The ongoing crisis in the Middle East is expected to have lasting consequences for agriculture and horticulture in the Netherlands. The main concerns are uncertainty over the availability of raw materials, including fertilizers, substrates and crop protection products, and sustained high gas prices. These issues were discussed at a ministerial consultation between State Secretary Silvio Erkens of the Ministry of Agriculture, Fisheries, Food Security and Nature (LVVN) and representatives from agricultural and horticultural organisations and supply chain partners. Ruud Paauwe, director of Glastuinbouw Nederland (the Dutch greenhouse horticulture sector organisation), attended on behalf of the organisation.

According to Wageningen University and Rabobank, the Dutch horticultural sector is particularly exposed to disruptions in the supply and pricing of fertilizers, packaging and crop protection products, many of which originate in or transit through the Middle East.

Mixed picture for gas prices
The situation regarding gas prices is mixed. The gas market is currently relatively stable, and many greenhouse businesses have fixed-price gas contracts, which cushions the short-term impact. As a result, average energy costs in the greenhouse sector have risen by approximately 2.8%.

However, many of these contracts expire at the end of this year or in 2027. Since energy prices are expected to remain elevated for an extended period, growers will not feel the full financial impact until those contracts come up for renewal. The sector can partially offset rising costs thanks to years of investment in energy efficiency and sustainability measures, such as the use of residual heat and geothermal energy.

For businesses that are unable to transition to more sustainable energy sources and will be exposed to higher gas prices, Glastuinbouw Nederland is exploring compensation options under the new EU State Aid package, for which the organisation has been actively lobbying in Brussels.

Use of CHP for grid balancing under pressure
With gas prices expected to remain high for at least the next two years, the profitability of combined heat and power (CHP) installations in the greenhouse sector is also coming under pressure. This affects not only the cultivation of vegetables, fruit, flowers and plants under glass in Northwest Europe, but also the Dutch electricity supply more broadly. Greenhouse horticulture currently accounts for more than 8% of total Dutch electricity consumption through grid feed-in from CHP systems, particularly during periods of low renewable energy output. Sustained high energy prices therefore put pressure on grid balancing capacity.

Food security not yet at risk
Supermarkets anticipate a significant rise in food prices later in the year. For greenhouse vegetables, the impact is expected to be less severe than for bulk crops such as wheat or maize. Nevertheless, farm margins are under pressure globally, which could constrain investment and production. In the Netherlands, short-term food security is not considered at risk, though affordability for vulnerable consumer groups warrants attention.

In other parts of the world, the risk of supply shortages is increasing. Even if the Middle East crisis is resolved quickly, the economic impact and price pressure are expected to persist for at least two years. The sector continues to focus on the energy transition, supply chain security and building resilience throughout the chain. Glastuinbouw Nederland is monitoring the situation closely and remains in contact with both the EU and the Dutch government.
 

Source: www.floraldaily.com