The Dutch need to reduce excess nitrogen levels, caused in part by decades of intensive farming, a problem that has led to courts blocking important construction projects until the issue is resolved.

Discontent over government plans to address the problem until now led to a major defeat for Prime Minister Mark Rutte’s governing coalition in regional elections in March.

Farm buyouts are seen as an important step toward a comprehensive plan to address the issue.

In the plans approved by the European Union’s executive body last week, the Netherlands reserved the money to compensate farmers who voluntarily close farms located near nature reserves.

The plans will have “positive effects that outweigh any potential distortion of competition and trade in the EU,” the Commission said in a statement approving the aid.

In addition to the plan to buyout ā€” or eventually force out if they refuse ā€” the ā€œpeakā€ emitting farms, the government is also planning a separate scheme that would give dairy, pig, and poultry farmers a deal for 100 % of the value of their farm if they wished to shut down. In total, some 1.4 billion euros is expected to be set aside for both farm shutdown schemes.

Should the plan go ahead, it would not only be a major blow for the farming industry in the Netherlands, which is one of the most productive in Europe but could potentially impact other nations as well, given that part of the condition of the buyout scheme is that the Dutch farmers would be prohibited from moving to other countries and starting up farms abroad, meaning that their knowledge and expertise would be squandered.

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German Finance Minister Olaf Scholz said European Union officials were working intensively to hammer out a broader trade deal with the U.S. and avert potentially far more devastating tariffs on European-built cars.

Asked about new U.S. tariffs on up to $7.5 billion worth of EU airplanes, cheese, wine and other imports, Scholz said he favored a ā€œfirm, clear and decisiveā€ approach that did not further escalate the situation.

The actions include 25 percent duties on a wide swath of French wine, Scottish whiskeys and cheeses.

Source: Reuters