Dutch agriculture is so developed that it can feed the whole world. So, what makes the Netherlands an agricultural powerhouse?
The Second Biggest Food Exporter Worldwide – The Netherlands An Agricultural Powerhouse
If I asked you who you think is the largest food exporter in the European Union, you might think of France, Spain, or Italy. Actually, the Netherlands is the agricultural powerhouse of the European Union. And that title could maybe stretch to the world for specific fruits or vegetables.
The Netherlands is the second biggest food exporter worldwide. Agriculture in the Netherlands serves incredibly well. It creates a lot of economic and productivity growth for the Dutch economy.
So, how did this happen? ‘Cause, we all know that this country has a relatively low land mass?
An Agricultural Powerhouse
So why has the Netherlands’ economy become an agricultural powerhouse? Generally, when nations become more prosperous, they move away from industries like agriculture to more heavy manufacturing, and finally services.
The reason for this is a result of an economic concept named opportunity cost. This is basically the hidden cost of making one decision over another. For instance, if you have a piece of land, and you use it to produce potatoes, you might earn a small amount of money. If instead, you use that space to build an office or a factory, the profit you gain back could be much higher.
Well, the Netherlands has actually been a bit backward in this aspect. Famous Dutch companies include Shell and Phillips and the first stock exchange in the world was actually in the Netherlands. It wasn’t until fairly recently that the Dutch economy started looking at ways to become a large agricultural producer and exporter.
Technology – The Netherlands An Agricultural Powerhouse
The answer to the question of how the Netherlands economy has become the garden of the world can be just in one word: technology.
But first, let’s go back a bit further to know why agriculture was a sector in the Netherlands.
In the 1970s, the economy of this country was one of the most thriving in Europe. The Netherlands economy was developing and occupying global markets in gas and electronics.
However, there were some problems that began to appear. During this time, with market-leading businesses growing at a rate quicker than the rest of the economy, it motivated younger more educated workers to move away from agriculture to well-paying sectors. This put Dutch agriculture under a lot of pressure. The matter became worse since Dutch farms cannot actually benefit from economies of scale.
How The Dutch Government Dealt With The Problem
Instead of giving up agriculture, the Dutch government decided to double down on agriculture. As a result, research and technology step in. And the concept named the agglomeration effect has generated an economic boom by working closely with agriculture firms. It has fostered more companies to set up in the sector.
Thankfully, because of the research, the Netherlands finally is a pioneer in led technology and enhancing agricultural yields. This helps generate an exactly controlled micro climate that can be worked 24/7. This has helped the Netherlands become a world leader in tomato planting and exporting.
The overall outcome is that Dutch agriculture is one of the most productive on the globe.
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