OREANDA-NEWS. September 24, 2015. Five major growers’ associations– collectively accounting for more than 70% of all Dutch greenhouse crops – formally signed an agreement on Friday that will see them enter into a close new partnership. The partners, who are to operate under the name Federatie VruchtgroenteOrganisaties (the Dutch Federation of Fruiting Vegetable Associations), have forged an alliance with the Dutch government and Rabobank. The new partnership seeks to restructure and develop greenhouse horticulture in the Netherlands. The alliance is headed by Cees Veerman, a former Minister of Agriculture, Nature and Food Quality. ‘We are not out to achieve overnight results with this process but are taking a more in-depth, careful and deliberate approach. We are pleased that the foundation has been laid,’ Veerman said, commenting on the new plan.

No action is not an option
Greenhouse vegetable growers, Dutch government agencies and Rabobank all agree with the conclusions from the McKinsey report published in late 2014: the greenhouse vegetable sector is beset by poor health. While some businesses continue to turn a profit, countless greenhouse vegetable growers are operating at a loss. Several industry representatives have recently engaged in negotiations to discuss what changes are needed. In addition to improvements to the sales structure, other areas of focus include infrastructure, geographic restructuring, agricultural logistics and renewing the GMO policy. The members of the brand-new allowance will be tackling these issues together, with each of the partners assuming their own responsibility.

Goal: to be number one in fruiting vegetables
The sector is seeking to position itself in the long run as the leading fruiting vegetable specialist in Europe and across the world. This involves using the highest-quality technologies, establishing a leading position in the main production and sales markets, maintaining a strong focus on high-value-added products, and taking every advantage of opportunities in new market segments and further expansion in growth markets. In order to achieve this goal and be able to make the investments needed, businesses will need to become more profitable in the immediate future. Based on an awareness within the sector that ‘united we stand, divided we fall’ – one of the cornerstones of the new plan – five major growers’ associations (Best of Four, DOOR, The Greenery, Harvest House and Van Nature) have taken an important step in establishing the Dutch Federation of Fruiting Vegetable Associations.

Dutch Federation of Fruiting Vegetable Associations
The federation seeks to improve the position of Dutch greenhouse vegetable growers by taking on issues of concern to all partners and adopting an integrated approach to finding solutions to these issues (excluding any issues with competitive implications for the partners). Moreover, the federation intends to play a constructive role in the new alliance with the government agencies involved and with Rabobank. Headed by the five directors of the growers’ associations, the federation serves as the link between these associations. The partnership may see further cooperation in the future: Best of Four and Van Nature, in fact, recently signed a letter of intent for this very purpose.

Alliance led by Cees Veerman
Former Dutch cabinet minister Cees Veerman will head up the new alliance, with Rabobank being in charge of the restructuring process. Rob van den Ende has been appointed as the Greenhouse Horticulture Project Director and is responsible, on behalf of the bank, for facilitating the required restructuring operation. Van den Ende brings to the table many years of experience and has an
in-depth knowledge of the sector. The national, provincial and municipal governments will also all be instrumental in the geographic restructuring process, agricultural logistics and infrastructure.

Milestones in a long process
The establishment of the Dutch Federation of Fruiting Vegetable Associations and the start of the new alliance both mark key milestones in what has been a long process. After a group of growers contacted horticulture trade association LTO Glaskracht Nederland to express their grave concern about the state of their industry, several associations established the High Level Group with the objective of strengthening their competitive position. The members of this High Level Group consistently made efforts over an extended period of time to get the sector back on track: They were the ones to kick-start the process. The High Level Group hired McKinsey to perform a critical analysis of the industry. In a report published in December 2014, McKinsey found that the sector had lost much of its resilience over a five-year period and that a large number of horticultural businesses were in dire financial shape. The growers’ associations will play an important role in strengthening the competitive position of businesses, which is essential to future success.
The partners have held numerous talks in recent months with Cees Veerman and representatives of the growers’ associations. Mr Veerman has prepared an analysis and made a number of recommendations, which were part of what prompted the establishment of the Dutch Federation of Fruiting Vegetable Associations. Government agencies and banks view this as a vital sign of a turnaround for the industry. The federation will focus in the next few months on further developing the plans and setting up the new association.