How The Dutch Environmental Policies Will Backfire
Should we pursue a cleaner environment no matter the cost? It is true that we must focus on making things better and cleaner. The less impact we have in the world the more sustainable our lives will be. But, as Thomas Sowell said, “There are no solutions, only trade-offs”. I think this is a universal framework that should go hand in hand with any political measure.
With that in mind, I want to cover in this post what has been going with the Dutch farmers for the last few months. Their government is trying to enforce a set of bad agricultural measures that could set the path that other governments might follow. And we, citizens, should be aware of it, because our country might repeat the same mistake.
Let me show you how a set of policies that seem to make sense, but in the end will cause exactly the opposite of what they intended to.
The Dutch Government Will Shutdown 25% Of The Farms
The Netherlands has committed to reaching the goals set in the 2030 Agenda. To move to a cleaner economy they have to reduce their nitrogen and methane emissions. The current government has set a strict maximum level of emissions to achieve those goals.
As a consequence, approximately 3000 farmers, 25 % of the total farms in the Netherlands, will have to sell their land to the government. This year, voluntarily, but next year forcibly.
In my view, the government should not have the right to take from people their land and their livelihood. But some might claim that it is for the greater good. Then, we should at least do a cost-benefit analysis, so we can judge if this brings a benefit to society in general or not.
So let’s start by understanding who the Dutch are by presenting some data.
The Netherlands A Tiny Super Efficient Producer
According to Wikipedia, The Netherlands is the 67th biggest country with a population of almost 18 million people. They are 0.2% of the whole world’s population. It occupies the 131st position out of 195th. As you see in terms of size, it is a drop in the ocean.
Despite their small size, they are the second agricultural exporter in the world. Their business volume is valued at 79 billion dollars. The Netherlands is a small country and a big producer, that makes them one of the most efficient producers worldwide. Take a look at this video to see how awesome their tomato production looks like.
Now that we know the Netherlands’ position on the world scale, let’s take a look at the effects of shutting down their farming.
Effects of Shutting Down Dutch Farms
We should start by asking, would people eat less if the amount of farms is reduced? Obviously, not. Your need to eat does not depend on how many farms are out there. It depends on the amount of calories your body needs to function.
So if 25% of the farms in the Netherlands would disappear, the need for their products would be still out there.
In the short term this would cause an increment in prices for those who are buying Dutch products. There will be the same amount of buyers but less products available. This raises prices of goods.
If prices are higher, the poorest importer countries don’t get to buy what they need. This means that developed countries will buy what’s available at higher prices. And, the developing ones will not be able to afford those products. Reducing the calorie intake of their population, and increasing the worldwide inequality,
However in the long run, high prices will encourage that those that are allowed to produce will increase their output. They will lower prices, and restore the amount of available goods out there.
But prices will not get as low as before because the remaining producers are not as efficient as the Dutch farmers that were shut down.
From an environmental point of view this is what will happen. They will shut down 3000 efficient Dutch farms. Then, those will be replaced for more than 3000 less efficient farms elsewhere.
The amount of nitrogen and methane emissions will be increased in total. Those that fill the gap left by the Dutch farmers will be more polluting and less efficient. This makes the Dutch government’s initiative useless in terms of economic output and in terms of emissions.
In summary, the Dutch government will close 3000 farms so others will be profitable elsewhere. This will increase the total amount of emissions. And, the consumers that used to benefit from cheap dutch products, will pay for the whole operation through higher prices.
We Are Damaging Our Economies And Polluting More In The Process
The west is focused on reducing their emissions within their territory. In the process, those emissions get transferred to developing countries.
The solution is not shutting down our most advanced producers. It is about sharing technological advances with those that are less efficient. That is the only sustainable way to reduce our impact on the planet.
If all farmers were as efficient as the Dutch, we would need half the farms we have now. And, we would improve the environment at the same time that we would have available food for everyone.
That is the reason, why everyone that supports a cleaner environment should be sympathetic with the dutch farmers. Because they are the one leading the way to a cleaner environment, they shouldn’t be punished instead.
How Can This Post Help You Improve Your Finances?
I believe that in order to create or maintain wealth, it’s important for us to have a solid understanding of human and market behavior. Only by understanding those, we can issue policies that would achieve our goals.
You might not feel like it, but if you live in a developed country and you are reading this post, you are most likely one of the wealthiest people on the planet. We should aim to keep it that way, at the same time we bring more people in.
For that, we should recognize that private individual property rights are the reason of western success. Without those rights, there cannot be freedom. And without freedom, the brilliant minds out there cannot implement their ideas for the benefit of all.
Removing individual property rights can become a slippery slope. Those are a guarantee against extreme forms of governance such as communism or fascism. Those regimes are impossible to implement if private property exists. But without it anything is possible.
That is why I support the right of those to own and to exploit their property. That guarantees that the best form of governance can arise, or at least that the worst doesn’t stand a chance.
Extending this mindset across citizens, helps their wealth preservation. So share this post if you agree with me, or leave me a comment explaining me why you don’t 🙂
