines. Several suppliers reacted positively to the request and as a result the number of conventional companies involved in the organic market increased significantly.

To promote the organic product range, Albert Heijn uses its monthly customer magazine (Allerhande, 2.1 million copies). In a later stage, Albert Heijn intensified its promotion campaign with television advertisements, temporary price reductions and the publication of leaflets to inform consumers about the organic home brand. The company aimed to offer 500 organic products by 2001. Recently, Albert Heijn publicly expressed its concern about the high price level of organic products and announced a stronger collaboration with producers and processors with the aim of achieving more reasonable price levels (BFN News Service, 9 March 1999).

With regard to ICM, the retailer Albert Heijn started to implement an ICM programme ('Aarde & Waarde') back in the early 1990s. The publication of the Multi-Year Crop Protection Plan ('MJP-G') by the Dutch government was the impetus to start the programme. Albert Heijn had the advantage of its policy of long-term supply contracts. It was because of its concern for quality that the company has traditionally exercised a tight control over the various supply chains, which in the case of fruits and vegetables consist of a limited number of direct suppliers who buy the produce of selected farmers. The ICM programme started with the development of ICM standards to which Dutch suppliers and farmers should conform. Subsequently, the programme has been implemented step by step within the existing supply chain management system. At first a small number of farmers started with ICM on a limited number of crops. The number of crops along with the number of participating suppliers and farmers were increased such that in 2000 all crops from Dutch origin were produced under ICM standards. In 1996, Albert Heijn also started with an ICM programme for its foreign suppliers and farmers, beginning in Italy and Spain. It is Albert Heijn's final aim to offer all fresh produce, produced under either ICM or organic standards. In the context of the ICM programme, Albert Heijn cooperates with several other large European retailers in the EUREPGAP initiative.

The future of food industry initiatives for more sustainable agricultural production will be, more or less, affected by current policy developments in The Netherlands, as the government has published a strategic document called 'Integrated management, the way ahead, crop protection policy up to 2010' (Zicht op gezonde teelt). The central objective of the new policy is the realisation of integrated production on certified farms, ultimately in 2010, and it will be accompanied by a set of financial incentives. According to the government, the market, the production chain and individual growers are all responsible for the development and application of integrated crop protection. To give a framework to the objective of integrated management, the government will develop two different sets of ICM standards. The first set is an ambitious one, for farmers in the forefront, with innovative practices, and the second one will be less ambitious and is targeted at mainstream farmers. At this stage, the government has not taken any definite decisions about the level of standards to be applied.

Another relevant government document concerns a policy plan for promoting organic agriculture between 2001 and 2004 (Beleidsnota biologische Landbouw). Consistent with the previous policy document (Plan van Aanpak Biologische Landbouw 1997-2000), but unlike neighbouring European countries, the Dutch government holds the opinion that market forces will determine which share of organic production is feasible in The Netherlands. Considerable effort and money will be put into research, increased cooperation in organic product chains and tax incentives. A remarkable fact, though, is that the Dutch government, as the first in the EU, plans to abolish conversion subsidies after 2002. At a first impression, it seems that the Dutch government has chosen the option of ICM as the most realistic form of sustainable agriculture for The Netherlands, and that in its opinion every farmer converting to organic agriculture is a bonus.

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