The proposed Act lays down the conditions on the production of manure with dairy cattle. After entry into force on 1 January 2018, phosphate rights will be required. This measure is necessary in order to comply with the Commission Implementing Decision of 16 May 2014 granting a derogation requested by the Netherlands pursuant to Council Directive 91/676/EEC concerning the protection of waters against pollution caused by nitrates from agricultural sources (OJ L 148, 2014).

Amendment of the Fertiliser Act in connection with the introduction of a phosphate rights system

This bill introduces a phosphate rights (production quota) system for dairy cattle, in order to control the production of animal manure.The European Commission issued what is known as a 'decision granting derogation' to the Netherlands - for the period of the fifth Nitrates Directive Action Programme (2014-2017) - to allow farmers, under specific conditions, to apply more animal manure than the Nitrates Directive standard of 170 kilograms of nitrogen per hectare. As has been the case since the first derogation, applicable to the period of the third Nitrates Directive Action Programme (2006-2009), this derogation is also subject to the condition that manure production in the Netherlands shall not exceed the 2002 level, also known as the 'manure production ceiling', in terms of nitrogen and phosphate.A set of statutory instruments to control manure production from dairy cattle has proven necessary following the sharp increase in manure production from the dairy farming sector, due in part to the elimination of European milk quotas on 1 April 2015. This increase caused the Netherlands to exceed its manure production ceiling in 2015, according to provisional figures from Statistics Netherlands. In order to bring the Dutch cattle sector back under the production ceiling, production control measures are required in the dairy farming sector.The proposed Act of 1 January 2018 aims to introduce a system of tradable phosphate rights, with the aim of reducing production and maintaining it under the manure production ceiling (such as contained in the decision granting derogation by the European Commission). Therefore, a generic discount on the phosphate rights granted is necessary by 1 January 2018.The phosphate rights system is to be regarded as State aid. The European Commission has adopted the position that this State aid is not permissible if the free allocated phosphate rights are negotiable in the period within which the Netherlands exceeds the manure production the ceiling. For this reason, the phosphate rights are negotiable only if the generic discount on the phosphate rights has been applied.